Old Mutual Investment Group (OMIG) Q1 2023 Outlook predicts Kenya’s economy will bounce back in the next one to two years due to falling inflation rates, predicted favourable weather and reduced food and fuel prices.

The outlook is a quarterly OMIG forum on the prevailing macro-economic environment and its influence on available investment options for both institutional and retail investors.

“Despite inflation appearing to stabilize at 9%, it may remain elevated in the near term because oil prices are still high, and weather conditions remain unfavourable hence affecting food prices. However, from a policy perspective a lot is happening to support farmers, and this may yield fruit, therefore the economy will bounce back not in the immediate term but gradually for over the next 12 – 18 months,” said OMIG Kenya Chief Investment Officer Eric Karimi.

The outlook urges investors to diversify their investment portfolio made-up of both growth and income assets or securities to realise better and more stable returns.

Head of Alternative Investments at OMIG Kenya Kevin Nyaga says the current state of the financial markets has shown a need to diversify one’s cash and near cash, stocks and bonds

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Nyaga advises that investors now include other alternative assets or securities whose returns and performance have a lower correlation with traditional investment markets.

“To date, we are seeing more demand in alternative investments like infrastructural themed private equity, venture capital and property sub-sectors such as affordable housing targeting low to mid income earners, and specialized housing such as college student accommodation, among others,” said Nyaga.

He added, “Since the peak of Covid in 2020, we have witnessed that Alternative Investments have, and continue to provide some level of diversification in a volatile macro-economic environment.”

OMIG says investors can access such opportunities through a fund structure that is being professionally managed, diversified, offering economies of scale and improves liquidity.


“Offshore Investments which are diverse in nature and cut across different geographies, strategies, and asset classes such as equities, interest bearing securities, indices, commodities etc, also go a long way in providing a currency hedge and extra diversification for investors,” said OMIG’s Senior Portfolio Manager and Head of Offshore Investments John Kihara.

Kihara added, “In essence, maintaining an appropriate level of exposure in the offshore asset class provides diversification benefits and higher-risk adjusted returns in the medium to long-term considering a weakening Kenya shilling and limited local investment opportunities.”

The most significant markets that are expected to outperform over this period are the developed markets such as the US and key Emerging Markets such as China and India.

The Old Mutual Group is seeking to boost innovation in financial service solutions to enable African households to attain financial stability and remain cushioned in a tough economy.