Category: Business Daily

Christmas garlands were never really a Kenyan thing. A few years ago, most consumers didn’t even know about these long strands of artificial cypress that are hung as Christmas decor. But now it has become one of Nairobi’s most profitable holiday decorations, and business owners are now making a killing from it.

It is a Tuesday in November, only a few weeks into the festive season, and already the hunger for Christmas garlands has taken on a frantic, almost comic urgency.

A woman on TikTok posts her Christmas decorations that she had bought from Panda Mart and China Square stores, and the questions start coming in: ‘Where did you get the garland?’ ‘I went there, and they are over?’ ‘I asked the attendants to bring down the garland on display. Another woman had been eyeing it, but the moment she heard the price, she quietly walked away. I needed eight pieces for my staircase, and at Sh3,450 each, I walked out having spent nearly Sh28,000.’

With many Kenyans now eager for their homes to have the same holiday charm and style they admire in US and UK houses, the Christmas garland has become the most sought-after décor.

Gladys Nyambura, who has a home décor shop, Glahpe Suppliers, in Nairobi’s Central Business District, says demand for Christmas garlands picked up much earlier than usual this year, pushing her to stock up as early as October.

Ms Nyambura, whose business sells mainly online through Instagram, Facebook and TikTok, brought in 2.5-metre garlands retailing at Sh3,500, only to sell out in weeks, even before Christmas.

‘This is our best Christmas so far. We have never sold out this early. Right now, all the Christmas stock is gone,’ she tells BDLife, adding that restocking was no longer viable because new consignments, sourced from China, would only arrive after the festive season, likely in January.

She attributed the surge largely to increased visibility through social media, which has changed how consumers view decorative items previously seen as non-essential.

‘Before, people did not really understand how to use garlands. Now, with exposure on social media, they can see how it works as a table runner, on door frames, stairways or even fireplaces,’ Ms Nyambura says.

She adds that the garlands often act as an entry product, helping drive the sale of other décor items. ‘It’s rare for someone to buy just one item. If they’re buying a garland, they’ll likely add a Christmas tree or other decorations, which has boosted our overall sales,’ she says.

New business opportunity

With rising Christmas spending, entrepreneurs are seizing new opportunities, even temporarily abandoning their usual products. Salome Mwazo, who runs a small shop called Pesabiz in the city, is now selling Christmas décor before she switches back to books in January.

Read: Light up your festivities with these creative flower ideas

She sells from lights to trees, but the Christmas garlands are the fastest-moving items.

‘Customers started buying as early as late October. Many use garlands to decorate walls, TV stands or staircases, often inspired by Pinterest,’ she says, adding, they are preferred because they are also cheaper compared to trees, if someone is buying one piece.

Another seller is Evelyne Karimi, the founder of Nairobi-based home décor business Posh Abodes, says the rush has peaked around popular colour themes, particularly red, gold and combinations of white and red.

‘These sell out first,’ she says, adding that some variations are already out of stock and while she imports most garlands, she has had to supplement supply from local distributors. ‘This is a good season for riders, too. We don’t have enough, so we’re experiencing delays,’ she says.

Now three years into the business, Ms Karimi says rising demand is driven by growing awareness around home décor and a desire by households to create festive spaces. Her typical customers include families, corporate clients and operators in the short-stay accommodation market such as Airbnbs.

Priced between Sh3,000 and Sh3,500, Ms Karimi estimates that garlands have lifted her overall sales by at least 20 percent so far.

Veteran sellers are facing competition as more entrants seek to cash in, but sales are still holding up surprisingly well.Jackueline Mutheu, the proprietor of Arvani Home Essentials, is in her third year of selling Christmas garlands. Ms Mutheu says she began stocking them after noticing a gap for classy festive accessories in the market.

‘The first time we tried, it worked, so we brought more. People are investing more in quality and uniqueness,’ she says, adding that festive décor now accounts for nearly half of her overall sales during the Christmas period, driven largely through exposure on Instagram and TikTok,’ she says.

She sources from China.

‘The snow-flocked version with lights is the fastest mover,’ she says.

With more shops now stocking them, garlands now account for about 15 percent of her total sales so far.

Over the past few years, active retail investor participation at the Nairobi Securities Exchange (NSE) has remained notably low, averaging fewer than 10,000 per month.

This is strikingly low when compared to Kenya’s tens of millions of mobile phone users, a demographic that clearly has the capacity to invest in the market.

