Nairobi has been named as one of the leading regional destinations for companies establishing international headquarters.
Kenya’s capital appears on the Fortune 500 list alongside Dubai, Johannesburg, Casablanca, Lagos and Cairo, as one of the destinations with the highest attractiveness.
According to a new report released by Infomineo, a global business research company specialising in Africa and the Middle East, Nairobi, is the leading destination for the Fast Moving Consumer Goods (FMCG) companies.
Nairobi is the top choice for organisations looking to service East Africa and has seen a 12 per cent increase in Fortune 500 investment since 2015.
“While Dubai and Johannesburg are the most popular hubs overall, Casablanca and Nairobi are rapidly gaining traction and international awareness,” says the report.
Casablanca uptick is by 18 per cent, Dubai’s increase is eight per cent while that of Johannesburg is by 26 per cent.
The report focuses on multinationals looking at entering, or already present, in the Middle East and Africa region (MEA).
The Infomineo analysis includes the regional footprint of multinationals in the MEA region, the most commonly chosen cities, and the factors which influence the selection of a region, country and city like the geographical proximity and the talent pool present in the city.
Each element reveals the dynamic growth patterns within the region and a clear trend of Fortune 500 companies establishing presence.
“Among factors which impact on the organisation’s selection of a specific city include the local market potential, maturity of the industry, existing competitors, political stability and the quality of the employment market. Determining the attractiveness of a location along these clear lines assures the Fortune 500 companies of a stable and profitable investment and significantly mitigates risk,” said the report.
Overall, there was a 17 per cent increase in the number of Fortune 500 companies in MEA in 2016 compared to 2015, with Johannesburg being the leading destination for Africa.
In Africa, Egypt lags behind due to political instability.
Germany and France are leading in terms of coverage rate while China has the lowest presence in the region.
Casablanca has the highest growth rate overall, while Dubai has the highest count.
The same can be said for London, which has tripled its number of regional headquarters serving the region, acting as an MEA hub.