There is a lot of political bickering and terror threats from all angles that tend to paint a picture of a critically ailing nation. However, behind the curtains things are very different with investors busy making money every day. The ordinary citizens are busy with their daily hustles at the construction sites, farms, retail trades among other businesses. And the broader picture is even more colorful!
Attending a property investors’ breakfast at hotel Villa Rosa Kempinski in Nairobi earlier on this month that fact better dawned to me than before. I was sitting with real estate investors and developers behind the magnificent property developed in Kilifi under the brand name of Mandharini and their view of Kenya was amazing. In a precise and concise manner, our own investment analyst and commentator Aly-Khan Sachu summarized the economic context of Kenya with facts that cannot go unshared.
According to the IMF, Kenya’s economic growth is projected to be 5.9% in 2014 up from 4.7% in 2013 and 4.6% in 2012; and thereafter grow by 6.3% in 2015. The report from the IMF also terms Kenya as one of the Africa’s frontier economies. That notwithstanding, in 2013 Kenya was also rated by the World Bank and World Economic Forum as the top country in Sub-Saharan Africa for economic policies and institutions. Its score of 3.9 was the highest among 40 countries in Africa.
A year earlier in 2012, Kenya was ranked among the top 10 African brands by Brand Finance; a global valuation consultancy which measures a country’s reputation and image with investors. In the same year, the Economist Intelligence Unit polled global institutional investors who reported that they all hoped to invest in the emerging Africa markets by 2016. The good news is that Kenya and Nigeria were top preferences for the investors with two-thirds of them seeing the two countries as holding the greatest opportunity.
Our own stock market the NSE was among the top performing securities markets in Africa, with the NSE All Shares Index rising 50% in 2013 and beating the 33% growth of the S&P Africa Frontier Index. The Index tracks stocks in Nigeria, Ghana, Botswana, Zambia, Namibia, Ivory Coast, Mauritius and Kenya.
On the other hand we have multinationals coming to Kenya and others relocating their regional offices to Kenya in the recent past. Top in the list we have Coca-Cola, Google, IBM, Visa International, Pepsi, Nestle, World Bank’s International Finance Corporation (IFC), General Electric, Bharti Airtel and South Africa’s FirstRand Bank.
With the Kenya’s middle class growing and accounting for 44.9% of the population, things can only look brighter for this great nation in the years to come.
A multi-billion property developer from Spain at the breakfast compared the current political noise and terror scares in Kenya to the same situation in their home country last year. Spain was among the countries in the Eurozone which had been blacklisted as bankrupt and their credit rating reduced to junk by the international credit rating agencies including S&P, Moody and Fitch. Spain actually completed the acronym coined to list the bankrupt countries in the Eurozone; the PIGS.
The investor however was quick to explain that the actual economic conditions on the ground were very different with what international media was broadcasting. Businesses were running as usual and the cities never lacked ravers in the night clubs as the property investors continued with their normal buying and selling. The bankruptcy according to him was more of a concern for the policy makers than it really mattered to the ordinary citizens.
Well, the terror scares may be real and the politicians will continue with their bickering, corruption and ethnic appointments in the government for public offices. However, after the dew dries up Kenya will always emerge a strong economy driven by the private sector, if the strong economic indicators outlined above are anything to go by.