Kenya's hotel industry has been a favorite among private equity investors who believed that East Africa's largest economy boasted a sizable middle class capable of consuming more cups of coffee and developing a taste for the American burger.

American chains like Kentucky Fried Chicken (KFC) arrived in Nairobi in 2011, followed quickly by Subway three years later. Cold Stone Creamery and Domino's Pizza joined the scene the following year, followed by Pizza Hut and Burger King in 2015 and 2016, respectively.

These popular brands swiftly gained a following among young, urban, social media-savvy individuals, challenging local competition that had traditionally organized the city around an ethnic array of tastes. Local establishments like Kosewe offered Luo delicacies, Highlands and G&R mainly catered to Kikuyu dishes, and Somali options were available in generous servings. Sonford, synonymous with Nairobi's dining history, roasted sacks of potatoes along Moi Avenue to cater to smaller budgets in the bustling downtown area.

With the advent of ten-minute pizzas, crunchy burgers, sugary slurpy syrups, and social media marketing, the city's new global brands made a significant impact on the fast-food dining scene in Kenya's capital.

Easy access to private equity funding attracted even more startups to the industry, including Jakoni, Amaica, and CJs. Meanwhile, global wealth funds like Abraaj acquired Java for US$130 million in 2017, as Artcafe found a new niche in Nairobi's high-end malls.

Hotel revenues

The overwhelming interest in Kenya's culinary preferences gave rise to a new business centered around data. This data played a crucial role in making decisions about choosing locations, pricing dishes, and even creating menus. Logistics companies with e-commerce licenses developed mobile applications that established digital restaurants, reducing restaurant setup costs by 30 percent. Ride-hailing services such as Bolt, Glovo, and Jumia utilized data to serve restaurants with substantial client orders, sometimes accounting for over half of the hotel revenues.

To attract customers, they provided the convenience of delivering food to your doorstep in record time. Restaurants aspiring to tap into this lucrative market were pressured to reduce preparation time, resulting in the offering of quick, often fried, and unhealthy fast food, as opposed to homestyle cooked dishes.

Studies began revealing an increase weight, particularly among women, rising from 7 percent to 10 percent over six years from 2008, with 28 percent of adults aged 18-69 years being overweight.

Despite this, Bolt celebrated each year, announcing that Kenyans ordered fried chicken 30,000 times through 2022, with the most selected food items being pizza, burgers, and alcohol.

As foreign brands expanded, local firms experienced a decline in their market share, leading to the disappearance of some, such as Kenchic Inn, once a ubiquitous fast-food branch, succumbing to the pressures of competition.

In 2007, Mr Obado Obado entered the market with his restaurant brand, Cafe Deli. Having received training as a chef at the legacy restaurant Norfolk, Mr Obado had prior experience working at corporate and tourist hotels like Safari Park, Block Hotels (now Nyali Beach), and Sarova Hotels. With a solid understanding of the Kenyan culinary market as a chef, he established a pastry shop before venturing into a full-fledged restaurant. This strategic move gave him an advantage over traditional local rivals who primarily targeted the lunchtime traffic of the four million Nairobi residents streaming into the city each day.

Online-driven "chickenization"

Upon entry, he astutely observed the market trends cultivated by the new players. Nairobi boasted a considerable middle class, albeit small and transient, concerned about their image and in need of restaurant murals for selfies and Wi-Fi-equipped spaces for work and meetings.

Before the online-driven "chickenization," menus predominantly featured replicas of standard American offerings. Obado, however, aimed for a different approach. He sought to blend local dish offerings, presented as continental rather than ethnic, with the high-quality standards learned from his experiences in tourist hotels. Those seeking alternatives to Java’s coffee, Art Cafe’s cocktails, and Osewe’s timeless rhumba would soon find a home in Cafe Deli, which expanded at the heart of the city, staking a claim to Nairobi’s culinary landscape.

