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Where to put your money in 2015

By Paul Wafula, Jevans Miyungu and Winsley Masese | January 6th 2015

This year will have its risks, but there are also massive opportunities for savvy investors. Here are the money machines of 2015.


In August 2014, a tomato retailed as high as Sh17, but demand remained insatiable. Corner shops in residential estates sold three large tomatoes at Sh50, with small ones retailing at Sh10. This made 2014 one of the best years for tomato farmers, particularly those who were lucky enough to escape a pest attack that wiped out most of the country’s crop in July.

But even earlier than this, there was a boon in agriculture, with more emphasis being placed on value addition and more Kenyans being lured into agribusiness. This is not going to change in 2015.

The demand for farm products to feed the country’s growing towns and cities is not about to decline, so farming will continue to mint millions for those who invest in modern farming methods.

This is the time to buy a greenhouse if you haven’t already. Such technologies allow you to stay in production all year round and cushion you against the unreliability of the rains. Take your soil samples for testing, which can be done from as little as Sh1,200. You need to know what you can successfully grow; it saves you time and money.

The business of feeding people will be a great money spinner. More and more export markets are being opened up to smallholder and commercial farmers, while locally, more supermarkets stocking fresh produce are being opened. Thus, the prices of fruits and vegetables are heading in only one direction.

Farming is not easy, but it is worth the hassle. But if you do not have the time or patience to run a farm, there are reputable farm management companies willing to look after things for you, usually at a fee of 10 per cent of your proceeds.

Real Estate

Forget the noise about the bubble bursting in the real estate sector. This is not happening in Kenya, at least not in 2015. We have not even had a proper property boom yet, a scenario characterised by high home ownership and a thriving mortgage market.

Still, the sector is marked by great ambition. There is the Government’s ambitious target of one million Kenyan home owners, and the numerous gated communities and shopping malls being put up across major towns. And then there are the mega road projects that promise to open up even more of the country.

Therefore, the real estate sector will continue to make millionaires.

The opening up of Nairobi and Kisumu cities with big bypass roads is music to the ears of realtors, who are now lining up posh homes along the new highways.

Then there are projects like Konza City and Two Rivers, where developers are building small cities from scratch, and they look set to take shape this year.

However, the market for homes that a majority of the population can afford is still hugely underdeveloped. Less than 1 per cent of Kenyans can afford to buy a house. In urban areas, only one in five people can afford a home that costs more than Sh1 million.

Imagine the potential in that overlooked 99 per cent. And remember, with devolution, more and more urban areas will sprout, which assures you of a ready market.

Those in the supply chain of building and construction materials will also remain in the money.

Land will also make a good investment as property values grow. In fact, the surge in land value in Kenya outstrips that for most countries in the world.

Further, the Global Property Guide ranks Nairobi the best city in sub-Saharan Africa to invest in, citing good rental yields and a landlord-friendly legal framework.


Only three in 10 households in Kenya are connected to the electricity grid. Our electricity installed capacity is around 2,000 megawatts. In Uganda, it is just 682MW and in Tanzania, 1,450MW. As these economies expand and put up massive infrastructure projects, they will need power to fuel this growth. Astute investors see the opportunities in energy generation. There are many ways to make profits while also doing a world of good for consumers.

Deep-pocketed entrepreneurs can become independent power producers (IPPs), selling what they generate to Kenya Power for distribution.

Or they can supply materials and equipment to the players in the sector. For instance, a company like the US-based General Electric is supplying most of the turbines for wind power projects in Kenya.

Nairobi Securities Exchange-listed firms TransCentury and Centum are also angling for a slice of the pie.

Just recently, the Geothermal Development Company (GDC) entered into key agreements with three firms for power generation at the Menengai Geothermal Project. The three IPPs are Quantam Power East Africa, Orpower Twenty Two, affiliated to TransCentury, and Sosian Energy. Each of these firms will install a 35MW power plant.

