Nairobi, Aug 13 (IANS): Kenya has set a target of attracting at least $8 billion in foreign direct investment (FDI) over the next five years, the country's investment agency said.

Kenya Investment Authority (KIA) managing director Moses Ikiara said a lot of international firms have shown interest in setting up shop in Kenya's diversified economy, reported Xinhua.

"We are therefore encouraging investments in the manufacturing, agro-processing as well as the services sector in order to increase the country's foreign exchange earnings," Ikiara said.

Data from the KIA showed Kenya attracted over $600 million in FDI last year.

"This is also part of the government's strategy to reduce the widening trade deficit that is putting pressure on the local currency," he said.

Ikiara said Kenya has one of the highest growth rates in attracting FDI.

"Kenya has lost ground in the past two decades in attracting FDI to the rest of the east African region," he said.

"This is primarily because these nations discovered natural resources such as hydrocarbons and minerals ahead of Kenya. So, the bulk of the FDI was used to exploit natural resources while Kenya's capital inflows were seeing market opportunities," he added.

Ikiara said that if Kenya maintains political stability, it will overtake the rest of the region in attracting FDI due to its huge natural mineral resources coupled with skilled labour force.