Kenya is second behind Ghana in the cheapest countries to do business in according to US News Best Country Rankings.
Kenya was featured on the list after it posted the second-lowest manufacturing costs across the continent
The 2023 ranking report, which was carried out by the renowned website, US News and World Report, also placed Kenya 13th globally in a list that was dominated by Asian countries.
The US firm revealed that Kenya posted an attractive market for investment due to its Ksh15 trillion GDP which was higher than Ghana’s GDP of Ksh10 trillion. The country also showed a higher per capita income.
Low manufacturing cost is informed by favourable trade laws, supply of cheap raw materials and availability of labour.
Cerexio, a data science giant, revealed that the low manufacturing costs across the country could guide Kenya and its citizens toward the path of economic posterity.
“Manufacturing is one of the most important sectors, especially in a developing country.
“It is regarded as the backbone of a country’s social and economic development and significantly contributes towards its economic growth,” Cerexio described the importance of low manufacturing costs.
Being ranked higher for low manufacturing costs means that developed nations can set up their factories in Kenya enabling the country to collect revenue as well as create employment and enjoy improved infrastructure.
“Outsourcing manufacturing to another country is a common practice when a company requires a good or item to be produced at a competitive market price,” the report explained how Kenya could benefit from the ranking.
The country through President William Ruto’s government has already started tapping into the benefits of having low manufacturing costs.
On February 14, 2023, Ruto announced that each county was set to receive Ksh100 million to set up the development of industrial parks and aggregation centres.
With the setting up of industrial parks, foreign investors are welcome to set up their factories in Kenya.
Trade Cabinet Secretary (CS) Moses Kuria on April 6, 2023, announced that foreign investors had agreed to set up multi-billion industries at the Dongo Kundu Special Economic Zone (SEZ) in Mombasa which is part of Ruto’s industrialisation plan.
The top ten countries with low manufacturing costs are; India, China, Vietnam, Thailand, Philippines, Bangladesh, Indonesia, Cambodia, Malaysia and Sri Lanka.