Kazakhstan seeks ways to expand capital investments

The country’s government wants to expand fixed capital investments to $41.5 billion this year / primeminister.kz

The government of Kazakhstan is going to extend the amount of fixed capital investments (FCI) to $41.5 billion in 2023. Last year, this rate was only about $3.1 billion, according to Prime Minister Alikhan Smailov, who chaired the meeting of an inter-agency board on investments.

As National Economy Minister Alibek Kuantyrov said, over the period from January 2023 to April 2023 FCI rose several times and reached $8.5 billion. The mining and processing industries, real estate, transportation, warehousing and agriculture are leaders in terms of FCI, according to the official website Premierminister.kz.

«In January-April, we reached our target. Twelve regions out of twenty delivered on their plans and even did much more than that,» Kuantyrov said.

Among those who over-fulfilled their plans 1.2 to 1.5 times are the Ministry of Health, Ministry of Education, Ministry of Trade, Ministry of Ecology and administrations of the Turkestan, Kyzylorda, Karaganda, Mangystau and Akmola regions. However, eight regions and two ministries haven’t reached their target, the prime minister highlighted.

«The Ulytau and Jambyl regions didn’t reach their targets on FCI last year. Last time, we met withg the heads of these two regions and they promised to fix the problem. However, their regions still haven’t done any better. The digital ministry has to boost a number of projects in the sphere of IT while the Ministry of Culture needs more investments in tourism. Once the first half of the year is over, we will decide which officials are responsible for investments and which should quit,» Smailov stated.

In 2022, the amount of FCI reached $3.1 billion. Real estate accounted for the vast majority of these funds ($1.4 billion) followed by transportation and warehousing ($467 million), industry ($254.9 million) and wholesale and retail trade ($254 million). Foreign direct investments (FDI) were mainly put into the mining industry (purchasing 10% or bigger stake in a company or project by a foreign investor).

According to Deputy Internal Minister Almas Aydarov, FDI reached $28 billion in 2022, which is a record high for the past decade. The Netherlands accounts for a third of this money while the U.S. and Switzerland share another third. Last year, Kazakhstan reported 199 new projects worth $5.1 billion thanks to FDI. This year, the government is going to launch 281 projects worth $4.2 billion. As Smailov noted, the key target articulated by President Kassym-Jomart Tokayev is $150 billion of FDI by 2029. In 2023, the cabinet is going to attract $24 billion of foreign investments into the national economy.

In 2022, the country adopted a new concept of investment policy designed for a period ending in 2026. Under this concept, FCI must account for 25.1% of the national GDP while FDI is expected to reach $25.5 billion in 2026.