, NAIROBI, Kenya, Sept 4 – Kenya has been ranked third in an analysis illustrating where UK companies should invest in, sub-Saharan Africa.
Dubbed ‘The Barclays Africa Trade Index’, Kenya scored 56.2 percent behind Nigeria which scored 62.6 percent with South Africa leading with 73.3 percent.
The report, which is sponsored by Barclays Bank and other partners, compared and ranked 31 sub-Saharan countries based on their attractiveness for cross-border trade.
Indicators used include openness and opportunities offered by these countries. Broken down, the index looked at demographics, market size and growth, trade and investment flows, tariff policy, boarder administration and transport and communication.
Quoting the report, the UK’s Financial Times listed the top 10 countries for UK countries to invest in as South Africa, Nigeria, Kenya, Ghana, Tanzania, Ethiopia, Angola, Cote d’Ivoire, Sudan and Senegal respectively.
Kenya and some of East Africa’s countries were commended as trade hubs because of improved cross administration and its single customs territory which, according to Matt Tuck, Head of Global Corporate Banking at Barclays, has simplified the control of goods moving across the customs unions.
“Many countries, particularly in East Africa, have invested in major developments in both infrastructure and ‘soft’ infrastructure such as tariffs and border policies,” Tuck told the Financial Times.
On the other hand, countries included at the bottom of the list are Malawi, Madagascar, Rwanda, Congo, Gabon, Lesotho, Guinea, Chad, Burundi and Gambia ranked the least places for UK companies to invest in.
The report however identified five countries in sub-Saharan Africa which after experiencing significant economic upheaval, are playing catch up and experiencing growth at a rapid pace.
Dubbed ‘Sleeping Giants’, the countries include Ethiopia, DR Congo, Mozambique, Ghana and Tanzania.
According to the report, these countries are increasingly attractive to foreign firms and international investors with an eye on long term returns.
Barclays suggests that these countries, whose combined population is around 270 million and average annual GDP of 7.3 percent, present the UK with an opportunity to diversify their African businesses in the back of Asia’s increased competition.
Nigeria, although rated behind South Africa, is termed as a better investment destination for UK companies in the long term.
This is based on the fact that Nigeria is more populous, with an estimated 173.6 million people, offering bigger opportunities than its counterpart whose national population stands at an estimated 52.98 million.
Barclays however pointed out that investing in Nigeria suffered from logical difficulties posed by inadequate infrastructure as, “companies would have to provide their own power and water.”