In the early years of independence, Kenya’s leaders faced a daunting dilemma: how to restructure an economy built on racial exclusion without scaring off investment, stalling growth, or igniting class warfare. The solution they chose was pragmatic, paradoxical, and quietly revolutionary. Kenya would not abolish capitalism. It would Africanise it.
This is the story of how the postcolonial state sought to create a new African capitalist class—one that would replace the old European and Asian economic elite without burning down the house they had built.
The Colonial Inheritance: A Racial Pyramid
Colonial Kenya’s economy was defined by a strict racial hierarchy. Europeans owned the land, ran the large businesses, and dominated export agriculture. Asians controlled retail, light manufacturing, and trade. Africans—by design—were left at the bottom, their participation limited to labour, subsistence farming, and small-scale enterprise in the reserves.
By 1963, this racialised economy had produced wealth for the few and exclusion for the many. The African nationalist movement had fought for political freedom, but economic emancipation remained elusive.
Kenyatta’s Balancing Act
When Jomo Kenyatta assumed power, he and his lieutenants—men like Tom Mboya and Mwai Kibaki—understood that dismantling capitalism outright would be suicidal. Kenya lacked the domestic capital and technical expertise to nationalise and run a modern economy. Unlike Tanzania’s Julius Nyerere, who bet on Ujamaa socialism, Kenya’s leadership bet on the market—under new management.
Their approach was outlined in the 1965 Sessional Paper No. 10 on African Socialism and Its Application to Planning in Kenya, a document that rejected both Western capitalism and Soviet-style socialism. Instead, it advocated for state-guided capitalism with a strong African face.
The goal was clear: Africans must own and control a greater share of the national economy. But this would not be done by decree. It would be done through buy-ins, shareholding schemes, loans, and tax incentives—tools borrowed from capitalism itself.
The Instruments of Africanisation
1. The Industrial and Commercial Development Corporation (ICDC):
This parastatal was the engine of Africanisation. It issued loans to African entrepreneurs to buy businesses, invest in industry, or enter joint ventures. In theory, it was a ladder into the middle class. In practice, it sometimes became a slush fund for the politically connected.
2. Share Schemes:
Perhaps the most iconic example came in 1967, when the House of Manji, a major biscuit manufacturer owned by an Asian family, converted to a public company. The government actively facilitated the issuance of 45% of its shares to the Kenyan public—emphasising access for African women workers. The Ministry of Commerce and Industry even oversaw distribution to ensure rural Kenyans and small investors could participate.
3. Tax Incentives and Preferential Licensing:
African businesses were given preferential treatment in licensing, tenders, and procurement. Import licenses were sometimes denied to non-Africans if an African competitor could be found. In effect, the state created a protected lane for African capitalists to accelerate and merge into the formal economy.
The Rise of the “Wabenzi Class”
These measures worked—but not always as intended. By the early 1970s, a new African elite had emerged: ministers, civil servants, and businessmen whose rise was built on state largesse. This group became known, somewhat cynically, as the “Wabenzi”—a nod to the Mercedes Benz vehicles they favoured.
Their wealth came from access, not innovation. Many bought businesses from departing Europeans. Others secured lucrative supply contracts. Some acquired large farms in the former White Highlands under the Million Acre Scheme. Still others were silent partners in Asian-owned firms, receiving shares in exchange for political protection.
Critics, including backbenchers in Parliament, began to accuse the government of creating a comprador bourgeoisie—an elite that profited from the existing system without changing it.
Race, Class, and the Myth of Equality
At the heart of the Africanisation agenda was a fundamental tension: the attempt to eliminate racial inequality without deepening class inequality. The idea was that if Africans could rise into commerce and industry, racial imbalance would be addressed. But in practice, the benefits accrued to a narrow class of urban, educated, politically connected individuals.
Tom Mboya and Mwai Kibaki defended the policy. Africans, they argued, had been shut out of commerce for 70 years. Correcting that imbalance required affirmative action. If the Asian and European elites had enjoyed first-mover advantage, African businessmen needed a head start.
But the critics had a point. The masses remained poor. The urban unemployed grew restless. The promise of African socialism began to ring hollow.
The Exodus and the “Citizenship Crisis”
As Africanisation deepened, especially in retail trade, some non-Africans—particularly Asians—felt squeezed out. In 1967 and again in 1968, hundreds of Kenyan Asians without citizenship left the country, fearing forced displacement or nationalisation. While the government officially denied any anti-Asian policy, the pressure was real.
Yet many Asians stayed—and adapted. They partnered with African politicians, naturalised as citizens, and found new ways to stay relevant. Their resilience and strategic alliances helped them maintain a foothold, even as the rhetoric of Africanisation intensified.
Capitalism, With Kenyan Characteristics
Kenya’s model was neither pure socialism nor unrestrained capitalism. It was state-engineered capitalism with a nationalist agenda. The government did not seek to own all businesses, but it did seek to shape who could.
This model allowed Kenya to maintain relative economic stability through the 1970s and 80s. It attracted foreign investment while projecting the image of economic justice. But it also entrenched patronage, politicised enterprise, and created a blurred line between public service and personal enrichment.
Conclusion: The Limits of Economic Nationalism
Africanising capitalism was never just an economic policy—it was a political compromise. It allowed Kenya’s nationalist elite to claim the mantle of anti-colonialism while avoiding the upheaval of full-scale redistribution or nationalisation. It created African millionaires but left the structure of inequality largely intact.
Today, Kenya remains a capitalist state with a powerful African private sector. But the inequalities are stark. Land ownership is still skewed. Wealth is concentrated. And many of the same families that rose through Africanisation continue to dominate.
The dream of a broad-based black bourgeoisie became a gated community. And the revolution, as they say, was not televised—it was capitalised.