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Kenya and Cote d’Ivoire have been ranked as the rising stars of global trade years by Standard Chartered’s The Trade20 index.
Kenya came in second after Cote d’Ivoire as the key markets that have demonstrated particularly impressive progress in trade growth potential. The report highlighted that the two countries significantly improved their trade readiness, demonstrating that investments in infrastructure and business environment improvements are paying off.
“Although these are smaller economies that cannot be expected to match the overall trading potential of larger trading powers, our index shows that they are progressing quickly, albeit from a low starting point.
“Kenya is consolidating its position as the trading hub of East Africa, while Côte d’Ivoire is cementing its position as a West African trading hub.” the report noted.
The Kenyatta-led government was recognized for being successful in attracting external investment for substantial infrastructure development, including renewable energy projects.
Interestingly, the report noted that Kenya’s ability to refinance debt obligations through commercial borrowing suggests investors are not yet overly concerned about rising debt levels or rising share of budget revenue allocated to debt servicing.
For Kenya, improvements in ease of doing business ranking have been driven by governmental reforms, including in the areas of starting a business, access to electricity, registering property and protecting minority investors.
Kenya’s trade readiness score is particularly high, due to infrastructure and ease of doing business improvements that far surpass most other African nations in our index.
However, the report added that Kenya’s market is faced with challenges of poverty, inequality, climate change, and rising debt levels and Kenya’s loan rate cap which has weakened private-sector growth.
For Côte d’Ivoire, the report noted that its top position was propelled by the improved potential in terms of trade readiness and economic dynamism.
“The largest economy in Francophone Sub-Saharan Africa, Côte d’Ivoire has emerged from instability and political crisis to achieve impressive GDP growth for the last seven years,” the report noted.
Saif Malik, Regional Co-Head, Global Banking, AME, Standard Chartered noted that the continent has a great potential to soar higher as a big player in the global arena.
This comes at a time when the African Continental Free Trade Area is being launched with the hope of steering growth opportunities for trade and investment within Africa.
“Additionally, the growing young, digitally-savvy population and an increasing female workforce will aid in the continent’s economic transformation,” the report added.
Generally, the report noted that African markets(except Ghana) showed limited improvement in terms of inward FDI flows, suggesting that most markets need to do more to encourage and reassure overseas investors. Building strong institutions and improving the ease of doing business is critical in this respect.
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