The Central Bank of Kenya (CBK) has is blaming a lag in foreign direct investment for the country’s loss of competitiveness compared to its East African counterparts.

Earlier in the week, CBK published comparative data for Kenya, Uganda and Tanzania, covering various measures and ratios such as the current account, exports-to-GDP, travel receipts, FDI and debt service, which show that Kenya’s position has deteriorated consistently compared to those of her EAC neighbours.

Kenya has only outperformed Uganda and Tanzania in growth of diaspora remittances, which have in the past decade risen to become the country’s top source of dollar ahead of agriculture and tourism earnings.

Uganda and Tanzania have been helped by more stable currencies against the dollar this year, a factor that foreign investors consider when pumping in capital into an economy due to the erosion of returns through exchange losses.

This year, the shilling has weakened against the currencies of Uganda and Tanzania by 18 percent and 13.8 percent, respectively.
Against the dollar, the shilling has depreciated by 19.5 percent to 153.29 units since January. In the same period, the Uganda shilling is down by 1.7 percent against the dollar, while the Tanzania shilling has depreciated by 7.6 percent against the greenback in the period.