New data from Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) showed companies reduced staffing levels during the month, ending a stretch of continuous job creation that had lasted since the start of 2025. 

Many businesses said the reductions mainly affected temporary workers as lower demand eased pressure on capacity.

The PMI fell to 46.6 in May from 49.4 in April, the steepest deterioration in business conditions since July 2024. A reading below 50 signals a contraction in activity.

The downturn reveals a strong slowdown across the private sector. New orders declined for a third consecutive month and at their fastest pace since mid-2025 as customers cut spending and tightened household budgets. 

Business activity also weakened further, with firms linking the decline to lower sales and softer demand.

Construction and services companies reported falls in both output and new orders during the month. Manufacturing was the only sector to record growth in production, while declines were recorded elsewhere. Agriculture and retail businesses were among those that reduced staff numbers.

Private sector employment fell after firms reported they had enough capacity to handle current workloads. Backlogs of work also declined for a third straight month, reducing the need for additional hiring.

Christopher Legilisho, economist at Standard Bank, said: “The Stanbic Bank PMI data for May reflects a deterioration of business activity by private sector firms. Inventory purchases slowed, from being expansive, because of weakening sales, cash flow concerns, and rising costs. 

“Consumer resistance to spend, alongside rising costs, contributed to contractions in new orders and output. These declines may stem from the week-long disruption to business activity because of nationwide protests by transportation sector players that constrained movement.”

High costs added to the challenges facing businesses and, ultimately, jobs in Kenya. The survey showed overall input price inflation accelerated to its strongest level since November 2023, driven largely by higher purchase costs, fuel expenses and transportation charges.

Although wage costs continually increase, businesses kept salary growth moderate. Many firms also slowed inventory purchases and held back spending as they sought to preserve cash due to weaker sales and tighter margins.

At the same time, companies passed part of the higher costs on to customers. Selling prices rose at the fastest pace in two and a half years, with all five monitored sectors reporting increases.

The weaker business conditions will likely lead to concerns about employment prospects, particularly as thousands of young Kenyans enter the labour market every month. Consumer-facing businesses, including startups and technology firms that depend on household spending, could also face softer demand if spending remains subdued.

Despite the difficult operating environment, firms were optimistic about the year ahead. Business confidence climbed to its highest level since February 2023, supported by plans to increase advertising, introduce new products and expand digital sales channels.

Legilisho added: “Inflationary pressures have intensified, constraining demand conditions, with input prices, purchase costs and output prices driven up by higher fuel and transportation costs. Still, despite subdued business momentum, firms remain optimistic about future conditions.”

Under the Finance Bill 2026 before parliament, the government wants to introduce a 15% capital gains tax on gains made by non-resident investors selling shares abroad when those shares derive value from Kenyan assets or operations.

If passed, the amendment to Kenya’s Income Tax Act would allow the Kenya Revenue Authority (KRA) to tax transactions completed outside the country, even when the companies involved are registered in foreign jurisdictions such as Mauritius, Delaware, London or the Cayman Islands.

The proposal targets a long-standing structure used by venture capital and private equity firms investing in African startups. Many Kenyan startups operate locally but are incorporated abroad because foreign investors prefer offshore holding companies that simplify fundraising, offer stronger legal protection and make acquisitions easier.

Kenya now wants a share of the profits when those investors exit.

The bill states that gains arising from “the alienation of shares by a non-resident person where the shares derive their value from Kenya” would become taxable locally, regardless of where the transaction happens.

Treasury officials are also seeking powers to tax deals involving “a change of the group membership of a company resident in Kenya” as well as changes in ownership tied to Kenyan property.

The proposed law could impact investor exits in sectors including technology, energy and infrastructure, where offshore ownership structures are common.

For founders and investors in Kenya’s startup ecosystem, the changes may create fresh tax exposure during acquisitions, secondary sales and restructuring exercises carried out at the holding-company level.

The Institute of Certified Public Accountants of Kenya (ICPAK) warned lawmakers that the amendment may go beyond standard asset sales.

