Category: Business Daily

Imports recorded the fastest growth of all sources of electricity supplied to Kenya Power in the year ended June 2025, underscoring the pivotal role of Ethiopia and Uganda in averting blackouts in Kenya.

An analysis of data from the utility firm shows that imports grew by 27.9 percent to 1,534 Gigawatt-hours (GWh) in the review period from 1,199GWh a year earlier, while supply from the dirty thermal plants rose 18.2 percent to 1,335GWh from 1,129GWh.

Kenya has in recent years deepened reliance on Ethiopia and Uganda to shore up supplies and avoid widespread power rationing amid near stagnant generation from geothermal and hydro sources.

Imports recorded the fastest growth of all sources of electricity supplied to Kenya Power in the year ended June 2025, underscoring the pivotal role of Ethiopia and Uganda in averting blackouts in Kenya.

An analysis of data from the utility firm shows that imports grew by 27.9 percent to 1,534 Gigawatt-hours (GWh) in the review period from 1,199GWh a year earlier, while supply from the dirty thermal plants rose 18.2 percent to 1,335GWh from 1,129GWh.

Kenya has in recent years deepened reliance on Ethiopia and Uganda to shore up supplies and avoid widespread power rationing amid near stagnant generation from geothermal and hydro sources.

‘It (importation of power) is a major concern and this is not premised on the thinking that they will be unable to supply us. Rather, my concern is that this is hydropower from these countries and in the event that there is a serious drought it may put them in a position where they are unable to meet this obligation,’ Joseph Siror, the Managing Director of Kenya told this publication recently.

Supply from geothermal sources grew by 0.19 percent to 5,718GWh in the review period from 5,707GWh a year earlier while hydro grew 3.1 percent to 3,504GWh from 3,396GWh.

Hydropower and geothermal are the mainstay of the national grid but their near stagnant growth in contribution has forced Kenya Power to overly turn to imports.

Wind power plants contributed 1,908GWh in the period under review which was a rise of seven percent from 1,780GWh a year earlier while supply from solar remained unchanged at 473GWh.

Kenya Power signed a 25-year electricity import deal with Ethiopia in 2022. Ethiopia Electricity Power Company (EEP) supplied the Nairobi Securities Exchange-listed firm with the most foreign electricity at 1,268 GWh in the review period.

Kenya Power also has power exchange deals with Uganda and Tanzania, with the net importer paying the other.

Kenya has been grappling with a surge in demand especially at peak hours, which has in turn triggered power rationing in some parts, mostly Western Kenya.

President William Ruto recently said that the utility rationed some of the parts of the country from as early as 1700hours. Traditionally, peak demand in Kenya happens between 1900-2100hrs and this is the time when rationing has been used in recent years.

Increased supply from Ethiopia and Uganda has been critical in averting both widespread power rationing and a spike in power prices.

This is because imports are the second cheapest source with a kilowatt-hour of power from Ethiopia priced at an average of Sh8.39 behind local hydropower at Sh3.83 per unit.

Thermal power plants supply the most expensive power and increased contribution directly leads to costly electricity largely due to the fuel cost charge.

‘Thermal utilisation remained within target, with the supply mix anchored by geothermal and complemented by hydro, wind, imports and solar,’ Kenya Power says in its latest annual report.

Kenya risks missing its fiscal consolidation targets in the medium term due to its inability to cut its fixed recurrent budget costs, undermining the country’s ability to invest in job-creating development projects amid depressed revenue growth.

In its recently released Kenya economic update report, the World Bank said widening fiscal deficits, persistent revenue underperformance, rising pending bills, heavy reliance on local borrowing, and growing public debt have all contributed to weakening Kenya’s fiscal position, stalling the positive momentum seen in the initial post-pandemic period when the country cut its budget overrun.

In the year to June 2025, the Treasury saw its fiscal deficit as a percentage of GDP hit 5.9 percent, compared to the target of 4.3 percent that was set in the last of its supplementary budgets for the period.

