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. 

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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. 

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“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.”

IMF cautions Kenya and Ethiopia on currency risk from swapping U.S. dollar loans into yuan amid global rate pressures.

IMF Warns Kenya and Ethiopia on Currency Risks

The International Monetary Fund (IMF) warned on November 11, 2025, that Kenya, Ethiopia, and other emerging economies face potential currency risks as they convert U.S dollar dominated loans into Chinese yuan.The shift, part of a broader trend among developing nations, aims to ease debt servicing costs but may expose countries to new exchange rate vulnerabilities.

In its statement, the IMF noted that while these currency swaps may reduce immediate borrowing costs, they do not eliminate macroeconomic risks. “Countries must carefully weigh the short-term benefits of debt conversion against the longer-term challenges posed by currency fluctuations,” the IMF said.

The Mechanics of the Currency Swap

Kenya, like several African economies, has explored Chinese financing to fund infrastructure and development programs. Loans from China have traditionally been U.S. dollar-denominated, which exposes borrowers to fluctuations in the exchange rate between their local currency and the dollar.

By converting these loans into Chinese yuan, countries hope to stabilize debt payments, particularly as the U.S. dollar remains strong and interest rates high. However, the IMF warns that this approach introduces new risks tied to yuan volatility, international trade dynamics, and potential refinancing challenges if global conditions shift.

For Kenya, the move could ease pressure on the shilling, which has faced depreciation against the dollar in recent years. Analysts caution that reliance on yuan could make the country more sensitive to China’s monetary policy and capital flow regulations.

Regional Implications

The IMF highlighted that Kenya is not alone. Ethiopia, among other East African nations, has undertaken similar measures. The fund emphasized that while currency swaps can provide short-term relief, they do not replace broader economic reforms necessary for fiscal stability and debt sustainability.

Economist George Muchiri of the University of Nairobi said, “Converting loans to yuan might give temporary breathing room. But countries like Kenya must strengthen revenue collection, manage public spending, and maintain foreign reserves to avoid a future crisis.”

Global Context

The trend of dollar-to-yuan swaps reflects larger shifts in global finance. Many developing nations are increasingly considering alternatives to U.S.-denominated debt to reduce exposure to high interest rates. With the Federal Reserve maintaining historically high rates, emerging markets carrying significant dollar-denominated debt face growing debt service costs.

China, meanwhile, has actively promoted its currency in global finance. Yuan-denominated loans and bonds, sometimes referred to as “dim sum” debt, offer borrowers an alternative but carry their own geopolitical and market risks.

Potential Risks for Kenya

For Kenya, several risks accompany the decision to swap currencies:

1. Exchange Rate Exposure: If the shilling weakens against the yuan, debt servicing could still increase.
2. Refinancing Challenges: Yuan-denominated loans may be harder to restructure if global conditions change.
3. Policy Dependence: Kenya may become more sensitive to Chinese domestic financial policies and capital controls.

The IMF stressed that prudent debt management and transparent reporting remain critical to avoiding fiscal stress.

Balancing Benefits and Risks

Despite the warnings, converting debt from U.S. dollars to yuan can deliver tangible benefits. Lower interest rates and more predictable payment schedules can free up funds for infrastructure and social programs. For Kenya, this could mean more budget flexibility to invest in energy, transport, and industrialization projects that drive long-term growth.

The IMF urged governments to adopt a cautious, measured approach. Officials recommend regular stress tests, robust hedging strategies, and strong fiscal discipline to ensure currency swaps do not inadvertently worsen financial vulnerabilities.

Conclusion

Kenya’s decision to swap U.S. dollar loans into yuan illustrates the complex choices facing emerging economies in today’s volatile global financial landscape. While the move can reduce near-term debt pressures, IMF experts caution that it carries long-term currency and refinancing risks.

As Kenya continues to balance fiscal needs with market realities, policymakers must carefully monitor exchange rate trends and maintain robust economic safeguards. The IMF concluded:

“Currency conversion is a tool, not a solution. Countries must integrate it into a broader strategy for fiscal sustainability.”

Centum plans Kenya’s first dollar-denominated REIT worth $37M, boosting foreign investor confidence and deepening the country’s real estate market.

Kenya’s Centum Unit to Launch Country’s First Dollar-Denominated REIT

Kenya’s capital markets are on the brink of a historic milestone as Centum Investment Company Plc prepares to introduce the country’s first dollar-denominated real estate investment trust (REIT). The move underscores a growing appetite among international investors for Kenyan real estate and signals the country’s gradual transition toward globally aligned capital-market products.

