New Opportunities – Kenya Among Business ‘Rising Stars’
A meeting in Nairobi recently organised by GIBS and African Management Services Company (AMSCO) sought to explore developments across Africa and discover challenges and opportunities that businesses face. EDGAR NYANDONG reports.
Kenya has been listed among seven countries identified as ‘rising stars’ in business growth by a prestigious business science institution.
The Gordon Institute of Business Science (GIBS) in South Africa has listed Kenya together with Colombia, India, Indonesia, Malaysia, Mexico and Poland as countries with potential for global business growth in 2015. The GIBS Dynamic Market Index 2014 (DMI) employs indicators such as Foreign Direct Investment (FDI), time to start a business, percentage GDP growth, and rule of law in business policies.
A business leaders meeting in Nairobi titled Executing for Growth in Africa – Trends, Opportunity and Strategies recently organised by GIBS and African Management Services Company (AMSCO) to discuss the index, also sought to explore developments across Africa and discover challenges and opportunities that businesses face today and provide insights on appropriate strategies.
“With the growing interest in African economies and as East Africa, especially as a sub-region leads economic growth, GIBS through the Centre for Dynamic Markets is establishing premier events for key stakeholders in an effort to better understand the inner workings of the exciting dynamic markets across the continent,” said Dr Lyal White, the Director of Operations at AMSCO.
It has also emerged that second-tier economies in developing regions are improving their competitiveness, therefore forcing a decline in market dynamism especially with the BRICS countries seen to be underperforming.
BRICS include Brazil, Russia, India, China and South Africa and were originally pegged as the developing and newly industrialised nations.
With Kenya now appreciated as among the emerging markets, the DMI has sought to establish a measure that goes beyond mere GDP growth rates and demographics to establish true performance and potential of institutions and countries. The measure has been used across 133 countries globally to assess and compare structural changes that shape innovation, socio-political systems and sustainable economic development.
The index also supports the ‘Africa Rising’ story with the continent having seen growth and increased diversity through structural changes in recent times. But as Prof Nick Binedell, Dean of GIBS explains, other countries have been making the mistake of looking at Africa as one without considering the differences of individual countries.
“I think very often one of the dangers for outsiders is looking at Africa as a continent. There is more economic, cultural and logistical diversity in Africa by far than there is in Europe. South Africa (for example) is incredibly diverse and as we work in the continent and other countries, we realize just how incredibly diverse it is.”
GIBS believes that 2015 promises to be a year where many markets with structural deficiencies, weaker institutions and poor competitive performance will be exposed, a process that began in 2014. There is belief that the sharp fall in oil prices will spur growth, but might not be enough to offset other negative factors as indicated by the World Economic Outlook update of January 2015. The DMI also shows that emerging markets and developing economies will see an upward growth by 4.7% in 2016 despite experiencing a projected slow growth in five years in 2015.
Prof Binedell believes that Kenya as a leader in Africa’s ICT market has a lot to offer the continent.
“You can teach South Africa a great deal about ICT. There is no session in South Africa where we do not talk about M-pesa, that we don’t talk about your low-cost broadband compared to ours, that we don’t talk about the ability of Kenyan entrepreneurs to use broadband. Even though it is not evenly distributed, you have a huge competitive edge over us.”
However, the DMI has shown hope for Africa in 2015 with Sub-Saharan Africa’s growth of 15 years still expected to outstrip global growth by between an average of two and three per cent. According to GIBS, 2015 is ‘a crucial year for Africa to entrench its own narrative’. The expected negative or positive shapers and drivers of this agenda will be elections, commodity prices, terrorism and insurgencies, the Ebola virus and end of millennium development goals (MDGs) and adoption of sustainable development goals (SDGs).