A consortium comprising local investors has also announced plans to develop close to 50MW in renewable energy through a wind farm in Limuru, Kiambu County.

The consortium, which features TransCentury’s subsidiary firm, Civicon as a local project contractor, is gearing up to develop the $130 million (Sh11.8 billion) Limuru project, with groundbreaking set for March.

Further, General Electric is also in plans to start building a 100MW wind power farm in the country this year.

The Government plans to ramp up our power generation capacity to more than 5,000MW by 2017; IPPs will make their cash in helping translate this into reality.

Centum, which is associated with billionaire Chris Kirubi, has also seen the potential in this sector.

Recently, a consortium led by Centum and Gulf Energy was awarded the tender to develop a 1,000MW coal plant in Lamu. It is a deal projected to significantly lower electricity costs. The two firms were part of a larger consortium that included two other Chinese firms, with the project worth about Sh180 billion.


Five years ago, former President Mwai Kibaki signed the Kenya Communications (Amendment) Act, 2008, into law and sparked the country’s Internet boom.

The law promotes e-commerce by increasing confidence in electronic transactions, giving legal recognition to the use of electronic records and digital signatures. Spurred by this law, savvy Kenyans are making money hand over fist online.

This sector could well provide the biggest platform for entrepreneurs to make money in 2015.

E-commerce is estimated to be worth more than $500 billion (Sh45.4 trillion) globally. In Kenya, with more than half the population going online regularly, growth prospects are bright.

In the past, the biggest impediment to online shopping was a lack of payment gateways, but several startups have addressed this, including PesaPal and JamboPay, which recently won an e-ticketing contract for Nairobi County.

Other firms providing payment gateways are Zege Technologies and Intrepid Data Systems (iPay), each of which has developed software unique to Kenya, making payments faster and viable across different software platforms, including bank and mobile systems.

Mainstream companies are also turning to the Internet as a sales channel, joining the thousands of entrepreneurs running online stores on sites such as Facebook, OLX, Mamamikes, Hellofood, Eatout, Kopokopo, Ticketsasa, Jumia and Cheki.

The idea of daily deals is also catching on, with massive untapped potential in counties outside Nairobi.

Rupu, launched in December 2010, has become Kenya’s most successful provider of daily deals. Its closest competitor is Zetu, which was launched shortly before Rupu.

Yum, a Nairobi-based food delivery service, is also angling for a piece of the e-commerce segment by giving customers access to more than 60 restaurants from one platform. One orders a meal, their favourite restaurant prepares it, and Yum delivers it.

One of the oldest e-commerce sites in Kenya is Mamamikes, which has largely focused on the diaspora whom it allows to buy goods and services for friends and family back in Kenya.

Kenya has undergone a revolution since 2007, when M-Pesa, a mobile payments system operated by Safaricom, was launched, with many startups using it as a base for their businesses. PesaPal, for instance, streamlined the payment of school fees through the service by helping institutions and parents keep track of upcoming deposits.

The mobile phone has become the preferred payment platform for e-commerce, especially since the mobile sector accounts for 99 per cent of Internet access in the country.


Kenya’s public transport is chaotic, but there is a lot of money in this sector. Telecommunications firms and banks know this well.

The money to be made is in cutting out the ‘middle man’ — the cartels and rogue officers that eat into matatu owners’ bottom line. The push towards cashless payments is partly informed by this motive.

From providing services such as fare payment platforms to free wi-fi Internet access, the race is on for a share of the estimated Sh218 billion in revenue the sector generated last year.

This cash has whetted the appetite of firms such as Hong Kong-based TaptoPay, Safaricom, MasterCard, Visa, Equity Bank, Co-operative Bank and Google, who stand to rake in at least Sh2 billion annually in revenue by processing fare payments for PSV operators.

In 2013, Safaricom introduced free wi-fi for matatus through a service dubbed Vuma Online. The aim was to convert passengers into Internet users.

