The Implication of EAC Integration on foreign direct investment (fdi) and fdi determinants in Kenya

Abstract

The overall goal of East African Community (EAC) integration is to improve the standard of living for it citizens through increased competitiveness, value added production, trade creation and increased investment among other initiatives. EAC has attractive investment opportunities in agro-processing, mining, manufacturing, services, tourism and energy (EAC Industrial Policy 2012-2032). The year 2015 is the 15th year of the current EAC integration and it’s important that member states evaluate the gains from this cooperation so as to make informed decisions on future engagements. The purpose of this research therefore was to examine the implications of EAC integration on the performance of Foreign Direct Investments (FDI) in Kenya and ascertain what determinants influenced the decision of foreign investors to invest in Kenya. The findings would be used to improve FDI national and regional FDI policies and decisions that enhance FDI determinants. The study confirmed that several determinants influenced investors’ decision to invest in Kenya. Economic determinants especially the market size and search for raw materials had the highest impact. The market size was attributed to the provisions of the EAC Custom Union and EAC Common Market Protocols and an EAC market size of 143.5million people