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Kenya’s Nairobi ranked Africa’s top FDI destination
BUDGET DAY 2016 - SAEAST AFRICANEWS
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Trust Matsilele February 3, 2016 11:49 am 11 views
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Kenya’s capital, Nairobi, is attracting huge investment and industry experts reckon the government is working to ensure the trend is sustained.
A recent report by investment monitoring platform, FDI Markets ranked Nairobi as Africa’s top foreign direct investment destination as it saw inflows surging by 37 per cent in 2015.
The country’s ministry of Investment, Trade and Industry is also reviewing draft regulations on special economic zones in efforts to promote export growth in the country.
Kaigua Munyi, Research Analyst at Genghis Capital said apart from the obvious benefits of tax benefits that are offered by Nairobi, there were also Public Private Partnerships (PPPs) that were attracting companies into the country.
He added that the government had demonstrated to improve the infrastructure challenges the country has been facing.
“Infrastructure, ICT and energy took top priority on the country’s budget as the government committed about 373.9 billion Shillings ($37bn). Citizens should start to see deliverables on this investment between three to five years,” Manyi told CNBC Africa.
“We are also social impact energy projects especially the geothermal power plants were last year we saw commitments of up to 85 billion Shillings.
African economies have been hit by the low commodity prices and investors have been looking at alternative emerging economies of which Kenya is one of them.”
WHY NAIROBI IS AFRICA’S LEADING FDI CITY
Nairobi, the capital city of East Africa’s largest economy, has been ranked the most attractive destination for foreign direct investment (FDI) in Africa and a regional financial services hub, a position that clearly distinguishes it from the other 20 African cities in PwC’s latest report on the continent.
The report studies variables such as housing, transport, water and power, healthcare, education, public safety as well as factoring economic indicators like GDP, inequality, middle-class growth, ease of doing business and FDI inflow.
In the 2013/2014 financial year, FDI to Kenya was estimated to have surpassed Sh150 billion ($1.59 billion), owing to amplified confidence in the country’s investment climate, despite a heighten spat of terror attacks from al Shabaab, an Al Qaeda affiliated terror group. A number of lessons for other African states may lie within this success story, for which reason Ventures Africa has analyzed the key drivers of Nairobi’s accomplishment.
Rapidly developing infrastructure: Infrastructure plays a fundamental role in attractive a real investor. According to PwC, good infrastructure leads to even better cities as a strong correlation exists between infrastructure, human capital and economics, a situation that lures foreign investments. “As the accompanying graphic of infrastructure evolution illustrates, the developmental trajectory of successful cities from antiquity to the present has followed a certain course. Put schematically, it proceeds from infrastructure to human capital to, finally, a robust and self-perpetuating economy, some of whose profits finance urban life at its peak: from the arts and culture to environmental sustainability,” the report read.
As a country, Kenya has received substantial investment into its energy sector, maritime, aviation and rail. These have largely come from foreign capital championed by big time investors like China, Japan, Western Europe and the United States.
Leading the technology adoption train: The country is also an undeniable leader in technology adoption and advancement within the African continent. Its mobile banking platform (M-Pesa) is globally acclaimed to have deepened financial inclusion in the country and has now been adopted in parts of Europe and Asia. Nairobi also emerged the only African smart city among the list of top 20 smart cities globally.
The planned construction of the Konza technology city, a technology hub to be constructed as part of the nation’s Vision 2030, has also attracted the interest of key global tech giants including IBM (which set up the first African research lab in Nairobi last year), Google, Microsoft and Intel. Dubbed the African “Silicon Savannah”, the project is expected to be a key economic driver for the country in the coming years.
High value mineral resources: In addition to natural resources like coal and titanium, the recent discovery of oil and gas has contributed immensely to FDI inflows into Kenya over the past three years. Excited by the new prospects, firms from the UK, US and Canada have moved to quickly set up operational camps in Nairobi.
Growing consumer base: The growing consumer class in the country, anchored on a fast-expanding middle class, has provided perfect business opportunities for all sorts of consumer goods. Telco manufacturers are keen to penetrate this space as are many other foreign companies in different sectors. South African retail giant Massmart is expected to make an entry into Kenya in May, trading under the “Game” brand name. Carrefour, a French retailer, has also, reportedly, signed up for a similar move.
