Impact Of Chinese Foreign Direct Investments In Infrastructure Construction On Kenya’s Economic Growth

Infrastructural development forms the foundation of all developments in any economy in the world.Investment in good infrastructural projects creates a pool of physical capital upon which other developments projects for a country are based.Unfortunately,most countries in the world are seriously lacking in good infrastructure and more severely in the developing countries majority of which are found in the Sub-Saharan Africa(SSA).This should clearly explain why meaningful developments in these countries is yet to be experienced several decades after most of them gained independence from their colonizers.It is estimated that in order to solve this huge infrastructural gap,a total of USD 93 billion will be required per year for such projects if any meaningful improvements have to be experienced.Kenya the leading economy in the East and central African region and one of the fastest growing economies in SSA was until recently characterized with one the poorest infrastructural network in SSA.On engaging the Chinese investors in the sector,things are seldom improving hence the reason for its current status as one of the fastest growing economies in SSA.This came as part of the interventions aimed at improving the situation with the view of achieving a middle-level income country by the year 2030.The Kenya Vision 2030 document which is aligned to the UN’s SDG encourages investment in the infrastructure sector with the view of achieving the desired outcome of a developed nation by the year 2030.This research reviewed various theories and related literatures to establish the relationship between infrastructure improvements and GDP growth.The key interest was on the involvement of the Chinese FDI’s in the infrastructure construction and how that contributed to the economic development of Kenya.Various theories that attempt to explain the behavior of FDIs were reviewed and they included conventional theories that explain why international trade occurs and contemporary theories explaining FDI behavior such as capital theory,the Eclectic Paradigm theory of Dunning,Internationalization theory,and the Product Life-cycle theory of Vernon.The research methodology adopted involved collection of secondary data from various sources,among them the World Bank,UNCTAD and the KNBS,running it through a multi linear regression model and analyzing through various test of authenticity to ascertain its suitability.Inferences were drawn from the results of the analysis that helped in coming up with meaningful conclusions and recommendations.It was indeed ascertained that FDI inflows have a positive impact on economic growth of a country besides other factors such as exports.Finally it was recommended that policy makers and governments should tirelessly endeavour to create an enabling and attractive investment environment and opportunities for these FDIs for better lives for their citizenry.