dc.description.abstract | The forces making for direct investment abroad are many and varied.
Basically, the investing firm is interested in the contribution which such a capital
outlay will make to the prosperity of the whole organisation. Host government's
objectives, however, do differ from the foreign investor's and may, in fact, be
characterised by the government's strong faith in economic growth and progress,
irrespective of whether or not it is inspired by the 'modernisation' or 'social
transformation' paradigms.
In presenting results of the analysis of investment by multinational companies
in Kenya and the impact of their strategies on the economy, this study has shown
that the features of direct foreign investment and capitalist accumulation in Kenya
before 1945 were largely concentrated in the agricultural production, ancillary
services and primary production. Because of colonial supremacy, all of these
activities remained in the hands of white settler communities and other foreigners,
while the role of the indigenous African was confined to that of cheap labour.
, However, following the Second World War, several changes in the pattern of direct
foreign investment and the nature of the Kenyan economy led to the inflow of
predominantly industrial capital not only from Britain, but also from the U.S.,
West Germany, France and other countries. ... The consequence of these trends
therefore implied that the MNC sector played a very important role in the
manufacturing sector. It is argued in this analysis that the presence of the MNCs
in Kenya, although necessary, is of strategic importance to them only, while of
lesser beneficial impact to the Kenyan economy. Several reasons, in both Chapters
Three and Four, show that this argument may have some ground. For example, it
is the desire of these companies to expand horizontally or laterally, either to
overcome import restrictions of one kind or another, or to open up new markets
in Kenya.
In the process, these companies have managed to negotiate and set up import
substituting industries limited only to the production of particular products on which
parent companies concentrate in developed countries. The conclusion here is that
this type of transfer limits employment and linkage effects, and severely undercuts
local entrepreneurs making simpler but basic product equivalents. Furthermore,
protective barriers and internal market dominance by these firms not only hurts
local consumers, but also results in considerable MNC surplus appropriation and
repatriation of funds from Kenya. Also due to the fact that there is a connection
between the present multinational companies and the colonial state, the study
concludes that:
Although colonialism induced a rapid expansion of the cash economy
in Kenya, it has left behind an economy characterised by continuing and
perhaps intensifying structural imbalances, massive growing inequalities,
apparently irreducible dependence on external sources of capital and
technological innovation, and a tendency towards political authoritarianism
and instability.
These problems make the position of the MNCs in Kenya more precarious.
This study therefore suggests a change in strategy and attitude on the part of
MNCs, particularly with regard to development objectives. Areas of concern should
include industrial locations and social responsibility, which should extend beyond the
urban areas into the rural sections, and in all regions of the country; and there
should be a constructive commitment to Kenya's future development to allow for
future stability and progress. | en |