Kenya tops Africa in private sector expansion with PMI 55 in Nov 2025, outpacing Nigeria and Uganda as regional economies strengthen.

Kenya recorded the strongest private sector expansion among eight major African economies in November, as business activity accelerated across the region, according to the latest Purchasing Managers’ Index (PMI) surveys published by S&P Global.

The East African economy topped the continental rankings with a headline PMI of 55, overtaking Nigeria, The marked upturn reflects a sharp rise in sales volumes and new customer orders, supported by softer price conditions and a wave of new product launches.

Uganda maintained its position as the region’s second-best performer at 53.8, followed by Nigeria at 53.6 and Zambia at 51.1. Mozambique and Ghana posted readings of 50.8 and 50.1 respectively, signalling marginal improvement.

Egypt’s private sector returned to growth for the first time in nine months, also registering a PMI of 51.1.

South Africa, however, was the only country to remain in contraction, underscoring its continued divergence from an otherwise strengthening regional trend.

A reading above 50 indicates an improvement in private-sector business conditions, while figures below the threshold point to a deterioration. The PMI surveys track trends in output, new orders, employment, suppliers’ delivery times and inventory levels across key industries.

In its latest Africa’s Pulse report, the World Bank notes that sub-Saharan Africa’s recovery is gaining momentum, with regional GDP projected to grow from 3.5% in 2024 to 3.8% in 2025, and to average 4.4% between 2026 and 2027. 

Related Story:Kenya’s business activity hits 11-month low on weaker demand, protests

The improved outlook reflects cooling prices pressures across the several economies, supporting broader economic stability in the region.

More on the countries’ business activities 

Kenya: Output, new business climb to five-year high

Kenya’s PMI rose to 55.0 in November from 52.5 a month earlier, marking the fastest growth in five years and a firm rebound from protest-related disruptions earlier in the year. 

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Firms reported a strong uplift in new orders as improved purchasing power, easing inflation and successful product launches drove demand. Businesses responded by increasing input purchases and hiring at one of the quickest rates since 2023.

“Inflation expectations are anchored,” said Christopher Legilisho of Standard Bank, noting softer increases in input, purchase and output prices, though higher material costs and taxes still squeezed margins.

Improved supplier delivery times supported inventory rebuilding across all monitored sectors. Confidence remained positive but continued to ease for a third month.

Uganda: Firms raise selling prices amid rising inflation

Uganda’s private sector posted another month of solid growth in November, with the PMI edging up to 53.8 from 53.4 in October as stronger new business and output underpinned activity. New orders rose for the tenth straight month and were spread across sectors, though gains were softest in construction.

To meet rising demand, firms increased hiring, ramped up input purchases and expanded inventories. The build-up in stock levels came despite renewed delays in supplier deliveries, which panellists linked to adverse weather conditions.

Inflation remained a key pressure point. Companies reported higher purchasing costs driven by broad-based price increases. “Businesses reported higher input prices in November, reflecting higher utility costs, especially electricity and water, and greater purchased goods prices,” said Legilisho. This prompted firms to lift selling prices to protect margins.

Business confidence for the year ahead held steady, supported by planned investment in advertising and marketing.

Nigeria: PMI expansion holds for 12 straight months

New product launches helped lift customer demand in November, driving another rise in new orders and business activity across Nigeria’s private sector. The country posted a PMI reading of 53.6, signalling solid improvement—only slightly softer than October—and marking 12 consecutive months of expansion.

Conditions were supported by easing inflationary pressures. Headline inflation slowed for a seventh month to 16.02% in October from 18.02%, the softest increase in more than three years. Input cost inflation moderated but remained elevated, while output price growth eased for the sixth time in seven months.

Hiring rose again, though at a slower pace, while firms sharply increased purchasing and inventory levels. Business confidence weakened further, hitting its lowest level since May.

“We still see the Nigerian economy growing by 4.0% in 2025,” said Muyiwa Oni of Stanbic IBTC. “Both manufacturing and services are likely to post stronger growth next year based on PMI trends so far.”

