Kenya has made a historic entry into the global economic arena, emerging as Africa’s most competitive economy in the 2025 International Institute for Management Development (IMD) World Competitiveness Ranking.
The debut places Kenya at 56th globally, ahead of regional peers including Botswana, Ghana, South Africa, and Nigeria.
Kenya joins Namibia and Oman as the newest entrants in the influential index’s 37-year history.
But what does “global competitiveness” mean?
In simple terms, it is a country’s ability to produce high-quality goods and services that can compete internationally while ensuring sustained economic growth and a high standard of living for its citizens.
Competitiveness is shaped by multiple factors, including institutions, policies, productivity, innovation, infrastructure, and a stable macroeconomic environment.
Countries that perform well can attract investment, generate
jobs, and deliver products and services that meet global standards.
Organisations like the World Economic Forum and IMD measure competitiveness using comprehensive indices, such as the Global Competitiveness Index (GCI).
IMD evaluates nations based on four key pillars: economic performance, government efficiency, business efficiency, and infrastructure.
Each pillar combines hard data with surveys of business executives, capturing both measurable outcomes and perceptions from those operating within the economy.
In total, 336 indicators are used to assess performance, emphasising execution and measurable results over policy announcements.
For Kenya, several indicators drove its high ranking. Infrastructure has seen significant improvements, notably at the Mombasa port and through new energy projects, easing bottlenecks and enhancing reliability for businesses.
Digitalisation has also played a major role, with faster licensing processes, simplified tax systems, and expanded digital public services boosting efficiency and investor confidence.
Improvements in macroeconomic stability, including fiscal controls, prudent spending, and currency stabilisation, further strengthened the country’s competitiveness.
Other key areas of strong performance include market size, reflecting Kenya’s position as East Africa’s largest economy with a growing consumer base and regional trade influence.
Innovation capability was also highlighted, particularly in mobile technology and fintech solutions, positioning Nairobi as a leading innovation hub in Africa.
These factors, combined with a relatively diversified economy, have underpinned Kenya’s rise on the global competitiveness map.
However, the survey also noted ongoing challenges. Electricity reliability, fiscal pressures, civil unrest, and severe flooding caused by heavy rainfall were cited as constraints.
Political instability, including the impeachment of the
deputy president, rising national debt, and increased taxes on citizens and
businesses, have also weighed on confidence, signaling areas that need
attention to sustain progress.
Being ranked Africa’s top economy carries significant implications for ordinary Kenyans.
A more competitive economy tends to attract foreign direct investment (FDI), particularly in sectors that directly benefit from Kenya’s strengths, such as infrastructure, energy, logistics, trade, and services.
These investments can spur job creation, offering more employment opportunities and potentially higher wages, especially as businesses expand to meet growing domestic and regional demand.
Stronger competitiveness can also drive economic growth, leading to improved public services, better infrastructure, and a higher standard of living.
For ordinary citizens, this could mean more reliable transportation, electricity, and digital services, along with expanded access to markets and financial services.
Over time, these gains can help reduce the cost of doing business, lower prices of goods and services, and improve overall quality of life.
At the same time, Kenya’s long-term growth prospects depend on sustaining and expanding investment in innovation, research, and human capital.
While the country’s innovation outputs—such as tech startups, mobile solutions, and fintech products—are strong, its “innovation inputs,” including education, research funding, and workforce skills development, remain areas for improvement.
Without strengthening these foundations, Kenya risks plateauing in global competitiveness over the next decade.
The IMD ranking is also notable for the limited participation of African countries. Only six nations met the stringent criteria for reliable, continuous datasets in 2025, highlighting the importance of measurable results over policy promises.
Kenya’s inclusion demonstrates the tangible impact of reforms, careful execution, and the ability to provide verifiable data, setting an example for other economies on the continent.
For businesses, global competitiveness translates to the ability to produce high-quality products efficiently, adopt new technologies, and respond to changing market demands.
Companies operating in a competitive national environment are better positioned to innovate, expand into new markets, and remain resilient against global challenges.
For citizens, the result is a more dynamic economy that creates opportunities, attracts investment, and drives sustainable growth.
In summary, Kenya’s position as Africa’s most competitive economy marks a significant milestone in the country’s economic journey.
It signals growing confidence in the country’s institutions, infrastructure, and business environment.
The ranking offers hope for increased jobs, investment, and economic growth, while highlighting areas such as innovation and energy reliability that require continued attention.
If Kenya can build on these gains, it is well-placed to continue improving its global standing, fostering an economy that benefits citizens across all sectors.
Being globally competitive is about more than rankings; it is about ensuring that Kenyans can access opportunities, enjoy a higher standard of living, and participate in a thriving, resilient economy.
The 2025 IMD results suggest that Kenya has taken crucial steps toward achieving this vision, laying the foundation for a future where the nation can not only compete globally but also deliver tangible benefits to its people.
