Kenya on sale: Local businesses struggle as foreigners find fortune

East Africans and other foreign investors appear to be scrambling for opportunities in Kenya, pumping billions of shillings to buy out existing firms, but also in greenfield ventures and seemingly finding success. 

The opposite is, however, true for many investors in Kenya, who are holding on to crumbling enterprises weighed down by a bad business environment that appears to be getting worse by the day, forcing some of them to up and leave.

Tanzanian tycoons appear to be the unlikely winners in the Kenyan business landscape, having made major inroads in the country in recent years, with a spate of acquisitions of blue-chip companies, but also investing billions in new industries.

Other than its East African neighbours, Kenya has also attracted many firms in recent years across different sectors that include manufacturing and energy, technology, fintech and e-commerce, as well as hospitality and real estate. 

On the flipside, the country has lost numerous businesses that have exited the market, citing the challenging environment, with factors such as high taxes, expensive power, poor transport infrastructure and suppressed local demand as among the factors pushing them out.

The latest to venture into Kenya is Tanzanian billionaire Rostam Azizi, whose Taarifa Limited has this week announced the acquisition of Nation Media Group (NMG), buying a 54.08 per cent stake owned by the Aga Khan Fund for Economic Development (Akfed). 

But a day after the Tanzanian firm announced its foray into Kenya, lobbies representing different sectors in the country – including manufacturing, agriculture, retail and export – issued a joint statement protesting the difficult business environment that has recently become even more challenging following the introduction of a new standards levy. 

The new charge, they noted, is set to make it even more expensive for many firms operating in Kenya and adds to the numerous taxes that have been imposed on businesses recently.

“The continued introduction of new levies and fees by regulatory agencies erodes Kenya’s competitiveness both locally and globally. At a time when businesses are struggling to absorb existing operational costs, these measures undermine the country’s ability to attract, grow and retain much-needed investment,” the lobbies that include the Kenya Association of Manufacturers said in the statement. 

It further said the new charge does not translate to enhanced service delivery and if anything, “all Kenya Bureau of Standards (Kebs) services are offered at a cost, which has been increasing over the last 3 years.

Azizi’s entry into Kenya’s media industry follows his earlier investment in Kenya’s energy industry. His Taifa Gas is currently constructing a $130.5 million (Sh16.8 billion) cooking gas terminal in Mombasa. The facility, which will have a handling and storage capacity of 30,000 metric tonnes, is nearing completion and is set for commissioning in the course of this year. 

The project, which is being built at the Dongo Kundu Special Economic Zone, broke ground in February 2023 at a ceremony presided over by President William Ruto. Commencement had faced a three-year delay on account of legal battles. 

Another Tanzanian firm that has made major inroads in Kenya is Amsons Group, owned by the family of Edha Nahdi, which in 2024 acquired a majority stake in Bamburi. Shortly after, it followed with an acquisition of East African Portland Cement, giving it control of the local cement sector.

Amsons Group acquired a 58.6 per cent stake in Bamburi from Holcim, the Swiss-based global building materials firm, in December 2024 for Sh23.6 billion. It later squeezed out many of the remaining minority shareholders and currently holds a 96 per cent stake in Bamburi.

Through its subsidiary Kalahari Cement Ltd, Amsons acquired a 68.7 per cent stake in EAPCC in 2025. The firm in December 2025 completed the acquisition of the National Social Security Fund’s (NSSF’s) 27 per cent stake in EAPCC. It had earlier acquired Holcim’s 29.2 per cent stake in EAPCC. In acquiring Bamburi, Amsons also acquired Bamburi’s 12.5 per cent stake in EAPCC.

The acquisition of EAPCC was amidst a storm as MPs protested the transaction and had at some point recommended that EAPCC consider buying back shares that Kalahari bought from Holcim and instead sell them to Kenyans through an IPO.

This, according to the National Assembly’s Committee on Trade, would move ownership from a single foreign entity to thousands of Kenyan investors, aligning with broader government goals.

“The committee recommends that the National Assembly resolves that EAPC Plc buys back shares from Holcim Group and offer them to the public through a fresh Initial Public Offering on the basis that the transaction aligns with the Privatisation Policy in Kenya and will deliver clear public benefits,” reads the recommendations in the initial report published November last November.

The committee also questioned whether regulatory agencies had conducted analyses on the impact of the translation on market competition, consumer prices, or employment.

Amsons started in bulk oil and petroleum products and later became a manufacturing and energy conglomerate with over $1 billion (Sh130 billion) in annual revenue.

Another Tanzanian who appears to find success in Kenya is Ally Edha Awadh, the owner of Lake Gas. The firm entered the Kenyan market following the acquisition of Hashi Energy in 2017 and rebranded the retail outlets to Lake Oil. 

It has since grown from being just a downstream firm and is now a significant player in the midstream LPG market following its commissioning of a 10,000 cooking gas handling facility in Kilifi.

