Business & Money
BlackRock’s Africa Exit Underscores Challenges in Emerging Markets
One of its primary focuses was Kenya, a rapidly growing economy in East Africa. In this region, it made its inaugural private investment by acquiring a stake in Africa’s largest wind farm, a deal that was announced in 2023
: As Africa progresses through its economic journey, BlackRock’s experience provides crucial insights into managing the balance between opportunity and risk for sustainable long-term investments.
By Charles Wachira
BlackRock, the global investment giant and largest asset manager worldwide, recently announced its decision to exit the African continent, including closing its $400 million iShares Frontier ETF. The move comes amidst:
- Macroeconomic Challenges: Persistent macroeconomic challenges in African markets, including currency weaknesses and economic instability, have impacted investor confidence and returns.
- Foreign Investor Flight: Foreign investors’ flight from local bourses reflects broader concerns over market conditions and regulatory uncertainties.
Among its key focuses was Kenya, a burgeoning economy in East Africa. There, it made its first private investment, buying a stake in Africa’s largest wind farm in a deal announced in 2023.
Entry into Kenya and Africa: In 2012, BlackRock opened an office in South Africa, initiating its foray into Africa and targeting high-growth markets like Kenya, where it opened an office in 2014. This marked its entry into the Kenyan market, leveraging Nairobi’s status as a financial and economic hub in East Africa. The move was part of BlackRock’s broader strategy to expand its presence in emerging markets across the continent.
The move was part of a broader strategy to diversify its global portfolio and capitalise on the continent’s potential. With Kenya’s robust financial services sector and strategic location, BlackRock aimed to leverage local expertise and expand its footprint.
Reasons Behind the Move: BlackRock’s decision to enter Kenya and Africa was driven by several factors:
- Emerging Market Potential: Africa, including Kenya, represented untapped potential for growth in frontier and emerging market equities.
- Strategic Expansion: By establishing a presence in Kenya, BlackRock sought to strengthen its foothold in East Africa and position itself strategically amidst increasing global interest in African markets.
- Diversification: BlackRock’s decision to diversify its investment portfolio beyond traditional markets was crucial for mitigating risks and capturing new growth opportunities.
BlackRock Inc. saw investment opportunities in Kenyan stocks, which went from the world’s worst performers in 2023 to the best this year. The Nairobi All-Share stock index has surged by 48% when measured in dollars, rebounding from a 43% decline in 2023, when the index reached levels last seen in 2011.
Conclusion: While BlackRock’s entry into Africa marked a significant milestone in global investment, its recent exit highlights the complexities and risks inherent in emerging markets. For Kenya and other African nations, the focus now shifts to addressing macroeconomic vulnerabilities and enhancing investor confidence to foster sustainable economic growth.
As Africa continues to navigate its economic landscape, BlackRock’s experience serves as a valuable lesson in balancing opportunity with risk in the pursuit of long-term investment success.
Keywords:BlackRock Africa exit:Macroeconomic challenges in Africa:Kenya wind farm investment:Emerging market equities:Foreign investor flight
: KCB Group reports Sh44.5B ( US$ 342.31) nine-month profit, outpacing
Equity Bank. Learn about its 49% growth, challenges, and stock performance this
year.
KCB Group Plc has outperformed Equity Bank to cement its position as Kenya’s leading
lender, posting a net profit of Sh44.5 billion for the nine months ending September
This represents a 49% year-on-year growth, surpassing Equity Bank’s Sh37.5
billion profit during the same period.
Profit Growth Driven by Core Business Performance
The remarkable profit growth was fueled by higher earnings from both interest and non-
interest income streams. KCB’s diverse revenue base has been pivotal in maintaining
its dominance in the competitive banking sector.
Non-Performing Loans a Key Concern
Despite the impressive profit growth, KCB’s non-performing loan (NPL) ratio rose to
18.5%, compared to 16.5% last year. This increase highlights persistent challenges in
managing credit risk, with Chief Financial Officer Lawrence Kimathi acknowledging it as
a “pain point” for the bank.
KCB Stock Outshines Peers on NSE
KCB’s strong financial performance has translated into exceptional stock market results.
The bank’s stock has risen 78.8% year-to-date, making it the best-performing banking
stock on the Nairobi Securities Exchange (NSE).
Plans to Sell National Bank of Kenya
Earlier this year, KCB announced plans to sell its struggling subsidiary, National Bank of
Kenya (NBK), to Nigeria’s Access Bank. While Nigerian regulators have approved the
deal, it is still awaiting clearance from Kenya’s Central Bank. The sale aims to
streamline KCB’s operations and address losses at NBK.
