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January 21, 2019

Nairobi City leads Africa, Middle East in attracting FMCG multinationals

A file photo of an aerial view of Nairobi city a top KICC in 2011.
A file photo of an aerial view of Nairobi city a top KICC in 2011.

Nairobi is the leading destination for Fast-Moving Consumer Goods multinationals looking to expand into Middle East and Africa, a survey by global business research firm Infomineo suggests.

 This is in the wake of an increasing number of Fortune 500 companies [ the largest 500 US firms by revenues] seeking to establish or cement their presence in the MEA region.

 The report by Infomineo states there was a 17 per cent increase in the number of Fortune 500 companies in the MEA region last year compared to 2015. Johannesburg is the leading destination for Africa, the report says.

 “Nairobi, in Kenya, is the leading destination for the FMCG companies and tends to be the top choice for organisations looking to service Eastern Africa,” the report, published yesterday, says. “Dubai and Johannesburg are the most popular hubs overall, but both Casablanca and Nairobi are rapidly gaining traction and international awareness.”

 Fast-moving consumer goods or consumer packaged goods are products that are sold quickly and at relatively low cost. They include non-durable goods such as soft drinks, toiletries, over-the-counter drugs, processed foods among other consumables.

 Casablanca, the largest city in Morocco, has the highest growth rate overall, while Dubai has the highest count. London has tripled its number of regional headquarters serving the MEA.

 “Given the geographical proximity and the talent pool present in the city, it could be that London is playing the role of a first step into the MEA region, especially for Japanese and North American companies,” the report states.

 Kenya has in the last 10 years been pushing to position Nairobi as a key destination for foreign direct investments in the financial services sector to rival Johannesburg, through the establishment of the Nairobi International Financial Centre.

The financial hub plans are geared at promoting a well-functioning financial system to accelerate economic growth and establish Kenya as a leading financial centre in Eastern and Southern Africa. Benefits of the project include job creation, foreign direct investments as well as an expanded domestic market to tap capital from.

 “There are numerous factors which impact on the organisation’s selection of a specific city. These include the local market potential, maturity of the industry, existing competitors, political stability and the quality of the employment market, among others,” the report reads.

 The most attractive cities in the MEA are Dubai, Johannesburg, Casablanca and Nairobi, and at the lower end of the spectrum, Cairo, Paris, Algiers and Cape Town, Infomineo says.

 “Determining the attractiveness of a location along these clear lines assures the Fortune 500 companies of a stable and profitable investment and significantly mitigates risk.”

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