The firm also faced a fair share of challenges before the facility was completed, as residents expressed concerns over safety, a matter that spilled into the environmental court with the locals challenging the validity of its environmental licence. The facility started operations last year.

Large firms, as well as midsized and even individuals from Tanzania, have, over the years, set up in Kenya with fair ease and appear to thrive. The treatment is, however, not always reciprocated by Tanzania. Over the years, different scenarios have played out where Tanzania appears to put bottlenecks for Kenyans businesses and even small-scale traders.

These range from the infamous burning of over 6,000 chicks and confiscating cows to senior executives sent by Kenyans firms to oversee their operations in Tanzania being deported.

In July last year, when Tanzania enacted new laws barring foreigners from operating in certain sectors, the initial days of implementing saw small businesses owned by Kenyans facing harassment and even the threat of deportation.

While the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order of 2025 banned all foreigners from playing in certain areas, analysts then noted that the subsidiary law could very well be targeted at Kenyans in the country. This was especially considering the kind of sectors that non-citizens have been banned from operating in. 

This was, however, resolved and Tanzania assured that the order would not negatively affect Kenyan nationals operating in the country.

The financial sector has also seen major inroads by external players, with South Africa’s Nedbank proposing to acquire 66 per cent of NCBA, Nigeria’s Zenith Bank wanting to get 100 per cent of Paramount Bank and South Africa’s Absa also actively exploring acquisitions in Kenya to boost its retail market share and regional footprint.

“Kenya is absolutely special, given the size of the economy and the fact that it is the central hub of East Africa. If we cannot get it right in Kenya, we have no chance in East Africa,” said Kenny Fihla, Absa Group chief executive. 

These are in addition to Uganda, whose national oil company (Unoc) acquired a 20 per cent stake in the Kenya Pipeline Company. While seen as a move to secure the supply of petroleum products to the landlocked Uganda, analysts noted it is also against KPC’s promise of further growth. 

Vodacom is also eyeing an expanded stake in Safaricom through the acquisition of a 15 per cent government stake and another five per cent stake indirectly held by Vodafone Kenya. The two transactions will increase Vodacom’s ownership to a controlling 55 per cent. Asahi Group of Japan has also agreed to acquire Diageo’s 65 per cent stake in East African Breweries for Sh297 billion.

The spate of acquisitions in the recent past has also taken a political angle, with Kiharu MP Ndindi Nyoro warning of the politicisation of NSE.

This week, the legislator, once an ally of President Ruto but turned a fierce critic of Kenya Kwanza’s economic policies, claimed that a Kenyan has been “camouflaging as a Tanzanian investor” and acquiring huge stakes in listed firms.

Despite the opportunities that foreign firms are finding in Kenya, many operating locally continue to grapple with challenges that have seen many scale back production and, with it, a freeze on hiring and layoffs, while others have found the going too tough and closed shop.

On Tuesday this week, the Kenya Association of Manufacturers published a new regulatory audit in which it raised concerns about the deteriorating state of industries in Kenya. In the report, manufacturers say major challenges for businesses in Kenya include high taxes, regulatory overlap and county levies. 

“Instead of industrialising, Kenya is deindustrialising,” said KAM. “High and unpredictable taxation is a core challenge.”

In recent years, Kenyan firms have been battered with a series of tax hikes, but also new taxes and levies that have made production in Kenya more expensive than importing finished goods.

These include the 1.5 per cent Affordable Housing Levy deducted directly from gross salaries, matched by employers. The Social Health Insurance Fund (SHIF) takes another 2.75 per cent. National Social Security Fund (NSSF) contributions have jumped to five per cent of pensionable income. The government has also increased the cost of fuel by doubling Value Added Tax on fuel and increasing Road Maintenance Levy by Sh7 per litre of petrol and diesel.

On Wednesday, KAM, alongside other industries representing such sectors as maize millers, tea producers, retailers and exporters, issued a statement protesting yet another levy – the revised standards levy introduced in August last year.

In a joint statement, the lobbies noted that while the levy rate remains unchanged at 0.2 per cent of monthly turnover, the 2025 Order introduces significant revisions to the maximum payable limits and applicable exemptions. The maximum levy payable is now set at Sh4 million per year for the first five years, rising to Sh6 million per year thereafter. 

“This represents a substantial increase from the previous cap of Sh400,000 per year – a tenfold rise in the financial obligation placed on manufacturers,” said the lobbies in a statement 

The levy would translate to about Sh11,000 per day during the first five years, increasing to about Sh16,000 per day thereafter, including non-productive days such as weekends and public holidays. 

“The revised Standards Levy Order, 2025, is therefore expected to have a significant financial impact on manufacturers, leading to a negative social-economic impact on the country,” reads the statement that calls for suspension of the levy for more discussions among stakeholders.

“This sharp escalation places an unprecedented financial burden on Kenya’s productive sector.”

“The charge is unique to Kenya and not applied in other East African Community (EAC) member states. This disparity undermines the regional competitiveness of Kenyan manufacturers and risks diverting investment to neighbouring economies.”