All cabinet secretaries who made it to President William Ruto’s nomination for a second time posted an increase in net worth in the past two years majorly from what they attributed to their businesses.
However, over the past year, the case has not been the same for a number of prominent Kenyan companies that have found themselves under administration or facing liquidation.
A trend highlighting the significant challenges within the country's business environment, impacting a majority of the sectors from insurance to manufacturing and tech startups.
In July 2024, the High Court Judge Alfred Mabeya hit the last nail on Blueshield Insurance coffin, upholding the Insurance Regulatory Authority’s decision that the insurer cannot get back to its footing.
This signaled an end for the insurance firm that was incorporated in 1982.
Similar is the story of Resolution Insurance, that went down with Sh4.1 billion in Gross Written Premiums, as at December 2021, according to data by the IRA. The highest contributor was the medical insurance with around Sh3.6 billion.
The company had been facing a number of challenges particularly relating to its ability to meet its obligations and mitigate its inherent risks.
UK-based global insurance solutions provider–Linkham Group attempt to rescue the insurer through a majority stake acquisition, dragged until the firm went under.
Similarly, in December 2023, Insurance Regulatory Authority (IRA) placed Xplico Insurance under statutory management and appointed PCF to manage the insurer.
The situation has not only been tough for insurance players, in the manufacturing sector, Savannah Cement has faced severe financial difficulties.
Despite being a major supplier of cement in the region, the company has been unable to sustain operations due to mounting debts and competitive pressures.
In August 1, almost one year after the High Court approved the appointment of an administrator to recover Savannah Cement’s defaulted debt, the failed cement maker’s administrator has invited expressions of interests in its assets.
“EOI should clearly be marked ‘Expression of Interest – For purchase of the business and assets of Savannah Cement Limited (Under Administration, In Receivership)’ prepared in English and submitted in sealed envelopes presented in three hardcopies, one of which is an original, should be delivered and addressed to Peter Kahi, the administrator,” said the notice.
Similarly, Kansai Coatings, known for its paint products, has also encountered economic headwinds that have pushed it towards insolvency.
In May this year, Kansai Coatings Kenya, a distributor of paints, announced Members’ Voluntary Liquidation, a less costly process of terminating a firm that is about to wind up operation.
Kansai said that the decision was formalized during an Extraordinary General Meeting (EGM), where members passed the necessary resolutions to initiate the process.
“Notice is hereby given that Members’ Resolutions were passed at the EGM of the members of Kansai Coatings Kenya Ltd (the Company) placing the Company in Members’ Voluntary Liquidation and appointing KVSK Sastry, as the Liquidator with immediate effect,” read a notice by Kansai.
The tech and logistics sectors have also been hit hard. Copia, Copius, iProcure, and the latest being Mobius have all struggled to navigate the challenging business landscape.
Copia, a retail platform aimed at underserved communities, and iProcure, an agricultural supply chain integrator, have both been unable to secure the necessary funding to continue operations.
Mobius, a manufacturer of affordable vehicles for the African market, has faced production and financial hurdles, announcing closure on August 7, 2024.
Sendy, a logistics and delivery company, also found it difficult to maintain profitability amid increasing operational costs and competitive pressures.
The cases underline a broader economic issues facing Kenyan businesses.
This as the combination of high operating costs, competitive markets, and economic instability has created a challenging environment for companies to thrive.