‘These repeated fiscal slippages continue to undermine the credibility of Kenya’s fiscal policy; over the last two years, the fiscal deficit has, on average, exceeded projections by 1.3 percent of GDP.’ The World Bank defines rigid expenditures in the budget as ‘institutional, legal, contractual, or other constraints that limit the ability of governments to change the size and composition of the public budget, at least in the short term.’

The share of these kinds of expenditure, which include public sector wages and debt service costs, stands at 56.4 percent of total expenditure, and the equivalent of 75.8 percent of revenue, inclusive of grants, as per World Bank estimates.

Given the difficulties in cutting the rigid expenditure, the government has instead been opting to cut its development spending.

In the 2024/2025 fiscal year, development spending declined to 3.4 percent of GDP from 3.5 percent a year earlier (despite a larger total budget), and was well below the 7.9 percent share seen a decade ago.

Development projects have traditionally been the main casualties of budget cuts whenever successive governments seek to realign expenditure through supplementary budgets to cater for programmes that were not approved in original budgets, amid the perennial shortfalls in revenue estimates.

Treasury officials have, at the same time, argued that there is usually little room to cut the recurrent votes on items such as wages and maintenance costs for public offices.

At the same time, lower than projected revenue performance has tended to force the government to make upward revisions in its annual borrowing targets, effectively adding to the cost of servicing debt going forward.

In the 2024/2025 fiscal year, the Budget Statement had set the initial deficit and borrowing target at Sh597 billion, which was to be financed through domestic borrowing of Sh263.2 billion, and external funding worth Sh333.8 billion.

Three revisions through supplementary budgets followed, which saw the deficit for the year eventually settle at Sh1.034 trillion, financed through domestic borrowing of Sh854.5 billion and external borrowing of Sh179.7 billion.

November is synonymous with deep discounts, but the savings aren’t just limited to electronics, appliances and groceries. For savvy investors, the ‘Black November’ season offers an opportunity to hunt for bargain investments.

In this episode, Wesley Manambo, a Senior Research Associate at Standard Investment Bank (SIB), walks us through the essential process of identifying an undervalued asset (a bargain) from a simply cheap one (a trap). Discover how to effectively bargain hunt in your investment portfolio.

Driven by a surge in gold exports to Dubai, the United Arab Emirates was Kenya’s fastest-growing goods market in the first nine months of the year, the latest official trade numbers show.

Exports to the Gulf nation jumped by more than a quarter (26.3 per cent) to Sh42.76 billion between January-September, up from Sh33.86 billion in the same period last year.

The growth in value of purchases from the UAE, which made it a standout performer among Kenya’s major markets, coincided with a spike in shipments of gold to the Middle-East giant economy.

Kenya exported 1,217.79 kilogrammes of gold in the three months, to June, worth Sh8.19 billion, according to the data collated by the Kenya National Bureau of Statistics (KNBS).

The earnings from gold sales, captured as domestic exports, were markedly higher than Kenya’s average annual gold earnings of Sh1.81 billion in the decade to 2023, and above the full-year 2023 export value of Sh4.70 billion.

Harry Kimtai, the Principal Secretary in the State Department for Mining, attributed the boom to both global pricing and domestic reforms.

‘The jump in gold exports may be attributed to ongoing reforms in the mining sector in Kenya, coupled with the global price rally that has seen gold attain the highest price in history,’ he said in October, referring to the more than a 50 per cent surge in global gold prices in the review period and the ongoing formalisation of the artisanal mining sub-sector through registration of their co-operatives.

‘The price rally has led most investors to liquidate their gold holdings.’

Uganda remained Kenya’s largest regional and global export destination in the review period, with purchases climbing 7.38 percent to Sh97.40 billion this year from Sh90.71 billion in 2024.

The United States followed with a modest 6.31 per cent rise, to Sh57.52 billion from Sh54.10 billion, while the Netherlands also posted a 5.09 per cent growth, from Sh49.78 billion to Sh52.31 billion.

However, Pakistan-a top buyer of Kenyan tea-saw its import bill drop 8.57 per cent, to Sh54.56 billion from Sh59.67 billion, while the United Kingdom purchases slipped 3.29 percent to Sh44.10 billion.

