Kenya’s retail sector is still among the most attractive for long-term investors in sub-Saharan Africa, a new report has suggested.
The interest is largely fuelled by the sector’s growth. It has outperformed the economy in the last five years due to rising households’ disposable income, analysts at financial advisory firm StratLink said in a monthly update.
“With a formal retail penetration estimated at 30 per cent, ahead of peer economies such as Nigeria and Tanzania, the Kenyan market is uniquely positioned to offer investors strategic access to the growing spend not only in Kenya but also the wider eastern Africa,” the report states.
The market has in recent years attracted global supermarkets including France-owned Carrefour, the world’s second largest retailer by revenue after Walmart of the US, and South African Massmart which operates under the Game brand.
Carrefour, whose domestic operations are overseen by Dubai-based conglomerate Majid Al Futtaim, is reportedly keen to add to its two stores at the The Hub in Karen and Two Rivers Mall in Ruaka by taking advantage of the void being created by Nakumatt.
“Despite the present headwinds, we still believe the retail segment of Kenya’s economy offers great promise for long-term investors,” StratLink analysts said.
Industry and Trade secretary Adan Mohamed last Wednesday said the sector may be regulated in the near term. StratLink said delay in repaying suppliers points to lapses in corporate governance standards and adherence to best practices.