NAIROBI, Kenya, Sep 10 — From the boardrooms of the capital to the industrial parks of Kiambu and the port of Mombasa, counties are competing for a larger share of private investment.New data offers the clearest picture yet of where Kenya’s strongest investment ecosystems are — and where the biggest gaps remain.For decades, the answer to where one should invest in Kenya has seemed almost obvious.Nairobi is where multinational corporations establish regional headquarters, banks and financial institutions are concentrated, professional services firms operate and some of the country’s largest consumer markets are found.The County Competitiveness Index (CCI), developed by the State Department for Investment Promotion, measures the investment readiness of counties using a common set of indicators.Nairobi’s lead is not simply a reflection of its status as the national capital. The index shows that the county has built a powerful combination of economic activity, infrastructure and institutions.Yet the same data reveal an uncomfortable contradiction: the country’s economic powerhouse performs poorly when it comes to business efficiency.That raises a bigger question for investors: is Nairobi really the best place to do business, or is it simply the place where Kenya’s biggest business ecosystem happens to be?The CCI assesses counties across six broad areas: government and institutions, economic development, productive infrastructure, human capital, business efficiency, and climate and environment.Nairobi scored 100 per cent in government and institutions, 100 per cent in economic development and 100 per cent in productive infrastructure.An investor setting up in Nairobi enters an economy that already has the infrastructure and networks required to support sophisticated businesses.There are banks to finance businesses, lawyers and accountants to provide professional services, universities supplying skilled workers, transport networks connecting businesses to markets, technology companies providing digital services and a large consumer population.In other words, Nairobi’s biggest investment advantage may not be any single road, building or institution.A technology company benefits from being close to other technology companies. A financial institution benefits from proximity to regulators, clients and professional services. A manufacturer can draw on established supply chains.That creates an economic ecosystem that is difficult for another county to reproduce overnight.The CCI’s overall ranking reflects that advantage. After Nairobi’s 77 per cent came Kiambu at 73 per cent, followed by Nyeri and Murang’a at 61 per cent each.But the rankings should not be read as a simple list of where every investor should put money.The index is designed to benchmark competitiveness and guide policy and investment decisions across the 47 counties. An investor’s best location will ultimately depend on the sector, infrastructure needs, market access and operating costs.That compares with 100 per cent in Kiambu, 81 per cent in Murang’a, 83 per cent in Kirinyaga and 69 per cent in Machakos.Nairobi has Kenya’s largest and most sophisticated business ecosystem, but that does not necessarily mean individual businesses experience the county as the easiest place in which to operate.Land and commercial property are expensive. Traffic congestion raises the cost of moving people and goods. Competition for skilled labour is intense, while businesses navigate a crowded regulatory and administrative environment.Nairobi therefore has the country’s strongest investment ecosystem without necessarily having its most efficient business environment.That distinction could become increasingly important as investors pay greater attention to the cost and speed of doing business.Kiambu is only four percentage points behind Nairobi overall, with a score of 73 per cent.But its business-efficiency score tells a different story: 100 per cent compared with Nairobi’s 26 per cent.Kiambu also recorded 77 per cent in productive infrastructure and 89 per cent in climate and environment. Its major weakness was economic development, where it scored 37 per cent.The picture is of a county benefiting from its proximity to Nairobi while developing an investment proposition of its own.For businesses that need access to the capital’s large market but do not necessarily need to be located in central Nairobi, Kiambu could offer an attractive alternative.This is particularly relevant to investors in manufacturing, logistics, property, agribusiness and businesses serving the wider Nairobi metropolitan area.Yet the coastal county scored 93 per cent in productive infrastructure, making it one of the country’s strongest counties in this category.For businesses whose fortunes depend on trade and the movement of goods, that matters enormously.A logistics company, importer, exporter, hospitality investor or business targeting the blue economy may therefore find Mombasa more relevant than its overall CCI ranking suggests.
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