Kenya is renewing its push to make Nairobi a regional financial hub, offering sweeteners such as a 20-year tax holiday to global firms that set up shop in its capital.
But the Nairobi International Finance Centre (NIFC) faces an uphill task of upstaging well-established regional financial centres such as Johannesburg, Casablanca, and Mauritius, even as it fights to dispel fears that it could degenerate into a clearing house for dirty money.
This has, however, not stopped Kenyan authorities from dreaming.
“I am 100 percent confident that Nairobi will be the regional financial hub in sub-Saharan Africa,” said Daniel Mainda, the new chief executive officer of the NIFC Authority.
After a two-year lull following its official launch in July 2022, the NIFC was given fresh impetus with a reconstituted board, appointment of Mr Mainda, and recruitment of permanent staff, ending its reliance on seconded hands from the National Treasury.
The authority also sent out a strong signal of intent at the Kenya Investment Forum 2025 in London, where it announced having inked deals with three multinational insurers: Bupa Global, the UK-based health insurance giant; Africa Specialty Risks (ASR) of Mauritius; and Lloyd’s, the world’s leading insurance marketplace.
Mr Mainda says the three deals are expected to unlock foreign direct investment (FDI) amounting to between $120 million and $150 million, with hundreds of jobs expected to be created.
This is in addition to another three that signed up on the days of its launch, including insurer Prudential Plc, motorcycle manufacturer ARC Ride Kenya, and AirCarbon Exchange (ACX).
This came around the time the country had given tax incentives to NIFC-certified firms under the Finance Act 2025. Companies investing at least Sh3 billion in Kenya and certified by the NIFC will pay a corporate tax rate of 15 percent for the first 10 years, then 20 percent for the next 10, compared to the standard 30 percent.
The Finance Act 2025 also extended similar relief to start-ups — 15 percent for the first three years and 20 percent for the subsequent four.
NIFC-certified entities that reinvest dividends amounting to at least Sh250 million within the same year of income are exempt from withholding tax of 15 percent on those dividends.
Mr Mainda noted that they are aggressively working on ‘enhanced’ incentives that they hope to be included in this year’s finance bill. He said he could not disclose the specific incentives.
Kenya is not only banking on the self-belief that has given rise to the notion of Nairobi as the “Silicon Savannah,” a self-styled cradle of ICT innovation comparable to America’s Silicon Valley, but also its strategic location, free market economy, and relatively stable political environment.
Mainda reckons that Nairobi bridges the time zones between Asian and Western markets. Moreover, the city has a highly educated, English-speaking workforce and sits at the crossroads of a continent where financial intermediation is still underdeveloped.
With its well-developed physical and financial infrastructure—banks with a strong regional presence and logistics that seamlessly serve neighboring countries—Nairobi has, in many ways, been functioning as a regional financial hub long before it formally earned the title.
However, while Kenya says it is borrowing best practices from Qatar and Dubai, it is also from latter that it risks inheriting the darker side of a financial centre. Dubai has often been accused of enabling illicit flows.
Indeed, it is almost as though Kenya merely took the place of the United Arab Emirates (UAE) on the grey list, having been added to this log of shame by the Financial Action Task Force (FATF), the global anti-money laundering watchdog.
In February last year, the FATF flagged Kenya for its weak framework in combating money laundering and terrorist financing—just as the UAE, whose commercial hub is Dubai, was being removed from the watchlist.
From gold smuggled out of war-torn Sudan to narcotics routed from Latin America, and from arms trafficking to the financing of terrorism, Kenya has repeatedly been flagged as a conduit for dirty cash.
“The NIFC takes this (illicit financing) seriously,” says Darshan Shah, a board member of the NIFC, noting that all the companies they onboard are required to comply with all the regulations.
“On an annual basis, there is an inspection by the NIFC and other regulators,” added Shah.
“We want regulators to understand how the NIFC works so they can also help their clientele on that side,” Mainda said, adding that the hub is “guided by law to ensure beneficial ownership is well articulated as well as accountability and transparency.”
The goal is to make Nairobi as competitive as renowned financial hubs such as Dubai and London, which offer their own tax advantages as well as non-tax ones such as the ease of starting a business.
But critics such as Dr Lyla Latif, a lawyer and University of Nairobi lecturer, warn that such concessions could undermine fiscal goals and tax equity, especially when the government is cutting spending.
“These preferential tax rates represent potential short-term revenue losses at a time when the government is actively seeking to improve its fiscal position,” she said.
Mainda counters that incentives are only part of the equation and that the NIFC’s onboarding process is “water-tight” to ensure only vetted investment flows in.
Financial centres are ecosystems where investors, issuers, intermediaries, and regulators interact to mobilise funding, price risk, and unlock economic value.
Thus, NIFC proponents insist that the hub will be a magnet for foreign direct investment, which will then result in job creation. They insist that the target is not only foreign firms, but also local ones. The centre can attract capital that stabilises the foreign exchange rate, stimulates economic growth, and generates jobs — all without adding to public debt.
Mr Mainda notes that over the past six months the centre has attracted international firms in healthcare and insurance and is now targeting finance, start-ups, and technology.
The authority has now set a target of raising $2 billion (Sh260 billion) in FDI by 2028, though Mainda believes it could be achieved by 2027 with continued government support.
The Treasury has already sought dedicated prime office space for the centre, signaling its strategic importance.
However, the biggest challenge for the NIFC will be competition from other international financial centres, including those in the Gulf States such as Dubai, Abu Dhabi, and Riyadh.
Mr Mainda reckons that besides the advantage of geographic location, Kenya’s relatively liberal economy will help it in the race to attract finances.
Unlike some countries such as South Africa, Mr Mainda says there are no restrictions on foreign exchange repatriation—once foreign currency enters Kenya, it can be repatriated through dividends, providing comfort to investors.
