How Kenyan businesses can thrive by embracing African values

Kenyan businesses stand at a crossroads, torn between chasing global trends and harnessing the unique strengths of Africa’s socio-economic fabric.

As the country navigates the complexities of economic growth, it’s essential to recognise that the secret to long-term success lies not in mimicking Western capitalism but in rooting business models in African values such as community, trust, and collective prosperity. In essence, creating a feeling of “our business” amongst all stakeholders.

This approach is not just a moral imperative, but a sound business strategy that can drive growth, innovation, and sustainability.

In Africa, stakeholder capitalism is not a recent development, it is a time-honoured practice.

From Harambee, to Umoja, to Ushirika; African values have always embodied the concept of businesses serving employees, customers, and society, not just shareholders. This approach is deeply ingrained in the continent’s culture and history.

For instance, the Maasai people of East Africa have long practiced a system of communal land ownership, where land is held in trust for the benefit of the community.

Similarly, many communities in yesteryears worked together to clear fields, build infrastructure, and maintain resources, prioritising collective prosperity and wellbeing over individualism.

It’s not just about transactions, it’s about relationships built on trust. Companies like Safaricom and Equity Bank have already demonstrated the effectiveness of this approach. By prioritising accessibility and community impact, they have built trust with their customers and reaped significant rewards.

Also, research has shown that businesses that engage in community-driven initiatives can see a significant increase in customer loyalty, leading to improved growth and profitability. This is not just a moral victory. It is a sound business strategy that drives growth and profitability.

While previously some people had argued that prioritising shareholders interests was the key to business success, this approach is short-sighted.

In Africa, where relationships and trust are paramount, prioritising shareholders over stakeholders can lead to long-term distrust and ultimately, business failure. As an illustration, recent high-profile collapses in the supermarket and banking sectors illustrate the importance of prioritising long-term relationships over short-term gains.

Luckily, Kenya’s regulatory landscape is also shifting to support this approach. The Capital Markets Authority now requires ESG disclosures for listed firms, and the Companies Act emphasises beneficial ownership transparency.

These moves align with African communal values, where businesses are accountable to society, not just investors. By embracing these regulations, Kenyan businesses can demonstrate their commitment to transparency, accountability, and sustainability.

The youth factor is another key consideration. Currently, approximately 75 percent of the country’s population comprises people under 35 years old and companies that tap into this demographic will reap the benefits.

Future business success is likely to come from designing solutions for and by Africans, hiring locally and solving local problems. By leveraging the energy and creativity of the youth, businesses can drive innovation, growth, and sustainability.

That said, the path forward is clear. Businesses must merge profit and purpose, by embracing African values and stakeholder capitalism in order to build trust, drive growth, and achieve long-term success. By accommodating their key stakeholders, businesses can avoid the costly consequences of focusing exclusively on shareholders, as failure to do so can be costly.

In conclusion, the future of Kenyan business is African-centred capitalism. It’s time to ditch the Silicon Valley playbook and focus on solving African problems the African way.

Regulators, business leaders, and citizens, must work together to create an ecosystem that supports businesses that prioritise stakeholders, community, and collective prosperity. By doing so, we can build a more sustainable, equitable, and prosperous future for all Kenyans.

Karugor Gatamah is a Corporate Governance Trainer and Consultant and the Chief Executive Officer at Africa Corporate governance Advisory services, Kenya.

Danson Kimani is an Associate Professor at the University of Sheffield, United Kingdom, and Visiting Professor at Uganda Christian University, Uganda.