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Nairobi has a huge amount of appeal for international businesses thanks to its history as a trading centre, its location and its progressive, entrepreneurial approach.
“Perhaps the key to Nairobi’s past and current success as a regional hub is the geographical outreach it is able to provide,” says Kunal Ajmera, chief operating officer of Grant Thornton Kenya. “We connect high volumes of international trade for neighbouring landlocked countries such as Uganda, Rwanda, Burundi and even the Congo because of the access we have to the Kenyan port of Mombasa.
“Since the late 1980s, Nairobi has also become an aviation hub for these economies, as well as much of sub-Saharan Africa. We have easy access to Europe and Asia – indeed, India and China are two of our largest trading partners. And there is a lot of maritime trading activity between Mombasa and Dubai, for example.”
More than a good location
But its geographical position as a natural midway point across the continent and a Gateway to East Africa is not the only reason for businesses to consider the city as an African base, Ajmera adds.
“Nairobi and Kenya in general have a fairly open economy, certainly in comparison with many of our neighbours. There are very few government restrictions on setting up a new business in any sector.” He points out that the World Bank’s ease of doing business index has shown Kenya moving steadily upwards in recent years.
“Also, Kenya can boast the most stable currencies in Africa. At a time when the likes of South Africa, Nigeria, Tanzania and many of the larger economies have suffered devaluations against the dollar, the Kenyan shilling has remained fairly stable in the past three or four years.”
As a result, Ajmera says, a number of well-known multinationals now have African bases in Nairobi. These include Coca-Cola, Mastercard, IBM and Microsoft. “We have also seen a huge influx of Chinese investment across Africa, and Chinese companies have been doing much more business in Nairobi. These are mainly in large-scale infrastructure projects such as the new rail line connecting the city with the port at Mombasa.”
Growth in renewables and healthcare
The renewable energy sector is one of the fastest-growing parts of the Kenyan economy, with high levels of investment flowing through Nairobi. Ajmera says: “Cleantech is big news right now. We have abundant sunshine here, and there is a lot of hydropower and geothermal power potential. And one of our clients, Lake Turkana Wind Power, is Africa’s largest wind farm.”
Recent years have seen heightened interest in the healthcare sector, too. “There are a number of private equity firms and multinationals that are buying up existing hospitals or setting up greenfield sites,” says Ajmera. “Universal healthcare is a priority development goal for the government. A lot of people travel to Nairobi from all over east Africa for due to availability of world class healthcare facilities.”
Foreign investors will also benefit from the skilled local workforce, Ajmera says. “In many of our neighbouring countries, it can be very difficult to find senior talent at a local level. Part of the reason Kenya performs better is due to the country’s historical links with the UK and English speaking population, availability of international schools, and hardworking ethos of Kenyans. A lot of our workforce is well travelled, in the US or Europe in particular, so they come back here with a great deal of experience.”
A tech-savvy population and good digital connectivity means Nairobi and the wider Kenyan market is often used as a testbed for tech firms looking to enter Africa.
For businesses seeking to relocate to Nairobi, Ajmera adds, the Kenya Investment Authority is an excellent support organisation that can assist with local planning, immigration and company formation.
Gateway to east Africa and the rest of the continent
“Nairobi is a dynamic and entrepreneurial city,” Ajmera says. “There is a large expat community here. That makes the city very cosmopolitan and vibrant. Combined with the local skills and the openness of the Kenyan economy, this is the ideal place to gain a foothold in Africa.”
Nairobi’s cosmopolitan and well-connected business environment makes it the ideal gateway for companies looking to expand into both east and sub-Saharan Africa. To find out more about establishing your business here, contact Kunal Ajmera.
Nairobi quick facts
- Location: Kenya, east Africa
- Time zone: East African Time, GMT + 03:00
- Population: 4.3 million in metro area
- GDP: US$16.8bn[1]
- Industrial strengths: Manufacturing, logistics, tourism, agriculture
- Growth sectors: Automotive, technology, renewable energy, healthcare, education
- Regional access: Kampala, Uganda, is 503 kilometres (km) away and 1 hour 15 minutes by air. Dar es Salaam, Tanzania, is 673 km away and 1 hour 30 minutes by air. Johannesburg, South Africa, is 2,927 km away and 4 hours 10 minutes by air. Cairo, Egypt, is 3,534 km away and 4 hours 45 minutes by air; Dubai, UAE, is 3,561 km away and 5 hours by air; Mumbai, India, is 45,40 km away and 6 hours 15 minutes by air.
[1] GlobalData.com