Historically, much of the attention in Kenya’s capital markets has shifted toward institutional investors, who were viewed as the primary drivers of market activity and transaction volumes, and, consequently, higher fees for intermediaries.

While this approach made sense for a time, global investment patterns now show that overreliance on institutional investors creates market vulnerability, particularly in frontier markets like Kenya.

Through extensive engagements with London-based institutional investment firms, it has become evident that liquidity, not economic fundamentals or valuations, remains the biggest constraint limiting foreign investor participation in Kenyan equities.

Many global funds have introduced strict liquidity thresholds for their portfolios. One such fund indicated it only trades in securities with a daily turnover between $300,000 and $500,000, with limited exceptions.

As a result, it exited most of its Kenyan holdings that failed to meet this benchmark. Another fund, once heavily invested in frontier markets, was forced to merge into an emerging market vehicle, reducing its frontier exposure from $900 million to just $150 million, primarily due to liquidity constraints.

These examples highlight a simple truth: foreign institutional investors are not avoiding Kenya due to weak fundamentals or poor valuations, they are staying away because of liquidity challenges. For institutional investors, the ability to quickly enter and exit positions is critical, especially when managing client funds that may need to be recalled at short notice.

So, how then does activating domestic retail investors help unlock liquidity? The answer is straightforward. Institutional investors, both domestic and foreign, tend to buy and hold, meaning their trading frequency is low.

However, to sustain a vibrant and liquid market, consistent trading activity is essential. Retail investors, who generally trade more frequently and speculate based on market movements, provide that constant flow of transactions that keeps the market active.

This steady participation by retail investors unlocks market liquidity, improves daily turnover, and makes the market more attractive to institutional investors, who gain confidence from being able to enter and exit positions efficiently.

Globally, markets that have achieved significant liquidity, such as the US, have done so through strong retail investor participation. According to the US Federal Reserve, approximately 61 percent of American households directly or indirectly own stocks, either through brokerage accounts, mutual funds, or retirement plans. This broad base of participation has created one of the most liquid markets in the world.

Limited market participation also has a direct impact on the valuation of listed companies. In a thinly traded market, price discovery becomes inefficient, often leading to undervaluation of fundamentally strong companies.

Increasing retail investor participation is therefore critical to ensuring fair and transparent price discovery, a persistent challenge that continues to affect issuers at the NSE.

Many listed companies currently trade at significant discounts to their intrinsic value because illiquidity prevents accurate reflection of market demand.

Read: NSE targets 40 IPOs, but past trend casts long shadow

A deeper, more active retail investor base would not only enhance valuation accuracy but also restore investor confidence in the market’s ability to reflect true corporate performance.

The NSE 2025-2029 Strategy places strong emphasis on revitalising retail investor participation, with a bold target to grow the number of active retail investors to 9 million.

This will be achieved through initiatives focused on enhancing market access, investor education, and continuous engagement. Achieving this target will play a critical role in making Kenya’s capital markets more appealing to both local and international investors by unlocking liquidity and supporting efficient price discovery.

While abroad, Vicky Ngari saw versions of the kiondo that were ‘very manufactured and inauthentic.’

‘They looked good, but they were not done the right way or with the original sisal material, yet they were being sold for around Sh259,300 to Sh388,950 ($2,000 to $3,000),’ she says.

She was working as an assistant stylist in London, UK and got exposed to many global opportunities.

‘But I didn’t see African fashion in the way that I envisioned it or in a way that felt authentic, even after it became the in-thing in the global fashion industry,’ says the former Miss Kenya and Miss East Africa UK.

Ms Ngari came to the conclusion that perhaps the solution was not in creating something new, but in involving the people who have the knowledge of the original kiondo craftsmanship before it dies away.

But hers was slightly different; she aimed for a luxurious kiondo, but still made the traditional way but with a tinge of modernity.

She started her handwoven kiondo brand called ‘Vicky Ngari’, stocked in boutiques in London, in the Billionaire’s Resort in Malindi, and in the Artisanal Gallery at Hemingways Eden in Nairobi’s Karen. Ms Ngari is also planning a pop-up in Lamu in the near future.

She says hers are different. They are made with natural sisal, brass (logo and handles), and tree bark dye, and are produced in batches of 10. This is reminiscent of the daughters of the Gikuyu clan, including the unmarried one who is often overlooked. Each kiondo comes with a certificate of authenticity, just like luxury goods like Chanel or Louis Vuitton.

The prices range from Sh10,000 to Sh45,000, depending on size.

