Kenya gets positive ratings for attracting investments
Port of Mombasa: Kenya has been rated highly for attracting investments. FILE
What you need to know:
Kenya is ranked number 96 in the GCI 2013/4, up from 106 the previous year, after scoring 3.85 points out of the possible seven.
The world’s best economy, Switzerland scored 5.67 points.
The index ranks countries based on their ability to boost productivity in the face of prevailing global challenges.
Increased confidence in institutions, research and financial sector reforms helped Kenya move ten places up in the latest Global Competitiveness Index, overtaking most of its investment rivals in Africa.
Kenya is ranked number 96 in the GCI 2013/4, up from 106 the previous year, after scoring 3.85 points out of the possible seven, a communiqué from the World Economic Forum said.
“Kenya’s strengths continue to be found in the more complex areas of GCI measurement,” the GCI report indicates.
The world’s best economy, Switzerland scored 5.67 points. The index ranks countries based on their ability to boost productivity in the face of prevailing global challenges.
Despite being 13 paces below the best ranking of 83 in 2003, this year’s ranking makes Kenya the tenth best economy in Africa. This could boost its edge in attracting foreign direct investments.
Kenya is second in the East African Community after Rwanda (in position 66) and fifth in Comesa after Mauritius, Rwanda, Seychelles and Zambia.
Unlike its rivals which are riding on traditional sectors like institutions, infrastructure, macroeconomic stability and education system, Kenya’s improved performance is based on the new economy driven by ICT.
Based on individual pillars of GCI, Kenya is ranked number 31 and 35 globally in financial markets development and labour market efficiency.
The report ranks Kenya’s innovative capacity at position 46, recognising the high Research and Development budgets of leading companies and scientific research institutions.
“Kenya has some of the best innovative minds in the world,” says industrialist Chris Kirubi. “This country could change drastically if development partners shelved some of their current programmes and partner with thriving local banks to finance youth to create jobs,” he said.
Kenya’s creative edge has mainly been in the area of information and communication technology where mobile phone operators and hand makers are currently riding on improved access to phones and internet services.
“It is a proven fact that whenever mobile broadband penetration is increased by 10 per cent, GDP goes grows by one per cent,” says CEO of Ericsson Kenya Robert Rudin.
“Every 1000 mobile broadband customers create 80 new jobs,” he said.
Mr Rudin made the remarks at a dinner reception for Sweden’s Minister for International Development Cooperation Gunilla Carlsson in Nairobi on Tuesday.
While derided for reaching a relatively small proportion of the population compared with most other countries - Kenya’s education system gets relatively good global ranking - number 44 and 49 respectively for quality and on-the-job training.
Technocrats attribute the improved global rating to policy reforms inspired by the new constitution across the economic, social and political fronts.
The officials said Kenya’s GCI ranking was expected to improve further next year as some of on-going flagship projects begin to bear fruits.
“The stringent implementation of constitution, construction of the Standard Gauge Railway line, JKIA Terminal Four and related infrastructural developments at the Port of Mombasa, will further serve to enhance our global competitiveness,” said Vision 2030 Delivery Board Chairman James Mwangi.
Despite various reforms that have seen maternity fees scrapped, the health sector remains an area of serious concern for Kenya, the GCI ranking shows.
The country is ranked number 121 on the health pillar because of a high prevalence of communicable diseases that have limited life expectancy to 58 years, very low by international standards.
Poor health is regarded reduces the productivity of the workforce. Kenya is also ranked at position 131 on security which been complicated by presence of small arms and porous borders.
On a continental scale, the report notes that the sub-Saharan Africa region continues to underperform significantly in providing health and basic education.
The continent’s poor performance across all basic requirements for competitiveness is in contrast to its stronger performance in financial market efficiency where Kenya, South Africa and Mauritius rank in the top quartile.
