Kenya is rapidly becoming an economic hub in Africa due to a combination of factors, including a youthful and educated workforce, strong economic growth, infrastructure development, and its strategic location.
Some international journalists like CNN’s Larry Madowo have labeled Kenya the capital of Africa. Kenya hosts many international organizations and has in recent years hosted international conferences that brought together delegations from around the world.
The increasing international profile means that Kenya is positioning itself as a leader in various high-demand industries. From technology advancement to sustainable development initiatives, local and international investors have plenty of opportunities to explore in the Kenyan market.
Let’s explore what is in demand in Kenya right now, and the next big opportunities that investors, entrepreneurs, and policymakers should watch out for.
1. Agriculture and Agribusiness
Agro-Processing
Kenya’s agriculture sector is the backbone of the economy, and it employs a significant portion of the population. However, there is an ongoing emphasis on adding value to raw agricultural products through agro-processing, such as processing tomatoes and milk into finished products.
Agro-processing not only extends the shelf life of agricultural produce but also enhances food security and provides higher income for local farmers. Investment in agro-processing also opens up agri-export opportunities, allowing Kenya to compete in international markets with value-added products.
Smart Farming
Smart farming uses technology such as sensors, drones, and data analytics to enhance farming practices to help farmers increase production and reduce their cost of production. Precision agriculture allows farmers to monitor soil health, optimize water usage, and manage crops more effectively.
Initiatives like the Digifarm platform by Safaricom empower farmers with information and financial services to help improve their livelihoods. The adoption of smart farming is supported by various stakeholders, including the government, private sector, and development organizations.
As climate change continues to impact agricultural productivity, smart farming offers a sustainable solution to mitigate risks and ensure food security. Integrating ICT into agriculture also attracts the youth to farming, transforming the sector into a more lucrative and attractive career option.
2. Technology and Digital Services
Mobile Payments
Mobile payments have revolutionized the financial industry in Kenya, largely due to MPESA, a mobile payment solution by Safaricom PLC, the largest telecommunications provider in Kenya, and one of the most profitable companies in Africa.
MPESA has become an essential part of the daily life of nearly every Kenyan, and people can send and withdraw money anywhere in Kenya, even in the remote villages of Turkana and Tana River. It has facilitated cashless mobile transactions, with nearly every business accepting payments from MPESA, through LIPA NA MPESA services.
Fintech Solutions
Peer-to-peer lending, digital wallets, and online micro-loans are gaining traction as they provide much-needed financial services to small businesses and individuals. These services reach the unbanked citizens, who are unable to accept formal banking services in the bigger towns.
The accessibility of mobile payments has driven the demand for fintech solutions that offer seamless financial services, particularly in rural and underserved areas. The regulatory environment is also evolving, with the Central Bank of Kenya providing frameworks to ensure security and consumer protection in digital transactions.
E-commerce
The increasing internet penetration and a growing tech-savvy population have driven the growth of the e-commerce sector.
Thousands of e-commerce websites are capitalizing on this growth by offering a range of products like electronics, kitchen appliances, organic foods, groceries, personal care items, fashion, furniture, etc. Some notable e-commerce websites include Jumia, Kilimall, Deqcue Space & Style, TNA, MyDawa, and Sky.garden.
The increased adoption of online shopping has made it convenient for households to order products online and get them delivered to their doorsteps. The change in consumer behavior has led to a surge in demand for e-commerce platforms and reliable delivery services.
The expansion of 4G, the rollout of 5G, and the latest entry of Elon Musk’s Starlink Internet are set to enhance internet accessibility and create opportunities for traditional businesses to tap into the growing market.
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3. Renewable Energy
Solar Energy
Solar energy has become an increasingly popular alternative source of energy, especially in rural areas that are off the national grid.
As the country on the equator, Kenya receives abundant sunlight throughout the year, with the sun rising daily from 6.00 am to 6.30 am and setting at 6.30 pm to 7.00 pm.
