Casablanca and Nairobi are the leading destinations for Fortune 500 companies in the Middle East Africa (MEA) region in 2016.
A new report released by Infomineo, a global business research company that specialises in Africa and the Middle East, said that the region had become increasingly important for the majority of global Fortune 500 companies.
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks 500 of the largest U.S. corporations by total revenue for their respective fiscal years.
The list includes public companies along with privately held companies for which revenues are publicly available.
The report focuses on multinationals looking at entering, or already present in the Middle East and Africa region.
“Nairobi the capital of Kenya is the leading destination for the Fast Moving Consumer Goods (FMCG) companies and tends to be the top choice for organisations looking to service Eastern Africa.
“Casablanca, the largest city in Morocco has the highest growth rate overall with both Casablanca and Nairobi rapidly gaining traction and international awareness,” the report said.
The report added that 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.
Dubai and Johannesburg are the most popular hubs overall with Casablanca having the highest growth rate overall, while Dubai has the highest count.
According to the report, leading regional destinations on the Fortune 500 list include Dubai, Johannesburg, Casablanca, Nairobi, Lagos, and Cairo.
“Egypt remains behind the leaders due to political instability, however, it has seen a 250 per cent increase in Fortune 500 investment since 2015.
“In 2016, 196 Fortune companies had established a dedicated regional headquarters in the MEA region.
“In the Middle-East, Dubai is the most popular choice with 138 companies establishing a dedicated entity in the city,” it says.
The report showed that Germany and France are leading in terms of coverage rate by Fortune 500, while Cairo, Paris, Algiers and Cape Town are at the lower end of the spectrum.
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.
Infomineo noted that there were numerous factors which impact on the organisation’s selection of a specific city.
It said they include the local market potential, maturity of the industry, existing competitors, political stability and the quality of the employment market, among others.
“Determining the attractiveness of a location along these clear lines assures the companies of a stable and profitable investment and significantly mitigates risk,” it said.