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A Landmark Move by Centum

According to Bloomberg News, Centum’s subsidiary — Two Rivers International Finance & Innovation Centre (Trific) — plans to issue a US $37 million REIT denominated in US dollars before the end of 2025.

The product will be the first of its kind in Kenya, marking a new phase of diversification within the Nairobi capital market. Centum’s Group Chief Executive James Mworia said the dollar-priced REIT aims to attract both local and international investors seeking predictable returns and protection from local-currency depreciation.

The instrument is expected to deliver an 8 percent annual return and will require a minimum investment of US $1,000, making it accessible to a wide range of investors.

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Why This REIT Matters for Kenya

The launch of a dollar-priced REIT is more than a financial innovation — it’s a statement about Kenya’s evolving capital market. For years, Kenya’s real estate and investment sectors have been dominated by shilling-denominated instruments, which often deter foreign investors due to currency-exchange risk.

By pricing in US dollars, Centum’s REIT offers a hedge against shilling depreciation and provides an opportunity for investors to earn stable, foreign-currency returns from local assets. This could help deepen investor confidence, enhance market liquidity, and broaden the pool of foreign capital flowing into Kenya.

The initiative also aligns with the Capital Markets Authority (CMA) reforms that aim to expand alternative investment products, such as REITs, to support Kenya’s Vision 2030 development goals.

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Key Features of Centum’s Dollar-REIT

Feature	Details
REIT Size	Approximately US $37 million
Minimum Subscription	US $1,000
Expected Annual Return	8 percent
Asset Base	Fully leased, USD-generating property under Trific
Regulatory Status	Awaiting approval from the Capital Markets Authority
Planned Launch	Before end of 2025

The REIT will acquire a fully leased, revenue-generating commercial property located within Two Rivers Development — one of East Africa’s largest mixed-use projects, owned by Centum.

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Market and Regulatory Implications

The launch of this REIT represents a breakthrough for Kenya’s capital-market innovation. However, it must first secure regulatory approval from the CMA, which has historically exercised caution in licensing new investment products to protect investors.

Experts believe this product could open the door for other foreign-currency-denominated instruments, helping diversify the Nairobi Securities Exchange (NSE) portfolio. In the long term, it could position Kenya as a preferred investment hub for East African property funds.

Still, challenges remain. Market analysts warn that property-valuation transparency, tenant creditworthiness, and macroeconomic headwinds — including inflation and high interest rates — could influence performance. Nevertheless, the REIT’s USD pricing significantly cushions investors from local-currency volatility.

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Broader Economic Context

Kenya’s property market continues to attract institutional capital, thanks to rapid urbanization and rising demand for Grade-A commercial space. The country’s infrastructure development under projects such as Vision 2030’s Big Four Agenda and Nairobi’s affordable housing program has further boosted investor confidence.

According to data from Knight Frank Kenya, Nairobi remains one of Africa’s top destinations for high-yield commercial properties, with rental yields averaging 8 – 10 percent in prime zones. Centum’s dollar REIT is expected to capitalize on this demand while offering global investors an easy entry into Kenya’s real-estate market without direct currency exposure.

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What It Means for Investors

For foreign investors, this REIT provides a stable entry point into an emerging market with high potential for real-asset growth. By earning returns in US dollars, investors mitigate the impact of local-currency depreciation — a major concern for global portfolios in frontier markets.

For local investors, the product encourages a new savings and investment culture that bridges domestic and global financial systems. As Centum sets the precedent, other developers may follow suit, introducing hybrid and offshore-linked instruments.

This will likely enhance transparency, improve reporting standards, and attract more institutional investors — such as pension funds and insurance companies — into Kenya’s real-estate sector.

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A Step Toward Market Maturity

Kenya’s financial system has undergone steady reform since the 1990s, but REIT adoption has lagged due to low investor awareness and regulatory complexity. Centum’s initiative could shift perceptions by demonstrating how professionally managed, dollar-based instruments can deliver returns comparable to — or even surpassing — traditional real-estate projects.

As the Nairobi Securities Exchange seeks to boost listings and diversify revenue streams, such innovations could inject new vitality into Kenya’s investment landscape.

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Conclusion

Centum Investment Company’s plan to introduce Kenya’s first dollar-denominated REIT marks a defining moment for the country’s capital markets. It reflects both confidence in Kenya’s economic fundamentals and a strategic move to align with international investment trends.

Once approved and launched, this US $37 million REIT could attract global investors seeking stable, dollar-linked returns in Africa’s most dynamic property market. More importantly, it signals Kenya’s readiness to compete in the international investment arena — one dollar at a time.