Agema Analysts Weekly Business Update: Key Developments in Kenya & East Africa

Date: Friday, March 7, 2025

Welcome to this week's Agema Analysts Business Update. Every Friday, we provide a concise recap of significant political, economic, financial, and regulatory developments shaping the business landscape in Kenya and the broader East African region.

1. Kenya’s Private Sector Expands Despite Low Business Confidence

Kenya’s private sector activity showed marginal growth in February, with the Stanbic Bank Purchasing Managers’ Index (PMI) rising to 50.6 from 50.5 in January. Growth was seen in agriculture, manufacturing, and construction, while the retail and services sectors declined due to reduced consumer demand. However, only 5% of firms expect future growth, highlighting continued uncertainty.

www.reuters.com

Implications for Business:

• Investment Strategy: Businesses should plan cautiously, considering the uncertain economic outlook.
• Sector-Specific Growth: Industries like manufacturing and construction offer investment opportunities.

2. Kenyan Shilling Strengthens Amid Improved Dollar Inflows

The Kenyan shilling appreciated slightly against the US dollar, trading at 128.50/129.00 per dollar as of March 14. Increased remittances and export earnings contributed to the gains, along with lower importer demand for dollars.

www.reuters.com

Implications for Business:

• Import Cost Management: A stronger shilling could lower import costs for businesses.
• Exporters’ Caution: Exporters may need to adjust pricing strategies in response to currency fluctuations.

3. Marriott International Expands Luxury Safari Offerings in Kenya

Marriott International has announced plans to launch two luxury safari camps in Kenya under its Ritz-Carlton and JW Marriott brands. The Ritz-Carlton Masai Mara is set to open in August 2025, offering premium suites starting at $2,646 per night. Additionally, a JW Marriott lodge is scheduled to open in 2026 at the Solio Game Reserve.

businessinsider.com

Implications for Business:

• Tourism Growth: The entry of high-end hospitality brands is likely to boost Kenya's tourism sector.
• Local Economy: Increased tourism can stimulate local economies through job creation and demand for local goods and services.

4. Refugee Protests in Kakuma Camp Over Food Rations

Clashes erupted in the Kakuma refugee camp as refugees protested against reduced food rations due to funding shortages. At least four individuals sustained gunshot wounds during confrontations with the police. The World Food Program (WFP) reported that food rations are currently at 45% of the minimum food basket because of resource constraints.

apnews.com

Implications for Business:

• Humanitarian Concerns: Businesses involved in supply chains or operations near refugee camps should be aware of potential disruptions.
• Corporate Social Responsibility: Opportunities may arise for businesses to engage in humanitarian assistance or partnerships with NGOs.

5. Global Coffee Trade Disrupted by Soaring Prices – Potential Impact on East Africa

The global coffee trade is experiencing significant disruptions due to soaring prices, with market volatility causing supply chain challenges. The sharp price increases have put pressure on producers and exporters worldwide. This development underscores the need for regional producers to strengthen local value chains and explore strategies to mitigate external market shocks.

www.reuters.com

Implications for Business:

• Export Revenues: East African countries like Kenya, Ethiopia, and Uganda, which rely heavily on coffee exports, may see fluctuating revenues due to market instability.
• Production Costs: Rising global prices could benefit farmers but may also lead to increased costs for inputs such as fertilizers and transport.
• Supply Chain Strains: Disruptions in global coffee trade could impact logistics, affecting timely exports and pricing strategies in the region.

Final Thoughts

This week’s updates highlight Kenya’s economic resilience, currency fluctuations, and growing international partnerships. As these developments unfold, Agema Analysts continues to monitor key trends, risks, and opportunities for businesses and investors in the region.

Stay tuned for our next update! For detailed analysis and custom advisory services, reach out at f.haertl@agema-analysts.com or visit www.agema-analysts.com.