Increasing consumer growth, diverse economic structure and a deliberate pro-market regime helped move Kenya to number six as a top investment destination in Africa, a latest report has shown.
The Where To Invest report, now in its seventh publication, also has a surprise – Egypt which took position one, pushing South Africa to the second position.
Since the inception of the report by the Rand Merchant Bank (RBM), South Africa, the continent’s largest economy, has dominated the number one position for the past seven years.
Ethiopia is also rising fast. It is now number four after Morocco but that does not mean it will be at that position for long.
At number five, Ghana sends a wake-up call to Nigeria, Africa’s economic super power with its many natural resources including oil and a large population. Nigeria did not feature among the top 10.
Kenya’s good position is a huge boost coming at a time when the nation is battling market jitters as a result of heightening political activity in the country.
A repeat presidential poll is expected on October 26 as ordered by the Supreme Court which annulled the August 8 presidential results.
However, despite the political bickering, the Kenyan financial markets have remained stable with the shilling keeping its head afloat.
The RBM report also takes into consideration economic activity and relative ease of doing business.
Kenya has been pursuing policies aimed at easing doing business especially for the budding entrepreneurs.
Some of the policies include easing business registration and taxation processes which have in the past been fingered for hampering business take-offs and enterprises especially for the youth and women.
Weak market policies and corruption, according to the report authors, continue to hold back the potential of some of Africa’s top economies.
For instance, despite countries like Botswana and Namibia scoring higher in the ease of doing business index, a smaller market size cut them from being ranked in the report.
The ranking comes at a time when leading economies in Africa have been forced to undertake unpopular budget slashes, currency devaluation and stringent monetary policies in the wake of dwindling traditional sources of revenues.
Some countries have diversified into the extractive sector buoyed by the recent natural gas and oil finds in countries like Kenya.
Despite the ranking, the authors note, Africa continues to be an under-performer while the West and China control the global economic stake.
“From a global perspective, African countries are still at the lower end of the global performance spectrum which continues to be dominated by the US, UK, Australia and Germany,’’ notes the report.