By Emmanuel Iruobe
Move over South Africa: Kenya now Africa’s largest source of intra-regional investment
by
Kate Douglas on '28 July 2016'
Kenya’s leading retailer, Nakumatt, has become a market leader in East Africa.
Kenyan companies have replaced South Africa’s as the largest intra-African investor group, according to EY’s Africa attractiveness programme 2016,Staying the course report, released this week.
This title is determined by the number of outward
foreign direct investment (FDI) projects into other parts of Africa (as opposed to their value), which Kenya managed to more than double – from 15 projects in 2014 to 36 in 2015.
As a result, Kenya is the seventh leading source country of FDI into Africa globally, jumping up from 13th position in 2014.
South African investors, on the other hand, are showing less activity in the rest of the continent. Last year companies launched only 33 projects, compared to 54 in 2014 and 65 the previous year. As a result,
South Africa has gone from Africa’s second-leading source of FDI projects globally, to eighth.
However, in terms of the value of these projects, both
Morocco (US$3.4bn) and South Africa ($2bn) rank ahead of Kenya ($1bn).
While South African companies were some of the first to venture into the rest of the continent, Kenyan businesses are beginning to catch up.
Although they have mostly been focused on the East Africa region, a number of players are looking further afield. For example, Kenya’s Equity Bank has expanded to
Uganda,
Tanzania,
Rwanda and
South Sudan – but has expressed interest in entering an additional 10 African countries over the next decade.
Kenyan supermarket chain Nakumatt has also managed to become a key regional player. Over the years it has kept South Africa’s leading retailer, Shoprite, from gaining market share in the region. Shoprite was one of the pioneer retailers to expand across the continent and today has operations in 15 countries. But, in East Africa, it only has a presence in Uganda.
In 2013, Shoprite exited Tanzania after 12 years in the market and its stores where acquired by Nakumatt.
Another Kenyan retailer, Uchumi Supermarkets, shut down its loss-making stores in Uganda and Tanzania last year, but is
reportedly considering expanding to
Nigeria,
Ethiopia and the
Democratic Republic of Congo.
Services have also been a key focus of Kenya’s FDI activity into Africa. According to EY’s report, financial and business services accounted for nearly 78% of the country’s projects in the region last year.
What makes Nairobi Africa's 'most intelligent' city
by Alex Court, for CNN
Updated 1230 GMT (2030 HKT) February 10, 2015
Photos: Africa's 'most intelligent' city revealed
Future techies – Experts have also praised the government's Vision 2030 development plan for having a strong emphasis on the importance of technology and ICT in schools. With 15 million children in Kenya's education system, it seems this is key if the country will confront the challenges of a connected economy.
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Photos: Africa's 'most intelligent' city revealed
Intelligent city – In it's Global Cities report, consulting firm A.T. Kearny, identifies Nairobi as one of two sub-Saharan cities likely to achieve developed status within 20 years. The city is identified as an "important center of regional politics" and the authors say the fact IBM is building a research laboratory illustrates it is a place advancing its global positioning.
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Photos: Africa's 'most intelligent' city revealed
Growing Fast – And an Economist Intelligence Unit report commissioned by Citigroup in 2012 says Nairobi is expected to be among the world's 40 fastest-growing cities between 2010 and 2016. The same report ranks the Kenyan capital as the fifth most competitive city in Africa.
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Photos: Africa's 'most intelligent' city revealed
Underwater web – But it's not just Nairobi which has impressive connectivity. The East African Marine System (Teams) is a 3,100 mile long fibre-optic undersea cable linking Mombasa with the UAE. The $130 million project to bring high-speed internet to Kenyans, is a joint venture between the government of Kenya and UAE-based operator Etisalat.
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Photos: Africa's 'most intelligent' city revealed
Global City – Kenya's busy capital city, Nairobi, has been crowned the most intelligent city in Africa by the Intelligent Community Forum. Click through for the key reasons experts think the city is particularly well placed to deal with the challenges of the broadband economy.
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Photos: Africa's 'most intelligent' city revealed
Payment prowess – Nairobi is at the heart of the Kenya's mobile payments revolution - mobile money is commonly used by residents across the city, as well as by the local county government for fee payments. Safaricom's M-Pesa service, introduced in 2007, now handles $320 million in payments each month. The amount represents a quarter of Kenya's GDP. The service has encouraged economic activity by making banking services available to low-income citizens.
