Tanzania—once a socialist nation that eschewed wealth accumulation— is now prodigiously minting billionaires and is one of the leading sources of capital to Kenya.
In the last decade, tycoons from Dar es Salaam have injected at least $340.6 million (Sh45 billion) into Nairobi, setting up a fierce supremacy battle with their Kenyan rivals in sectors such as cement, energy and finance.
Lured by Kenya’s vibrant capital market and consumer economy, at least five Tanzanian billionaires have made entry into the local market through mergers and acquisitions (M&A) and greenfield investments, reversing an earlier trend where capital tended to flow from Nairobi to Dodoma.
Edha Nahdi, the founder of Amsons Group, is the latest Tanzanian to make the plunge into the Kenyan market with a transaction of $183 million (Sh23.64 billion) to acquire 95 percent of the equity shares in Bamburi Cement late last year.
With the acquisition, he effectively dethrones Rostam Aziz, another Tanzanian tycoon, who had earlier announced he would be building a 30,000-tonne cooking gas plant and storage facilities at the port of Mombasa port worth $120 million (Sh15.5 billion).
Mr Nahdi, 39, began his business career at a young age, and has built Amsons Group into a family-run conglomerate with interests across multiple key industries in the region.
Started 19 years ago in the bulk oil and petroleum under the Camel Oil Tanzania brand, Amsons has since diversified into other sectors including cement, transport and real estate.
But it is in the cement industry that he has been pivoting more. Amsons Group recently announced that it has formally started the integration of local cement products manufacturer Bamburi Cement into its corporate fold, with Nahdi promising to invest an additional $400 million over the next three years to power growth at Bamburi Cement.
Once the largest cement maker in the country, Bamburi has lost its competitive edge to new players such as steel magnate Narendra Raval’s National Cement, whose brand is Simba Cement.
“We are confident that these investments will position the company for sustained success and strengthen Bamburi Cement’s market leadership,” Nahdi said.
Rostam Aziz
Rostam Aziz, through Taifa Gas Group, who is building the LPG plant in Dongo Kundu, made history in 2013 when Forbes magazine recognised him as the first Tanzania to achieve a billion-dollar fortune. Currently, his compatriot Mohammed Dewji holds this title.
Mr Aziz through his Taifa Gas is building a 30,000-tonne cooking gas plant and storage facilities at the Mombasa port worth Sh16.9 billion.
Before him, there was the wealthy Ally Awadh who is also building a similar, but smaller facility at 10,000 tonnes after quietly entering Kenya through acquisition of fuel service stations of Hashi Energy.
He is doing the deals through his firm, Lake Oil Group—founded in 2006 and now grosses annual revenues in excess of Sh150 billion.
Aziz was joining another Tanzanian billionaire, Ally Awadh Awadh of Lake Group, who had earlier expressed interest in Kenya’s LPG.
Through its subsidiary Lake Oil, Lake Group is looking to build a cooking gas facility in Kilifi county worth $6.8 million (Sh875 million).
However, a ruling by the National Environment Tribunal on March 10th this year, revoked the Environmental Impact Assessment (EIA) permit issued to Lake Oil, citing inadequate public consultations with the local community.
Mr Awadh has moved to court to appeal the ruling.
The entry of the Aziz’s Taifa Gas and Lake Oil signals a vicious battle for control of the Kenyan cooking gas market that remains under the tight leash of Mombasa-based tycoon Mohamed Jaffer.
Aunali and Sajjad Rajabali
In 2017, Tanzanian billionaires Aunali and Sajjad Rajabali bought 30.2 million shares, equivalent to a 20.6 percent stake in Kenolkobil, rising to the list of the oil marketer’s top shareholders. At the time, the shares had a market value of Sh378 million.
Two years later, Rubis Energie SAS acquired KenolKobil Plc and subsequently rebranded the business as Rubis Energy Kenya.
Also in 2019, the two tycoons became the second in list of individual investors behind CEO Gideon Muriuki after acquiring a 0.47 percent stake in Co-operative Bank valued at $7 million (Sh906.5 million).