Agikuyu culture

To make the kiondo as grandmothers made it, she got in touch with Prof Joseph ‘Mukuyu’ Kamenju, a lecturer on architectural history and theory. His guidance helped open Ms Ngari’s eyes to the world of weaving, as seen through the lens of the Gikuyu people.

‘The Gikuyu never crafted anything without a purpose. They encoded so much into their artefacts,’ she says. ‘Like the way the kiondo is woven in a spiral cone shape, with the centre starting at the bottom. This is the same way the Gikuyu people came together to dance around a tree whenever they were celebrating. The wefts and warps mimic how the men and women wove their hands together as they danced, with the men placing their arms on the women’s shoulders, and the women weaving theirs around the men’s waists.’

The same weaving technique was also used as the Kikuyu people of old built their houses.

Speaking at the official launch of ‘Vicky Ngari’ bag collection at Hemingways Eden in Nairobi a few weeks ago, Prof Kamenju added some insights.

‘According to Kikuyu culture, everything started when Gikuyu met Mumbi, but it’s important to note that the woman pre-dates the man in that story and was seated somewhere just waiting for him. She is the essential life form, and this is why the Kikuyu are matriarchal in nature,’ he said.

‘Now, when the kiondo is being woven, it starts at the centre (the navel) with four strands. These are symbolic of the woman before the man comes in. The man comes in when the two strings are added to hold the four together, and then it begins to go round and round in an ever-winding circle.’

If you go on to decode the kiondo, the professor said, it shows the stages from conception to baby, baby to child, to young man, married man, old man, and then death.

‘In the old tradition, they would even put in the initiation ceremonies that are evoked from one stage to the next,’ he said. ‘This is why it is said that when the woman is weaving, she is actually encoding the memory of the entire tribe.’ But with the erosion of African culture, some of these ideals have been lost, and these are precisely the ideals Ms Ngari hopes to restore with her kiondos, even as she continues to learn.

‘My bags now are completely plain and in one colour, but I am committed to doing many different versions with different messaging as we develop. But as simple as it is now, Prof Kamenju assures me that it suits the times perfectly, with how far we’ve strayed from tradition.’

Beyond fashion and culture, however, Ms Ngari is also using her kiondos to empower women.

Her challenge, however, has been in finding the time to weave.

‘I still have to do my household duties, so sometimes I’m too busy with the day-to-day responsibilities to find time to weave. In such instances, I’m forced to either sleep very late or wake up very early to make up for that time.’

For Janet Mwende Kioko, 49, weaving offered her a helping hand when she was at her lowest.

‘My husband passed away in 2018, leaving me alone with our four children. To provide for them, I learned from the older women how to weave kiondos, and that is what has fed us, kept a good roof over our heads, and educated all my children. I owe everything to this work.’

She also credits it for her wellbeing and overall positive outlook in life. ‘When you weave, it’s difficult for your mind to be idle or get into a depressive state. It keeps you busy all through since you can even do it as you walk.’

For Anastasia Mwikali, 54, her weaving journey began back in 1999 when she had only two children.

‘In our village, there is no other work for us to do, so this was the only way for me to support myself,’ she says. ‘I used to help my mother make the sisal strings as a young girl, so I knew that from an early age, but the actual weaving I learned later in life after I was married and had children, and life became extremely difficult.’

Ms Mwikali says her husband’s income is really meagre and inconsistent and can barely support them and their six children. The income she gets from selling her kiondos really boosts their upkeep.

Having passed on the craft to her children as well, she believes the practice of making a kiondo has helped them not only bond as a family, but it has also given them a foundation on which they can build a financial future for themselves.

‘We really have a great relationship with my children, and I like that whenever they need some money for something, they are able to make some sisal ropes or kiondos, sell them, and get their money.’

Her regular group of weavers come all the way from Naivasha and Matuu.

Peninah Nduku, a mother of three, is one of them. She was taught to weave as a young girl by her grandmother. She also learnt the technique in primary school while studying art and craft. Now, this is her source of livelihood.

‘I dropped out of school after Class Eight and got married soon after. This is what supports my family and puts food on my table. It has also taken all my children to school,’ she says.

Other beneficiaries

The other beneficiary is Beyond Fistula, an NGO that supports women with fistula. Ms Nduku counts the experience of teaching them how to make kiondos as one of the golden opportunities that her craft has offered her.

‘We taught them to make finished products, sell them, and earn money. We’ve stayed in touch with some of them, and they say they’re doing well. It brings me a lot of joy to know that I touched someone’s life in a positive way.’

