mzeiya
Elder Lister
A compressed x-ray of Kenya’s entire political economy — and it tells multiple deep, uncomfortable truths, if you’re willing to read between the lines.
Layer 1: Safaricom’s Domination – The Digital MonolithSafaricom’s market cap stands at Sh819 billion, making it more than five times larger than its nearest contender, Equity Bank. But Safaricom is more than just a telecom company — it functions as the unofficial Central Bank of retail Kenya through M-Pesa.
Its immense size reflects the centrality of mobile money in Kenya’s economy, not necessarily innovation or productivity. What this tells us is stark: Kenya’s most valuable asset is essentially a payments toll booth. Not a manufacturer. Not a logistics company. Not an energy or agricultural innovator.
Layer 2: Banks Rule Everything Around Me (B.R.E.A.M.)Of the top seven listed firms, six are banks — all heavily reliant on interest income, government securities, and consumer overdrafts.
Their dominance doesn’t signify innovation but rather their embedded role in Kenya’s debt cycle: the government borrows, banks buy bonds, and citizens pay taxes. Then the cycle repeats.
This reflects deeper issues: a low-innovation economy, shallow capital markets, and a government that crowds out private sector borrowing.
Layer 3: Vanishing Private EnterpriseWhere are Kenya’s standout private manufacturing or tech firms? EABL, valued at Sh137 billion, is a relic of colonial capital, now mostly owned by Diageo. It’s driven by liquor sales and brand legacy.
There’s no emerging industrial powerhouse, no energy disruptor, no major agro-exporter rising through the ranks. Their absence is telling.
Kenya’s capital markets don’t reward enterprise. They reward gatekeeping and reliance on state structures.
Layer 4: Market Cap ≠ Real EconomyThe NSE leaderboard doesn’t mirror Kenya’s lived economic reality.
In the past five years, the Kenya Shilling has lost over 50% against the US dollar. SMEs are buckling under the weight of taxes, levies, and inaccessible credit. Wages, once adjusted for inflation, are declining.
So while companies may appear “valuable” in shilling terms, those values are rapidly depreciating. A Sh819B firm in 2025 might actually be worth less in USD than it was at Sh500B in 2020.
Layer 5: The Structural Lie of DiversificationOn paper, Kenya’s stock exchange features multiple sectors. In reality, it's dominated by banks, Safaricom, and a long tail of underperformers.
When the same players dominate the index year after year, it shows that capital isn’t being reinvested into innovation — it’s being hoarded by entrenched interests.
There is no true diversification. The system is reinforcing its gatekeepers.
Layer 6: Global Investors Already Know ThisForeign capital is leaving the Nairobi Securities Exchange at an increasing rate. Institutional investors typically buy Safaricom, hedge with forex, and exit — they don’t hold onto shilling-based risk long-term.
That’s why Safaricom behaves more like a bond than a growth stock. It’s also why no emerging Kenyan unicorn chooses to list locally.
The market itself lacks faith in its future. It’s not investing — it’s hedging against currency erosion.
Bottom Line:Kenya’s capital markets are top-heavy, rent-seeking, and constrained by a weakening currency. The system rewards incumbency and inertia — not innovation or enterprise.
~rkirubi