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Photos: Africa's 'most intelligent' city revealed
Incubating innovation – Nairobi has also welcomed incubation centers, such as iHub. The co-working space has become the epicenter of Kenya's burgeoning tech scene, playing host to technologists, investors, tech companies and hackers seeking to solve global issues through tech. "Many tech (and non tech) multinationals have their regional or continental headquarters here due to the strategic location of the city as well as the talent pool available," says Josiah Mugambi, iHub's executive director. "Many now recognize the potential for technology to be used to transform the way business is done."
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Photos: Africa's 'most intelligent' city revealed
University approach – The city is home to university innovation centers, such as the Chandaria Business Innovation and Incubation Center at Kenyatta University. The institute was founded by leading Kenyan industrialist, Manilal Chandaria, and seeks to train people to become job creators rather than job-seekers. "We are thinking through the challenges we have, like mortality in children, for example. Its amazing to see young people engaging with these issues and searching for solutions about such global issues," says George Kosimbei, the director of the institute.
Hide Caption
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Photos: Africa's 'most intelligent' city revealed
Future techies – Experts have also praised the government's Vision 2030 development plan for having a strong emphasis on the importance of technology and ICT in schools. With 15 million children in Kenya's education system, it seems this is key if the country will confront the challenges of a connected economy.
Hide Caption
5 of 8
Photos: Africa's 'most intelligent' city revealed
Intelligent city – In it's Global Cities report, consulting firm A.T. Kearny, identifies Nairobi as one of two sub-Saharan cities likely to achieve developed status within 20 years. The city is identified as an "important center of regional politics" and the authors say the fact IBM is building a research laboratory illustrates it is a place advancing its global positioning.
Hide Caption
6 of 8
Photos: Africa's 'most intelligent' city revealed
Growing Fast – And an Economist Intelligence Unit report commissioned by Citigroup in 2012 says Nairobi is expected to be among the world's 40 fastest-growing cities between 2010 and 2016. The same report ranks the Kenyan capital as the fifth most competitive city in Africa.
Hide Caption
7 of 8
Photos: Africa's 'most intelligent' city revealed
Underwater web – But it's not just Nairobi which has impressive connectivity. The East African Marine System (Teams) is a 3,100 mile long fibre-optic undersea cable linking Mombasa with the UAE. The $130 million project to bring high-speed internet to Kenyans, is a joint venture between the government of Kenya and UAE-based operator Etisalat.
Hide Caption
8 of 8
Photos: Africa's 'most intelligent' city revealed
Global City – Kenya's busy capital city, Nairobi, has been crowned the most intelligent city in Africa by the Intelligent Community Forum. Click through for the key reasons experts think the city is particularly well placed to deal with the challenges of the broadband economy.
Hide Caption
1 of 8
Photos: Africa's 'most intelligent' city revealed
Payment prowess – Nairobi is at the heart of the Kenya's mobile payments revolution - mobile money is commonly used by residents across the city, as well as by the local county government for fee payments. Safaricom's M-Pesa service, introduced in 2007, now handles $320 million in payments each month. The amount represents a quarter of Kenya's GDP. The service has encouraged economic activity by making banking services available to low-income citizens.
Hide Caption
2 of 8
Photos: Africa's 'most intelligent' city revealed
Incubating innovation – Nairobi has also welcomed incubation centers, such as iHub. The co-working space has become the epicenter of Kenya's burgeoning tech scene, playing host to technologists, investors, tech companies and hackers seeking to solve global issues through tech. "Many tech (and non tech) multinationals have their regional or continental headquarters here due to the strategic location of the city as well as the talent pool available," says Josiah Mugambi, iHub's executive director. "Many now recognize the potential for technology to be used to transform the way business is done."
Hide Caption
3 of 8
Photos: Africa's 'most intelligent' city revealed
University approach – The city is home to university innovation centers, such as the Chandaria Business Innovation and Incubation Center at Kenyatta University. The institute was founded by leading Kenyan industrialist, Manilal Chandaria, and seeks to train people to become job creators rather than job-seekers. "We are thinking through the challenges we have, like mortality in children, for example. Its amazing to see young people engaging with these issues and searching for solutions about such global issues," says George Kosimbei, the director of the institute.
