Kenya’s image boosting investments

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BY MARY KIMONYE

The image of a country is the reputation that is attached to it. It’s composed of four components: Cognitive (what one knows about a place): Affective (how one feels about a certain place): Evaluative (how one evaluates the place or its residents) and behavioural (whether one considers immigrating to working, visiting and investing in a certain place).

It therefore follows that individual nations have distinct images that are unique to their particular situations, as it is these images that ‘consumers’ of nation offerings use to make consumption related decisions. A nation brand is therefore a unique value position of a country, a tool to raise people’s interest in investing, visiting or doing business in a particular country.

To survive in the competitive global market, nations are engaging in “nation branding”, and the concept is increasingly becoming a priority for many governments. It encompasses marketing techniques and strategies that a nation uses to improve, enhance and strengthen its image and reputation globally. It is therefore important for nations to differentiate themselves in a globalised marketplace. For instance, the frequent reference to Kenya as the regional business and Information Communication Technology (ICT) hub, differentiates the country amongst other Africa nations, and is viewed as a well performing nation.

Positive economic ratings continue to stamp the country’s position as the economic hub of the region. Notably, Kenya’s investment environment is characterized by a market driven economy with abundant natural resources; access to world and regional markets; an educated and highly adaptive highly skilled hardworking labour force; as well as developed ICT. The current image of Kenya as an investment destination is caged on these key factors which boost investor confidence and ultimately raises the Foreign Direct Investments (FDI) to Kenya.

A stable macroeconomic environment is a critical prerequisite for FDI. The government continues to implement measures to strengthen Kenya’s economic competitiveness through accelerated governance and public sector reforms and by increasing government spending on expansion and modernization of transport sector. The National Treasury reported recently that the economy is expected to grow by 5 percent. The Treasury pegs the projected growth to on-going structural reforms in government departments alongside expected increase in the country’s exports as the global economy recovers. The 2015/2016 budget will intensify these efforts with more focus on development expenditure in energy, infrastructure, ICT, agriculture and social expenditure in education and health. The standard gauge railway under construction will raise Kenya’s GDP by 1.5 percent once it becomes operational.

It is also expected that the economic benefits of the high speed trains will be massive and the immediate effects will include decongestion of the port of Mombasa that will lead to higher volumes of national and regional trade. Other factors expected to spur the economy are low energy prices pegged on falling crude prices. These economic growth predictions serve as a positive indicator for investors.

Indeed, there is growing confidence by global investors in our country and Kenyans need to be proud. Kenya was ranked as one the top seven investment destinations to watch in emerging markets by Fortune magazine. The ranking recognized the massive efforts being made in infrastructure development, the power sector and the improving macro-economic stability. Kenya has also embarked on an ambitious programme to address challenges on the ease of doing business and has set up a delivery team to make the country a world class investment destination.

The rating comes not so long after the World Bank upgraded Kenya’s Policy and Institutional Assessment (CPIA) rating to 3.9 as a result of its effort to improve policies to boost institutional growth and reduce poverty. This lifted Kenya to the highest rated country in sub-Saharan Africa in institutional and policy reforms. In addition, Kenya has been able to maintain a favourable sovereign credit rating of B1 by Moody’s and B+ by Fitch and S&P and the issuing of the first Sovereign Bond in the international market, which was very successful.

To improve Kenya’s attractiveness further, the government has embarked on an ambitious programme to address challenges on the Ease of Doing Business and has set up a delivery team to make the country a world class investment destination. The Ministry of Industrialization and Enterprise Development is spearheading the business climate reform agenda and is working with various government agencies.

The reducing cost of doing business and stable macro-economic environment continues to make a clear signal that Kenya is ready to do business with the world and we are delighted that the number of investors is on an upward trend. All citizens need to commit themselves to the pursuit of a united prosperous nation and to play their part in boosting the attractiveness of Kenya.

(Kimonye, MBS is the Chief Executive Officer of Brand Kenya Board)

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