“As drafted, the provision may create Kenyan CGT exposure for offshore investor exits, capital raising transactions, group restructurings and internal reorganisations undertaken at holding company level,” the body said.

Kenya’s move follows a string of high-profile disputes over offshore transactions linked to local assets.

Last year, Tullow Oil agreed to sell its Kenyan subsidiary, Tullow Kenya BV, to Gulf Energy in a deal connected to the Lokichar oil project in Turkana. Although the transaction was structured offshore, the KRA issued a KES 21 billion ($161.7 million) tax demand, arguing that the transferred shares drew their value from Kenyan oil resources.

The tax authority took a similar position in the 2017 sale of Java House by Emerging Capital Partners to Dubai-based Abraaj Group. Kenya’s Tax Appeals Tribunal later upheld a KES 773.8 million ($5.9 million) tax assessment after rejecting arguments that the transaction fell outside Kenya’s jurisdiction.

The Finance Bill 2026 also includes other tax measures. Kenya plans to raise rental income tax from 7.5% to 10%, introduce a 20% tax on gambling winnings and impose a 1.5% withholding tax on scrap metal sales.

Most provisions in the bill are expected to take effect from July 1, 2026, if parliament approves them.

Kenya is not alone in strengthening tax rules around offshore deals. Uganda already taxes some offshore transactions linked to local assets, while governments across emerging markets are increasing pressure on multinational investors to pay taxes where economic value is created.

For foreign investors already dealing with a slow funding market across Africa, the proposed tax could complicate and increase the cost of Kenyan startup exits.

The project, announced in May 2024 during President William Ruto’s visit to Washington, was expected to become one of the biggest digital infrastructure investments in East Africa. 

Microsoft and Abu Dhabi-based G42 planned to build the facility in Olkaria, near Naivasha, using geothermal power. It was also meant to host Microsoft’s first Azure cloud region in East Africa.

However, negotiations later became difficult after Microsoft and G42 asked the Kenyan government to guarantee annual payments for part of the data centre’s computing capacity. 

According to reports from Bloomberg, Kenya could not provide guarantees at the level the companies requested, and discussions on the Microsoft data centre project stalled.

The delay has now raised wider concerns about whether Kenya’s current infrastructure can support hyperscale data centres and growing artificial intelligence workloads.

At full scale, the facility was expected to require around 1 gigawatt of electricity. That is close to one-third of Kenya’s current installed power capacity, which stands between 3,000 and 3,200 megawatts.

President Ruto had earlier warned about the pressure such a facility could place on the country’s grid.

“To switch on that one data centre, we would need to shut off power for half the country.”

Kenyan officials say the project has not been abandoned. John Tanui, principal secretary at Kenya’s Ministry of Information, said discussions are still ongoing, although the structure and scale of the project is still under review.

“The scale of the data centre they wanted to do still requires some structuring,” he said, while adding that power requirements are still under discussion.

The government now wants to expand Kenya’s electricity capacity to 10,000 megawatts by 2030 as it pushes to attract more large-scale technology investments.

Officials are also considering a phased rollout, beginning with a smaller 100-megawatt facility before expanding gradually. That approach could reduce immediate stress on the national grid while allowing Kenya to continue negotiations with Microsoft and G42.

The uncertainty around the project also reveals a bigger challenge facing African countries trying to attract global cloud and AI investments. 

While demand for digital infrastructure is growing with speed, many countries still lack the power generation and transmission capacity needed to support energy-intensive facilities.

The delay could also affect the rollout of Microsoft Azure services across East Africa, including cloud tools tied to products such as OneDrive and Copilot.

Neither Microsoft nor G42 immediately responded to requests for comment on the reported Kenya data centre dispute.

The deal allows ShipAfrica to plug into Unlimit’s payment network, giving customers access to a wide range of local and international payment options. 

The integration is already live in several countries. Users in Kenya can now complete transactions through Pesalink, M-Pesa, and Airtel Money. 