Zambia: Business activity rises slightly as energy shortages bite

Zambia recorded a modest improvement in business conditions in November, with the PMI edging up to 51.3 from 50.8 in October, supported by expansions in new orders, employment and input purchases. 

But the upturn remained fragile as persistent energy shortages weighed on output, which fell for a second month, while new business growth eased to a three-month low.“Agriculture was the only monitored sector to see simultaneous growth in output and new orders,” noted Musenge Komeki of Stanbic Bank.

Input costs rose at the fastest pace since May, although firms cut selling prices slightly to support demand, while confidence slipped to a ten-month low.

Egypt: Non-oil private sector exits contraction amid easing costs

Egypt’s non-oil private sector returned to growth in November, with the PMI rising to 51.1 — the first reading above 50 since February. 

Output expanded across manufacturing, construction and services, supported by a surge in new business after eight months of decline. 

Firms also benefited from slower increases in input and output prices, helping stabilise margins. Employment remained largely unchanged, contributing to a modest rise in outstanding work, while input inventories showed signs of stability.

S&P Global noted the upturn signals a strong end to the year: “Historically speaking, the latest PMI reading signals that year-on-year GDP growth could rise above 5% in the fourth quarter,” David Owen, a senior economist at the agency said. 

Despite softening slightly from October, expectations for future activity remained positive, pointing to a generally upbeat outlook for the sector.

Mozambique: Rising orders lift PMI to nine-month high

Mozambique’s private sector expanded at the fastest pace in nine months, with the PMI rising to 50.8 in November, driven by a surge in new orders and higher employment. Backlogs fell for the seventh consecutive month, while firms increased input purchases and improved supplier delivery times.

Cost pressures accelerated, with overall input prices rising due to higher material and wage costs, leading to a modest increase in selling prices.

“The PMI suggests some passthrough from cost increases to higher sales prices. USD/MZN stability should continue to limit inflationary pressures,” said Fáusio Mussá, Chief Economist at Standard Bank Mozambique.

The softer outlook coincides with post-election shocks and risks from a potential Mozal Aluminium shutdown, although LNG projects offer hope of recovery.

Ghana: Output stagnates despite cooling prices, stronger demand

Ghanaian firms saw business conditions remain largely unchanged in November, with the PMI edging slightly down to 50.1 from 50.3 in October, even as new orders rose for the tenth consecutive month. 

Companies continued to lower selling prices for the seventh straight month amid easing input costs, yet output remained flat. Employment, input purchases and inventory levels all increased, reflecting firms’ efforts to meet stronger customer demand.

“Companies are yet to see the full benefit of muted price pressures on business activity, but with the Bank of Ghana cutting interest rates again in November, we will hopefully start to see meaningful expansion,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.

Ghana’s headline inflation has been on a downward trajectory since January — a trend that has allowed policymakers to cut interest rates by 1000 points this year. 

South Africa: Business confidence hits 12-month high despite softer conditions

South Africa’s private sector contracted further in November, with the PMI slipping to 49.0, marking the fastest decline in eight months. 

The softer reading  was driven by lower new business and output, while input costs surged, putting pressure on margins. Industry and construction led the downturn, partially offset by steadier activity in services and wholesale & retail. Employment rose modestly, but input purchases remained muted amid subdued demand.

Despite these challenges, firms showed greater confidence for the year ahead, with optimism rising to the highest level in 12 months. 

Related Story:Kenya’s business activity nears expansion as confidence hits 30-month high

“After seeing improving business conditions throughout the middle of the year, the recent data may only reflect a modest cooling-off,” said David Owen. “The risk will be whether the uptick in price pressures observed in November is sustained, a factor that could hit business margins and customer demand.”

Kenya’s private sector hits five-year high in Nov 2025, driving bank loan demand, economic optimism, and investor confidence.

NAIROBI — Kenya’s private sector recorded its strongest expansion in five years in November 2025, raising expectations for increased borrowing activity and a brighter outlook for the country’s banking sector. According to a survey by Stanbic Bank Kenya, the Purchasing Managers’ Index (PMI) rose to 55.0 in November, up from 52.5 in October.