Local companies like M-KOPA Solar have made significant investments tap into solar energy, and they offer affordable solar home systems that households can use to access electricity for lighting, charging phones, and powering small appliances.
Currently, the government is offering various tax incentives and subsidies for solar equipment to attract local and foreign investors to tap into the growing market.
Wind and Geothermal Energy
Kenya is also harnessing wind energy and geothermal resources to diversify its energy sources. The Lake Turkana Wind Power project, the largest wind farm in Africa, is one example of the country’s commitment to harnessing renewable energy.
Kenya is also home to the Olkaria Geothermal Project, which contributes a substantial portion of the national electricity supply. KenGen owns five geothermal power stations, and other geothermal power stations are under construction. Kenya is ranked the 8th largest geothermal power user in the world, with close to 950MW of geothermal energy.
4. Real Estate sector
Affordable Housing
Kenya faces a significant housing deficit, particularly in urban areas, where there is a growing population. To address the housing shortage, the government has invested in the Affordable Housing Program to provide decent and affordable housing for low and middle-income families.
The program has created a surge in demand for construction materials and technologies to meet government targets. Developers and investors are seizing this opportunity to participate in large-scale housing projects.
Additionally, the government’s focus on public-private partnerships (PPPs) is playing an important role in mobilizing resources and expertise for these projects.
Urban Development
Urbanization is transforming Kenya’s five cities, creating demand for commercial and residential real estate. Nairobi, Mombasa, Kisumu, Nakuru, and the newest city Eldoret are experiencing a boom in construction activities, with new office spaces, shopping malls, and residential complexes springing up.
Developers are also focusing on mixed-use developments that combine residential, commercial, and recreational facilities in one space. The growing trend optimizes land use and increases the quality of urban living.
5. Healthcare and Pharmaceuticals
Healthcare Infrastructure
The healthcare sector in Kenya is growing through radical surgery to meet the demand of the growing population and demand for better healthcare services. There is a need to invest in healthcare infrastructure such as new hospitals, specialty clinics, and health centers in the peri-urban and rural areas.
Through initiatives like the Universal Health Coverage (UHC) program and Social Health Insurance Fund (SHIF), the government is focused on ensuring easy access to quality healthcare services. This can create a demand for medical equipment, pharmaceuticals, and healthcare professionals.
Private sector investment in healthcare is also growing, with new private hospitals and specialized health facilities being established. International healthcare providers are also bringing in advanced medical technologies and expertise.
Telemedicine and mobile health services are gaining popularity, especially in remote areas, helping reduce the burden on traditional healthcare facilities.
Pharmaceuticals
There is a high demand for both general and specialized medicines to treat a wide range of conditions. Kenya imports most of the essential drugs, and this means there is an opportunity for local pharmaceutical manufacturing.
Additionally, the rise of non-communicable diseases such as diabetes, hypertension, and cancer has increased the need for specialized medications and treatments. Setting up cancer treatment and diabetes care clinics can enhance healthcare delivery.
Research and development in the pharmaceutical sector are also growing, with a focus on developing drugs tailored to the specific needs of the local population.
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6. Education and Training
Ed-Tech Solutions
Online learning platforms and digital educational tools are becoming increasingly popular, particularly in the post-COVID period. An example is Kidato School by Sam Gichuru, a Kenyan techpreneur.
These platforms provide access to quality education for students in both urban and rural areas, and they help bridge the gap created by traditional educational limitations.
Platforms like Eneza Education and eLimu provide curriculum-aligned content and interactive learning experiences. The integration of technology in education not only enhances learning but also prepares students for the digital economy.
Vocational Training
Vocational training is becoming increasingly important in Kenya as the country seeks to address high youth unemployment rates and equip its workforce with practical skills.
Programs offering skills development in areas such as technology, agriculture, and trades are in high demand. Technical and Vocational Education and Training (TVET) institutions play an important role by providing hands-on training that is directly aligned with market needs.
