Kenya ranks poorly as retail destination

Rwanda is the most preferred destination for retail investment in Africa, a survey says.

The Africa Retail Development Index (ARDI) study however ranked Kenya the 20th most attractive retail market on the continent despite concerted efforts to make the country an investment hub.

“The country’s ranking was hampered by low scores in market size and time pressure, which measures how much of long-term opportunity a market represents and the low growth rates for both the GDP and sales per capita,” states the report.

Tanzania is the only other country in East Africa that made it to the top 10 positions.

ARDI surveyed 48 countries and ranked them on a 0-100 scale: the higher the ranking, the more economically viable it is to run retail business there.

Rwanda was top with a 70.3 per cent score, followed by Nigeria (64.2) and Namibia (60.2). It was praised for its focus on reforming business climate and attracting foreign investment.

“Specifically, infrastructure reforms have focused on developing an efficient transport and road network system, and turning Rwanda into a regional logistics hub,” says the report carried out by A.T. Kearney, a global management consulting firm.

The country’s less restrictive regulatory policies have made regional cross-border road transportation easier.

Other countries in the top 10 list are, Gabon, Ghana, South Africa, Botswana, Mozambique and Ethiopia. Kenya scored 44.7 while Uganda, its landlocked neighbour, was ranked 17 with 46.5 points.

In its Ease of Doing Business report by World Bank released this year, Kenya slipped seven positions to be ranked 122 out of 189 countries.

A Kenya Economic Update (KEU) report released in December recommended removal of roadblocks within the region to reduce the high cost of doing business in the East African Community.