Overall domestic exports for January-September reached Sh726.27 billion, extending a multi-year growth streak, albeit at the slowest rate in at least half a decade from Sh712.71 billion in a similar period in 2024.

But export earnings from tea, the top export, fell from Sh147.09 billion to Sh134.94 billion, reflecting headwinds in key markets. The Kenya Tea Development Agency (KTDA) linked the decline to geopolitical turmoil.

‘Geopolitical challenges and instability in key markets such as Pakistan, Russia, Sudan, and Iran also affected demand, though the situation has now slightly stabilised,’ said the KTDA in its update in October for the year to June 2025.

Other exports fared better, with inflows from cut flowers rising 12.52 per cent, to Sh60.83 billion, while coffee exports rose fastest at 38.59 per cent to Sh43.36 billion from Sh31.29 billion.

The enactment of the Insurance Professionals Act, 2025 marks a defining moment for Kenya’s insurance industry, juxtaposing an evolving marketplace with a renewed commitment to competence, ethics, and continuous development.

At its core, the Act establishes two key institutions: the Insurance Institute of Kenya (IIK) and the Insurance Professionals Examinations Board (IPEB). Together, these bodies are mandated to oversee the examination, registration, and regulation of insurance professionals across the country.

This structure is a bold statement of intent, one that ensures insurance practice in Kenya is steered by merit, regulated by integrity, and measured by global standards. To understand its impact, it is essential to examine what the Act introduces and how it seeks to lift professional standards across the sector.

For years, the insurance industry has grappled with misconceptions and mistrust, often rooted in inconsistent practices and limited regulatory oversight of individual practitioners.

The new Act directly addresses this by introducing practicing certificates, defined qualifications, and a transparent code of conduct.

These measures go beyond administrative adjustments; they represent a fundamental shift aimed at rebuilding public confidence.

When the consumers are served by certified professionals bound by a uniform code of ethics, they are more likely to trust the process, honour their policies, and view insurance as a reliable partner in financial security.

A key pillar of the Act is continuous professional development, a requirement that ensures practitioners remain informed, agile, and competent in a rapidly evolving market. Insurance today operates in an environment shaped by digital disruption, emerging risks, and new customer expectations.

By institutionalising ongoing learning, the Act guarantees that every practitioner – from insurance marketers, brokers, and agents to underwriters, claims managers, loss adjusters, risk managers, and assessors – remains current with modern practices, regulatory updates, and technological innovations.

This commitment to lifelong learning will not only elevate service quality but also create a workforce capable of competing at regional and global levels.

Beyond professional development, the Act serves as a catalyst for broader sectoral growth. Clear standards and stronger accountability frameworks will attract both local and international investors, positioning Kenya as a leading insurance hub in the region.

Moreover, as professionalism deepens, we can anticipate more robust partnerships between insurers, healthcare providers, and technology firms. This will enable the creation of innovative products and efficient distribution models tailored to the dynamic needs of consumers.

While the Act sets a solid foundation for transformation, the professionalisation journey will not be without its challenges. Compliance with new regulatory requirements, adapting to digital transformation, and addressing workforce gaps, particularly in specialised fields, will demand strategic alignment and investment in the institutions.

However, these challenges present an opportunity for growth. Forward-thinking organisations will view compliance not as a burden but as a chance to refine their systems, strengthen governance, and embrace innovation. In the long run, those who invest in professional development and digital readiness will emerge as leaders in this new landscape.

The Insurance Professionals Act, 2025, is a call to action for every stakeholder. Regulators, insurers, brokers, and training institutions must work in concert to ensure the Act’s provisions translate into tangible outcomes: greater trust, better service, and sustained industry growth.

Directline Assurance Company has been penalised Sh85 million for abusing buyer power by delaying payments to two garages it had contracted to repair damaged vehicles.

The Competition Authority of Kenya (CAK) imposed the fine on the insurer after finding it guilty of two violations of the Competition Act, each attracting a penalty of Sh42.5 million.

According to the ruling delivered by the competition watchdog on Wednesday, the insurer abused its buyer power and exercised a skewed bargaining position that favoured its interests over the welfare of its suppliers.

