Nairobi ranked low on inclusive growth in Africa

An aerial view of the Nairobi central business district. Photo/FILE  

By George Omondi, omondi@ke.nationmedia.com

Posted  Tuesday, June 10  2014 at  20:59

In Summary

• MasterCard’s African Cities Growth Index (ACGI) 2014 ranks Nairobi at position 19 out of the 49 large cities surveyed.
• Nairobi has an overall score of 37 points, falling nine places behind Dar es Salaam but ahead of other East African capitals of Kampala, Kigali and Bujumbura.
• Accra, for the second year running, topped MasterCard ranking.

Nairobi has been ranked among African cities with the lowest ability to support profitable investment and to provide better material life for its residents.

MasterCard’s African Cities Growth Index (ACGI) 2014 released Monday ranks Nairobi at position 19 out of the 49 large cities surveyed.

It says the capital has low potential for growth in the next five years based on capital formation, political stability, GDP per capita, governance and household consumption.

The ranking comes amid rising terrorist attacks and heightened political activity.

Specifically, the cities have been ranked based on political governance, infrastructure for water, sanitation and electricity, foreign direct investment, mobile phone subscription and air travel connectivity. The index also reviews household expenditure in health and education.

READ: Rising insecurity takes shine off EA’s biggest economy

Nairobi has an overall score of 37 points, falling nine places behind Dar es Salaam but ahead of other East African capitals of Kampala, Kigali and Bujumbura. It also beats its other peers like Durban, Cape Town, Cairo and Addis Ababa.

The ranking, however, means Nairobi’s expansion model consigns a huge chunk of its more than three million population to poverty compared to cities ranked above it, which are mostly in West Africa.

“We believe that inclusive urbanisation is a prerequisite for inclusive growth, and so the ACGI is a lens through which African cities can be assessed as future investment destinations,” Dr Yuwa Hedrick-Wong, co-author and chief economist at the MasterCard Centre for Inclusive Growth, said in a statement Monday.

Mombasa, which has borne the brunt of insecurity in the last three years, is ranked 40th among the continent’s large cities after scoring 29 points, beating only Bujumbura in East Africa.

For the second year running Accra, the capital city of Ghana, was ranked the only African city with high inclusive growth potential, scoring 50.9 points.

Unlike other African cities, Accra with a population about 2.3 million, has legislation, policy and resources that promote and sustain economic inclusivity among its citizens, the ACGI states.

“Other than growth factors beyond their control, the growth potential of cities is determined to a large extent by their willingness and ability to embrace growth accelerating factors”, the ACGI adds.

The report notes that Ghana’s 2012 presidential election tested the country’s political stability.

Apart from Accra, Kumasi (Ghana), Freetown (Sierra Leone), Lagos (Nigeria), Casablanca (Morocco) and Tripoli (Libya) are consistently ranked top.
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