How much did Zakayo1 pay Washington Post to write this?

Energy

Kenya Is Poised to Become the ‘Singapore of Africa’

Analysis by Tyler Cowen | Bloomberg

June 14, 2023 at 12:01 a.m. EDT

Comment

Gift Article

Share

Of all the countries in sub-Saharan Africa to be optimistic about, the most promising is Kenya. Economic and political forces are converging to put the continent’s seventh-largest nation in a relatively favorable position.

Africa is the fastest-growing continent and is expected to account for one-quarter of the world’s population by 2050. That means more multinational corporations see a need to have a direct presence somewhere in sub-Saharan Africa. Many such companies already realize they need a presence in Asia, with Singapore proving increasingly popular as the hub, especially as Hong Kong has been absorbed into communist China.

In contrast, a locale with a reasonable level of English fluency and an attractive year-round climate will get a lot of attention — and that nicely describes Kenya. Kenya also had a growth rate of about 5.5% last year, despite negative shocks to the prices of imported food and energy. Since 2004, growth rates have been in the range of 4% to 5%.

Kenya also has some geographic advantages. It has an extensive coastline on the Indian Ocean, and research suggests that landlocked countries have worse economic performance. Countries with a coast also find it easier to stay in touch with the rest of the world, and Kenya has relatively easy access to China and India, large markets and sources of capital. In the current geopolitical climate, East Africa is attracting more interest from more sources than is most of West Africa.

In terms of scale, Kenya’s population of about 57 million cannot compete with Nigeria’s 222 million. But East Africa, with almost 500 million people, has a larger population than West Africa.

Advertisement

Tanzania, just to the south of Kenya, has a larger population than Kenya. But Kenya is much wealthier and has a superior infrastructure — and that includes the digital infrastructure, as internet access in Kenya is ranked among the most reliable in Africa.

To the extent the world focuses more on green energy, Kenya also has a positive story to tell. The country already has more than 80% renewable energy, and the climate is ideal for an ongoing expansion of solar power. Foreign companies looking to boost their green reputations might find Kenya an attractive destination. That said, expensive energy — due in part to taxes and poor regulation — has been a growth drawback.

There are other elements of the case against Kenya. It has had difficulty attracting foreign direct investment, even compared to other African nations. Corruption, regulatory barriers to entry and political instability remain concerns and cannot be dismissed lightly.

Advertisement

That said, Kenyan governance has been stable as of late, and the 2022 election went relatively well. The government is proving more adept at preventing major terror attacks, often coming from groups in Somalia. As Kenya becomes wealthier, there is a good chance those problems will diminish further.

It is also possible that sub-Saharan Africa will not develop a single dominant corporate hub at all. The United Arab Emirates will continue to evolve into Africa’s financial center, Lagos will have the most startup activity, South Africa will remain the dominant business center in the South — and London, Beijing and India will play more important roles in Africa’s economic future.

Still, African distances are great and its population is growing, two simple facts that argue for Kenyan growth no matter what. The idea of putting a manufacturing plant or service center near Nairobi or Mombasa makes sense even if it serves only East Africa. Kenya’s immediate neighbors to the west and south, Tanzania and Uganda, also have an English-language background, and Tanzania may become one of the world’s most populous countries.

Advertisement

Not only is Africa rising, but East Africa is too. And Kenya is likely to be the easiest and most predictable way to bet on it.

Elsewhere in Bloomberg Opinion:

• Kenya’s Economy Can’t Afford a Political Crisis: Bobby Ghosh

• What Africa Needs Now Is Its Own Singapore: Noah Smith

• The West Is Ceding Africa’s Promise to China’s Exploitation: Max Hastings

For more Bloomberg Opinion, subscribe to our newsletter.

(1) South Africa also has the disadvantage of being geographically distant not only from the rest of the world but also from most of Africa’s population.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. He is coauthor of “Talent: How to Identify Energizers, Creatives, and Winners Around the World.”

More stories like this are available on bloomberg.com/opinion

ad revenue ziko down pale murica, conveniently written jana… na iko opinion section :rofl:

Money talks

All those achievements the newspaper is talking about on superior infrastructure, internet, power, green energy were made by Uhuru. Uhuru was a visionary leader.

2 Likes

How comes your replies are highlighted while others inakam design different? Tell the @administrator to get rid of the reply button entirely and replace it with the quote button ndo all replies ziwe uniform

2 Likes

I normally highlight the text, then click on a pop up option showing “quote”
You can try it too Mdau

Ara.

Jess. @Electronics4u is right.

2 Likes

Ndio hiyo kiongos

Thats a lot of work. Ndo nasema delegate that quote function to the reply button. @kenyatalk and @kubernetes mnaona ii maneno?

1 Like

For the sake of aite uniformity ndo kila mtu atumie iyo design

Ala. It’s so easy Mdau. Furthermore its the best way to respond to a specific issue rather than quoting the entire post.

It works.
Ok, that makes sense.

1 Like

ghasia

Receive Christ

Alikuwa na hopes za iyo housing levy, nyumba zijae kama singapore

Ati the next Singapore. Big difference in culture. And it’s that which holds us back.
Whenever you hear the next Micheal Jordan, the next Messi, the next Ronaldo, the next Usain Bolt, it typically points to a failure. Because those people were not the next somebody, but simply themselves. The sky was the limit for them .
@Durango

3 Likes