In a significant move to bolster Kenya’s economic landscape, the Nairobi Securities Exchange (NSE) has announced a strategic partnership with MOBILIST, a UK government-backed program aimed at enhancing investment opportunities within the Kenyan market. The collaboration was inaugurated at a high-profile event in Nairobi, attended by His Majesty’s Trade Commissioner for Africa, John Humphrey. This marks the beginning of a three-day UK trade visit to Kenya, reinforcing the UK-Kenya Strategic Partnership, a five-year agreement designed to promote mutual economic benefits.

The partnership between the NSE and MOBILIST aims to drive the listing of new investment products in Kenya, with a particular focus on sustainable development and climate-related projects. It is expected to increase private-sector capital available for development initiatives and economic growth, especially within the sectors most in need of funding. Kenya’s growing role as a leader in green industrialization and climate initiatives aligns well with the goals of this partnership.

MOBILIST’s Role in Mobilizing Investment for Sustainable Development

MOBILIST is part of the UK government’s investment strategy, designed to help emerging markets, such as Kenya, tap into global capital. The program provides investment and technical assistance to businesses contributing to the United Nations Sustainable Development Goals (SDGs), helping them overcome barriers to listing on stock exchanges. This is crucial in addressing critical development challenges, such as climate change, by channeling funds into scalable projects.

MOBILIST has already established similar partnerships with major African stock exchanges, including the Nigerian Exchange and the Johannesburg Stock Exchange (JSE). It is expected that Kenyan firms will soon follow suit, leveraging the expertise and resources offered by the program to expand their operations and attract international investors.

UK-Kenya Strategic Partnership and Its Broader Impact

The UK-Kenya Strategic Partnership, launched in 2020, has been a cornerstone of the bilateral relationship between the two countries. The partnership aims to unlock significant economic benefits for both nations while ensuring that Kenya does not take on unsustainable debt. Instead, the focus has been on fostering long-term investment that drives development and benefits both parties. Trade Commissioner Humphrey’s visit to Kenya underscores the UK’s commitment to this partnership, with a clear focus on climate projects and sustainable development.

During his visit, Humphrey is scheduled to meet with key Kenyan government officials, including Cabinet Secretary for Investments, Trade, and Industry, H.E. Salim Mvurya. Together, they will discuss the implementation of flagship climate projects that align with President William Ruto’s Africa Green Industrialisation Initiative (AGII). The AGII is a bold plan to position Africa as a global leader in green energy and sustainable industrialization, an area where the UK sees significant investment opportunities.

In addition to high-level government meetings, Humphrey will also launch the British Business Breakfast Club, an initiative aimed at understanding the challenges faced by British-Kenyan enterprises. By fostering dialogue and collaboration, the UK aims to address barriers to investment and trade, thus strengthening commercial ties between the two nations.

UK Trade Commissioner’s Visit and Focus on Key Kenyan Sectors

One of the highlights of Humphrey’s visit is his trip to Naivasha, where he will meet with Flamingo Flowers, one of Kenya’s largest exporters of cut flowers. The British-owned business employs over 11,000 Kenyans and has benefitted significantly from the global suspension of the 8% export tariff on cut flowers entering the UK. This move exemplifies the UK’s commitment to supporting industries that are vital to Kenya’s economy, particularly those that generate significant employment and contribute to export earnings.

Kenya is one of the largest exporters of flowers globally, with Europe being its main market. The removal of export tariffs on flowers entering the UK is expected to have an immediate positive impact on Kenya’s flower industry, providing Kenyan exporters with a competitive edge in the UK market. In turn, this will strengthen the country’s agricultural exports and support rural communities dependent on the flower trade.

The Role of the Nairobi Securities Exchange (NSE) in Driving Investment

The Nairobi Securities Exchange plays a pivotal role in Kenya’s capital markets, serving as a conduit for local and international investment. By partnering with MOBILIST, the NSE aims to expand its offerings and attract more listings, particularly from sectors focused on sustainability and climate resilience. This is in line with the NSE’s broader strategy of positioning itself as a hub for sustainable finance in Africa.

NSE CEO Frank Mwiti emphasized the importance of this partnership in mobilizing capital for sectors with the most pressing needs. “The strategic partnership between the NSE and MOBILIST aligns with our new strategic focus aimed at enabling the NSE to play a more dynamic role in mobilizing and channeling capital to sectors that have the most significant capital needs, with a special focus on sustainable development,” Mwiti said during the launch event.

The NSE has been working to position itself as a leader in sustainable finance, and the MOBILIST partnership is expected to enhance its capacity to attract investments that align with Kenya’s development goals. By providing a platform for businesses to raise capital through public markets, the NSE can play a crucial role in addressing funding gaps for key sectors, such as renewable energy, agriculture, and infrastructure.

MOBILIST’s Contribution to Africa’s Development Goals

MOBILIST’s mission to mobilize institutional capital for sustainable projects is not limited to Kenya. The program has been instrumental in helping African economies address some of their most pressing challenges by providing access to capital markets. In Kenya, MOBILIST is expected to work with businesses that are aligned with the UN’s SDGs, particularly in sectors that address climate change, such as renewable energy, sustainable agriculture, and water resource management.

Ross Ferguson, MOBILIST Programme Lead at the UK’s Foreign, Commonwealth & Development Office (FCDO), highlighted the potential of African stock markets to mobilize private capital for development. “Public markets in Kenya and other African economies hold great untapped potential to mobilize the private capital the continent urgently needs to gain ground in addressing the SDGs and the severe impact of climate change,” Ferguson noted. “MOBILIST is proud to partner with the NSE in building a local capital market that can give African firms working on these challenges access to the capital they need to grow.”

This sentiment was echoed by His Majesty’s Trade Commissioner for Africa, John Humphrey, who emphasized the importance of investment solutions in driving economic growth and development. “Mobilizing investment solutions in Kenya are vital to economic growth as they provide a platform for Kenyan businesses to raise the capital they need to expand their operations, increase cross-border trade, and employ more Kenyans – and at the same time tackle climate change and achieve critical development goals.”

UK-Kenya Partnership in Climate Action and Green Industrialization

The UK-Kenya Strategic Partnership also focuses on supporting Kenya’s efforts to tackle climate change through investment in green technologies and infrastructure. As part of President Ruto’s Africa Green Industrialisation Initiative (AGII), the UK has committed to investing in projects that support Kenya’s transition to a low-carbon economy. This includes investments in renewable energy, sustainable agriculture, and climate-resilient infrastructure.

The AGII aims to position Kenya as a leader in green industrialization, not only in Africa but globally. By leveraging Kenya’s abundant renewable energy resources, such as geothermal, wind, and solar power, the initiative seeks to create a sustainable industrial base that generates jobs, reduces emissions, and supports long-term economic growth.

Conclusion: A Promising Future for UK-Kenya Relations

The new partnership between the Nairobi Securities Exchange and MOBILIST marks a significant step forward in the UK-Kenya economic relationship. By focusing on sustainable development and climate resilience, the partnership aligns with Kenya’s long-term goals of becoming a regional leader in green industrialization. As the UK continues to deepen its investment ties with Kenya, both nations stand to benefit from the mutual economic and environmental gains that come with this collaboration. With initiatives such as the AGII and the removal of trade barriers, Kenya is well-positioned to attract the capital it needs to drive its development agenda and create lasting change.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

25th September 2024