As most Kenyans grapple with challenging economic times, experts continue to emphasize the importance of investing.
Investing not only provides a means to establish a secondary income source but also serves as a fundamental tool to build long-term wealth.
With just four months remaining in 2023, Kenyans.co.ke takes a closer look at the five specific sectors that Kenyans are choosing to invest in as they navigate their path toward financial freedom.
Farming
Kenyans are increasingly turning to farming, not only to meet their nutritional needs but also as a supplementary source of income.
According to the May 2023 Agriculture Survey, the agricultural sector now contributes approximately 20% to the country's GDP.
Interestingly, the survey highlights that vegetables have demonstrated higher yields in comparison to crops like rice and wheat.
Kenyans have the opportunity to explore various crops for export, including French beans, mushrooms, asparagus, macadamia nuts, avocados, carrots, passion fruits, and mangoes. This diversification can potentially boost the country's economic growth.
Farming has also become a significant source of employment for the youth, due to the government's efforts in facilitating access to more affordable farm inputs, such as fertilizer, which have seen prices drop from Ksh6,500 to Ksh2,500.
Notably, organic farming is gaining momentum in Kenya, with foreign investments pouring into this sector.
Organic farming entails cultivating crops using organic fertilizer, like composted manure.
Treasury Bonds
Investing in treasury bonds can be challenging for newcomers, but the Central Bank of Kenya (CBK) online platform simplifies the process.
"Treasury bonds are a secure, medium- to long-term investment that typically offers you interest payments every six months throughout the bond’s maturity. The Central Bank auctions Treasury bonds on a monthly basis, but offers a variety of bonds throughout the year, so prospective investors should regularly check for upcoming auctions," CBK advises.
In July, CBK reported that it had received bond bids totaling Ksh51.76 billion for the financial year 2023/2024.
Initially, CBK had offered Ksh40 billion worth of bonds, and this overwhelming response from Kenyans resulted in a significant 29% oversubscription.
Real Estate
The real estate industry in Kenya is experiencing steady growth, with a growing number of Kenyans looking to own homes and land across the country.
Data from the 2023 Economic Survey reveals that Kenya's construction sector expanded by 4.1% in 2022. This multi-billion-dollar industry has led to the development of high-end apartments in major cities, contributing to the country's economic growth.
Reports from HassConsult highlight rising land prices in specific areas of Nairobi due to increased demand and ongoing development projects. Some of these areas include Ngong, Thika, Syokimau, Mlolongo, and Kitengela.
One of the key factors attracting Kenyans to invest in real estate is the reliability of this asset class, which many aver is less susceptible to the fluctuations of the weakening shilling and high inflation rates.
Car Sales
The automobile industry presents numerous opportunities, including the sale of spare parts, car leasing, and profitable vehicle sales.
In the 12 months leading up to June 2023, Kenya imported more than 62,495 units of used vehicles.
The majority of these imports originated from Japan, followed by the United Kingdom and Thailand.
A growing segment of the market is focusing on the taxi business, driving increased demand for smaller-capacity used cars. However, recent tax hikes on imported vehicles may impact the number of vehicle purchases.
Conversely, the government is actively promoting the adoption of electric vehicles to support environmental conservation.
Nonetheless, the cost of electric vehicles may rise in the near future.
According to data from the Kenya Motor Vehicle Industry Association (KMIA), new vehicle dealers in Kenya have increased their exports to the East African market by 39.4% up to June 2023, mainly driven by the demand for trucks and buses.
AirBnBs
The concept of Airbnb gained significant momentum during the pandemic when Kenyans were seeking a place to unwind, as public amenities were temporarily closed.
Airbnbs have proliferated in many cities, providing both Kenyan residents and foreigners the option to rent furnished apartments for short stays.
Airbnbs have emerged in various locations, including areas like Roysambu, offering affordable lodging options for travelers.
The app short term rentals have garnered a diverse class of investors, particularly creative Kenyans who are transforming their properties into attractive Airbnb listings.
Some innovative hosts have repurposed shipping containers into unique Airbnb accommodations, while others have transformed traditional houses into upscale lodgings, utilising materials like mud and wood.
Experts suggest that Airbnb properties offer quicker returns compared to traditional monthly rentals.
A well-managed property can be booked multiple times within a month, significantly increasing profitability compared to conventional long-term rentals.
Many Kenyans seeking to enter the Airbnb industry begin by listing their own homes, and the sector benefits from the convenience of online platforms for easy booking and management.
