•Top 20 Index report released by Standard Chartered Bank has shown the government’s Big Four development initiative is driving Kenya’s increased trade growth potential.
•China followed Kenya in the fourth position.
Kenya has been ranked position 3 in the Top20 markets with the greatest potential for future trade growth, demonstrating that investments in infrastructure and business environment improvements are paying off.
According to the Top20 Index report released by Standard Chartered Bank, the market’s potential for trade growth suggests that the government’s Big Four development initiative is driving Kenya’s increased trade growth potential.
Trade20 index identifies the markets by measuring changes in 12 metrics under three pillars in economic dynamism (foreign direct investment, export and GDP growth), trade readiness (infrastructure, e-commerce, and ease of doing business) and export diversity (the range of exports).
China followed Kenya in the fourth position.
“Kenya’s trade readiness score is particularly high, due to infrastructure and ease of doing business improvements that far surpass most other African nations in our index,” Standard Chartered CEO, Kariuki Ngari said.
The report shows the country has been successful in attracting external investment for infrastructure development, including renewable energy projects.
This has been enhanced by the government's drive to create a friendly environment through the enactment of several regulatory reforms to simplify both foreign and local investment, including the creation of export processing zones.
Côte d'Ivoire is the market that has most rapidly improved its trade growth potential over the past decade, according to the new research.
“While existing trade powers like China and India continue to rapidly improve their trade potential, African economies are making particularly strong progress from a relatively low starting point,” the report stated.
The study examined 66 markets around the world.
Kenya is consolidating its position as the trading hub of East Africa, while Côte d'Ivoire is cementing its position as a West African trading hub.
The country, however, remains as a market-based economy with major activities around agriculture, forestry, fishing, mining, manufacturing, energy, tourism and financial services.
The country's trade balance recorded a deficit of $1.0 billion (Sh103.91 billion) in April 2019, compared with a deficit of $719.2 million in the previous month.
Total exports reached $483.0 million in Apr 2019, a decrease of 2.5 per cent year on year while imports recorded $1.5 billion in the month, an increase of 0.3 per cent year on year.
The report has also shown that Africa is expected to become a bigger player in the global arena with connected trading powers in Asia, particularly China, through the Belt & Road Initiative.
This coupled with the African Continental Free Trade Area whose operational phase kicked off in early July.
Growth opportunities for trade and investment are expected in the years ahead after end of Phase II talks expected to continue throughout 2020.