May 2, 2013


Three different surveys of Kenya ranked the country highly. Highly attractive to private equity, high in rates of fraud, highly impoverished.

You don’t want to rank highly in all of those.

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Surveys of Kenya: high in attractiveness for private equity, fraud and poverty

Surveys of Kenya: high in attractiveness for private equity, fraud and poverty

The future’s brighter, the present somewhat less so. Three reports provide a mixed picture of the Kenya of today and tomorrow.


The East Africa Private Equity Survey released by Deloitte and Touché found that Kenya attracts the highest interest from foreign private equity funds wanting to invest in East Africa.

Small and Medium sized Enterprises (SMEs) in Kenya came out on top when it comes to securing the most deals from firms in Europe and North America picking up Sh6.8 million from 58 deals across sub-Saharan Africa in 2012. The survey found that Kenya is now up there with South Africa and Nigeria when it comes to closing private equity deals.

Kenya has the most diversified and mature economy in the region and as such, it attracts most private funds, with most investments targeting financial services investments , real estate, healthcare, manufacturing and agriculture,” said Deloitte’s director of Corporate Finance Services, Alexander Van Schie.

At an average of Sh400 million per deal most private equity funds were directed at SME’s with such funds investing more than Sh40 billion in East Africa in 2012

The Kenya Investment Authority predicts that more than Sh25 billion will be invested in Kenya as foreign direct investments (FDIs) in the next one and a half year.


So, the good news is that private equity funds want to invest in Kenya because they believe the country is going places. Now to prick the balloon of optimism and complacency.

Another day, another report, this time from KPMG which places Kenya high on another list: the list of countries with the most cases of fraud.

The ‘Africa Fraud Barometer’ report suggests that Kenya is in the top four of countries with the most cases of fraud, just behind South Africa, Nigeria and Zimbabwe.

“The perpetrators are normally the employees with assistance from the third parties. We also noted that IT departments are more often involved, with some input from operational people”, said Mr. William Oelofse, KPMG’s East African director responsible for forensic services, suggesting that the financial sector covering banking and insurance were hardest hit by fraud.


On the day that Deloitte and Touché reported the good news that Kenya was the first port of call in East Africa for private equity funds to moor their money, the World Bank and the International Monetary Fund showed Kenyans to be poorer than Ugandans.

Using the ‘poverty cut- off point’ at $ 1.25 per person(Sh 105) per day, the ‘Global Monitoring Report 2013’ compares Uganda’s poverty rate at 38.01 per cent compared to Kenya’s 43.37 per cent, Tanzania’s 67.87 per cent, Rwanda at 63.17 per cent and Burundi’s 81.32 per cent.

So private equity finance points to a better future for Kenya but right now most Kenyan’s are still undeniably poor.


There must be a way to tackle this poverty says the Kenya Forum and perhaps part of the answer lies with the World Bank/IMF report.

The Global Monitoring Report points out that in 1990 poverty rates in Sub-Saharan Africa and East Asia were the same at 55 per cent for each region. 23 years later and East Asia has reduced extreme poverty to 12 per cent of the population compared to Sub-Saharan Africa at 48 per cent.

Time for some comparative studies? If East Asia can achieve such a reduction in extreme poverty, why not Sub-Saharan Africa?


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