The decision followed a complaint filed by two garages contracted to repair damaged vehicles for Directline’s customers. The garages said the insurer had refused to pay their pending bills despite repeated attempts to have the amounts settled for services already delivered.

CAK Director-General David Kemei said the penalisation, which matches the gravity of the violations established, should remind ‘businesses that abuse their influential positions to disenfranchise their suppliers.’

‘The penalties levied are commensurate with the gravity of the offence, as well as the conduct of the accused party during the investigation. Supply contracts between parties to a commercial relationship should be equitable and the product of candid engagements,’ said Mr Kemei.

‘Abuse of buyer power, which cripples suppliers, defeats the country’s aspiration of promoting inclusive economic development. SMEs are liquidity-constrained enterprises.

Therefore, failure to honour payments for work done can destroy a business and render thousands jobless.’

The complaining companies Kilele Motors Limited and Midland Autocare Limited alleged that Directline owed them Sh5 million and Sh7.6 million respectively, which the insurer delayed payments without justifiable cause and in breach of their agreement.

Directline told the regulator that its delays had resulted from temporary inaccessibility of its bank accounts after the courts froze them last year amid a shareholder dispute.

However, after sustained pressure from the regulator, the insurer paid only Sh2.9 million to Midland and Sh3.7 million to Kilele, leaving an outstanding balance of Sh6 million. Despite repeated reminders, the insurer failed to update the authority on any challenges it was facing, ignoring a cumulative 19 formal reminders from the regulator.

‘Based on the foregoing, and in line with the authority’s mandate of sanctioning abuse of buyer power in the economy, the insurance firm has been penalised Sh42.5 million for each count and ordered to honour the outstanding invoices,’ said the regulator.

The authority has also ordered Directline to amend its supply contracts to include provisions for interest payments on late invoices and to desist from practices that violate the Competition Act.

This is not the first time the competition watchdog has intervened in the motor insurance industry to facilitate payment of garages and vehicle assessors.

In 2022, it compelled 18 major insurers to pay 20 vehicle repairers and assessors Sh38 million owed for services rendered, although it did not impose sanctions on the companies at the time.

The State is planning to offload a 15 percent stake in Safaricom to South Africa’s Vodacom Group in a deal that will raise Sh244.5 billion for the exchequer to ease dependence on debt to fund its budget deficit, the Business Daily has learnt.

The amount comprises Sh204.3 billion for the six billion shares to be sold at a price of Sh34 each and an advance dividend of Sh40.2 billion.

The Sh204.3 billion is substantially higher than the Sh169.4 billion that the staThe advance dividend to the National Treasury amounts to a hefty payout of Sh6.69 per share. Safaricom is expected to declare an interim dividend early next year as it continues with cash distributions to shareholders.

Sources familiar with the plan said that the sale of Safaricom shares is part of a wider plan by the government to dilute its shareholding in several enterprises to raise funds for short-term budget support.

Last month, Vodacom Group informed its shareholders that it would bid for extra Safaricom shares once the government resolved to dispose of a stake, with its group Chief Executive Officer, Shameel Joosub, saying that he expected the Kenyan government to reach out with an offer.

‘In terms of increasing stakes, you know, we look at it in any market where our partners want to sell, we would consider it, and of course, we’d expect that they would talk to us, you know, as we’ve been partners for a very long time,’ Mr Joosub said on November 10.

He made the remarks when he was asked if Vodacom was intent on raising its ownership in Safaricom.

The South African company, together with its parent Vodafone Group of the UK, holds a 40 percent stake in Safaricom, which is valued at Sh451.9 billion at the telco’s closing share price of Sh28.20 as of Wednesday.

The government’s current 35 percent holding is valued at Sh395.4 billion. After the sale deal with Vodacom, the government would retain a 20 percent interest valued at Sh226 billion at the current price.

The amount set to be raised from the latest sale of Safaricom shares will surpass the Treasury’s targeted amount of Sh150 billion from the privatisation of public enterprises in the current fiscal year.

