The year of economic convalescence

Nairobi, 14th January 2020

The year of economic convalescence”

Award Winning Fund Manager ICEA LION Asset Management presents ‘Outlook 2020’

East Africa’s pioneering Investment Management Firm ICEA LION Asset Management presented it’ 1st Quarter 2020 Investor Pulse today, with the theme ‘Outlook 2020’ 

Speaking at the event, Judd Murigi, ICEA LION Asset Management’s Head of Research highlighted the following key trends:

  • Broad-based deceleration in 2019:  In 2019, ten sectors representing 70% of GDP experienced decelerated growth, compared to 2018 when only four sectors decelerated. The agriculture, manufacturing, construction, trade, hospitality, and transport sectors were among the sectors that grew at a slower pace relative to their 2018 performance.  Indeed, the construction sector decelerated for the fourth year in a row. Only the financial services, real estate, education and health sectors witnessed faster growth in 2019 relative to 2018.
  • GDP growth to recover in Kenya:  GDP growth in Kenya is expected to recover to 5.8% in 2020 driven by base effects in agriculture, manufacturing and financial services. We expect 2020 to be the year of economic convalescence. The real economy is expected to start healing this year on the back of renewed private sector credit growth and also dependent on improved timeliness in payments to suppliersHowever, the recovery is only likely to start being felt in the second half of the year and going into 2021. The recovery in the agriculture sector in particular faces risks from destruction caused by heavy rains in late 2019 and the ongoing locust invasion. In addition, increasing political risk in an emerging risk factor that could peg back the economic recovery not only in Kenya but across the region in light of upcoming elections in Tanzania, Uganda, Ethiopia, Somalia and Burundi. In Uganda, presidential and parliamentary campaigns in the second half of 2020 could lead to a weakening of the Uganda shilling and a high interest rate environment.
  • Rate cap denies SMEs KES 300bn:  The share of SME loans as a proportion of total banking sector loans declined from almost 25% prior to the rate cap to 15% in 2019. We estimate that SMEs were denied credit of up to KES 300bn over the rate cap period, an amount equivalent to 1% of GDP per year.
  • Private sector credit growth recovers:  Net credit of KES 160bn was advanced to the private sector in the first 10 months of 2019. However, the new credit was not equal across sectors but was dominated by the consumer durables (KES 46bn in net credit advanced), manufacturing (KES 34bn), trade (KES 36bn) and personal households (KES 21bn) sectors which together received 85% of total net credit advanced to the private sector in 2019. We estimate that net lending to the private sector tripled from KES 60bn in 2018 to KES 200bn in 2019. In 2020, we anticipate that net lending to the private sector will be at least KES 300bn, which represents double digit growth for the first time since 2015Out of this, we expect credit of KES 50-100bn to be availed to SMEs in 2020. 
  • Rates and currency at risk:  We expect continued upward pressure on interest rates as well as the currency in 2020 as the economy adjusts to a post rate cap environment.

In closing, ICEA LION Asset Management CEO – Einstein Kihanda, who is also the current Chairman of the Fund Managers Association summarized thus: “The economic outlook for Kenya is certainly better this year, although the effects will probably only be felt going into the second half of year and beyond. It will also be dependent on idiosyncratic factors in the agriculture sector, faster payment of suppliers and continuation of a moderate political environment”


For more information contact:

Nkatha Gitonga

Group Manager

Marketing & Communications


+ 254 722 844 304

Judd Murigi

Head of Research

ICEA LION Asset Management 

+ 254 719 071 466

Paul Sagati

Group Assistant Manager

Marketing & Communications


+ 254 724 971 345



ICEA LION Group is a one-stop-shop for insurance and related financial services with roots dating back to 1895. Its heritage of providing innovative and award-winning products and services in insurance, pensions, investments and trusts continues to this day.

The Group is a member of the First Chartered Securities Group (FCS), a leading regional investment and trading group controlling major business enterprises in diverse sectors of the economy such as banking, insurance, logistics, manufacturing and agriculture.

ICEA LION Group’s strengths lie in their strong heritage; excellence in service delivery; quality & innovative product & service design; highest levels of professionalism & integrity; excellent technical expertise; award winning track record; solid financial backing; and their East African presence.

The Group in Kenya comprises 4 companies, each one a market leader in its field:

  • ICEA LION Life Assurance is the largest guaranteed fund manager in Kenya with current total funds under management in excess of Kshs 40 Billion. Its asset base and total life fund are in excess of Kshs 70 Billion and Kshs 57 Billion respectively as at December 2017. The Company is humbled to have been awarded Life Assurer of the Year for 6 years in a row that is 2013 -2018.
  • ICEA LION General Insurance is amongst the leading insurance companies in the region. Its investment income as December 2017 was Kshs 950 Million which is within the industry average. Its total asset base and total net assets are in excess of Kshs 12.8 Billion and Kshs 4.2 Billion respectively as at December 2017. Funds under investment are in excess of Kshs. 9 Billion. ICEA LION General Insurance is delighted to have been awarded General Insurer of the Year in 2014 and 2017.
  • ICEA LION Asset Management is a research-driven investment manager, delivering superior returns for both its retail and institutional clients. It offers investment opportunities in Kenya as well as offshore. They are the oldest Investment Manager and the only Fund Manager that demonstrates a 30-year track record of property development & investment in Kenya, with a property portfolio currently valued at Kshs 15 Billion. We also actively participate in seeking alternative investment opportunities, including Private Equity, for its Clients. It currently holds Kshs 142 Billion in assets under management. The Company is humbled to have been awarded Fund Manager of the Year (Overall) for 3 years in a row.
  • ITSL Trust Company offers pension fund administration and trustee services providing scheme administration, corporate trusteeship, trust and related financial solutions in Eastern Africa and beyond. The Company seeks to preserve the wealth of its customers in accordance with their wishes for their organization, estate or beneficiaries. The Company is proud to have won first runners up as the Pensions administrator of the year 2016

ICEA LION Asset Management –1st Quarter 2020 Investor Pulse – Press Release


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