From DSTV to Old Mutual bank to the recently opened Game stores, South African firms have in recent past mushroomed in the Kenyan market as they seek to muster growth away from their country that is plunged in crisis.
How South Africa is slowly taking over Kenya
At least 60 companies have invested in the Kenyan market
The one time ‘economic giant of Africa’ is now at the helm of an economic turmoil marked by political infighting that is threatening to downgrade the country’s ratings.
Add to that a public debt nearing 50 per cent of the GDP and an economy forecast to improve by just 0.4 per cent, the future does not look positive for the South African economy.
In a bid to stay afloat, the countries’ companies have been forced to look for market elsewhere with Kenya alongside East Africa as a whole proving to be promising destinations.
The SA President’s recent visits to Kenya last year and Tanzania last week is just but proof of how the country is seeking to stamp its authority in the East African market.
Just last week, UK giant Vodafone transferred its 35 per cent stake in Safaricom to Vodacom of South Africa in a transaction worth $2.5 billion.
Prior to that, Distell Group bought a 26.43 per cent stake of Kenya Wine Agency (KWA) Holding East Africa Ltd from Centum Investment increasing its shareholding to 52.43 per cent.
The blossoming of SA firms has been due to the region’s positive economic growth, political stability, an improved regulatory environment and a big market of 120 million people.
Firms like Vodacom dominate Tanzania’s telecoms market and now it has a presence in Kenya through Safaricom. Likewise, MTN continues to command the market in Uganda and Rwanda.
Other South African companies that have seen their fortunes blossom in East Africa are CfC Stanbic Bank, Liberty, South Africa Airways, and Dimensions Data.
New entrants are now looking to make inroads into the market and compete with local firms and multinationals.
Game Stores, that recently opened doors in Garden City Mall, is seeking a piece of the Kenyan retail market which is already on a slowdown.
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