Tanzania has added M-Pesa, Airtel Money, and Mixx, while ShipAfrica customers in Nigeria can pay via bank transfers and cards. Major global card schemes will also be enabled in additional markets.

ShipAfrica’s platform connects African sellers and shoppers with overseas destinations and offers delivery services for individuals and businesses. The company expects the new payment channels to reduce failed transactions and improve access for users who rely on domestic payment systems. 

“Enabling cross-border operations is at the heart of Unlimit’s mission. By integrating Unlimit’s payment platform, we are enabling ShipAfrica to receive payments locally in the markets where our customers are most active. 

“This eliminates the friction of international payment processing, reduces transaction costs, and improves access for consumers who prefer local payment methods,” explains Walter Isoko, CEO, at ShipAfrica.

Unlimit, which launched in 2009, provides payment processing, banking-as-a-service, and other financial services to clients operating across different regions. The company has offices in 17 locations, including London, Singapore, and São Paulo, and employs more than 700 staff.

Africa’s online retail market continues to expand, with revenue expected to reach $61.78 billion by 2030. Rising demand for digital payments has pushed logistics and financial service providers to improve settlement times, reduce operating costs, and support local payment behaviour across borders.

“Unlimit is deeply committed to supporting the new chapter of Africa’s e-commerce growth. Our partnership with ShipAfrica helps businesses scale by giving their customers access to familiar, reliable payment experiences across borders. 

“Together, we’re reducing operational costs, avoiding settlement delays, improving cash flow, and enabling merchants to tap into the full potential of Africa’s fast-growing e-commerce economy,” adds Irene Skrynova, Chief Customer Officer at Unlimit.

Both Unlimit and ShipAfrica say the partnership is aimed at easing trade across regions and supporting businesses that need faster, simpler international transactions.

The corporate disclosure was communicated to the Bank’s shareholders, investors, and the general public and filed with the Nigerian Exchange Group (NGX).

This measure was taken due to viral information currently trending online and reported by media outlets that the lender has acquired Paramount Bank Kenya.

According to Michael Otu, the group’s secretary, the corporation is currently exploring various regional expansion opportunities, inclusive of the East African Market. This is not limited to the acquisition of any financial institution as a part of its strategic long-term agenda.

The Bank also pledged to fully comply with the NGX Rulebooks, the Securities and Exchange Commission (SEC) regulations, and other statutory requirements by providing accurate and reliable information should any deal occur in the future.

Zenith Bank finally called on the various stakeholders to rely solely on the lender’s official communication channels for verified information.

The Group is listed on the Premium Board of the NGX, and its share closed at N61.55 on Tuesday, November 19, 2025, shedding 1.95%  of its share price.

According to the Banking on Innovation report by Briter Intelligence and Lateral Frontiers, fintech firms in Egypt, Kenya, and Nigeria collectively raised more than $6.5 billion in the last decade.

This shows a shift from rapid expansion to sustainable, partnership-driven growth.

The report found that Nigeria alone attracted over $3 billion, led by major payment startups such as Paystack, Flutterwave, and Moniepoint, while Kenya’s fintech ecosystem secured around $2 billion, largely in digital credit and asset finance. 

Egypt’s fintech sector, now the country’s most funded, amassed $1.68 billion, driven by players like Fawry, Khazna, Paymob, and MNT-Halan.

What stands out is how collaboration, rather than disruption, is now bolstering Africa’s financial inclusion. In Egypt, Banque Misr’s partnership with valU has expanded Buy Now, Pay Later (BNPL) services to underbanked groups, modernising consumer credit in a country where cash remains dominant. 

In Kenya, Citi’s alliance with Visa and Cellulant created Citi Optimised Pay, tackling a $25 billion SME financing gap by allowing small suppliers to access instant payments. And in Nigeria, Paystack’s integration with leading banks has enhanced merchant transactions, a success so notable that Stripe’s $200 million acquisition of Paystack became a model for fintech-bank synergy across the region.

