NAIROBI, Kenya – Kenya has been named Africa’s most competitive economy in the 2025 International Institute for Management Development (IMD) World Competitiveness Ranking, marking the country’s first-ever appearance in the influential global index.
The report places Kenya 56th worldwide, ahead of Botswana (59th), Ghana (61st), South Africa (64th), Nigeria (67th) and Namibia (68th). Only six African countries qualified for the ranking due to strict data requirements, making Kenya’s debut and top ranking regionally a significant milestone.
The IMD assessment evaluates how effectively nations deploy economic, institutional and human resources to sustain long-term productivity.
It uses 336 indicators across four pillars — economic performance, government efficiency, business efficiency and infrastructure — blending hard statistics with insights from senior executives.
What Powered Kenya’s Rise
IMD attributes Kenya’s strong performance to a mix of structural reforms, better macroeconomic management and improved institutional capacity.
“Over the past several years, the government has undertaken decisive measures across macroeconomic management, infrastructure development, and regulatory reform. These actions have produced tangible outcomes that IMD recognises as central to competitiveness,” the report states.
Key factors identified include:
• Macroeconomic stabilisation: Efforts to unify exchange rates, tighten fiscal controls and streamline public spending have reduced budget deficits and curbed inflation volatility. IMD notes these steps boosted confidence in government efficiency.
• Infrastructure investments: Major upgrades at the Mombasa port, new transport corridors and independent power projects helped ease bottlenecks that have long hampered business operations. While gaps remain, IMD says these improvements fed directly into infrastructure and business-efficiency scores.
• Regulatory and digital reforms: Modernised licensing systems, simplified tax procedures, and corporate oversight improvements reduced compliance burdens. Policies encouraging innovation and technology adoption also helped expand the formal sector.
Kenya’s relatively large domestic market, diversified economy and active role in regional integration further lifted its global standing.
Challenges Still Weighing on Outlook
The report cautions that several risks could slow future gains. Persistent power reliability issues, widening fiscal pressures, and dependence on external trade conditions remain major concerns.
Domestically, economic confidence has been affected by civil unrest, flooding linked to heavy rainfall, and political instability — including the impeachment of former deputy president Rigathi Gachagua.
Rising national debt and higher taxes on households and businesses were also cited as competitiveness constraints.
Global Leaders
Globally, Switzerland retained the top spot, followed by Singapore and Hong Kong.
Switzerland’s ranking was supported by exceptional government efficiency and robust infrastructure, despite minor declines in economic performance.
Singapore recorded the world’s strongest economic performance but slipped to second place due to drops in government and business efficiency.
Hong Kong climbed to third after improvements across all competitiveness pillars.
The 2025 edition evaluated 69 countries using 164 weighted indicators, combining data from national statistics and executive perception surveys.