Plot purchase and construction topped the uses of loans taken out by Sacco members, a new report shows, pointing to an increased desire for home ownership despite shrinking pay slips.

A Financial Sector Deepening Kenya (FSD Kenya) survey that involved Sacco Societies Regulatory Authority (Sasra) and Kenya Mortgage Refinance Company PLC (KMRC), showed members took out most loans for buying small parcels of land followed by construction of multiple residential units such as apartments and single units.

‘Plot purchase is the dominant purpose for Sacco land and housing loans, presenting a clear opportunity to drive uptake of construction mortgages, enabling members to develop purchased land,’ the report read in part.

Sacco members took Sh17.4 billion to purchase plots, followed by Sh4.05 billion for building apartments and other income generating rentals and Sh3.7 billion for the construction of single residential units, according to the loans portfolio of the institutions that participated in the survey.

‘Construction is the second most popular use of funds, suggesting that most land purchased by members is likely earmarked for future development,’ the report added.

‘Construction loans are in higher demand than outright purchase loans, as they allow members to build customised homes while maximising perceived value for money and affordability compared to ready-built options. [They] are also popular for building income-generating rentals.’

These loans also support incremental building -using multiple loans to gradually build over time. This is highlighted by the lower average principal amounts compared to mortgages pegged on most members earning below Sh100,000 monthly.

The number of loans taken out for the purpose of buying land were 13,343 at an average principal of Sh1.3 million, accounting for the larger share of loans.

Construction of multiple residential units accounted for 10.1 percent or Sh4.05 billion, with 3,097 loans taken out at an average Sh1.3 million. Some members took loans of about Sh1.03 million for the building of a single residential unit.

Incremental building lets members who cannot qualify for a full construction loan build their homes in stages using smaller, short-term loans over a period of time.

‘This approach differs from KMRC’s construction or buy-and-build products, which require qualification for full funding upfront for the entire project cost. Saccos could respond by creating a structured incremental building product that mirrors this phased borrowing pattern while meeting refinancing criteria,’ the report recommends.

The report aggregated data on the 19 sacco loan portfolios under land and housing loans, including mortgages, based on statistics provided by the participating lenders.

All saccos that participated in the study were deposit-taking institutions, with the majority classified as ‘larger tier’ by asset size and 84 percent of them had assets above Sh5 billion in 2023.

Kenya has taken a decisive step toward infrastructure-led growth with the approval of the Rironi-Mau Summit Road project. The 175-kilometer highway upgrade, valued at Sh170 billion, is set to reshape the country’s economic landscape and strengthen its position as a regional trade hub.

Coming at a time when Kenya is recovering from the effects of the pandemic and global supply chain disruptions, the project to be delivered through a public-private partnership could not have come at a better time.

The Nairobi-Nakuru-Mau Summit corridor already carries close to 40 percent of the country’s trade traffic.

Modernising this key route will unlock Western Kenya’s vast potential, enhance cross-border trade with Uganda and other landlocked neighbours, and elevate Nakuru into a strategic economic centre. This development goes beyond building a road.

It represents an investment in equitable growth and a vision for shared prosperity.

For decades, Western Kenya’s agricultural strength has sustained the nation. Counties such as Kericho, Kisumu, Bungoma, and Kisii produce much of the country’s tea, coffee, maize, and sugarcane.

Yet poor road networks have long constrained progress, limiting farmers’ access to markets and increasing transport costs.

The new road will change this reality. With its dual carriageway and modern design, it will cut travel time between Nairobi and Mau Summit by several hours, easing the movement of goods and lowering logistics costs.

The ripple effects will be significant. Reduced transport expenses could translate into lower food prices, improved household incomes, and greater competitiveness for small-scale manufacturers.

Tourism in the Rift Valley, Lake Victoria region, and Kerio Valley are also likely to grow as access improves, stimulating hospitality and related industries.

Infrastructure projects of this scale create jobs and spark secondary business activity. Thousands of direct and indirect employment opportunities are expected during construction and operation. In a region where youth unemployment remains high, this could revive rural economies and slow down migration to major cities.

This road will also strengthen Nakuru County’s potential as a Special Economic Zone hub. Efficient transport is one of the most critical enablers of SEZ success, and this corridor will directly link Nakuru to Nairobi, the port of Mombasa, and neighbouring regional markets.

Lower transportation costs and shorter travel times will make Nakuru an attractive destination for investors in manufacturing and logistics.