Other shareholders in the telco hold a 25 percent stake equivalent to 10 billion shares, which was offloaded by the Treasury in a March 2008 initial public offer that raised Sh51.75 billion after being oversubscribed by 532 percent.

The Treasury is also planning to offload a 65 percent stake in Kenya Pipeline Company (KPC) through an IPO by March 2026 to raise about Sh100 billion. This government decision to dilute its holdings in various enterprises follows the recent signing into law of the Privatisation Act, 2025, that came into effect on October 21, 2025.

Section 74 of the Act provides that the national government may sell or dispose of part or all its shares in a government-linked corporation with the approval of the Cabinet after a recommendation from the National Treasury.

Such a sale would, however, require ratification by the National Assembly. In the case of KPC, the Assembly gave its nod for the sale of the 65 percent stake on October 1.

The share sales in firms like Safaricom and KPC, if successful, would ease the Treasury’s headache of funding a Sh901 billion budget deficit for the 2025/2026 fiscal year, which is set to be financed through domestic borrowing of Sh613.5 billion and external borrowing of Sh287.4 billion.

The deficit is likely to be revised upwards in the next supplementary budgets due to lagging ordinary revenue collection that was Sh90 billion below the target of Sh663.5 billion in the first three months of the fiscal year (July to September).

The disposal of a significant stake in Safaricom would ordinarily see a scramble for the shares by investors, given the company’s record of profitability and steady dividend payment over the years.

However, analysts have said that the government’s deal with Vodacom is likely to be a negotiated transaction that will be implemented off-market. The purchase price of Sh34 per share is, however, a signal that the telco is still trading at a significant discount despite its major stock price gain over the past 12 months to close at Sh28.2.

The stock previously hit record highs of Sh44.6 in 2021 after Safaricom won its licence to enter Ethiopia.

Safaricom remains the region’s most profitable firm, riding on the back of data and M-Pesa, which has seen the operator consistently pay dividends.

The company reported a 52.1 percent rise in its net profit to Sh42.7 billion for the half year to September 2025, helped by a smaller loss in Ethiopia and M-Pesa’s double-digit growth.

Safaricom launched in Ethiopia in 2022 as the government opened up the tightly controlled economy to foreign competition and is hoping its presence in Africa’s second-most populous country will power future growth.

Its net profit grew from Sh28.1 billion the previous year, and it expects to declare an interim dividend in February 2026. The firm paid a dividend of Sh1.20 per share in the full year ended March 2025, representing a windfall of Sh19.2 billion and Sh16.8 billion for Vodacom and the exchequer, respectively.

Since Safaricom’s listing in 2008, the Treasury has drawn about Sh550 billion in dividends from the company, making it one of the most lucrative sources of investment income for the public purse.

The company has also paid the government a cumulative Sh1.57 trillion in duties, taxes, and fees since its inception, with the latest being a Sh90.51 billion remittance in the half year to September 2025.

Safaricom, Kenya’s leading mobile carrier with close to two-thirds of the country’s subscribers, is valued at Sh1.13 trillion on the Nairobi Securities Exchange.

Kenya Power paid out Sh1.42 billion ($11million) to a US energy firm, Ormat Technology, in October as part of overdue obligations for electricity purchases from the latter’s geothermal plants in Olkaria, Naivasha.

The payout reduced the balance of Sh4.69billion ($36.3million) that Kenya Power owed to Ormat as of September 30, 2025, new disclosures showed, adding to the Sh1.96billion($15.2 million) it had earlier paid in April and May.

‘The company has historically been able to collect on substantially all of its receivable balances.

As of September 30, 2025, the amount overdue from Kenya Power was $36.3 million, of which $11.0 million was paid in October of 2025,’ Ormat revealed in a regulatory filing.

‘The company believes it will be able to collect all past due amounts from Kenya Power. This belief is supported by the fact that, in addition to KPLC’s obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of Kenya Power non-payment (such as non-payments that are caused by government actions and/or political events’ it added.

The US firm operates within the Naivasha-based Olkaria III complex through its wholly-owned subsidiary, OrPower 4, Inc., where it has an output capacity of 150 megawatts(MW)of geothermal power.

