Nairobi — Nairobi has been ranked the best performing urban area at 63 per cent in the latest Institute of Economic Affairs index released on Wednesday.

Nakuru comes second at 56 per cent and Eldoret third at 55.7 per cent in a study that was carried out in the six major urban areas of Nairobi, Mombasa, Kisumu, Machakos, Nakuru and Eldoret.

While releasing the report, the CEO of the Institute of Economic Affairs Kwame Owino said Nairobi emerged to be the most preferred urban area for residents and investors.

"The findings of the report show that Nairobi provides efficient and quality services to its residents, encourages competition and choice of service providers hence making it the most attractive for residents and investments," said Owino.

Despite Nairobi being the best performing, it emerged that the unemployment rate is still high as well as the number of people living in informal settlements.

The survey focused on public service delivery, social care, enabling conditions for investment and governance.

Machakos County was reported to have low poverty levels which was attributed to the several programmes and welfare kitty that has been put in place by the County Government.

Unemployment rate is said to be low as well.

The report noted that in totality the performance of the six urban areas in regard to service delivery and conditions for residents was average.

The report however made recommendations that the six urban areas need to make some improvements on the principle of good governance and also provide favourable conditions for investors.

Government reports and those from UN Habitat show that Kenya for the last four decades witnessed rapid urbanization, with about 50 per cent of the population to be urbanized by the year 2030 up from 34 per cent in 2011.

According to UN Habitat, urbanisation is acknowledged as a tool for development said to globally contribute about 65 per cent of GDP.