The country’s Capital City has the sixth highest growth potential in the continent, a survey has said.
MasterCard African Cities Growth Index says Nairobi was named after Accra, Lusaka, and Luanda, the capital cities of Ghana, Zambia and Angola. They were identified as the Sub-Saharan African cities that have the highest potential for growth.
In East Africa, Nairobi was also beaten by Tanzania’s capital Dar es Salaam, which came in fourth. Addis Ababa took the fifth position.
“The entire African continent with its population of over one billion people is going through a fundamental transformation. This new index puts a spotlight on the economic and human factors driving urban growth over the next five years,” a statement accompanying the index reads in part.
The index by the global payments company is set to give Kenya quest to attract new investors a boost, coming at a time players in the tourism industry are grappling with the aftermath of increased insecurity.
It corroborates another global survey by the Economist Intelligence Unit that ranked Nairobi among the 120 most competitive locations for new capital in the world.
Verified data
The MasterCard African Cities Growth Index is compiled from a range of verified data on variables of city economic growth.
It was supported by historical data from the period 2009 to 2011 on the GDP Per Capita Growth, household consumption expenditure growth, governance factors as well as the ease of doing business. Other factors considered in the ranking are city population growths, national urbanisation and the middle class household growth.
It was done by Professor George Angelopulo of the University of South Africa and was released yesterday at the second Africa Knowledge Forum in Johannesburg.
The Forum explores how cities across Africa are playing an increasingly important role in driving national and regional growth, how they need to compete on the global stage in order to attract inward investment, and how these cities need to manage their natural and human resources more effectively.
The MasterCard African Cities Growth Index was developed in the final quarter of last year, and analysed 19 cities across Sub-Saharan Africa ranking them according to their growth potential between last year and 2017.
“Of the 19 researched cities, Accra, the capital city of Ghana, was ranked as having the highest growth potential, followed by Lusaka and Luanda, that were both identified as having medium-high growth potential,” the brief noted.
The index notes that whereas many of these larger and more established cities offer the expected potential for growth, other less prominent ones are quietly establishing themselves as those with even higher growth potential.
“This is primarily due to high scores on accelerated growth factors that include health, education, governance, infrastructure development, and the ease of doing business in those cities,” the report added.
Johannesburg – although already a strong economic powerhouse city in Africa – achieved lower scores in certain categories as a result of lower growth expectations due to its relative maturity when compared to other African cities.
Expected growth
The expected growth of the middle class population is higher from cities such as Accra and Luanda than it is for Johannesburg, which has seen a growing middle class since the change of government in 1994.
Harare (Zimbabwe), Kano (Nigeria), Abidjan (Côte d’Ivoire), and Khartoum (Sudan) were deemed to have the lowest growth potential of the 19 cities examined in the study.
Although these cities scored well in some categories, such as the overall health index and the levels of foreign direct investment, but their potential for growth was hampered by low scores in areas such as their political and regulatory environments.