A PMI reading above 50 signals business expansion, and the November figure — the highest since October 2020 — marks the third consecutive month of growth. Firms across manufacturing, retail, services, and wholesale sectors reported strong demand, increased new orders, and rising output. Analysts say the expansion is partly due to easing input costs and moderate inflation, which have helped businesses maintain margins while boosting production.

Employment continued to rise for the tenth straight month, while many firms expanded procurement and rebuilt inventories to meet rising demand, signaling confidence in continued business growth. According to Kenyans.co.ke, companies expect robust demand to persist into early 2026, especially in sectors serving both domestic and regional markets.

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Implications for Kenya’s Banks

The rebound in private-sector activity is expected to translate into increased demand for credit. Businesses expanding operations typically require working capital financing, trade facilities, and longer-term loans. Analysts predict Kenyan banks will likely see higher loan volumes, potentially boosting both asset growth and profitability.

Recent regulatory reforms have introduced greater transparency in loan pricing, coupled with lower base lending rates, which have improved access to credit. This combination creates favorable borrowing conditions, particularly for small and medium-sized enterprises (SMEs) that form a significant portion of Kenya’s private sector. Banks are expected to respond by extending new credit facilities, especially in trade financing and working capital loans.

Strong business performance also reduces risk for lenders. With higher output and rising demand, borrowers are more likely to service loans on time, lowering the probability of non-performing loans (NPLs) and supporting bank balance sheets.

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Macro-Economic Context

The private-sector rebound comes as Kenya’s broader economy shows signs of stability. The government has projected GDP growth of 5.3% for 2025–2026. Global institutions, including the World Bank, have revised Kenya’s growth estimates upward to 4.9% in 2025, reflecting stronger economic activity than previously expected. (Reuters)

Eased input-cost pressures and moderated inflation have enabled firms to maintain competitive pricing while increasing output. Procurement, hiring, and inventory-building activities have picked up across sectors, supporting sustained economic momentum. Analysts suggest that ongoing demand will likely fuel both domestic investment and regional trade engagement, offering opportunities for banks that provide foreign exchange and trade-finance services.

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Investor Perspective

For international investors monitoring African banking markets, Kenya’s private-sector expansion offers a strong signal. Rising demand for credit, improving loan-servicing capacity, and stable macro conditions boost the attractiveness of Kenya’s banks.

Banks with diversified lending portfolios, including retail, SME, corporate, and trade financing, are particularly well-positioned to capitalize on the growth. Expanding loan books could enhance earnings, improve return on equity, and support stronger capital positions. Additionally, transparent loan-pricing frameworks make investment risk easier to assess, potentially attracting foreign capital into the sector.

Public-market analysts note that improved private-sector performance may also accelerate mergers, acquisitions, and capital-raising initiatives among mid-tier and large banks, aiming to capture growing demand.

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Risks and Watch Points

Despite encouraging trends, several risks remain. Input-cost pressures, especially from imported goods, could rise if global commodity prices surge or the shilling weakens against major currencies. Rising operational costs and taxes could also strain margins if demand softens.

Banks need to maintain prudent credit policies to mitigate potential increases in non-performing loans. Observers note that a rapid acceleration in lending could strain capital buffers, emphasizing the importance of robust credit-risk management.

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Outlook for Early 2026

Key indicators to monitor include:

• Credit growth across SMEs and corporates, signaling demand sustainability.
• PMI and employment trends to confirm continued expansion.
• Base lending rates and liquidity conditions shaping borrowing activity.
• Non-performing loan trends, indicating banking sector health.
• Trade-finance and foreign-exchange flows, impacting banks’ cross-border operations.

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Conclusion

Kenya’s private-sector rebound in November 2025 — the strongest in five years — points to a promising outlook for both banks and investors. Strong demand, stable input costs, and improved credit access have created conditions for sustained growth.

Banks are positioned to expand lending, particularly to SMEs and trade-finance clients, supporting broader economic recovery. For international investors, Kenya’s financial sector presents opportunities for growth and stability, reflecting the synergy between a vibrant private sector and a responsive banking system.

