Kenya trails Nigeria and South Africa in business growth

Kenya is falling behind Africa’s largest economies, Nigeria and South Africa, in producing the continent’s fastest-growing companies, as local firms struggle to expand beyond national borders.

The 2025 ranking of Africa’s fastest-growing firms by the Financial Times and Statista shows South Africa leading with 36 companies in the top 100, Nigeria following with 28, while Kenya only has seven.

Kenya’s highest-ranked firm is Roam Electric AB, an electric bus assembler based in Nairobi, placed 33rd on the list.

Hotel group TPS Easter Africa, which operates Serena hotels, is second among Kenyan companies at 41st in Africa, and fintech firm M-Kopa ranks third nationally and 68th on the continent.

In contrast, South Africa and Nigeria’s larger economies provide a bigger market and more entrepreneurial opportunities, helping their firms grow faster.

The gap reflects challenges faced by companies from smaller countries, where different currencies, legal systems, and business environments across African markets limit growth.

Stéphane Bacquaert, managing partner at private equity firm Adenia, said, "You deal with different currencies, different legal environments and, despite the political efforts to try to integrate the regions, the reality is that you don’t operate the same way in Côte d’Ivoire as in Senegal. Those are two very different markets, as are Kenya and Tanzania."

Many Kenyan firms remain confined to their local markets, while Nigerian and South African companies can grow quickly even without expanding internationally.

The Financial Times ranking requires senior executives to confirm submitted figures, ensuring a reliable snapshot of business growth.

Of the top three firms, all from Nigeria, only Palmpay, a fintech company, operates in more than three countries.

The first-ranked company, Omniretail, has operations in just Ghana and Côte d’Ivoire.

Kenya’s presence in the ranking has also declined from nine companies in 2024 to seven this year, with several firms dropping in position.

Roam Electric AB is ranked 35th, down from last year’s top Kenyan performer Kentegra Biotechnology, which ranked ninth on the continent but is no longer in the top list.

Other firms like Lipa Later and Quickmart have either fallen out of the top 100 or slipped in ranking. Victory Farms moved from 80th to 91st, and M-Kopa fell from 57th to 68th. IT company Impax also slipped from 78th to 82nd.

The ranking highlights a tough funding environment since the pandemic, compounded by currency depreciation and challenges in financing startups.

Ylva Lindberg, Vice-President at the Norwegian Investment Fund, said, "Both the funding environment and the exit environment have been tough."