Across these economies, central banks are taking a more active role. Egypt’s Digital Wallet Interoperability Regulation and the Meeza national payments network, Kenya’s Digital Credit Provider laws, and Nigeria’s Open Banking Framework (2023) reveal a coordinated regulatory initiative to encourage innovation while maintaining consumer protection. 

Samakab Hashi, partner at Lateral Frontiers, noted, “Policymakers are no longer passive observers. They are actively shaping the future, using sandboxes, tiered licensing, and data protection mandates to balance innovation with stability.”

The research stresses that over one-third of all venture funding in Africa since 2014 has gone to fintech, now the continent’s most dynamic technology sector. 

However, the focus is now changing direction. Rather than chasing payment volumes, investors and founders are turning toward credit infrastructure, embedded finance, and insurtech, sectors with deeper, long-term impact.

On challenges, the report warns that issues around data governance, regulatory inconsistency, and compliance costs threaten progress. 

Nigeria’s resolutions on unlicensed digital lenders and Egypt’s limits on data sharing have slowed expansion for some startups. Still, fintechs are adapting through strategic partnerships, early engagement with regulators, and a stronger focus on cybersecurity and user trust.

For founders, the report recommends building before licensing, forming smart alliances, and focusing on infrastructure rather than duplication. In Egypt, the opportunity lies in e-KYC and Banking-as-a-Service; in Kenya, agricultural and SME credit tools; in Nigeria, open banking-based embedded finance.

Even with global venture slowdowns, African fintechs are standing on resilience and reinvention. Egypt’s steady growth, Kenya’s ecosystem maturity, and Nigeria’s scale show that the continent’s financial sector must continually focus on collaboration among banks, telcos, and innovators working together to bridge access and trust.

Disruption and the ability to collaborate, adapt, and build inclusive systems that leave no one behind, are highly indispensable among African fintechs and others.

The company’s 2025 Impact Report reveals that 9 out of 10 active customers now say M-KOPA has improved their lives, up from 8 out of 10 last year.

Since 2011, M-KOPA has reached 7 million total customers and deployed over $2 billion in credit to hardworking micro-entrepreneurs in the informal sector who are typically locked out by traditional financial services.

“What matters most to us is how many people we’re actively serving every day, those who stay engaged with us over time. Our active customer number reached 3 million for the first time this year,” said Jesse Moore, Co-Founder & CEO of M-KOPA. “When we ask customers,’ does M-KOPA make your life better?’ 9 out of 10 say yes. That’s tangible and meaningful impact on millions of lives.”

M-KOPA serves Every Day Earners – people who make their income daily in Africa’s vast informal sector but remain unseen by conventional financial services designed for salaried workers.

The company addresses a critical gap in Sub-Saharan Africa, where 60% of the population has internet coverage, but only 27% can afford to access it.

Since 2020, M-KOPA has enabled 2.5 million first-time smartphone users, with 81% of women customers reporting they couldn’t afford a smartphone without M-KOPA.

For 55% of customers, M-KOPA represents their first access to any formal financial product, while 67% are accessing health insurance for the first time.

Through its “More than a Phone” platform, 70% of customers use their M-KOPA smartphone to generate income and 59% report higher earnings since ownership.

M-KOPA’s approach operates across five interconnected pillars that scale individual inclusion into community transformation:

• Included: 55% accessing their first formal financial product; $2 billion deployed to over 7 million everyday earners
• Connected: 5 million first-time smartphone users since 2020; 40% first-time smartphone users in 2025, demonstrating that affordable access remains critical
• Prosperous: 70% use smartphones for income generation; 59% report higher earnings since ownership
• Sustainable: 4,000+ electric motorbikes financed, & 127,700 circular economy products resulting in 46,000 tonnes of CO₂ avoided
• Local Markets: Over 35,000 agents (17% growth), with 57% reporting M-KOPA as their first income opportunity

In 2024, M-KOPA’s local procurement spend totalled $236 million across all markets. Women represent 45% of M-KOPA’s agent network and 40% of all customers, with 86% reporting improved quality of life.