Hide Caption
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Story highlights
- Nairobi is the only African city to make it to the world's top21 "intelligent communities"
- The Kenyan capital, however, missed out of the top seven finalists
CNN Marketplace Africa covers the macro trends impacting the region and also focuses on the continent's key industries and corporations.
(CNN)For a second year in a row, Kenya's busy capital city of Nairobi has been named the most intelligent city in Africa -- failing, however, to make it to the world's top seven finalists.
According to the
Intelligent Community Forum, "intelligent communities" are those that have taken "conscious steps" to create an economy that can prosper in the "broadband economy." The group has recently released its latest rankings, recognizing the achievements of communities that have built inclusive, prosperous economies on a basis of information and communication technologies.
Nairobi was the only African city to appear on their shortlist of 21 hubs throughout the world for 2015.
Intelligent Community Forum co-founder Robert Bell says: "We see a strong foundation being put into place [in Nairobi]: sensible, pro-growth government policy, a more diversified economy, and an innovation ecosystem of startups, international companies and universities.
"Nairobi certainly has the opportunity to build an exciting future for its citizens, businesses and institutions."
The Kenyan capital, however, didn't make it to the next round that will see seven communities around the world contesting in June for the 2015 Intelligent Community of the Year award -- in alphabetical order, the 2015 Top7 Intelligent Communities were Arlington County (U.S.), Columbus, (U.S.), Ipswich (Australia), Mitchell (U.S.), New Taipei City (Taiwan), Rio de Janeiro (Brazil) and Surrey (Canada).
Nairobi ranked the most innovative city in Africa, Middle East
January 25, 2016
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The CMI study notes Nairobi’s position as the centre of technology in Africa
By
KEN MACHARIA, A new urban cities study has ranked Nairobi the most innovative city in Middle-East, Africa and among the top twenty cities in the world renowned for its innovation, livability and capacity to re-invent itself.
The City Momentum Index (CMI) study, conducted by global professional services and management company JLL, looked at 10 key areas including demographics, connectivity, technology and R&D, education, economic output and corporate activity.
Nairobi moved four places up from 15th position as the most dynamic city last year to sit at position 11 in 2016 out of the 120 cities surveyed.
“Nairobi’s impressive demographic and economic momentum is necessitating the creation of infrastructure and real estate to support the city’s expansion as it registers among the highest levels of office and retail construction and absorption of any city in the CMI,” the study states.
The CMI study notes Nairobi’s position as the centre of technology in Africa, and with a growing number of tech incubators and venture capital funds setting base in the city, as factors contributing to the city’s expanding influence in the world.
“The start of construction of Konza Techno City and devolution is laying a solid foundation for the future,” adds the study.
Nairobi is ranked ahead of mega cities like Shenzen, Tokyo, Hyderabad and Seoul. London topped the list for the second year in a row for its economic growth and real estate structure as well as initiatives that are transforming transport, such as the research centre currently being developed at White City.
Other cities that made it to the top five include Dublin, Silicon Valley, Bangalore and Boston.
“Bangalore (4) and Shenzhen (12) are home to some of the world’s fastest-growing tech companies, and Nairobi (11) is also making a concerted effort to move up the value chain and improve global connectivity,” the study states.
In addition to technology, the study says, real estate is another major factor in city momentum as it can enable productivity, creativity and entrepreneurship while creating a sense of community for its citizens in a sustainable urban model.
“Real estate no longer simply houses businesses – it attracts corporations and talent, and cities need to ensure their built environment provides the smart, productive commercial buildings that corporations, capital and talent now demand,” said Jeremy Kelly, director, global research for JLL.
Nairobi Governor Evans Kidero is excited about the study, saying it reveals that its importance stretches far beyond its role as an administrative or political centre.
“I am proud of Nairobi’s continuing position as one of the continent’s major urban hubs. The city is now in its 53rd year as the capital of an Independent Kenya. Yet its importance stretches far beyond its role as an administrative or political centre,” Kidero noted.
In 2015, Nairobi was ranked the most successful city in Africa by The Intelligent Community Forum (IFC).
The statistics are more. Let me not waste my time dwelling on it. Kenya may still be having its own challenges as a developing country but it is surely addressing those challenges and changing for the better