CEO Paul Russo Optimistic About Year-End Performance
“The journey has not been without its hurdles, but our ability to walk alongside our
customers has driven our success,” said KCB CEO Paul Russo. He expressed
confidence in closing the year on a high note, leveraging improving economic conditions
across the region.
Key Figures at a Glance
● Net Profit: Sh44.5 billion (+49%)
● Non-Performing Loan Ratio: 18.5% (up from 16.5%)
● Stock Performance: +78.8% year-to-date
KCB’s strong performance underscores its resilience in navigating challenges and its
commitment to sustaining growth in Kenya’s banking sector.
Business & Money
Top 10 Kenyan banks by total assets as of 2023, based on data from the Central Bank of Kenya:
KCB Bank Kenya Limited
Total Assets: KSh 1.425 trillion
Market Share: 17.4%
Equity Bank Kenya Limited
Total Assets: KSh 1.004 trillion
Market Share: 12.2%
NCBA Bank Kenya PLC
Total Assets: KSh 661.7 billion
Market Share: 9.2%
Co-operative Bank of Kenya
Total Assets: KSh 624.3 billion
Market Share: 8.8%
Absa Bank Kenya PLC
Total Assets: KSh 520.3 billion
Market Share: 6.6%
Standard Chartered Bank Kenya
Total Assets: KSh 429.3 billion
Market Share: 5.9%
Stanbic Bank Kenya
Total Assets: KSh 449.6 billion
Market Share: 5.8%
I&M Bank Limited
Total Assets: KSh 405.6 billion
Market Share: 5.4%
Diamond Trust Bank Kenya
Total Assets: KSh 399.6 billion
Market Share: 5.3%
Bank of Baroda (Kenya) Limited
Total Assets: KSh 201.9 billion
Market Share: 2.8%
These rankings illustrate the dominance of large Tier 1 banks, which collectively control over
76% of the market share. Strategic expansions, increased deposit mobilisation, and robust
lending practices underpin the sector’s strong performance
: Vasundhara Oswal, daughter of industrialist Pankaj Oswal, faces serious
charges in Uganda. The Oswals call for UN intervention amid claims of corporate
jealousy.
Vasundhara Oswal, the 26-year-old daughter of prominent Swiss-Indian industrialist
Pankaj Oswal, has found herself at the centre of a legal storm in Uganda.
Her father, a well-established business figure, is known for his diverse investments,
most notably a $150 million ethanol plant in Uganda.
This plant, the largest of its kind in East Africa, is a key part of Oswal’s broader strategy
to invest in industrial and eco-friendly solutions in the region. The facility produces extra-neutral alcohol (ENA), which is used in the beverage, cosmetics, and pharmaceutical industries.
It is recognised for its modern technology and sustainable practices, such as zero liquid
discharge, emphasising the Oswal family’s commitment to both industrial growth and
environmental responsibility.
In addition to the ethanol plant, Pankaj Oswal has made strategic investments across
various industries, including petrochemicals, agriculture, and real estate.
His ventures reflect a global reach, extending to Australia and India, where he has
been involved in industries ranging from agriculture to renewable energy.
His diversified business approach and commitment to sustainability have made him a prominent figure in international business. However, in October 2024, the family’s legacy was overshadowed by the legal troubles surrounding Vasundhara Oswal.
She was detained on October 1, 2024, after being accused of involvement in the
alleged murder of Mukesh Menaria, a former employee who had worked with the
Oswals since 2017.
Menaria had accused the family of harassment but later testified under oath that they
had not harmed him Despite this, charges of kidnapping and murder were brought against Vasundhara.
Her family has strongly denied these allegations, claiming that the charges are
politically motivated and part of a larger conspiracy orchestrated by their business rivals
in collaboration with corrupt officials in Uganda.
The Oswals have appealed to the United Nations, seeking intervention and asserting
that the legal proceedings against Vasundhara are unlawful. Vasundhara has actively managed the family business throughout her career, especially the ethanol plant, and led the company’s sustainable initiatives.
Beyond her business involvement, she has also been an advocate for community
welfare and mental health, further cementing the Oswal family’s reputation for corporate
social responsibility.
The unfolding legal drama has raised important questions about the intersection of
business, politics, and the legal systems in Uganda.
While the Oswal family’s ventures reflect a blend of industrial innovation and social
responsibility, the legal challenges Vasundhara faces have cast a shadow over their
business empire, highlighting the complex dynamics at play in East Africa.
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