Kenya tops 4th Africa Prospect Indicator
Kenya is the leading Africa Prospect Indicator for Micro Business, Consumer, and Retail markets. This is according to Nielsen’s 4th Africa Prospects Indicator report which attributes Kenya’s performance to a resurgent tourism sector as well as increased foreign direct investment resulting in infrastructure projects that have spurred the diversified economy.
Kenya has been in the upper regions of the API ranking since inception beating Cote d’Ivoire, Tanzania, South Africa and Ghana respectively in the top five.The rest are Ghana, Cameroon, Uganda and Nigeria to complete the top 8. The report says East Africa’s biggest economy is at the center of the shift of growth prospects from West to East Africa. However, Kenya’s retail sector is facing a mixed bag of fortunes.
“Truly informal small and medium-sized enterprises, as well as new start-ups, have been negatively impacted which has hindered growth and employment opportunities. However, elevated consumer purchasing power due to growth in per capita GDP has resulted in a bigger base of more affluent consumers who can maintain resilience in the retail sector, creating an upbeat outlook for Kenya’s retail sector,” the report notes.
The World Bank forecasts Kenya’s 2017 GDP growth at 5.6 percent, a good performance against the 1.5 percent average for Sub-Saharan Africa. Cote d’Ivoire’s dropped to second position this quarter due to negative shifts in Consumer Prospects. Despite strong Macro, Business and Retail prospects, Cote d’Ivoire’s Consumer prospects remain the biggest challenge.
Nielsen Head of Emerging Markets, Thought and Leadership, Ailsa Wingfield says businesses will need to adapt short-term and long-term country strategies to maintain relevance in fluctuating market cycles.
“Prospects for South Africa, relative to other Sub-Saharan countries, have been reconsidered, as investors refocus on more established markets where it is usually easier to execute in known consumer and retail environments,” Wingfield points out.
Moreover, oil woes have seen Nigeria in an eighth position particularly hard hit by lower oil prices compounded by low oil production resulting in a forex shortage, depreciation of the Naira and a curb on imports, creating a stranglehold on the economy which resulted in sky-rocketing inflation and tougher conditions for businesses and consumers alike.
Looking to the future, the report says new investors may see the cost of investment as more financially viable, given lower exchange rates, or an opportunity to develop products more suited to consumer wallets.“The key to success will be the overriding need to focus on consumers, competitiveness, and execution,” the report says
