Multinationals slash expat jobs in Kenya for first time in five years

For the first time in five years, multinational companies operating in Kenya cut back on foreign workers, a new government survey has revealed.

The 2024 Foreign Investment Survey (FIS) shows that expatriates in firms with foreign ownership dropped by 12.52 percent to 3,502 in June 2024, down from 4,003 a year earlier.

The report, released last week,  indicates that most of the cuts targeted foreign staff on short-term contracts. Their numbers reduced by 22.35 percent to 1,525, from a record 1,964 two years earlier.

Expatriates on long-term contracts were also affected, though to a lesser extent, with their numbers falling by 3.04 percent to 1,977 from 2,039.

“The number of foreign employees declined, with those on short-term contracts decreasing by 22.4 percent and those on long-term contracts by 3.0 percent in 2024,” the report noted.

“Foreign employees constituted 1.6 percent of the total workforce in the surveyed enterprises, while local employees accounted for 98.4 percent.”

The findings are drawn from 603 companies whose operations are largely supported by foreign equity and investment funds.

At the same time, the survey shows that while local employment continued to grow, the pace slowed to its weakest in three years. Kenyan employees in the firms increased by 3.62 percent to 221,267 in the review period.

The last slower growth was in June 2021, when employment rose by only 1.98 percent, reflecting the aftershocks of the Covid-19 restrictions.

The report stresses on Nairobi’s continued role as a regional hub for global firms and a growing centre for start-ups that attract billions in funding from private equity and venture capital investors.

On investment flows, the 2024 survey estimates that foreign direct investments into Kenya rose to Sh242.61 billion in 2023, marking a 28.92 percent increase from Sh188.19 billion in 2022.

However, these figures differ from those of the United Nations Conference on Trade and Development (UNCTAD), which placed the inflows at $1.504 billion (about Sh194 billion) for the same year.

Unlike the FIS, UNCTAD’s calculations are based mainly on greenfield projects, infrastructure financing, and multinational production activities.

Breaking down the inflows, information and communication technology received the highest investments at Sh64.67 billion.

Wholesale and retail followed with Sh48.31 billion, then finance and insurance with Sh45.32 billion, and manufacturing at Sh32.46 billion.

The government has since partnered with UNCTAD to set up a one-stop online investment platform that will integrate both national and county registration systems.

Once complete, the platform is expected to ease regulatory processes and make it simpler for investors to establish businesses in Kenya.