Kenya ranked second in Africa as investment hub for global firms
A photo of the Google search engine website. Google has a regional headquarters in Nairobi. PHOTO | FILE
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Globally, Kenya was fifth behind Saudi Arabia (24.69 per cent), Vietnam (24.72 per cent) and Argentina which was second (24.72 per cent).
The growth of a consumer class and Nairobi becoming a key gateway for East Africa are some of the reasons that are attracting the foreign firms.
Related indices have also shown a bullish approach for Kenya such as US-based analysis firm MSCI.
Kenya is the second most preferred destination in Africa for multinational corporations seeking to set up shop, according to a US data vendor that tracks emerging markets.
Frontier Strategy Group ranked Kenya second with a score of 23.17 per cent after Nigeria which was top on the continent and globally with a score of 29.57 per cent.
Globally, Kenya was fifth behind Saudi Arabia (24.69 per cent), Vietnam (24.72 per cent) and Argentina which was second (24.72 per cent).
The index is based on input from 200 multinational corporations such as Coca Cola and General Electric.
Multinational corporations in technology, consumer goods, industrial and financial services sectors have been opening regional and continent headquarters in Nairobi in recent years.
Google, Visa, MasterCard, KFC, Pepsi, Travelport and Dow Chemicals are multinationals corporations that have chosen the capital city as either their regional or Africa headquarters.
The growth of a consumer class and Nairobi becoming a key gateway for East Africa are some of the reasons that are attracting the foreign firms.
Frontier Strategy Group however said that despite the increase in Kenya’s attractiveness the spate of terrorist attacks will have a major effect on industries such as tourism in the short-term.
“Terrorist attacks will cause sporadic disruptions but the vibrant private sector, rising consumer spending and Kenya’s important role as a hub for East Africa are strong economic drivers which are unlikely to be derailed by insecurity,” said the company on its blog.
The country is grappling with terrorist attacks such as the recent raid on Lamu County which has left over 60 people dead.
Related indices have also shown a bullish approach for Kenya such as US-based analysis firm MSCI.
The MSCI Frontier Index increased the weighting for Kenyan stocks to 4.8 per cent from three per cent last week.
This is expected to see an increase in capital flows. The government also expects that more conglomerates will come to invest in technology, financial services, agriculture and infrastructure.
“Investment in a fibre optic platform has placed Kenya on the global map making it a preferred location for multinationals seeking foothold in Africa. This year holds room for more growth in the sector especially with heightened activity from government-led initiatives such as e-governance, school computerixation projects and Next-Generation Network infrastructure,” said Genghis Capital in their macroeconomic update for May.
Microsoft launched the 4Afrika initiative in March 2013 which will see it work with the government and service providers to provide fast Internet access at a low cost while IBM’s first research facility in Africa was launched in Nairobi last November.