Planned extensions to Kisumu, Eldoret, Kericho, Busia, and Malaba will expand the project’s reach. This is not simply an extension of tarmac; it is a deliberate effort to integrate Western Kenya into the broader East African economic network.

Once seen mainly as a transit corridor, the region could soon emerge as a destination for investment and value addition.

Agro-processing industries stand to benefit most. With better infrastructure, producers can move beyond raw exports to value-added products such as packaged tea, processed coffee, and canned fruits. Renewable energy ventures, particularly in geothermal and solar, could also gain momentum, attracting both domestic and foreign investors.

The project’s significance extends beyond Kenya’s borders. For Uganda, Rwanda, Burundi, and South Sudan, whose economies rely on the Mombasa Port, the upgraded corridor offers efficiency and reliability.

Improved connectivity could cut freight times from Mombasa to Kampala by up to 20 percent, reducing costs and boosting regional trade.

Trade between Kenya and Uganda already exceeds one billion dollars annually, driven by petroleum, cement, machinery, and agricultural products. With better roads, that figure could double within a decade, supported by opportunities in logistics and joint manufacturing ventures.

Border towns like Busia and Malaba could grow into vibrant trade hubs with warehouses, customs facilities, and financial services.

Closer to home, Nakuru is emerging as the next frontier of economic growth. Its location along the corridor gives it a natural advantage as a logistics hub.

With reduced congestion and improved accessibility, Nakuru could attract distribution centres for multinational companies, spur real estate development, and expand its industrial base beyond food processing and textiles into higher-value sectors such as pharmaceuticals and automotive assembly.

Improved connectivity will also strengthen the link between academia and industry. Local universities, including Egerton and Kabarak, could serve as innovation anchors for research, technology, and entrepreneurship.

Analysts estimate that modernization of the corridor could increase Nakuru’s GDP contribution by up to 20 percent within five years, creating a more balanced model of national growth.

Still, the project must balance progress with sustainability. Environmental safeguards, particularly around the Mau Forest ecosystem, will require strict enforcement. Tree replanting, wildlife corridors, and community engagement must be part of the process to ensure long-term benefits for both people and nature.

Kenya’s experience with large infrastructure projects such as the Standard Gauge Railway shows that bold decisions can deliver lasting impact.

This road is poised to do the same. It is not just a road but a lifeline for Western Kenya’s renewal, a bridge to regional integration, and a catalyst for inclusive prosperity.

As a nation, we must ensure its timely and transparent execution. When complete, it will not only connect towns, but ambition with opportunities and potential for growth.

Kenya will appeal against a court ruling this week that suspended its trade deal with European Union, setting the stage for a high-stakes legal and diplomatic battle to preserve long-term tax-free access to the 27-nation bloc.

The government on Wednesday said it had initiated ‘immediate appropriate steps’ to overturn the injunction by the East African Court of Justice (EACJ) on implementation of the Kenya-EU Economic Partnership Agreement (EPA).

Trade Cabinet Secretary Lee Kinyanjui said the ministry, in consultation with the Attorney-General Dorcas Oduor, had begun filing an appeal aimed at setting aside the injunctive orders and reinstating continuity of the pact.

He, however, maintained that exporters will continue accessing the EU market under existing arrangements. Kenya in 2024 exported goods worth $1.56 billion (about Sh203 billion), while importing goods valued at $2.09 billion (about Sh272 billion) from the EU.

‘The Government of Kenya wishes to confirm to its citizens and exporters that they will continue to access the EU market,’ he said.

‘We wish to assure all Kenyans, our trading partners as well as trading entities that Kenya will continue to trade with EU and steps are being taken to ensure continuity, predictability and protection of our existing commercial arrangements.’

The Arusha-headquartered EACJ on November 24 halted the rollout of the EPA pending a determination of a petition filed by the Center for Law, Economics and Policy (CELP East Africa), a civil society group.

The Ugandan-based think-tank accuses Nairobi of breaching EAC procedures by moving ahead with the agreement without notifying other members of the EAC bloc, including Democratic Republic of Congo and South Sudan.

At the centre of the dispute is Article 37 of the East African Community (EAC) Protocol which governs consultation on trade agreements reached between a partner State and an external party. Nairobi contends the article is intended to facilitate transparency and not to prohibit sovereign trade action.

Mr Kinyanjui warned the ruling risks straining regional integration by subjecting sovereign trade decisions to what it termed ‘over-judicialisation’ within the seven-nation EAC bloc.

