Kenya’s improvement in the quality of her business and investment environment continues to be recognized in various forums.
While the country’s unprecedented rise in the ranking under the World Bank’s Ease of Doing Business (from 136 globally in 2014 to 61 currently) is well known, its strong ranking in the global competitiveness index is less known and appreciated.
The Global Competitiveness Index (GCI), an initiative of the World Economic Forum assesses the competitiveness landscape of select economies across the globe spanning from developed, middle income to developing economies. The index provides insight into the drivers of productivity and prosperity of the said economies. The index consists of indicators derived from WEF’s Executive Opinion Survey conducted at national level by the Forum’s network of Partner Institutes, and published data on various aspects of the economy. In total, there are 12 pillars and 98 specific indicators that make up the index.
In the Global Competitiveness report released on October 2018, Kenya was ranked as the seventh most competitive economy in Africa (and 93 globally) behind Mauritius (49th globally), South Africa (67), Morocco (75), Tunisia (87), Botswana (90), and Algeria (92). Kenya did better than countries such as Nigeria, Egypt, and Ghana.
The pillars in which Kenya performed much better than others are labour market in which the country ranked 60th globally, business dynamism (63rd), and institutions (64th).
The table below shows how the country performed on all pillars.
The country ranked very well in the following specific indicators:
|Labour tax rate||8|
|Banks regulatory capital ratio||15|
|Internal labour mobility||16|
|Attitude towards entrepreneurial risk||18|
|Ease of finding skilled employees||21|
|Growth of innovative companies||23|
|Burden of Government regulation||28|
|Hiring & firing practices||31|
The pillars and the specific indicators in which the country ranked dismally are Infrastructure, ICT Adoption, Macro Economic stability, Health. These are the pillars that should receive the greatest and most urgent attention in terms of enhancing public awareness on the progress the country has made and also in terms of actual reforms and remedial investment.
Adjustment in Methodology
WEF used a new methodology in its latest edition to include elements that determine productivity. Of the 98 indicators (down from 114 previously), 34 were retained from the previous methodology while the other 64 indicators are new. The new methodology was applied on the 2017 data, thereby resulting in a revised ranking for 2017 besides the ranking for 2018 (see Table 2 for ranking of selected African countries). The ranking for Kenya remained the same between 2017 and 2018.
Global Competitiveness Ranking of African Countries in 2017 and 2018
|Ranking within Africa||Global Ranking||Ranking within Africa||Global Ranking|
*Numbers in parentheses indicate 2017 ranking using the previous methodology.
Numbers in bracket indicate 2017 ranking after using the current ranking system
Source: World Economic Forum
The Global Competitiveness survey 2019 kicked off in January 2019 and will continue until end of March 2019. In Kenya, the survey is being conducted by the Institute for Development Studies (IDS), University of Nairobi, on behalf of WEF. Private institutions that will be sampled or picked to participate in the online survey are encouraged to do so in order for the country to pick the priority areas for attention in the improvement of productivity and competitiveness.
KenInvest, National Productivity & Competitiveness Centre and IDS will hold several consultative meetings in the country, with public and private sector agencies, to enhance awareness of this survey and dialogue on productivity and competitiveness imperatives for our country.
This comes after the country was last year ranked position five among the wealthiest countries in Africa with $104 billion.
According to AfrAsia Bank Africa Wealth Report, the country came fifth following South Africa at $722 billion. Egypt and was second at $330 billion followed closely by Nigeria at $253 billion then Moroco came at number four with $$122 billion.
Last year, the total wealth held in Africa has risen by 13 per cent over the past 10 years (2007 to 2017) and by 3 per cent over 2017. Mauritius was the top performing individual market during both of these periods.
Ethiopia also performed well, although it should be noted that it started from a very low base, which makes growth easier – average wealth in Ethiopia is currently at around US$700 per person which is still quite low despite recent growth.
In the hospitality industry, according to the study, under luxury hotels and lodges, major destinations for the wealthy in the rest of Africa included: Mauritius, Seychelles, Marrakech in Morocco, Casablanca in Morocco, Cairo in Egypt, the Serengeti in Tanzania, Sharm El Sheikh in Egypt, the Masai Mara in Kenya, Livingstone in Zambia and the Okavango Swamps in Botswana. Gorilla safaris in the Virunga Mountains and the Bwindi Forest (Uganda) are also popular.