Kenya climbs to number 9 in Africa investment ranking

Vehicles on the Southern Bypass in Nairobi. Kenya is undertaking key infrastructure projects. FILE PHOTO |NMG 

By GEOFFREY IRUNGU

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Summary

• The country was position 15 in the 2017 index
• Morocco, Egypt and Algeria are the most attractive on the continent at position one, two and three respectively.
• Regional countries that come closest to Kenya are Ethiopia and Zambia which are ranked seventh and eight respectively.

Kenya is the ninth most attractive economy for investments flowing into the African continent, according to the latest African Investment Index 2018 by Swiss-based research and private equity firm Quantum Global.

This is an improvement from position 15 in the 2017 index.

Kenya beats other members of the East African Community (EAC) who do not appear on the top 10 list.

Regional countries that come closest to Kenya are Ethiopia and Zambia which are ranked seventh and eight respectively.

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North Africa

North African countries including Morocco, Egypt and Algeria are the most attractive on the continent at position one, two and three respectively.

“International investors are looking at a wide range of sectors for investments including energy, infrastructure, tourism, and ICT amongst others,” said Quantum Global in a statement.

The index is constructed from investment indicators, which include the share of domestic investment in GDP, the share of Africa’s total FDI net inflow, GDP growth rate forecast and a population-augmented GDP growth factor.

Other factors taken into account in the calculation are real-interest rate, the difference of broad money growth to the GDP growth rates, inflation differential, credit rating, import cover, the share of the country’s external debt in its GNI, current account ratio, ease of doing business and the country’s population size.

Indicators are based on secondary data collected from World Bank Development Indicators, IMF World Economic Outlook, UNCTAD Data Centre and Quantum Global’s estimates.

“Continued FDI inflows will continue to drive the much-needed capital to develop Africa’s primary sectors to meet the demands of the continent’s rapidly growing middle-class, and into manufacturing sectors to create more jobs, enhance economic growth and support structural transformation,” said Mthuli Ncube, head of research at Quantum Global and a professor of mathematical finance at Oxford University.

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Worst countries

The index rankings also includes the worst 10 countries to put investments in.
These are mostly either in conflict or have recently experienced political turmoil and include the Central African Republic, Liberia, Somalia and Zimbabwe.

Quantum Group said that international investors are looking at a variety of sectors including energy, infrastructure, tourism and ICT.

Kenya is currently undertaking or about to undertake several infrastructure projects including the dualling of the Nairobi-Mombasa highway, extension of the standard gauge railway, bypasses in several major towns as well as geothermal and wind energy projects.

Botswana, which was ranked the top in the last edition of the Index, came fourth in the latest index.