‘The over-judicialisation of Article 37 only encourages forum shopping, reduces policy space and makes the EAC appear anti-development in the eyes of investors and external partners,’ he said.

The ruling has triggered uncertainty over Kenya’s trade with the EU, its largest export destination for fresh produce, prompting Nairobi to reassure exporters of continuity in trade dealings with the European bloc.

Kenya’s rebuke of EACJ decision pending full hearing of the petition signals a deepening tension within the bloc, where member states have long used the principle of variable geometry to pursue differentiated integration paths, while remaining committed to EAC’s collective progress.

Nairobi insists the principle, enshrined in the EAC Treaty, allows it to move ahead with the deal with the EU, leaving room for other members to join later.

The EPA pact, enforced from July 2024, ensures Kenya’s largely farm produce exports continue to access the EU markets duty- and quota-free. The document is largely a modification of the text in the stalled EU-East African Community pact which was first agreed in October 2014 subject to approval by respective parliaments.

The major change is the inclusion of clauses around climate change. The implementation of the EU-EAC treaty, which Kenya endorsed in 2016, had stalled after the other EAC countries rejected it. Rwanda signed but did not ratify, while Tanzania and Uganda refused to approve the pact for various economic and political interests, including the fear of European goods flooding the market.

Nairobi committed to gradually lower duty on imports from Europe within 25 years after which trade will be liberalised. This means no duty will apply for goods from Europe while investments from EU will also be incentivised.

The EPA deal, however, has a protectionist clause which bars EU from applying blanket subsidies to agricultural exports to Kenya in absence of deepened policy dialogue with Nairobi.

This clause is aimed at safeguarding agriculture and food security in Kenya against unfair competition from the EU. Kenya, the current chair of EAC, intends to mount diplomatic pressure ahead of the upcoming EAC Summit, which Nairobi says will offer an opportunity for heads of state to address the legal and procedural tensions raised by the ruling.

‘Kenya will be hosting the EAC Summit soon where all critical issues touching on the State Parties to the EAC can be addressed at the highest level,’ Mr Kinyanjui said.

The standard gauge railway (SGR) saw its revenue rise 19.96 percent to Sh15.9 billion during the first nine months of this year compared to a similar period last year, lifted by a rebound in passenger traffic and sustained growth in cargo.

Data from the Kenya National Bureau of Statistics shows that passenger tickets rose 6.5 percent during the period to 1.9 million travellers as more commuters took the Madaraka Express despite higher fares introduced at the start of last year.

This saw passenger revenue surge 14.2 percent to Sh3.3 billion.

Cargo freight revenue, on the other hand, grew 21.6 percent to Sh12.6 billion, signalling the continued dominance of containerised cargo as the backbone of the SGR’s commercial performance.

Cargo volumes hauled between Mombasa and internal container depots terminals increased 13.6 percent to 5.4 million tonnes, reflecting growing demand for rail haulage among importers.

Cargo trains have remained the major revenue engine for the SGR since the service was launched in 2017.

Importers have increasingly leaned towards rail transport due to predictable transit times, minimal cargo losses, and tighter enforcement of cargo evacuation rules at the port.

The strong freight performance aligns with Kenya Railways’ strategy to deepen volumes on the Mombasa-Naivasha corridor while also linking more inland depots through the metre-gauge network.

The growth in earnings offers some relief to the financially strained SGR operation, which has historically relied on Treasury support to meet recurrent expenditure.

The revenue gap has complicated efforts to align the business with its original promise of generating enough revenue to meet its costs and repay Chinese loans used for its construction.

The loans, amounting to hundreds of billions of shillings, were sourced from China Exim Bank to fund the Mombasa-Nairobi section and the extension to Naivasha.

Kenya borrowed a total of $5.08 billion (Sh659.1 billion at current exchange rates) in 2014 and 2015 from China to fund the Mombasa-Naivasha SGR line.

Repayments for the loans – which were on a mix of concessional and commercial terms – kicked in from January 2020 after a five-year grace period. Repayment of the debt has put pressure on the country’s external financing obligations at a time when revenues remain below loan servicing requirements.

The rebound in passenger traffic has also helped the SGR claw back from last year’s performance dip triggered by fare hikes and a temporary shift by some passengers to cheaper road transport.