Benjamin Fernandes, Nala
Tanzanian payment financial technology (fintech) firm Nala, founded by Benjamin Fernandes, has also announced a $5 million investment in Kenya in 2023, months after securing approval from the Central Bank of Kenya and opening and staffing an office in Nairobi.
In July 2022, attracted by Nairobi’s fame as a Silicon Savannah, Nala moved its headquarters in Kenya’s capital where it will host a third of its workers.
Nala, which has been eyeing a piece of Kenya’s Sh500 billion inflows, plans to integrate harmoniously with major banks to better connect pay-ins internationally.
PepsiCo, through Seven-Up Bottling Company (SBC) Kenya, operates a manufacturing plant in Nairobi’s Ruaraka, producing brands such as Pepsi-Cola, Mirinda, 7-Up, Evervess, and Mountain Dew, aiming to cut costs and compete with Coca-Cola.
SBC is owned by Lebanese billionaire Faysal El-Khalil. SBC started in Nigeria in 1959 where El Khalil and his family moved from Lebanon, but the billionaire set up another subsidiary in Tanzania where he spent a better part of his life in Tanzania before eventually moving back to Beirut just before the pandemic.
It was from Tanzania that Pepsi re-entered the Kenyan market, setting up Sh2.8 billion plant in Ruaraka.
Latest data by the EAC Secretariat shows that Tanzania is the largest source of foreign direct investment (FDI) to Kenya amongst the member states of the East African community (EAC), with investors from Dodoma investing a total of $72.45 million (Sh9.36 billion) in Nairobi in the last six years highlighting the growing appeal of the Kenyan economy to regional and foreign investors despite continuous trade tiffs with Tanzania over non-tariff barriers.
The data showed that Dodoma has been the top most investor in Kenya among the EAC member states in the period running from 2018 to 2023 with the money being invested in 19 projects, followed by Uganda and Rwanda which invested $36.91 million and $3.69 million respectively.
Through acquisitions and greenfield investments, at least five Tanzanian billionaires have been engaged in a flurry of deals in the last six years
Kenya and Tanzania have had frosty trade and diplomatic relationship, going back to years after independence with the two countries adopting different ideologies. Kenya took the path of free market, while private enterprise was eschewed in Tanzania where socialism was the preferred economic system.
Recently, the differences have mostly been on non-tariff barriers, with the latest being the decision by Dodoma to introduce fresh protectionist levies on eggs, dairy and meat products, and confectionery like biscuits from Kenya upsetting East African Community (EAC) Customs Union’s rule and cutting exports earnings for traders.
In 2021, Tanzanian authorities threw into disarray KCB Group’s bid to acquire African Banking Corporation Tanzania (BancABC Tanzania) following what the lender said were delays in approval from regulators.
KCB noted that there were disagreements between London Stock Exchange-listed Atlas Mara - the majority shareholder - and the minority shareholder, the Tanzanian government, over the disposal of some of the assets.
Frustrated by the slow pace of the deal, which started in November 2020, and given that the agreement had a stop-date that KCB refused to extend, the Nairobi Securities Exchange-listed lender decided to back out.
But the two countries have been working out a plan to diffuse the tension.
Last March, at the eighth bilateral meeting, Kenya and Tanzania agreed to resolve at least 14 trade barriers that have stifled trade.
At the forum, Kenya also agreed to clear timber imports from Tanzania at Lunga Lunga/Horohoro border point. Kenya also resumed tea exports to Tanzania, which had been halted.
The decision to resolve non-tariff barriers followed a meeting between President William Ruto and Tanzanian’s Samia Suluhu last year.
This meeting has also bore fruits with the first major investment decision in Kenya by Tanzanian business conglomerate Amsons Group which later placed and closed a US$183 million bid to acquire up to a 100 percent stake in Kenya’s Bamburi Cement PLC (Bamburi) KCB Investment Bank a subsidiary of KCB Group is the Transaction Advisor/ Sponsoring stockbroker & Lead acceptance agent.
But the flow of capital between the two countries has been unfettered.
In 2016 Tanzanian Bank M became the first lender from the neighboring country to take over a Kenyan institution when it acquired a 51 percent stake in Oriental commercial bank.