However, the easy money that fueled the expansion of the hotel industry began to dwindle, and auditors started scrutinizing cash flows, exposing startups whose models clashed with market realities. Inflationary pressure resulted in a decline in customers, as Nairobi residents skipped lunch, and the proliferation of cheaper alternatives squeezed profit margins.

Cycles of political upheavals and COVID-19 restrictions on movement also dealt a severe blow to the sector, forcing restaurants online where they competed with laid-off Kenyans cooking and distributing from their homes. This indicated that the online business was not an easy game either.

Covid-19 restrictions

Read also: Landing the Kenyan immigrant in Dubai

The COVID-19 curbs, elections, and post-election political crises have forced restaurants to shutter their doors, which have hardly been busy amid the squeeze of inflation on the pockets of Nairobi residents.

As the money got thinner, talk of exits have started rising in the market with Kune foods shutting down City Lodge and Sentrim hotels selling 680 hotel. UK realtor Actis is also selling Java. Famous brand’s Debonair’s Pizza is also struggling to remain open suffering a dip in revenues. 

The squeeze on margins has forced restaurant owners to be innovative with some like fast food chain, KFC raising menu prices several times in a year. Some have opted to altering menus to offer less portions while shifting online to stay in business at a lower cost.

The economic strain has also presented takeover opportunities, and when Obado learned that Jakoni along Ngong Road was closing, he seized the outlet for his newest Cafe Deli branch. His sixteen years of experience has equipped him to navigate the tight market, enabling him to expand the restaurant by taking over Jakoni on Ngong Road at a time when most restaurants are downsizing their workforce and branch outlets to conserve cash.

This strategy offered him both a well-researched physical location and an opportunity to replicate Jakoni’s online model, which heavily focuses on offering tasty chicken.

Obado Obado, hailing from a small Luhya community known as the Banyala, regards chicken as the main domesticated animal in his community. The taste of chicken, especially in crushing bone marrow, is considered a western delicacy, akin to how cows are significant to the Maasai.

While western communities, on average, keep about a million chickens in the counties of Kakamega, Vihiga, Bungoma, and Busia, chicken rearing is prevalent across the country. According to the Kenya National Bureau of Statistics, there were 30.3 million indigenous (kienyeji) chickens, 5.5 million layers, and 2.9 million broilers in Kenya at the 2019 census. The national bird symbolized the Independence Party Kanu.

Gap in the market

However, chicken production is costly in the country due to the high cost of raw materials, including maize, sunflower seed cake, lime, wheat bran, rice polish, and mineral supplements. This makes feeds more expensive in Kenya compared to regional peers. Despite consistent maize deficits, duties on corn imports used for feed production, as governments attempt to protect maize farmers, especially in the Rift Valley—a powerful political mobilization base—have made production expensive, leading to a reduction in farmers' production over time.

"Because competition is very high, I try to stay ahead of the game by finding a gap in the market, and I have realized there is a gap in the supply chain," Mr. Obado said. "The day this country will get a working government, we will close almost 90 percent of our hotels. If we took inspectors from Dubai today and brought them here, they would close 90 percent of our hotels."

To establish his farm, the Café Deli owner drilled a Kes3 million borehole 92 meters deep into an aquifer in his home area to sustain his farm in Budalangi, aiming to secure his value chain from farm to fork.

This endeavor also provides him with an opportunity to give back to the community and employ a few more locals. Mr Obado emphasizes that there comes a time in business when you realize you genuinely enjoy what you do and seek better ways of doing it. After years of refining your skills, the business of selling it and achieving success in fulfilling work can only be capped by doing it slightly better than those around you while benefiting your community. 

Returning home presents its own set of challenges, as experienced by elites attempting to establish investments in villages while residing in the capital city, Nairobi. Many Bunyala diaspora individuals lament about farmhands selling their chicken while they are in Nairobi, relatives extracting monthly stipends for changaa women without contributing, and an overall lack of ambition.

Busia renaissance

Resignation to high levels of poverty has led to the perception that wealth can only be attained through political power, betting, or juju. "I need nothing if I can join a team and invest two thousand to make two hundred thousand. I pay school fees for the whole year and enjoy with friends," Major shares with me as we sit under the tree at Diana’s changaa den.