The company sells the electricity produced by its power plants in Olkaria to KPLC under a 20-year power purchase agreement that ends between 2033 and 2036.

Besides Kenya, Ormat has international operations in Turkey, Guadeloupe, Guatemala, Honduras, and Indonesia.

The payouts to Ormat come in the wake of improved fortunes of Kenya Power, which posted a profit after tax of Sh24.47billion for the financial year 2024/25, driven by lower costs of sales, higher electricity unit sales, and system efficiencies.

The company’s profitability was buoyed by an increase in electricity sales, which rose by 887 gigawatt-hours(GWh), to 11,403 GWh, an 8percent increase in sales, while total unit purchases grew by 787 GWh.

Kenya Power’s revenues, however, took the biggest hit from industries with sales from this consumer class dropping by 9.5 percent in the year ended June 2025, as reduced electricity tariffs across the board took a toll on the firm.

Company disclosures show that revenues from industries fell to Sh106.49 billion in the review period from Sh117.69 billion a year earlier, while those from homes dropped 1.3 percent to Sh68.19 billion. Among the categories of power users, only street lighting and electric mobility recorded growth in revenues.

Kenya Power’s total sales dropped five percent to Sh219.28 billion in the review period, when its net profit dipped 18.66 percent to Sh24.47 billion.

The revenue fall came in a year when base electricity tariffs fell by up to Sh1.40 per kilowatt-hour (kWh) in the third year of cuts that started in July 2023.

The reduced price per unit of electricity negated the growth in the number of units that Kenya Power sold, with sales rising to 11,403 GWh in the year to June 2025 from 10,516 GWh a year earlier.

The drop in revenues is the first for Kenya Power in at least a decade, highlighting the impact of the lower tariffs that were meant to ease pressure on consumers.

‘It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change,’ said Charles Darwin, who first studied theology at Cambridge.

How did a female Kenyan, 30 something year-old entrepreneur see possibility in an unremarkable space, creating a nifty small business success in green Tigoni? How do corporate Goliaths use a ‘something from something’ tactic?

Is it possible to apply a ‘something from nothing’ approach to gain an elusive competitive advantage? Are we looking in the wrong places to identify the illusive secret sauce? 50 shades of green

Less than an hour’s drive outside frantic Nairobi, sits the serene rolling tea fields of slighter cooler Tigoni. In 1903 the first tea seedlings were part of an experimental planting. In 1910, the first commercial tea farm, Kiambethu, in Tigoni took root, with commercial cultivation of tea beginning on a larger scale in Kenya in 1924.

Today the tea value chain contributes two percent to Kenya’s overall gross domestic product (GDP), roughly 40 percent of agricultural GDP, employing 6.5 million people directly and indirectly.

‘It’s not what you look at that matters, it’s what you see,’ advised Henry David Thoreau. In a space behind Tigoni’s only active petrol station, where once a struggling local restaurant, and then a fruit and vegetable shop did not survive, sits a case study in creativity.

Nifty smart thinking

In an example of imaginative ‘out of the box’ thinking, a few small rooms in a nondescript building, that no one really noticed, almost magically became Nifty Café and Wine Bar in October 2021. By opening up the back wall, and buildin’Know exactly what you stand for is important, know what experience you want your customer to walk away with. Consistency is key, in quality, in service. Small businesses don’t get the luxury of off seasons, we need to insist on great standards and that’s what will help us grow. You need to keep learning, keep listening and keep adjusting. The market changes, people change and you must be willing to evolve,’ advises Nifty owner, Kenya born and raised Sakina Seif.

Something from something

Unlike petite Nifty, a rich well endowed balance sheet company, can play to its strengths, just overwhelming small competitors. This is a playing chicken, ‘don’t mess with me’ approach. But is there a way that the tiny almost unnoticed competitor can get a jump on the market leader?

If a corporate giant has an endowment of valuable resources, the approach is to exploit those resources to overwhelm, outspend any competitor.

This would be the method of a dominant rival; use their significant supremacy in, for instance, liquidity, market share, technology, or know-how just to overpower the competition.