M-KOPA operates across Kenya, Uganda, Ghana, Nigeria and South Africa, and employs over 2,000 full-time staff and 35,000 sales agents across the continent.

The company has been recognized by the Financial Times as one of Africa’s Fastest-Growing Companies for four consecutive years and by CNBC as one of the World’s Top Fintech Companies 2025.

Click here to read the full M-KOPA Impact Report 2025. 

This transition is aimed at enhancing seller performance, improving customer experience, and accelerating Jumia’s advertising monetization strategy through AI-powered sponsored product ads.

Jumia and Mirakl Ads: Powering the Future of E-Commerce Advertising in Africa

With retail media projected to hit $204 billion globally by 2027 and grow at a 17.2% CAGR, Jumia’s integration of Mirakl Ads positions the company at the forefront of this explosive trend.

The partnership delivers enterprise-grade ad technology, enabling sellers, both large brands and small vendors, to boost visibility and sales across Jumia’s markets in Nigeria, Kenya, Ghana, Uganda, Egypt, Senegal, Ivory Coast, Algeria, and Morocco.

“Advertising is a key growth lever in our marketplace strategy,” said Francis Dufay, CEO of Jumia. “Partnering with Mirakl allows us to scale quickly, offering smarter advertising tools to sellers and a more personalized shopping experience to customers. This directly supports our goal to grow gross profit and accelerate our path to profitability.”

Faster, Smarter, and More Profitable Advertising

In just two months, Jumia successfully launched Mirakl Ads, demonstrating the platform’s rapid deployment capabilities and ease of integration. Now live, the solution delivers:

• AI-powered optimization for smarter targeting
• Automated campaign management for faster execution
• Improved product discoverability for higher conversion rates
• Advanced analytics to track ROI and ad performance

These tools empower sellers to run high-impact advertising campaigns directly within the Jumia marketplace, reaching millions of active online shoppers across Africa with relevant, personalized product recommendations.

Unlocking Revenue Streams and Seller Growth

This replatforming to Mirakl Ads is more than a tech upgrade—it represents a strategic shift in how Jumia monetizes its platform while deepening its relationships with sellers and customers. With personalized ad placements, real-time bidding, and data-driven insights, the advertising experience becomes more seamless and ROI-focused.

“Jumia’s decision to adopt Mirakl Ads validates our platform’s ability to deliver measurable impact at scale,” said Adrien Nussenbaum, co-founder and Co-CEO of Mirakl. “Together, we’re unlocking new levels of growth for African sellers and delivering a more engaging shopping experience for consumers.”

A Milestone for E-Commerce and Digital Innovation in Africa

The partnership marks a milestone in the evolution of retail media in Africa, bridging global technology and local market expertise. As Jumia continues to expand its digital services ecosystem, from payments to logistics and now advertising, it solidifies its position as Africa’s leading e-commerce and digital services platform.

The move, which began quietly in March 2025, shows a change in strategy for Africa’s highest-valued startup.

The layoffs have hit the company’s compliance, legal, human resources, and sales units, roles Flutterwave now appears to be relocating to its home market, Nigeria. The rationale points to the fact that Nigeria is cheaper to operate in and is more stable from a regulatory standpoint.

Less than a year ago, Flutterwave let go of 3% of its global workforce after shutting down its Barter virtual card service. This new wave of layoffs is more aggressive, pointing to investor pressure to deliver profitability ahead of a long-anticipated public listing.

In Kenya, sources familiar with the matter confirmed that about 10 of the company’s 20 employees were dismissed, with a few more resigning in the weeks that followed. 

A similar story played out in South Africa, where over half of the staff, mostly salespeople, were affected. Fewer than eight employees remain in the Nairobi office, mostly handling regulatory compliance.

“They’re cutting roles in countries they see as expensive to run,” one source close to the company’s leadership told TechCabal. “Flutterwave is also hiring for the same roles in the Nigerian market.”

