By Benjamin Obegi
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 report titled, Where To Invest, now in its seventh publication, also has a surprise entrant to the number one position which was taken by Egypt.
The Northern Africa state pushed Africa`s largest economic player, South Africa to number two.
Since the inception of the report by the Rand Merchant Bank (RBM), South Africa has dominated the number one position for the past seven years.
Another surprise is that Kenya`s East African neighbour, Ethiopia, bagged the number four slot following another Northern Africa heavyweight, Morocco, which comes in at number three.
Ghana comes in at number five. Another East African nation, Tanzania, comes in at number seven followed by Rwanda at number eight while Tunisia and Ivory Coast come in at number nine and ten respectively.
Kenya`s best ranking is a 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 in mid-October 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 in the past years pursued policies aimed at easing doing business especially for the budding entrepreneurs. Some of the policies include collapsing 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 plague and hold back the potential of some of Africa`s top economies.
This is what pushed Ghana to slot five while Nigeria, another Africa`s giant with huge oil deposits, did not feature in the top ten.
Market size was another key factor in the ranking. 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 and her East African counterparts.
Despite the ranking, the authors note, Africa continues to be an under-performer with the West controlling a major 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.