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NUR-SULTAN (TCA) — Over the years since independence, total gross inflow of foreign direct investments into the economy of Kazakhstan has amounted to about $350 billion. In 2019, gross FDI inflow to Kazakhstan amounted to $24.1 billion compared to $24.3 billion in 2018, Kazakh Invest national investment promotion company reported with reference to the National Bank of Kazakhstan.

In 2019, mining and metallurgy accounted for the largest volume of foreign investment - 56.3%. The industry attracted record $13.586 billion in foreign investment. The industry saw structural changes: FDI inflows to metal ores extraction sector increased by 60%, while FDI inflows to coal and lignite extraction decreased by 60%.

Over $3.5 billion was invested in manufacturing industry, $3 billion in trade, $1.1 billion in transportation and storage, and over $1 billion in finance and insurance industries.

Investors increased their capital expenditure on food, beverages and tobacco production by 50%. For instance, Indian investors, with the support of Kazakh Invest, implemented a project for the production of instant noodles in Kazakhstan’s Turkestan region. The plant, with a production capacity of 180 tons, employs over a hundred local citizens. In addition to supplying the local market, the investors export products to Uzbekistan, Kyrgyzstan, and India.

The top five countries investing the most into the economy of Kazakhstan remained unchanged in 2019. Being the largest investor, the Netherlands invested $7.3 billion in Kazakhstan (30.2%), followed by the USA — $5.5 billion (23.0%) and Switzerland — $ 2.2 billion. China outran the Russian Federation in terms of investments and took 4th place with $1.7 billion (7.0%), while the Russian Federation closed the top five with $1.4 billion (5.8%) invested in Kazakhstan.

Along with the changes in the top-five, investors from Singapore hold the lead in terms of the investment growth dynamics. In 2019, the volume of gross FDI inflow from the city-state increased sevenfold and amounted to about $166 million.

As to Singaporean investments, one of the examples is a project for construction of education institutions in Nur-Sultan, Almaty and Shymkent by a Singaporean company KinderWorld International. To date, land plots have been allocated for the project. In the near future Singapore's school system will become available to schoolchildren in Kazakhstan.

Investments from Turkey also showed positive dynamics with a 20% growth. In 2019, Turkey invested a record amount of about $358 million in Kazakhstan's projects. One of the largest projects by Turkish investors is a plant producing 144 thousand tons of ferrosilicon per year in Karaganda region. The project’s value is over $93 million.

To date, investors from Turkey are implementing a number of projects in the fields of transportation (airport construction), engineering (production of household appliances), chemistry (production of soda ash), mining and metallurgy (exploration), tourism (hotel complexes), as well as 4 projects in the field of healthcare (hospitals and diagnostic center).

Belarus and France also showed positive investment dynamics in Kazakhstan. In 2019, Belarusian investors increased their investment by 50% from $59 million to $87 million, and French investors — by 17% from $916 million to $1.1 billion.

Belgium, Canada, Luxembourg, Germany and India demonstrated a decline in investment activities in Kazakhstan. These countries accounted for only $1.6 billion in 2019 compared to $2.1 billion in the previous year.

2020 forecast

To date, the monitoring system of Kazakh Invest comprises 172 investment projects worth $46.5 billion at the development stage. The projects will create about 58 thousand jobs.

These projects cover such priority sectors of the Kazakh economy as agribusiness, light industry, mining and metallurgy, machine-building, petrochemicals, renewable energy, and logistics.

Of these, projects for construction of greenhouse complexes, meat processing plants, animal feed production plants, industrial gases production plants, mining and metallurgy plants, and solar power plants are planned for commissioning in 2020.

Due to the current situation in the world and Kazakhstan, the volume of foreign direct investment might be reduced in 2020. Nevertheless, considering work already carried out, agreements reached, trends in the global economy and measures introduced by the Kazakh Government, such as “The Economy of Simple Things” program and SME support, Kazakh Invest expects that industries such as manufacturing, food production, light industry, pharmaceuticals, ICT, domestic tourism, as well as logistics and warehousing will remain attractive for investors in 2020.

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