‘If you are relatively better endowed, your imperative is to invest in expensive advantages that your competitors can’t match. For example, when upstart Reebok challenged Nike in athletic shoe sales, Nike invented a new scale-sensitive cost category – athlete endorsement (e.g. Air Jordon, Dream Team), and cranked up the investments in this category to heights never even contemplated before until Reebok said ‘no mas.’ The rest is history: Reebok flatlined and Nike solidified its dominance. The general rule, then, is when you have a resource advantage over competition, look to invest in the most expensive sources of competitive advantage,’ explains Roger Martin.

But by definition, most companies, NGOs and development partners are trying to get by with the little [often dwindling] resources they have. How can they possibly compete?

Something from nothing

Something from zero sounds crazy, bordering on impossible, but there may be something one is failing to notice. Nifty’s success is a prime example.

If you are feeling lost and broke, at a ‘major resource disadvantage’ the focus has to be on looking out for sources of advantage that are cheap and doable for you, but tricky for the overconfident competition to follow.

Stress is on noticing what others may have missed. Turning what you have taken for granted as a cool spring in the desert, quenching a thirst for a competitive advantage.

‘If you lag your competitors dramatically in resources, don’t cry yourself to sleep at night and give up. You have a tough and tricky strategy task – but not an impossible one. Your central task is to think through how you can gain an advantage on the cheap. Start by refusing to focus on and obsess about how and on what your competitors are spending their massive resources. Instead ask, despite all that spending, what are customers missing? By the way, that means customers of all sorts because many modern markets are two sided. Then spend all your strategic thinking energy on finding inexpensive ways to achieve uniqueness in meeting those unmet customer needs,’ advises Martin.

Look under your nose and create

Search along two pathways. The first is assets under your nose that you aren’t utilsing. The second is cheap but valuable abilities that you can create – like competing on time, responding to people just about right away, or being more tech savvy, or conscientious, paying attention to detail.

Or, focusing on being creative, imaginative, innovative – not following the path of stale worn out thinking. Focus on a genuine attribute – insight, not fluff.

Whatever you do, don’t compete on hype. That space is over subscribed. Not surprising to see companies simply copying each other, so that the more they compete, the more they look the same. Remember purchasers buy feelings and emotions. We buy based on how we want to feel. What kind of car do you own? What kind of purse do you carry? Why do people pay ten times the price for an Apple iPhone versus a cheap Android clone? You might not know even why you buy? Research by the Nielsen shows that roughly 90 percent of purchasing decisions are made almost subconsciously.

Other inexpensive, almost no cost resource one has is mindset. In particular, the ability to manage the ever increasing pace of change. An ability to see new realities and quickly adapt. Today, on all sorts of dimensions change becomes ‘everything, everywhere, all at once’.

When KFC’s announcement in 2021 caused a social media storm with its revelation that it was importing frozen cut potatoes from Egypt, Humphrey Mburu saw an opportunity to take his enterprise into the next phase of growth.

At the time, Mr Mburu was already supplying fresh potatoes to Nairobi eateries through his company, Sereni Fries Ltd. He knew the demand for convenience-ready fries existed, but the KFC saga exposed something bigger.

‘That moment confirmed what we had always suspected,’ he recalls. ‘There was a huge untapped market. Kenya.’

It was also a reality check moment for him when KFC approached Mr Mburu to supply them after encountering logistical challenges importing frozen fries.

‘Luckily, we had equipment, so we began exploring frozen fries at our Mlolongo facility. But we didn’t meet KFC standards initially,’ says the entrepreneur who was a banker at Fina Bank before venturing into potato processing.

This only pushed him to improve and in 2024 set up a new line for frozen fries. ‘The industry has grown in leaps. Very few people still import frozen fries,’ he observes.

Journey to industrial processor

Mr Mburu’s journey into the business began long before the online uproar. In 2012 he had his light bulb moment.

‘I was talking to a friend who operated a fast-food restaurant in town. He was lamenting about the value-chain challenges they faced as an industry, especially around handling French fries. As he talked, I realised that if I could take away their headache and offer a solution in potato handling, there was a business opportunity,’ he recalls.

