Kenya: Challenges and Opportunities in a Frontier Market

“One of my biggest frustrations when speaking with outsiders is explaining that Africa is not a country,” explained a longtime private equity adviser residing in Nairobi. “There are 54 countries, each with its own distinct culture, ethnic mixture, and business environment that must be taken into account by prospective investors, whether private equity or otherwise. You cannot cross a border and think everything will be the same.”1 As this chapter will demonstrate, Kenya is endowed with a set of characteristics—including its relatively large population and long history as the primary hub for East African business and finance—which in some respects sets it apart from the majority of the other 53 African nations from a private equity perspective. But set aside these distinctions, and it bears more similarities to than differences from most nations on the continent, as well as other low-income countries throughout the developing world, that are striving to build a private equity industry.