Why connectivity sits at the heart of Kenya's growth agenda

George Duffield is Head of Sub-Saharan Africa at Bloomberg L.P.

Kenya’s next phase of financial-market growth will depend not only on digital services, but on connecting the systems that help investors access information, price assets and execute trades.

The global economy has faced a turbulent year, with conflicts and trade disruptions tightening financial conditions. Yet East Africa remains a bright spot, having recorded the continent’s fastest growth for the past two years. The African Development Bank forecasts the region’s economy will expand by 5.9 per cent this year, with Kenya at the centre of that growth.

The challenge now is to sustain this momentum. That will require countries across the region to attract international investment while mobilising domestic capital.

Achieving this requires financial infrastructure that can absorb and deploy capital efficiently, securely and transparently. The next phase of financial-market modernisation must therefore go beyond digitalisation to focus on connectivity.

Kenya has set an ambitious agenda to deepen and modernise its financial markets. Its Silicon Savannah ambitions reflect the country's technological drive, while its digital ecosystem has expanded across payments, government services and financial-market infrastructure.

However, digitalisation does not automatically create a connected market. Investors may still have to navigate separate systems to follow market developments, discover prices and execute trades. Moving between these platforms creates delays and operational friction, particularly when timely information and efficient transactions matter.

Connecting these parts of the investment process would bring market information, price discovery and execution closer together, allowing market participants to move more efficiently from assessing market conditions to making investment decisions.

The need for such infrastructure is growing as Kenya's capital markets become more active and outward-looking. Foreign-exchange reserves have climbed to historic highs above $15 billion, the shilling has maintained notable stability, and domestic markets continue to record strong liquidity and growth in secondary-market activity.

However, deeper market activity also exposes investors to developments beyond Kenya's borders. Technology cannot eliminate market risk, but access to real-time data, analysis and global reporting, combined with efficient execution, can help investors assess their exposure, navigate volatility and make informed decisions.

Progress is already under way. Bloomberg has been working with the Central Bank of Kenya (CBK) to support the adoption of its BMatch platform in the interbank foreign-exchange market. The platform is designed to improve price discovery, transparency and execution efficiency in local currency markets.

It also connects trade execution with the Bloomberg Terminal's wider range of market data, news and technical analysis.

The same principles could extend beyond foreign exchange, particularly to bond markets. Deep and efficient bond markets are essential for mobilising capital. They also depend on transparent pricing, reliable market information and efficient trade execution. Applying these principles across different asset classes could broaden participation, deepen liquidity and strengthen Kenya's financial system.

Kenya is part of a wider shift towards modern financial-market infrastructure across Africa. Bloomberg has worked with market participants and institutions in several countries to support this transition.

Its BMatch technology has also been adopted in Nigeria and Angola, while FXGO, its multi-bank foreign-exchange trading platform, is used in 21 African countries by more than 700 users. They have traded more than $1 trillion through the platform.

These developments reflect a broader move towards electronic trading and financial markets built around greater transparency and connectivity.

Technology, however, is not a complete solution to market fragmentation. Fragmented liquidity across domestic markets remains one of the constraints on capital-market development in Sub-Saharan Africa. Greater regional integration can help investors access market information and execute trades across different countries, making it easier to reach pools of liquidity that would otherwise remain difficult to access.

Nairobi Securities Exchange (NSE) Chief Executive Frank Mwiti recently challenged the East African Community (EAC) to accelerate plans for a shared regional trading infrastructure to reduce barriers to cross-border trading.

Common financial technology could help advance this ambition by making it easier for investors to access and transact across regional markets.

For Kenya, the opportunity extends beyond modernising its domestic financial infrastructure. As one of East Africa's established financial centres, the country can help shape how regional capital markets connect and operate.

Progress in Kenya could demonstrate how shared financial technology can reduce barriers between markets, improve access to investment opportunities and support greater regional participation.

Digitalisation has laid the foundation for Kenya's financial-market modernisation. Its next phase will depend on whether the country can build an integrated financial system that connects market information, investment opportunities and trade execution. This will help mobilise domestic capital, attract international investment and support sustainable economic growth.

George Duffield is Head of Sub-Saharan Africa at Bloomberg L.P.