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Kenya is a ‘complex’ market for foreign firms - study

Aerial view of Nairobi
Aerial view of Nairobi. FILE PHOTO | NMG 

A new index has categorised Kenya as a complex market for foreign firms looking to invest and establish a presence in the country.

According to the report by global strategy consultants Wilson Perumal & Company that is in partnership with the Wall Street Journal, Kenya’s categorisation as a 'builder' market means that the country is attractive for production but less desirable as an end market.

The ranking places Kenya as the sixth most favourable in its ‘builder’ group of eight countries that includes India, Peru, Philippines, South Africa, Sri Lanka and Trinidad & Tobago.

The analysis acknowledges the active efforts made to make the country more business-friendly but recommends that supporting regulations grow more mature and stabilise.

“‘The Builders’ are countries on the march towards development. Most have established themselves as regional and global manufacturing centres — they have less operational complexity than market or regulatory complexity,” says the report.

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“However, customers in these markets are economically, culturally, and geographically diverse, making them hard to reach and convert to sale. Production in these countries is oft exported to less challenging markets…These countries suffer from biased and unstable regulations that make planning difficult,” it adds.

Doing Business

African countries ranked ahead of Kenya include Egypt in the fourth category as well as Botswana, Morocco, Namibia and Tunisia in the fifth group.

The index by Wilson Perumal & Company is similar to the World Bank’s Doing Business report, which guides foreign investors hunting for deals on where to invest across the globe.

The Doing Business 2019 report noted that Kenya registered a marked improvement in its ranking to stand at 61.

The climb was attributed to a simplified process of providing value added tax information, implementation of an online land rent financial management system on the eCitizen portal and a reduction in time required for registering property among others.

In the WB report released in November, Kenya was fourth in Africa after Mauritius, Rwanda—the best in East Africa—and Morocco.

It beats giant economies on the continent such as South Africa and Nigeria, which came in at 82 and 146 respectively.

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