Passenger ticket prices were doubled in January 2024, pushing first-class fares to Sh4,500 from Sh3,000 and economy fares to Sh1,500 from Sh1,000 on the Nairobi-Mombasa route. Kenya is pursuing an extension of the SGR from Naivasha to the Malaba border to integrate its network with Uganda’s proposed standard gauge line.

The $5 billion (Sh648.7 billion) extension is expected to be funded largely through Chinese financing, although negotiations remain ongoing.

Kenya’s financial system has long been viewed as one of Africa’s most dynamic, but the next 30 years may reveal an even more consequential role.

The continent’s growth story is shifting, and the question is no longer whether Africa can attract capital, but whether African institutions can mobilise and deploy that capital themselves. Kenya is emerging as a key player in that transition.

From its mobile money rails and agency banking infrastructure – which have expanded financial access – to innovative fund structures and private market intermediation, Kenyan firms have demonstrated they can prototype solutions quickly and at scale.

This has been made better with the introduction of the Collective Investment Schemes Regulations in 2023, whose goal is to, among other things, promote transparency and accountability in Kenya’s capital markets.

The speed at which new products are attracting capital is a confirmation that investors are ready for more diversified, professionally managed vehicles.

Multi-asset vehicles broaden investor choice, provide liquidity, and allow for better risk-adjusted outcomes.

They absorb capital that would otherwise remain in narrow traditional assets and channel it toward productive, long-term opportunities. They are becoming structural building blocks for deeper capital markets.

The ability to build and adapt locally matters now more than ever. Africa’s next phase of development will depend on home-grown capabilities, including mobilising long-term domestic savings into infrastructure, deepening private capital markets, and creating regional investment pools that can move money efficiently across borders.

Kenya can take advantage of this by strengthening systems around its fintech, savings, and investment ecosystem so that capital is cheaper and more accessible.

For the last few years, Kenya has embarked on structural shifts that demonstrate its readiness to lead. First, institutional savings have matured.

Pension schemes, collective investment vehicles, and insurance asset pools are no longer passive holders of government securities. They are active allocators that understand risk, demand better products, and can fund long-term assets.

Second, the technology infrastructure – including mobile money, interoperable payment rails, and digitised operations – has created a foundation on which modern capital markets can scale.

Third, regulators have become more engaged. While there is still work to do, the openness to alternative products, new fund structures, and tech-enabled investment solutions signals a shift from defensive supervision to constructive enablement.

Together, these developments mean Kenya is no longer reacting to global trends; it is shaping its path.

The institutions most likely to dominate Africa’s capital markets in the future will be those that combine innovation with strong governance and regional ambition.

Whether they sit in investment banking, asset management, pension administration, insurance, or fintech, the winners will share three traits: a deep understanding of African clients, the discipline to build strong systems before scaling, and the patience to invest in multi-market expansion.

For Kenyan firms to scale regionally, they need cross-market talent, patient capital, and strong partnerships. It’s not enough to have excellent products; scaling requires local allies, predictable licensing pathways, and an understanding of how trustees and regulators behave in each market.

Tax incentives and harmonised regulations could accelerate this momentum, but strategic partnerships remain key.

Regulatory and infrastructure reforms will determine how fast Kenya moves from promise to dominance.

To unlock growth, there should be unified regional custody protocols to ease cross-border investment; digitised, accelerated approval tracks for debt, REITs, and alternative vehicles; and clear rules on FX repatriation and tax treatment for regional funds.

These changes will reduce friction, lower structuring costs, and shorten time-to-market – all of which are essential for a competitive regional hub.

The Standard Gauge Railway (SGR) saw its revenue rise 19.96 percent to Sh15.9 billion during the first nine months of this year compared to a similar period last year, lifted by a rebound in passenger traffic and sustained growth in cargo.

Data from the Kenya National Bureau of Statistics (KNBS) shows that passenger tickets rose 6.5 percent during the period to 1.9 million travellers as more commuters took the Madaraka Express despite elevated fares introduced at the start of last year.

This saw passenger revenue surge 14.2 percent to Sh3.3 billion.

Cargo freight revenue, on the other hand, grew 21.6 percent to Sh12.6 billion, signalling the continued dominance of containerised cargo as the backbone of the SGR’s commercial performance.

Cargo volumes hauled between Mombasa and the internal container depots terminals increased 13.6 percent to 5.4 million tonnes, reflecting growing demand for rail haulage among importers.

Cargo trains have remained the major revenue engine for the SGR since the service was launched in 2017.

Importers have increasingly leaned towards rail haulage due to predictable transit times, minimal cargo losses, and tighter enforcement of cargo evacuation rules at the port.

