Kenya beats regional peers in financial integration

By James Anyanzwa

Kenya outperformed its East African peers to rank top in financial markets development and innovations.

 But it comes second after South Africa in the entire African continent. According to the World Bank’s Africa Competitiveness Report 2013, Kenya, Rwanda and Uganda boast of a deeper financial market than their peers.

However South Africa and Mauritius are the continent’s top performers in terms of competitiveness, ranked first and second respectively.Kenya has made huge strides in financial inclusion, where firms in telecommunications and financial services have churned out innovative products aimed at reaching out to the unbanked. These include mobile money services where Kenya is a reference point globally and agency banking that has replaced brick and mortar banking branches

According to the report Africa will need to translate impressive economic growth into rapidly improving living standards for all as, as has happened in other regions with a similar growth performance.

“This is imperative if the continent is to take advantage of its historic opportunity to end poverty and embrace shared prosperity,” says report. Africa has enjoyed high sustained economic growth since the early 2000s. It registered consistent growth rates well above five per cent on average but these high economic growth rates have not yet translated into the rapidly improving living standards seen in other regions with a similar growth performance.

 The report notes that while over half of Africa’s improved growth performance can be attributed to improvements in infrastructure, a total of $93 billion annually until 2020 is still needed for infrastructure development.  And increased urbanisation, growing consumer markets, and broader ties to the global economy are putting additional pressure on the need for African economies to invest more in infrastructure.

 According to the report, developing adequate and efficient infrastructure will assist African economies to increase productivity, especially in manufacturing and service delivery.  This in turn will create more jobs and increase attractive investment opportunities as well as encourage the efficient use of natural resources.