Kenya’s tech sector has overtaken banking, manufacturing, and retail as the leading destination for foreign direct investment (FDI), according to new government data, revealing the growth of the digital economy.
On Wednesday, the Kenya National Bureau of Statistics (KNBS) released the 2024 Foreign Investment Survey, showing foreign capital inflows into the tech sector rose 71% to KES 64.7 billion ($500.9 million) in 2024. The growth made it the single largest recipient of FDI, accounting for more than a quarter of the KES 242.6 billion ($1.8 billion) total inflows, up from less than 10% in 2020.
The figure does not include capital raised by tech startups. VC-backed startups raised an additional $638 million (KES 82.3 billion) in 2024, more than a third of Eastern Africa’s $1.9 billion total, according to Africa: The Big Deal, a funding tracker. The growth in FDI into the tech sector points to a reweighting of foreign capital away from traditional sectors such as banking and manufacturing.
“The Information and Communication sector was the largest recipient of FDI inflows, which increased by KES 26.8 billion to KES 64.7 billion in 2023, pointing to a sustained investor interest in Kenya’s digital economy and innovation landscape,” the report said.
Banking and insurance attracted KES 45.3 billion ($350.7 million), manufacturing KES 32.5 billion ($251.6 million), and wholesale and retail KES 373.9 million (KES 48.3 billion), which was a decline from the previous year when the sector was the top FDI destination.
Preliminary data for the first half of 2025 shows legacy companies have already secured about KES 38 billion ($294.2 million) in inflows, suggesting the sector is on track to maintain its lead for a second consecutive year.
The surge into Kenya’s tech sector can be attributed to regulatory change. In 2023, President William Ruto scrapped a two-decade-old rule requiring foreign tech firms to cede a 30% ownership stake to local partners. The policy had been a dealbreaker for large multinationals like Amazon Web Services (AWS), Microsoft, and Google.
While the KNBS data only tracks inflows into legacy sectors, much of Kenya’s digital economy is powered by startups that receive millions in VC funding, such as M-KOPA, Workpay, BasiGo, and Shukhiba.
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