It’s mixed bag for Nairobi in latest investment ranking

While Nairobi is the preferred place to live and invest, it lags behind Mombasa and Machakos towns as the ideal investment hub in the country, according to a new report.

The report by a public think-tank, Institute of Economic Affairs (IEA), shows that Nairobi residents enjoy a relatively better standard of living than those in five other urban centres, including Nakuru, Machakos, Kisumu, Eldoret and Mombasa.

“Study findings reveal that Nairobi is the top-ranked urban area with a score of 63. This means that it is the place to be for residents and investors,” reads the Kenya Urban Areas Performance Index, 2017 report. The study sought to assess the performance of urban areas in service delivery, provision of enabling conditions for investment and governance.

Nairobi was ranked as the best performer in service delivery and governance, but under the cluster of governance, the city came second last when it comes to taxation matters. The capital city had the best performance in safety and disaster management. Eldoret, on the other hand, led in education, while Mombasa was the best performer in health.

“Mombasa had 96 medical personnel per 100,000 population in 2014; relatively high deliveries in a health facility (81.8 per cent). Fully immunised children in 2015 was at 86.6 per cent,” said John Mutua, Programmes Coordinator at IEA. The only area of concern in Mombasa, said Mutua, was the high reported cases of malaria, which stood at 7,189 per 100,000 people.

Nakuru town was the second-best performer overall after Nairobi, while Kisumu came last in the research that relied on data for 2015.

Nakuru performed well in the provision of water, with over 89 per cent of the household being connected to water supply against a national target of over 80 per cent by 2015. Consumption of water at Sh28 per 0-6m3 is the cheapest and with a reliability of 17 hours per day. Nakuru also performed well in taxation.

“Nakuru is the most tax-friendly of the six urban areas. It provides sufficient information on local taxes and levies like most of the other urban areas but has the lowest parking fees levied (Sh100) and single business permit charged for a general merchant shop (Sh4,000) against a mean of Sh5,367,” said Mutua.

Performed poorly

The authors of the study put the six urban centres’ performance at average in service delivery, the same as the provision of an enabling investment environment and ineffective and transparent asset and resource management.

All the urban centres performed poorly in public transport services. They were also poor in budgeting, betraying lack of transparent and prudent use of public resources.

IEA recommended county governments establish urban areas structures as provided for in the Urban Areas and Cities Act, 2011. Other recommendations included prioritising and scaling up of investment in the provision of networked infrastructure and services.