Small and Medium‑sized Enterprises (SMEs) eyeing growth beyond Kenya have been cautioned against treating the wider East African region as a single, uniform market. Trade experts say such blanket expansion strategies risk undermining business prospects, urging firms instead to adopt deliberate, country‑specific approaches.
Speaking during the NCBA Trade Commissioners Forum in Nairobi, Regional trade advisor and Bowmans lawyer Wathingira Gituro noted that while East African markets may appear similar on paper, they operate very differently in practice.
“There are still significant disparities in regulations across borders, and SMEs need to recognise that success in one market does not automatically translate into another,” Gituro said.
Gituro advised businesses to design market‑specific entry strategies tailored to each jurisdiction rather than assuming uniformity in trade laws and regulatory frameworks.
Gituro also warned against over‑reliance on informal intermediaries or politically connected middlemen, often perceived as essential for market entry.
“Businesses should be very cautious about intermediaries who claim to have influence or proximity to decision‑makers, because in many cases those arrangements introduce political and individual interests that distort commercial objectives,” he explained.
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While such arrangements may ease short‑term entry barriers, Gituro noted they frequently expose firms to long‑term risks where political or personal interests override business fundamentals, destabilising operations. He further called for greater investment in commercial legal expertise across the region, pointing out that many emerging enterprises lack access to specialised advisory services that understand trade and cross‑border commerce in depth.
“There is a clear gap in the market for legal advisory services specifically focused on trade and commercial expansion within the region, and SMEs in particular need structured, specialised guidance to navigate cross‑border growth effectively,” Gituro said.
This comes against a backdrop of persistent structural challenges facing startups in Kenya and the wider East African region. Data from the Communications Authority of Kenya shows that nearly 80 per cent of startups fail within their first year of operation, with only three to five per cent surviving beyond the initial 12 months.
Experts argue that unless SMEs adopt tailored strategies, invest in legal advisory capacity, and reduce reliance on informal networks, the high failure rate will continue to constrain enterprise growth and limit the region’s broader economic development agenda.
By Masaki Enock
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