Kenya Musings

Kenya, in East Africa, is about four times larger than Nepal and has a population of 57 million, nearly double of Nepal’s 30 million. Its GDP stands at USD 124 billion, nearly three times Nepal’s USD 44 billion. As a result, Kenya’s per capita income of USD 2,132 is nearly 50% higher than Nepal’s USD 1,449. Kenyans also work abroad but their remittance, USD 5 billion or 6% of GDP, is lower than Nepal’s USD 11 billion or 25% of the GDP. While Nepalis take pride in never having been colonized, Kenyans take pride in avoiding civil wars in a continent frequently marked by them.

I have always been intrigued by Kenya, especially its currency history. The Kenyan Shilling was introduced in 1966, replacing the East African Shilling which was the currency used across East Africa. I once saw a note in Kolkata with a Gujarati friend who showed one that the currency used three languages – English, Arabic, and Gujarati. This reflects the fact that East Africa was strongly influenced by Indian business communities, particularly those from Gujarat. Although their population has dwindled over the years, they continue to play a significant role in trade and industry. The many Hindu and Jain temples, along with vibrant community centers, testify the enduring presence of Indian origin communities.

I was fortunate to attend the signing of a USD 250 million agreement for Bamburi Cements in Matunga, Kawle County. The Amsons Group, a large Tanzanian conglomerate, partnered with China’s Sinoma CBMI Construction Co. Ltd. (CBMI). President William Ruto witnessed the ceremony, signaling Kenya’s desire to attract more foreign investments to promote import substitution and job creation. It was interesting to see the event that took place at 8 am, with the invitation marked for 7 am. I was told that this is common practice to avoid traffic congestion and allow attendees to reach work afterward.

While there are many issues to discuss in terms of promoting foreign investment, projecting the country as a regional hub, and pushing its global ambitions, three lessons from Kenya stand out for Nepal.

First, on December 15, I observed that the Cabinet approved the establishment of a National Infrastructure Fund and a Sovereign Wealth Fund. The funds will be financed through the sale of government stakes in key telecommunication, infrastructure, and other sectors, and will invest primarily in infrastructure projects. The goal is to create a KES 5 trillion (USD 38.8 billion) fund to transform the economy. Nepal could similarly divest from state-owned businesses with significant real estate holdings and channel those resources into public-private partnership projects with the private sector and multilateral financial institutions.

Second, like I noted in an earlier piece on Zimbabwe, there is much to learn about increasing tourism revenue. In 2024, Kenya welcomed 2.4 million international visitors, which is double Nepal’s figures but earned USD 3.5 billion in tourism revenue, nearly five times Nepal’s USD 700 million. While tourists spend a similar number of days (12-14), their average daily expenditure is USD 120 compared to a mere USD 43 in Nepal. This reinforces what we at Nepal Economic Forum have constantly emphasized: Nepal must move up the value chain and focus on earnings rather than visitor numbers.

Third, Kenya has positioned itself as an international hub. In the 1960s, after independence, Kenya provided land for United Nations (UN) offices, attracting a significant inflow of expatriates. It has over 80 embassies with many of the Ambassadors based in Nairobi accredited to the neighboring countries. Currently, 6,000 people work in various UN organizations in Kenya, with 5,000 stationed at the United Nations Office at Nairobi (UNON). A USD 350 million project is underway to expand UNON’s infrastructure as well. I found it insightful to interact with Nepalis working at these offices and learn how Kenya positions itself as an African hub for international organizations. Similarly, Bower Group Asia (BGA), the US strategic consulting firm I am associated with, has its Africa headquarters in Nairobi, with operations across six African countries.

The contrast in capital markets is striking. A decade ago, Nepal and Kenya’s stock exchanges each had a market capitalization of around USD 10 billion. By 2025, Nepal’s market had grown to USD 33 billion (75% of GDP), while Kenya’s stood at USD 22 billion (20% of GDP). I have long observed how domestic capital formation through Nepal’s stock market has driven economic transformation.

I am currently traveling to various countries, discussing Nepal 2043, and exchanging lessons that could benefit Nepal. Kenya is certainly a country from which Nepal can learn and could also serve as a hub for Nepali knowledge workers looking to expand into Africa. Few people recall that Cloud Factory, a technology company founded in 2010, chose Kenya as its first African expansion. We hope to see more such ventures in the future.