The company acknowledged the layoffs in a formal statement, calling them part of a performance and strategy-led review.

“These actions are a normal but necessary part of ensuring we operate at the highest level across every part of the business,” Flutterwave said. “We recognise and reward impact, and we make changes when expectations are not met.”

This restructuring phase has seen not just exits but promotions and bonuses for staff who exceeded expectations. But we see that the company is narrowing its focus. Flutterwave is doubling down on enterprise payments and its cross-border remittance app, Send, while strengthening partnerships and infrastructure in Nigeria.

However, there’s a regulatory elephant in the room. Despite operating in Kenya for years, Flutterwave still doesn’t have a full Payment Service Provider (PSP) licence. 

The Central Bank of Kenya only granted name approval in 2023, and the company is still awaiting formal clearance. In South Africa, the situation is similar; a larger market with no license in hand.

Still, Flutterwave insists it’s pushing ahead. “We are actively engaging with regulators,” the company said. “Our Kenyan application is progressing as planned.”

The layoffs come in the middle of Flutterwave’s operational integrity investigations. In April 2024, the company reportedly suffered a ₦11 billion security breach, although it claimed that customer funds were untouched. 

This, along with a history of frozen accounts and compliance queries in Nigeria and Kenya, has increased the need for a more disciplined structure.

Flutterwave last raised funds in early 2022, a $250 million Series D round that valued it at over $3 billion. Since then, profitability has become the north star. CEO Olugbenga Agboola confirmed as much earlier this year in an interview with Bloomberg, saying the company will only go public “once it becomes profitable.”

Some of the company’s most visible executives in East Africa are also gone. Leon Kiptum, the former regional manager for East Africa, and Saruni Maina, associate VP for stablecoins, both exited after less than two years with the firm.

The timing of these layoffs is telling, as regulators are tightening their hold and investors are demanding returns. Flutterwave is taking no chances; shedding weight, shifting talent to cheaper locations, and doubling down on its most bankable markets. 

The loan will further strengthen the bank’s ability to finance small and medium-sized enterprises (SMEs), which play a vital role in Kenya’s economy by creating jobs and driving growth.

Small and medium-sized enterprises are the backbone of economies, employment and innovation. With this second loan, the organization seeks to deepen its impact and enhance its capacity to support even more businesses. 

“This investment is in line with Swedfund’s mission to reduce poverty through sustainable investments,” says Jane Niedra, investment director for Financial Inclusion at Swedfund.

Access to long-term finance remains one of the biggest challenges for SMEs in developing countries. Swedfund’s investment aims to provide SMEs in sectors such as manufacturing, trade and agriculture with greater access to capital, enabling them to develop and expand their business.

“We are proud to partner with Swedfund, a respected institution supported by the Swedish government. Through this collaboration, we can grow while continuing to provide financial services with integrity.

“Beyond financing, Swedfund brings valuable technical expertise, enabling us to better support our SME clients and contribute to sustainable economic development. We highly value this partnership and our shared focus on growth and long-term sustainability,” says Dr. Yogesh Pattni, CEO of Victoria Commercial Bank PLC.

VCB PLC is an SME-focused bank in Kenya, operating with a robust governance structure and financial stability. The bank’s strategy focuses on personalised customer relationships and digital development, increasing access to financial services for underserved businesses

Swedfund invested in VCB PLC in 2018 with a loan of $5 million, becoming the first development finance institution to invest in the bank.

With Swedfund’s support, the bank has developed an environmental and social management system (ESMS) to systematically manage sustainability risks, including a sustainability policy, ESG risk assessment and staff training. The management system complies with the IFC Performance Standards and the ILO Core Conventions.

As part of its commitment to gender inclusion, VCB PLC has implemented Women4Growth—a Swedfund-supported women’s empowerment program—providing leadership and inclusion training. 

The bank qualifies for the 2X Challenge with over 50% female employees and more than 30% female senior managers.