“There are no investment opportunities that the young people can leverage on, I fear!” A conversation I had with a lad who is a student pursuing law at the University of Nairobi.
He goes on to say, “Tell you what, you must have loads of cash to actually invest in anything in this country.” This immediately picked my interest, is that really the case?
Investments are crucial to individuals, institutions and countries. In fact, if asked, I reckon that investments should be the backbone of an economy, especially emerging market economies.
Why so? Emerging market economies often have the capability and requisite capital- human, financial and natural to diversify their investment pool and not focus primarily on traditional investments that are known to them.
This creates a chance for industries to come up. The overall impact has been a notable sequence, that is, a rapid economic growth that leads to increased job opportunities which leads to a growing middle class that leads to improved standards of living and lastly, the country’s integration to the global markets.
Kenya’s growth over the years has been marred by debt vulnerabilities, climate change, currency depreciation and global impact.
The agricultural sector, which is the backbone of Kenya’s economy, has provided sanity and stability amidst these misfortunes.
According to a report by the World Bank, Transport takes the largest share of investments at 16%, followed by water at 14%, Finance, Competitiveness & Innovation at 10%, while agriculture and energy and extractives are both at 9% each.
The questions today are, what are some of the hidden investment opportunities that Kenyans can leverage on? Which sectors show potential for growth and investments?
Let us explore some of these avenues where hidden investment opportunities are waiting to be discovered.
1. Renewable Energy
Renewable energy presents a significant opportunity for investment in Kenya, especially considering the country’s abundant natural resources and the global shift towards sustainable practices.
You may be wondering how can one invest on renewable energy and have an substantial Return On Investment, take a look at this;
• Solar energy
Kenya is primarily located in the tropics, specifically between the Tropic of Cancer and the Equator. This geographical positioning contributes to its high solar irradiation levels, as regions in close proximity to the equator receive more direct sunlight throughout the year.
Individuals can invest in solar panels for commercial or residential use especially those with a keen interest in marginalized areas that lack electricity, solar panels would be your to- go option.
• Biomass and Bioenergy
Biomass refers to organic material from plants and animals while bioenergy is the energy produced from biomass, through processes such as combustion, fermentation or anaerobic digestion. This kind of energy can be harnessed for heating, electricity generation or as biofuels for transportation.
The potential for converting agricultural waste into energy is significant, especially in Kenya, as agriculture is the backbone of our economy hence farmers can benefit in additional income streams by selling excess energy produced back to the grid or to local businesses, soil improvement which leads to higher crop yields and sustainability.
• Energy storage solutions
Renewable energy sources such as solar and wind are intermittent, meaning their energy production is not constant or predictable. Solar energy relies on sunlight, which varies with time of day, weather conditions and it’s not every day that there is sufficient sunlight.
The same as wind, wind energy relies on wind patterns, which changes frequently. This intermittency can lead to fluctuations in energy supply, making it challenging to rely solely on these sources without adequate backup systems. Companies that develop or sell energy storage technologies are becoming increasingly important.
2. Technology and Innovation
“Software products and software start-ups definitely! Young people have very brilliant ideas but it’s not something embraced too much in our country.’’ Liam Mwicigi, an IT expert said when asked about tech investments in Kenya.
The technology space is a booming sector and it represents a significant frontier for economic growth and innovation. Fintech, short for financial technology, refers to the integration of technology into offerings by financial services companies to improve their use of financial services.
Examples include mobile banking, online payment systems, peer-to-peer lending, robo-advisors, crypto currency and blockchain technology.
The country’s focus on e-governance and digital identity has improved public services and encouraged innovation in cybersecurity and fintech. This has made Estonia to position itself as a leader in digital solutions and technology- driven services.
For Kenya, emulating such a model could mean investing in digital infrastructure, promoting tech education and encouraging public-private partnerships to drive innovation.
3. Public Equities Sector.
The public equities sector refers to the market place where shares of publicly traded companies are bought and sold.
This sector plays a crucial role in the economy as it provides companies with access to capital while giving investors opportunities to grow their wealth through stock ownership.
In Kenya, the Nairobi Securities Exchange (NSE) is the primary platform for public equities.
With traditional barriers to entry in the stock market being minimized, Kenyans can take advantage of the public equities sector through several ways.
4. Tourism and Hospitality
We often know tourism to be about safaris, coastal beaches and the beautiful sceneries. What we don’t know is that we can invest in this sector and actually have returns. Investing in this sector can be a lucrative opportunity especially as the industry continues to grow and a market that responds. Let me take you through that;
• Real Estate Development
Investing in lodges, hotels or vacation rentals can provide significant returns, especially in popular tourist destinations.
• Event planning and Management
With an increase in destination weddings, conferences and corporate retreats, investing in event planning services can tap into this growing market especially by offering comprehensive packages that include venue, catering and entertainment can be appealing to clients.
• Adventure tourism
This is a growing niche within the tourism sector that focuses on activities like bungee jumping, zip lining, rock climbing and off-road biking.
By investing in facilities or services that offer these experiences, you can attract thrill-seekers looking for adventure.
• Partnerships and collaboration
Collaborating with local businesses, government agencies and tourism boards, example, magical Kenya, can create synergies that enhance visibility.
5. Creative Industry
The creative industry has seen some significant growth especially in the areas of content creation and digital media.
• Content Creation.
This involves various forms of media, including blogs, videos, podcasts and social media posts. The beauty of content creation is that it allows individuals to express their creativity while connecting with audiences.
• Monetization
Verified accounts on social media platforms can monetize their content through several channels.
For instance, YouTube creators can earn money through ad revenue generated from views on their videos, while Instagram influencers often collaborate with brands to promote products in exchange for payment or free merchandise.
Additionally, creators can leverage affiliate marketing, where they earn a commission for sales generated through their referral links.
• Photography and Videography
These two fields are crucial in the creative industry, as they provide the visual content that drives engagement.
Photographers can specialize in various areas, such as portrait, landscape, or commercial photography, often selling prints or offering services for events like weddings and corporate functions.
Videographers, on the other hand, can create promotional videos, documentaries, or short films.
With the rise of platforms like TikTok and Instagram Reels, short-form video content is in high demand, presenting opportunities for videographers to showcase their skills and creativity.
• Digital Media and Marketing
The shift to digital has created a huge demand for engaging content that captures attention.
This opens up opportunities for content creators to work with businesses, helping them develop campaigns that resonate with their target audience. Understanding digital marketing strategies, such as SEO and social media algorithms, can further enhance a creator’s ability to reach and engage their audience effectively.
As evidenced by this article, investment opportunities are indeed plentiful.
It’s up to you to make informed decisions about where to invest, focusing on sectors that resonate with your interests. Don’t just invest for the sake of it; invest in areas you are passionate about.
