REPORT

Nairobi ranked among top 100 global financial hubs

Kenya's capital ranks at position 98, having improved eight position compared to March ranking

In Summary
  • The Global Financial Centers Index was created in March 2007 and it lists major financial hubs around the world based on their competitiveness.
  • The index which is closely followed by the global financial community is revised every March and September.
An aerial shot of the Nairobi CBD.
An aerial shot of the Nairobi CBD.
Image: ENOS TECHE

Nairobi has been ranked among top 100 International Financial Centres in the World, playing in the same league with cities like New York, London and Hong Kong. 

In the index released last month, Kenya's capital ranks at position 98, up eight positions in March and 21 places in terms of rating. 

In Africa, Kenya was placed sixth after Casablanca, Johannesburg, Cape Town, Mauritius and Kigali. 

Globally, New York retained its first place in the index, with London in second place, although both centres fell slightly in the ratings. Hong Kong and Singapore rank third and fourth, with San Francisco taking fifth place, overtaking Shanghai. 

The Global Financial Centres Index was created in March 2007 and lists major financial hubs on their competitiveness. It is revised every March and September.

The index evaluates cities based on competitiveness; business environment, availability of human capital, infrastructure development, Financial sector development, and reputation.

The report is comes at the time the world's  focus in on the Pandora Papers that lifted the lid on wealth stashed in offshore accounts by world leaders and their families including Kenya's President Uhuru Kenyatta. 

Kenya's Nairobi International Financial Centre has started taking shape, with two firms already submitting their letters of intent to be admitted in July. 

UK-based insurance firm, Prudential Plc with operations in Africa and Asia handed its application during President Uhuru Kenyatta's visit in UK. 

Prudential’s application was submitted alongside the signing of a Memorandum of Understanding between The CityUK and the NIFC, which builds on the UK-Kenya Strategic Partnership signed in 2020.

The centre, which has been in the works since 2014, is meant to help direct international investment to Kenya and Africa at large, enabling companies and investors to take advantage of trade and investment opportunities.

It aims to raise more than $2 billion in investments by 2030.

While the NIFC is an investment and job-creation tool, it’s also branding that shows that Kenya is ready to embrace new technology and is ready to be connected to the global economy.

Kenya, the third largest economy in sub-Saharan Africa, is already a commercial hub, with major global companies having their regional headquarters in the country’s capital.

The country is ranked 61st in the World Bank’s Doing Business 2019 index, which measures regulations on business activity in countries. Its score of 70.31 is much better than the regional average of 51.61.

Nairobi is also the global headquarters of the United Nations Environment Programme.

In addition, Nairobi is a major continental tech hub. Popularly known as “Silicon Savannah”, the city’s tech ecosystem hosts many innovation hubs and hundreds of startups.

Even so, anti-illicit financial flow crusaders are not happy with the establishment of the financial hub, saying it will turn Nairobi into a tax haven or aid financial ills. 

They are linking financial efficiency to secrecy index, arguing that the centre will make Nairobi a safe place for money launderers, corruption and tax evaders.  

Last year, Kenya's financial sector was ranked among the most secretive globally, according to a report by Tax Justice Network.

The country was ranked the second most rigid in Africa after Algeria and among the top 30 in the world in the latest Financial Secrecy Index of 2020.

''This means the country is a fertile market to stash ill-gotten private financial wealth and other illicit financial flows (IFFs),'' the TJN report said.