NAIROBI, Kenya, May 17 – Kenya and Tanzania have been ranked in the top five – Africa Prospect Indicator for Micro Business, Consumer and Retail markets.
This is according to Nielsen’s 4th Africa Prospects Indicator that places Kenya as the leading, beating Cote d’Ivoire, Tanzania, South Africa and Ghana respectively in the top five.
The report attributes Kenya’s top rank to Strong agricultural output; a resurge in tourism, as well as increased FDI resulting in infrastructure projects has spurred this more diversified economy.
The report says As East Africa’s most prominent economy, Kenya is pivotal for success as growth prospects shift from West to East Africa.
The report however says the challenge in Kenya is the Retail rank, pointing to in-trade execution challenges compounded by the capping of interest rates, resulting in loans being extended to only the most established and safest borrowers.
“Truly informal small and medium sized enterprises, as well as new start-ups, have been negatively impacted which has hindered growth and employment opportunities. However, elevated consumer purchasing power due to growth in per capita GDP, has resulted in a bigger base of more affluent consumers who can maintain retail resilience, creating an upbeat outlook for Kenya’s retail sector,” the report notes.
The World Bank forecasts Kenya’s 2016 GDP growth at 5.6 percent, a robust performance against the 1.5 percent average for Sub Saharan Africa.
Nielsen Head Emerging Markets Thought Leadership Ailsa Wingfield says to stay abreast of the rapidly evolving trends in 2017, businesses will need to adapt short-term and long-term country strategies to maintain relevance in fluctuating market cycles.
The East African Community registered 6.1 percent growth in 2016 even as Sub Saharan Africa grew by 1.4 percent, according to the Economic Survey 2017 by the Kenya National Bureau of Statistics.
Tanzania was the best performer recording at 7.2 percent Gross Domestic product growth followed by Rwanda that grew at 6 percent.
Kenya came in third recording 5.8 percent while Uganda grew by 4.9 percent.