The strong freight performance aligns with Kenya Railways’ strategy to deepen volumes on the Mombasa-Naivasha corridor while also linking more inland depots through the metre-gauge network.

The growth in earnings offers some relief to the financially strained SGR operation, which has historically relied on Treasury support to meet recurrent costs.

The revenue gap has complicated efforts to align the business with its original promise of generating enough cash to meet its costs and repay Chinese loans.

The loans, amounting to hundreds of billions of shillings, were sourced from China Exim Bank to fund the Mombasa-Nairobi section and the extension to Naivasha.

Kenya borrowed a total of $5.08 billion (Sh659.1 billion at current exchange rates) in 2014 and 2015 from China to fund the Mombasa-Naivasha SGR line.

Repayments for the loans – which were on a mix of concessional and commercial terms – kicked in from January 2020 after a five-year grace period.

Repayment of the debt has pressured the country’s external financing obligations at a time when revenues remain below loan servicing requirements.

The rebound in passenger traffic has also helped the SGR claw back from last year’s performance dip triggered by fare hikes and a temporary shift by some passengers to cheaper road transport.

Passenger ticket prices were doubled in January 2024, pushing first-class fares to Sh4,500 from Sh3,000 and economy fares to Sh1,500 from Sh1,000 on the Nairobi-Mombasa route.

The upward adjustment was attributed to rising operational costs, including higher fuel prices and increased maintenance charges for the rolling stock and track infrastructure.

Kenya is pursuing an extension of the SGR from Naivasha to the Malaba border to integrate its network with Uganda’s proposed standard gauge line.

The $5 billion Sh648.7 billion extension is expected to be funded largely through Chinese financing, although negotiations remain ongoing.

Financial Sector Deepening (FSD) Africa has announced a $30 million (Sh3.89 billion) fund aimed at supporting insurance start-ups to scale their operations and accelerate the uptake of insurance products across the continent.

The fund, called Inclusive Insurtech Investment Fund (3iF), will bridge the financing gap that prevents promising tech-enabled solutions from scaling and addressing Africa’s substantial insurance protection gap.

It will focus on early- and growth-stage insurtechs developing affordable, inclusive products-particularly those using digital distribution, data analytics and embedded insurance models-to reach underserved households and small businesses.

It will focus on early- and growth-stage insurtechs developing affordable, inclusive products-particularly those using digital distribution, data analytics and embedded insurance models-to reach underserved households and small businesses.

BimaLab started in 2020 in Kenya and has since supported over 135 startups in 28 African countries including Uganda, Rwanda, Egypt, Morocco, Nigeria, Ghana, Zimbabwe and Malawi.

The fund was announced at the opening ceremony of the BimaLab Africa Insurtech Summit in Nairobi. The annual event brings together insurers, regulators, investors, innovators, tech partners and development leaders from across Africa and beyond.

‘This fund will enable innovators within the insurance space to develop insurance solutions that meet the needs of the people and at the same time enable them to scale and reach more people and close the huge protection gap we see in Africa today,’ said Elias Omondi, principal of innovation for resilience at FSD Africa.

‘Africa’s protection gap is not just a market failure; it’s a capacity and capital gap. BimaLab Africa Insurtech Accelerator combines focused technical support with catalytic funding, we enable insurtechs to de-risk innovation, scale inclusive products and reach the millions who remain unprotected.’

The fund, which will be operationalised in January next year, has a blended structure combining junior equity from catalytic investors, anchored by FSD Africa’s investment arm called Investments (FSDAi). Senior equity will come from commercial and strategic investors led by Zep-Re.

FSD Africa has already committed $6 million while its strategic partner Swiss Re Foundation has committed $5 million.

‘Insurtechs are very crucial because they go to the last mile-the place where the people who are most exposed and need insurance the most are. Insurtechs will get there cheaply and with affordable products,’ said Godfrey Kiptum, IRA chief executive.

FSD Africa said the initiative will help address Africa’s persistently low insurance penetration by helping startups overcome constraints such as limited risk capital, weak distribution channels and regulatory complexity. Priority areas include health, agriculture, climate risk, and MSME insurance, where coverage gaps are widest.

The fund will also work alongside regulators, insurers, mobile network operators and investors to de-risk innovation and crowd in additional private capital.

Over time, FSD Africa expects the programme to help scale proven solutions, strengthen local insurance ecosystems and improve financial resilience for millions of people across Africa.