At the time, most restaurants bought raw potatoes and processed them at the back of their outlets, a labour-intensive process that created significant waste-management challenges. The big idea, therefore, was to create efficiency for restaurants by delivering fresh-cut potatoes.

With a Sh175,000 loan, he set up Sereni Fries as a sole proprietorship and later quit his job in May 2013.

‘We started in Mlolongo, Machakos in a small room where my first employee and I worked at night. I would then deliver potatoes to all three of our clients in my Toyota Probox.’

Those early days were ‘messy but instructive’, he says. Through mistakes and miscalculations, especially on potato varieties, Mr Mburu learned the demands and standards of the industry.

The greatest lesson from that season, he says, was to always be willing to learn and never fear making mistakes.

A key strength of his business model has been audacity. Mr Mburu cracked the code of asking for business very early. Before their first year ended, he had secured a major client.

‘I knew someone who worked at the Hilton Hotel. He introduced me to the executive chef, a Frenchman, who immediately saw the brilliance of our idea. He asked for a sample; we delivered it the same day, and he approved it and placed our biggest order then-30 kilogrammes, which we delivered immediately.’

About a year later, the business had grown significantly. ‘We were pushing about 200 kilos a day. That made us realise we needed more people, more space, and more water to manage growth.’

They relocated to a bigger space in Mlolongo. Mr Mburu’s brother joined as an investor after buying into the vision. In the same year, Sereni Fries onboarded Big Square, Naivas Supermarkets, and their biggest client to date-Chicken Inn, operated by Simbisa Brands Kenya.

A major turning point came through a trip organised by the Dutch Embassy for Kenyan industry players to the Netherlands. ‘We explored the entire value chain and learned how to market better. It made us realise the impact this business could have back home. That trip confirmed that I was in the right industry.’

Their growth led them to an even larger facility, and in 2016 they moved to their current 9,000-square-metre operations plant in Mlolongo. Around this time, they made an important discovery: ‘We quickly noted that for every 100 kilos you process, you need one person. Understanding scaling and capacity from an informed standpoint changed everything.’

By 2019, the business seemed to have plateaued.

Then came 2021. A market ready to be claimed revealed itself. Besides KFC, other restaurants also started making inquiries about frozen fries.

Mr Mburu says,’That’s when we made the decision to move into frozen fries properly.’

Funding has been necessary at every phase of expansion. How has Sereni Fries achieved this? ‘We have grown in two ways: reinvesting our profits and through loans from a local bank that has believed in us since 2015.’

The core of their business-the potato-must be the right variety and quality. ‘Kenya is saturated with a variety called Shangi, which is not suitable for the products we make. After returning from the Netherlands, we began working with seed companies to introduce better varieties.’

Today, Sereni Fries works directly with farmers growing their preferred varieties, eliminating middlemen and ensuring quality. ‘We have a network of about 3,000 farmers from all potato-growing regions, both smallholder and large-scale. Our top varieties now are Markies and Challenger. ‘

Sereni Fries operates nine fresh-cut potato outlets countrywide, employing 65 people, and one frozen-fries line in Naivasha, employing 73 people.

‘With frozen fries, it’s easier to operate from one central location because the product does not need to get to clients as quickly as fresh-cut. We supply the entire country from Naivasha.’

Their production has grown nearly 800-fold. ‘We started with 30 kilos a day; now we do 9,125 tonnes annually. We plan to scale even further. Outside Kenya, only Egypt and South Africa do this kind of business. The potential in the Sub-Saharan region is huge. We are eyeing Uganda, Tanzania, Rwanda, and beyond.’

Industry knowledge has also propelled their growth. ‘We now know things we didn’t know when starting out. Knowledge increases efficiency, reduces wastage, and grows margins.’

What is Mr Mburu’s long-term vision?

‘My idea for Sereni Fries is to lead a potato revolution in the region-both in production and marketing. We want to steer it. The market is untapped, and if we are deliberate, it can become a key economic driver.’ He notes that Kenya will host the World Potato Congress in 2026. ‘If you ever needed a sign, this is it.’