And then in 2014, Kenya’s largest telco introduced Lipa na M-Pesa, encouraging passengers to pay fare through the company’s money transfer platform. The firm also has a fare payment card dubbed My 1963, which puts Safaricom among the biggest beneficiaries of the National Transport Safety Authority’s cashless payments directive when it is rolled out.

Co-operative Bank is also in on the action and has unveiled a payment card for commuters, as has Kenya Commercial Bank, which launched the Pepea card that operates through Near Field Communication (NFC) — a short-range wireless technology platform.

Most other fare payment options rely on mobile money top-ups.

Other platforms include BebaPay (run by Equity and Google) and Tangaza Pesa PSV card. TaptoPay, a wholly owned subsidiary of Hong Kong Stock Exchange-listed Advanced Card Systems Holdings, has partnered with the Kenya Bus Service (KBS) to pilot a pre-paid card dubbed Abiria Card.

With cashless payment systems, PSV owners can sleep easy knowing there will be more accountable ways of collecting cash.

Many more techies and corporates are likely flock to the sector to offer solutions.

Content Production

Content production is one of the untapped sectors in the country. With the switch from analogue to digital, this will present numerous opportunities for local content providers.

Some of the sectors that offer an excellent investment opportunity for one to explore include entertainment, education and agriculture. These provide a chance for local content providers to generate employment opportunities as well as create wealth creation platforms.

In the entertainment industry, for example, content providers will offer actors, hosts, producers, directors and script writers a chance to showcase their talent to a wider audience.

Entertainment is a big hit in Nigeria, with Nollywood movies contributing about 4 per cent of the country’s income.

Digital migration is also expected to enable the Government promote the growth of local content and improved programming. Viewers will access a wide variety of channels with different content to choose from.

The Supreme Court, however, last week postponed the deadline for migration. Still, the world analogue switch-off deadline is June 17 this year. Investors should, therefore, remain ready to take advantage of the opportunities in digital transmissions.

Mobile money transfer

Statistics show that about Sh7 billion is transacted through mobile phones in the country every day. With Safaricom’s M-Pesa being a world leader in these services and succeeding at it, an increasing number of investors are eyeing the mobile money transfer space.

Equity Bank, through its Equitel network, has emerged as the strongest contender to take on the telco, though it has to overcome some obstacles, including convincing the 11th House that its Thin Sim is secure.

Other players in the sector are Airtel, Orange, Tangaza Pesa and MobiKash.

Analysts project a bright future for mobile money, particularly now that it has become ingrained in several sectors of the economy.

In the first 10 months of the year, transactions through mobile phones reached Sh1.943 trillion, surpassing last year’s Sh1.9 trillion by Sh41.7 million.

Banks are also fast adopting agency banking in place of conventional brick and mortar, and this is hinged on mobile money transfers.

Government securities

The Government’s appetite for debt is at an all-time high as it seeks financing for mega infrastructure projects.

For those looking to grow their money but unwilling to gamble, taking up Government debt — through Treasury bills and bonds — offers good returns.

The Central Bank has managed to maintain inflation below single digits for most of the last year, which means Government interest rates on these securities that are above 10 per cent will offer investors a better return than just banking their money.

Inflation erodes the value of money — month on month, you find you can buy less with Sh100. To secure the value of your cash, you need an investment that offers a higher rate of return than the inflation rate.

For instance, in December, inflation was at 6.02 per cent. Last week, the interest on 91-day Treasury Bills was 8.571 per cent.

This year, be on the lookout for high-yielding Government securities and infrastructure bonds.

Consulting and tenders

Demand for consultancy services will continue growing this year. A week hardly passes before the Government or a State agency invites bids for consultation on one project or another.

Consultancy, which remains nascent, has seen universities set up separate wings where its lecturers can make an extra coin. Align yourself with professional organisations in your chosen career to benefit from the growing demand.

And as the year starts, look out for tenders from the public and private sector to supply goods and services. The youth and women eyeing 30 per cent of Government tenders should arm themselves with pre-qualification certificates in good time to benefit.

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