Weekly Business Roundup: Kenya & East Africa (Week Ending January 31, 2026)

By Benadeta Mwaura - Reporter

31 January 2026 - This week’s business developments highlighted infrastructure and agricultural productivity gains, evolving financial sector dynamics, regional economic cooperation, and responses to internal security challenges that influence markets.

From Kenya’s capital markets and policy shifts in agriculture to Ethiopia’s record wheat harvests and AU diplomatic efforts, East Africa’s business ecosystem continues to adapt to regional and global economic forces.

Kenya’s Economic and Financial Sector Developments

1. Inflation Moderates as Key Cost Drivers Ease

Kenya’s annual inflation rate eased to 4.4% in January 2026, driven by declines in transportation, food staples and internet costs. Lower inter-city fares, reduced fuel prices, and cheaper communication services helped ease household price pressures while moderating headline inflation within the Central Bank of Kenya’s target range, a positive signal for consumer purchasing power and business input costs.

This trend reflects broader macroeconomic stability but also underscores the need for continued attention to regional agricultural supply dynamics where prices for some food items rose.

2. Road Safety Concerns Reflect Broader Social Costs

While not strictly a business story, the 398 road deaths in Kenya during January highlighted by the Traffic Police have economic implications for labour markets, healthcare costs and productivity. High accident rates strain public resources and disrupt value chains, especially in logistics-dependent sectors. Road safety remains central to sustainable economic growth.

3. NSSF Payout Trends and Pension Sector Confidence

Developments in the National Social Security Fund (NSSF) showed a 10 percent decline in retiree payouts even as contributions surged, reflecting structural issues in benefit uptake and demographic dynamics. This divergence raises questions about retirement security and the efficient translation of growing domestic savings into social protection outcomes.

4. SACCO Sector Stability and Legal Relief

In a significant case for Kenya’s cooperative finance sector, the High Court paused the auction of KUSCCO property over a KSh 108.8 million debt dispute, giving the apex SACCO body breathing room to defend its position. The ruling has sector-wide implications for liquidity, governance and confidence among member savings and credit societies.

5. Trade, Logistics and Fuel Initiatives

Private-sector innovation continued with partnerships such as KCB Bank and Pesapal digitising operations at over 10,000 fuel stations, which is expected to reduce transaction frictions, open new fintech revenue streams, and improve operational efficiency across the transport and energy sectors, crucial for market fluidity in East Africa.

6. Policy Shifts in Agriculture and Funding Caution

Kenya’s agricultural policy is adjusting toward reducing cereal imports to boost local production and agribusiness value chains. However, warnings of agricultural funding cuts raise concerns about mechanisation, rural development and smallholder productivity, potentially hampering sector resilience.

Ethiopia’s Business and Economic Sector Highlights

1. Record Wheat Production Signals Agricultural Gains

Ethiopia’s national wheat production reached 126.69 million quintals in the first half of the 2018 Ethiopian calendar, marking a major stride toward food self-sufficiency. Prime Minister Abiy Ahmed credited expanded cultivation, strengthened seed systems and smallholder support for the surge. While domestic demand continues to grow, rising output reduces reliance on imports and bolsters rural incomes and food security.

2. Public Infrastructure Bolsters Market Access

The government’s scaling up of rural roads and essential services is enhancing connectivity for farmers, lowering transport costs, and improving access to healthcare, education and market services. Supported by World Bank programmes and UNOPS equipment investments, expanded rural infrastructure is expected to stimulate local economies and improve logistics across Ethiopia’s agrarian economy.

3. Trade Misinvoicing Report Shows Revenue Leakage

A new report estimates Ethiopia lost $24.6 billion to trade misinvoicing between 2013 and 2022, highlighting a major leak in revenue and foreign exchange. Policymakers and analysts are pressing for customs reform, digital valuation systems and stronger enforcement to shore up fiscal resources for development priorities.

4. AU Diplomacy and Regional Stability Concerns

China, Somalia Pledge Closer Security, Trade Partnerships

Osotsi’s Oversight Stance Exposes Growing Tensions in Vihiga County Politics

At the continental level, the African Union Commission Chairperson called for maximum restraint amid renewed tensions in Tigray. While primarily a security and political issue, stability is essential for investor confidence and sustained economic engagement in northern Ethiopia.

Regional Economic and Business Integration

1. Kenya–Uganda Cooperation on KPC IPO

Kenya and Uganda engaged in consultations over the Kenya Pipeline Company (KPC) IPO, focusing on shareholding structure and continued access to critical transport infrastructure. The offering, one of East Africa’s largest, is already under subscription ahead of its Nairobi Securities Exchange listing, reflecting deepening regional economic integration.

2. Critical Minerals Interest Intensifies

Global interest in East Africa’s critical minerals, particularly Kenya’s rare earth deposits at Mrima Hill, gained momentum as the U.S. seeks strategic footholds to diversify supply chains. This aligns with national priorities to attract investment, strengthen processing capacity and advance value addition in high-demand commodity markets.

3. Uganda Revises Growth Forecast Ahead of Oil Output

Uganda lowered its annual growth forecast to 6.5 – 7 percent even as crude output and the East African Crude Oil Pipeline (EACOP) move toward first exports. The pipeline, linking Western Uganda to Tanzania’s Indian Ocean coast, remains a cornerstone project with regional infrastructure and investment implications.

Somalia’s Economic and Financial Sector Highlights

1. Financial Sector and Agribusiness Growth

Somalia’s economy displayed resilience with microfinance expansion via Salaam Somali Bank, increased agribusiness support through innovation grants, and capped dollar cash outflows to strengthen foreign reserve management and banking confidence. Efforts to deepen financial inclusion and support private-sector growth point to broadening economic participation.

2. Puntland’s Strategic Development Roadmap

The Puntland region unveiled a five-year strategic plan focused on self-sufficiency and governance reforms, an approach that could improve the investment climate and foster diaspora engagement and private-sector partnerships.

Regional Integration and Cross-Border Collaboration

1. EAC Institutional and Trade Integration

Somalia’s increasing participation in the East African Community’s institutional frameworks, including representation in the EALA, supports regulatory harmonisation and greater regional trade facilitation, a key driver of broader economic integration.

2. Tech and Innovation Push Across East Africa

Highlights of gender-inclusive innovation include funding for seven women-led startups in East Africa, underscoring the region’s growing support for diverse entrepreneurship and scalable tech solutions.

This week’s business stories reveal a dynamic economic landscape where infrastructure expansion, food production gains, financial sector developments and regional integration are shaping growth trajectories across East Africa.

From Kenya’s inflation moderation and financial sector reforms to Ethiopia’s agricultural achievements and Ethiopia–Somalia diplomatic engagement, markets are responding to both internal policy shifts and external investment flows.

Strategic regional collaborations, such as the KPC IPO consultations and critical mineral engagements, further reflect East Africa’s integration into global value chains.

Together, these developments illustrate an economic environment that is increasingly interconnected, innovation-driven and policy-responsive, even as countries navigate fiscal pressures, food security challenges and geopolitical dynamics.