Additionally, vocational training is encouraging entrepreneurship, as individuals gain the skills needed to start and run their businesses.
7. Transport and Logistics
Public Transportation
With the increasing urban population, there is a need for efficient and reliable public transportation systems in Kenya. Major cities like Nairobi, Mombasa, and Nakuru are grappling with traffic congestion and inadequate transport infrastructure.
To address these challenges, the government is investing in modern public transportation solutions, including the Nairobi Commuter Rail Service and the development of Bus Rapid Transit (BRT) systems. These projects aim to provide safe, affordable, and efficient transport options for the growing urban population.
Private sector players are also contributing by introducing ride-sharing services and electric buses, which are environmentally friendly. These investments are essential for improving urban mobility and reducing traffic congestion.
Logistics and Delivery Services
The rise of e-commerce in Kenya has significantly increased the demand for convenient logistics and delivery networks.
Consumers now expect fast and reliable delivery services, driving the growth of logistics companies. Innovations such as automated sorting centers are being explored to enhance efficiency and reduce delivery times.
Companies like Speedaf Kenya and Glovo are expanding their services to meet the growing demand for last-mile delivery solutions.
The development of infrastructure such as roads, bridges, and ports is essential to support the logistics sector. The Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project is a key initiative aimed at improving regional connectivity and facilitating trade.
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8. Consumer Goods
Fast-Moving Consumer Goods (FMCG)
The demand for fast-moving consumer goods (FMCG) in Kenya continues to grow, driven by an expanding middle class and changing consumer lifestyles.
FMCG products such as food, beverages, personal care items, and household goods, are essential for daily life. FMCG companies are continuously innovating to meet the changing consumer preferences, such as healthier food options and eco-friendly packaging.
The growth of modern retail stores, including supermarkets and convenience stores, is also contributing to the growth of the FMCG sector. These retail outlets offer a wide range of products, providing convenience to shoppers.
Luxury Goods
As Kenya’s middle and upper classes expand, there is a rising demand for luxury goods such as high-end electronics, fashion, and automobiles. This shift is driven by increasing disposable incomes and a desire for premium products that reflect status and lifestyle.
International luxury brands like Beyonce’s Fenty Beauty have entered the Kenyan market, capitalizing on this growing demand. Shopping malls and exclusive boutiques are catering to affluent consumers seeking high-quality and unique products.
The luxury goods market in Kenya is also benefiting from the rise of experiential luxury, where consumers value unique experiences over material possessions.
High-end travel and fine dining have become popular among wealthy Kenyans. By catering to the preferences of this affluent segment, businesses can tap into a lucrative market and enhance their brand presence in Kenya.
9. Financial Services
Insurance
There is a rising demand for various insurance products, including health, life, and agricultural insurance. Insurance companies like Britan, Pacis, and Jubilee have introduced innovative products tailored to the needs of different market segments, including low-income households.
Additionally, agricultural insurance is gaining prominence as farmers seek to protect their investments from risks such as drought, pests, and diseases. Integrating technology in the insurance sector, such as mobile-based insurance platforms, is enhancing accessibility and convenience for customers.
Microfinance
Microfinance institutions (MFIs) provide financial services to those who are underserved by traditional banks. These institutions offer loans, savings accounts, and other financial products to small-scale entrepreneurs, helping them to grow their businesses and improve their livelihoods.
Plus, digital microfinance solutions are leveraging mobile technology to reach a wider audience. These platforms offer quick and easy access to loans, reducing the barriers faced by small businesses in accessing credit.
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Kenya’s economic landscape is rapidly changing, creating opportunities for both local and international investors.
If you are interested in what is in demand in Kenya right now, explore the opportunities highlighted above to know what sector to put your money in. Whether you are seeking opportunities in financial services, technology, real estate, education, healthcare, or the FMCG sector, there is a big space for everyone.
Be aware that it is important to conduct due diligence to know if the opportunity is viable, to avoid incurring losses.