The Politicisation of Business is Retarding Kenya’s Economy

East African Breweries’ dominance of the brewing business is but one example of how east Africa’s biggest economy is distorted by the market power of a few big firms. It is a problem common in many other African countries, where markets are often small and fragmented, competition regulators are weak and barriers to entry are high. Another example is Safaricom, a mobile-phone operator with a 66% share of the Kenyan market. This dominance may explain why it is so profitable. Over the past five years its average return on equity (roe) was a mouthwatering 47%. That compares with an average roe of about 10% on mobile-phone operators in America, according to Aswath Damodaran, a finance professor at New York University.

THE ECONOMIST