The Panel was made up of Amb. Kyle McCarter (Partner at Everstrong Capital and Former United States ambassador to Kenya), Anzetse Were (Senior Economist at Financial Sector Deepening (FSD) Kenya), Kenneth Mwige (Director General of the Kenya Vision 2030 Delivery Secretariat) and was moderated by Sylvia Kithinji (Partner, Ashitiva Advocates LLP).

This opening Panel considered the ways in which Kenya’s current macroeconomic environment has an impact on the PE and VC investment.

According to the World Bank, Kenya’s economy is recovering from a polycrisis with Kenya’s GPD growth rate remaining in line with its long-term trajectory, even though the economy has faced challenges including global financial conditions, fuel and food price shocks, a historic drought that affected the economy especially in the second half of 2022. Kenya has also faced inflationary pressures, major pressure on the exchange rate and foreign exchange reserves, and debt sustainability challenges.

Macroeconomic conditions can have a substantial impact on the success of private investments considering their long-term horizon.

There are bright spots amidst Kenya’s challenging but resilient macroeconomic environment.

Anzetse Were observed that the decline in the macroeconomic environment in several countries in Africa including Kenya characterized by inflationary pressures, major pressures on the exchange rate, debt sustainability challenges will persist in the medium term and will continue to have an impact on consumer spending, investment spending, government spending and net exports and value chain resilience. Notwithstanding this decline, Anzetse pointed out that there are bright spots in the form of increased Foreign Direct Investment (FDI) interest in Kenya and Africa generally from a broader range of investors. The new interest from non-traditional investors offers different capabilities, risk appetite and sector interest thereby diversifying possibilities for private investment. In addition, traditional investors are reviewing their approach, financing options and sectoral interest which is likely to deepen private investment.

A challenging macro-environment offers opportunity for public private partnership.

In addressing what strategies private equity firms should adopt in a challenging macro environment, Ambassador Kyle McCarter highlighted the opportunities for investors to partner with government to deliver investment such as large infrastructure projects that support economic growth and deliver tangible impact.

Kenya’s unique advantages such as the entrepreneurial spirit of its people, makes it competitive in comparison to other African jurisdictions facing similar macro-economic challenges. However, the potential for partnership led investment and economic growth can only be fully realized with a conducive and predictable policy, regulatory and tax environment.

Kenneth Mwige added that the Government of Kenya’s Vision 2030 economic aspirations are intended to be delivered through a collaborative effort between private sector and public sector with government contributing 30% of the investment with the objective of catalyzing private sector investment.

Bridging the gap between the private and public sectors is key in attracting the 70% needed from the private sector. This can only be achieved through the efforts of initiatives such as the Nairobi International Finance Centre (NIFC) and the Kenya Investment Authority (KENINVEST).

In turn, private investment offers the appropriate financing options to enable Kenya to meet its long-term economic objectives under Vision 2030.