Kenya’s Family Bank secures Sh8 billion (~$65M) in an oversubscribed private placement, boosting capital and investor confidence.

Family Bank Secures Sh8 Billion (~$65M) in Oversubscribed Private Placement

Thursday, December 04, 2025 – 4 min read

Family Bank has successfully raised Sh8 billion (approximately $65 million) through an oversubscribed private placement targeted at institutional and accredited investors. The achievement underscores strong investor confidence in the bank’s growth strategy and reflects Kenya’s robust mid-tier banking sector.

The bank plans to deploy the capital to strengthen its Tier 1 capital, expand lending capacity, accelerate digital banking initiatives, and support infrastructure growth across Kenya. Analysts note that the oversubscription signals confidence in Family Bank’s resilient business model and ability to deliver consistent returns.

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Oversubscription Highlights Market Confidence

The private placement attracted commitments well above the targeted Sh8 billion, forcing the bank to scale back allocations to maintain regulatory compliance. Funds will be used to expand credit to SMEs and retail customers, a crucial segment in Kenya’s financial ecosystem.

“Investor interest demonstrates strong confidence in Family Bank’s growth trajectory,” said Family Bank CEO during a press briefing. “These funds will allow us to offer innovative solutions, improve digital services, and enhance shareholder value.”

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Private Placement Details

The Sh8 billion (~$65 million) private placement involved institutional investors, including pension funds, insurance companies, and high-net-worth individuals. Shares were priced at a premium to the prevailing market price, reflecting high demand.

The capital injection strengthens Family Bank’s Tier 1 capital ratio, enhancing its ability to meet regulatory requirements and support lending growth across retail, SME, and corporate sectors.

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Kenya’s Banking Context

Kenya’s banking sector has seen several capital-raising initiatives as lenders prepare for economic recovery, rising credit demand, and digital banking expansion. Oversubscribed private placements are increasingly popular among investors seeking stable returns from well-managed mid-tier banks.

Family Bank’s placement demonstrates its ability to attract substantial funding in a competitive market. Raising Sh8 billion in a single tranche is a significant achievement, signaling both investor confidence and market positioning.

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Impact on Borrowers and the Economy

Borrowers benefit from enhanced lending capacity, especially SMEs and individuals seeking personal or business loans. Medium- and long-term borrowers gain predictable access to credit, improving financial planning and business operations.

Economists note that the capital injection strengthens Family Bank’s financial resilience, enabling it to weather macroeconomic pressures while supporting credit growth. The bank’s expanded capital base may also improve liquidity in Kenya’s broader financial system.

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Strategic Use of Funds

Family Bank plans to deploy the raised capital across several key initiatives:

1. Lending Growth: Increase credit availability for SMEs and retail clients.
2. Digital Banking: Accelerate investment in fintech platforms for improved customer experience.
3. Infrastructure Expansion: Strengthen branch networks and ATMs in underserved regions.
4. Regulatory Compliance: Enhance Tier 1 capital ratios and meet Central Bank of Kenya requirements.

The bank’s strategy positions it to capture market share in Kenya’s growing financial services sector, particularly in SME-focused banking and digital platforms.

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Investor Takeaways

Investors gain access to equity in a bank with strong retail and SME penetration, which is often resilient to economic volatility. The oversubscription highlights high demand for well-managed mid-tier banks in Kenya.

Market analysts expect the fresh capital to enable Family Bank to increase lending capacity, invest in technology, and expand strategically, supporting financial inclusion and sustainable growth.

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Outlook

With Sh8 billion (~$65 million) raised, Family Bank is well-positioned to capitalize on Kenya’s expanding financial services market. The oversubscription reinforces the bank’s credibility and its ability to attract significant investor funding.

As Kenya continues to grow in digital banking, SME lending, and financial inclusion initiatives, Family Bank’s strengthened capital base provides a competitive edge, allowing the bank to serve its clients more efficiently while supporting national economic growth.