Kenya's Investment Opportunities in 2021

  • File image of Kenyan bank notes
    File image of Kenyan bank notes
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  • Despite the negative impact of the Covid-19 pandemic in Kenya, investors and market analysts remain optimistic over new business opportunities in the country.

    Industry players have been documenting investment opportunities and projections. Sectors in which Kenya's tycoons have poured hundreds of millions.

    In February 2021, How We Made it in Africa asked a handful of private equity investors to identify untapped business and investment opportunities on the continent. 

    David Owino, founding partner of a capital investment firm was bullish about the manufacturing sector in East Africa.

    HDPE Plastic pipes pictured at a factory Kenya.
    HDPE Plastic pipes pictured at a factory Kenya.
    File

    "Pipes are not products that are going to make the front-page news, but they are essential if you’re going to construct a building, 

    "They are safe from cheap imports. For example, it’s not cost-effective to ship pipes from China to Nairobi – they are light, but take up a lot of space,” he explained.

    Tech Investment

    According to analysts, Information and Communications Technology (ICT) is one of the top investment opportunities in the year 2021.  

    This year is expected to usher in an era of increased ICT economic-related activities in the country which is evidenced by the growth of e-business, mobile money transactions, and ICT startups in the previous years. 

    Some of the opportunities for investment in ICT are Film animation production, Cybersecurity, and anti-fraud systems, Mobile and web business transactions as well as Mobile and web applications.

    Investing in Government Bonds

    Bonds are the means by which the Kenyan government or large companies borrow from the general public to fund their projects, or run the government itself. 

    The Kenyan Treasury bonds provide quarterly, semi-annual, or even annual T-bonds with cash repayment periods of between 1-30 years.

    Government bonds are an excellent substitute for saving your money in the traditional bank since they fetch higher interest rates in the end.

    The interest shifts with the prevailing economic trends. Notably, the national government introduced a new affordable bond called the MKiba bond, bought through mobile money platforms.

    With as little as just Ksh 3,000, you can earn a 10% annual interest.

    Investment in Land

    Kenyan youth prefer investing in land compared to their peers in six other sub-Saharan African countries. 

    This is according to the November 2019 Geopoll study titled The State of Financial Services in Sub-Saharan Africa: How Youth in Six African Nations Spend, Save and Invest.

    "47% of Kenyan respondents prefer investing in farming, while only 14% indicated investing in buying land," reads an excerpt from the report.

    This is in line with the current situation in which some sharp investors have been making millions by purchasing land located in areas where the government has launched or is looking to launch major infrastructural projects.

    They then re-sell the land at a profit, while others opt to establish eateries, hotels, affordable houses, or petrol stations along these corridors.

    Farming also falls under the investment in land category with young Kenyans gradually embracing the lucrative field.

    Success stories of young Kenyans raking in millions via farming have encouraged others to follow the same path.

    Kenya is currently undertaking massive infrastructural projects and the government has identified the areas where investment is needed.

    President Uhuru Kenyatta in his March 31, address to the nation revealed that Kenya's economy was expected to grow in 2021.

    "The Kenyan economy was projected to grow by 6.2% in 2020, it grew by only 0.6%; thanks to Covid-19 Pandemic. 20. This translates to a loss of approximately Ksh 560 billion of GDP arising from the resultant economic downturn,

    "Further, projections indicate that, in spite of the COVID plunge, our economy is likely to bounce back and grow 7% in 2021," he explained.

    President Uhuru Kenyatta addressing the nation from State House on Friday, March 12.
    President Uhuru Kenyatta addressing the nation from State House on Friday, March 12.
    PSCU