Kenya also topped the list of African countries with the highest growth in new investment projects in the four years to 2011, beating South Africa and Nigeria, according to findings by global consultancy Ernst and Young.
New projects by Kenya and Nigeria-based firms to the rest of the continent also grew at a faster rate than from anywhere else in the world at 77.8 per cent and 73.2 per cent respectively.
“The growth in intra-African investment is being led by the respective regional powerhouses of Kenya, Nigeria and South Africa,” said the second African Attractiveness Survey.
South Africa’s investments into the rest of Africa grew at the rate of 64.8 per cent in the four years to 2011 placing it third on the continent.
In the eight years to 2011, South Korea led in new projects which grew at 82 per cent with Kenya coming second and India third.
The main investments from Kenya have been in the banking sector, retail stores, cement industry, oil and marketing among others.
KCB group was the fifth largest investor in Africa between 2003 and 2011, beating major multinationals such as Coca Cola, Total, French cement conglomerate Lafarge and beer maker SAB Miller among others.
Banco BPI was the largest investor in Africa followed by Eco Bank which was the largest African investor on the continent.
The data, however, shows the number of new projects but not the value of the projects.
The report did not capture mergers and acquisitions and other equity investments and had no minimum size for projects included.
Cement manufacturers have stamped their presence in regional markets with Bamburi Cement and Athi River Mining investing in Uganda and Tanzania respectively.
“Unlike West Africa, which is only spreading its financial services sector, Kenyan expansion has not only been led by banks but also manufacturing, oil and ICT sectors,” said Patrick Obath the chairman of Kenya Private Sector Alliance.
However, Mr Obath said, Kenyan companies have been moving to set up operations in other countries because of the high cost of doing business locally with oil marketers in particular complaining of inefficiencies in government infrastructure.
Oil marketer KenolKobil has one of the largest footprints in African markets with operations in the DRC, Mozambique, Burundi and Tanzania.
Kenya’s good performance has also been linked to the greater emphasis placed on regional integration which has facilitated easy movement of personnel, goods and services over a wider market.
Kenya was ranked the top investor in Rwanda and Uganda as measured by new foreign direct investments between 2003 and 2011 and third biggest in Tanzania, although it attracted only four per cent of the total FDI since 2003 to 2011.
ALSO READ: Rwanda, Burundi sign pact to facilitate cross border trade
The top five investors into Kenya by new FDI projects in the same period were the US, India, UK, South Africa and Japan.
India, however, led the rest of the world by the number of new jobs created in Kenya followed the UK, the US, China and Spain.
Between 2003 and 2011, there has been a 23 per cent annual compound growth in intra-African investment into new FDI projects.
This growth has at times spiked with the growth rate up by 42 per cent since 2007. In 2011, intra-African investment accounted for 17 per cent of all new FDI projects on the continent.
Kenya is ranked among the most democratic states in Africa, sitting in the league of Botswana, Ghana, Mauritius, Namibia, South Africa and Zambia, a key factor in attracting investment.