Busia town, whose Kes90 billion economy relied on processing border crossings, agriculture, construction, and trade, has faced challenging times with the establishment of the seamless one-stop border.

However, a new economy centered around aggregating produce for export to the Democratic Republic of Congo (DRC) and the cotton value chain through the Nasewa industrial park may soon alter the economic potential landscape.

This change has brought about power shifts that have made politicians, especially wary of the politicization of business leaders. Mr. Obado has come under such suspicion as part of a class of local elites who are politically active and offer an alternative leadership style.

As a member of Bunyala Processional (Bapro), a group that encourages its members to establish investments in their home area, employing at least ten people each to support the local economy, Mr. Obado set up his farm and chicken feed manufacturing plant. Others, like Mr. Jude Ogula, have built Acacia Lounge and Victoria Suites at Nambengele, while Collins Oyango is now bottling Chill Water at Nabalaki. Mike Ogalla put up HomePark, and Peter Osogo established Mulukoba.

The group has been actively involved in politics, interrogating local politicians before the 2022 elections and currently ranking a member, Sylvanus Alianda, as the Bunyala North Member of the County Assembly.

Kienyeji chicken

When he launched the water project to farm his kienyeji chicken, the entire political class showed up. Even on the drenched Friday Eid morning with the ground bogged down in swamping water, Busia Senator Okiya Omtatah, Budalangi Member of Parliament Raphael Wanjala, the County Government chief officer water Isabella Odolo, area MCA Alianda Sylvanus, and nominated MCA Angeline Wasike sloshed their way to the borehole where our small clan, Abalubanga, played hosts at the fork of history.

Obado does not pose a huge political threat; he comes from our small clan, Abalubanga, a fiercely territorial people at the edge of the Banyala border with the Luo. As Mwalimu Ounga says, in those days, the most courageous and fearsome men were placed at the borders to help hold off expansionist enemies. However, the clan is not politically sizeable enough to challenge the dominance of the Abamurembo, where former MP and current Sports Cabinet Secretary Ababu Namwamba hails from, or the Abakhone clan of Raphael Wanjala that ranks second to Abanyekera, the most dominant clan.

Coincidentally, both MPs have set up rival pet projects just next to Obado Obado’s farm. Furthermore, while Busia’s cotton value chain promises to define the future of Busia, it is right at this site, on the land of the Abalubanga clan, where cotton, once the main cash crop in this area, was collected, making it the center part of Bunyala’s economy at that time.

His home, Rwambwa, also known as Buulukhiro, meaning a place for rest, has not seen much action and is mostly a sleepy groove in the cleft at the foot of hilly Bunyala North that suffers from both the deluge of floodwater and great scarcity of drinking water due to the salinity in the area.

When the fresh water burst the surface of Rwambwa, it rose as high as the hills towering over the ground where an ancient cotton lint store once stood, which was the collection point of the main cash crop in the area. Now, it is just an iron sheet shack and a bus stage on the road.

Port Victoria

Rwambwa has lost its luster from the days it was the nerve center of the cotton ginnery, as economic activity shifted to wealthier Port Victoria, where fish farming, enterprising foreigners, and political power have coalesced in recent years.

But things are changing fast for the small villages in Bunyala as the local elite and businessmen, who have established careers, are going back home, trying to revive the local economy and investment at a time.

Leveraging their political network, they are changing how the political economy is organized in Busia, attracting the attention of all political leaders from the National Assembly, the Senate, and the county administration.

The speeches revolved around what the politicians will do for their constituents, build schools and football fields, roads, hospitals and dispensaries, channels to drain the water, and ensure state compensation for land, budgets permitting from legalizing the illegal Constituency Development Fund, and getting the broke government to disburse funds to the counties.

The troop of politicians is more scared of business leaders as potential rivals in the game of brokering for resources, as well as the entry of Kenya’s foremost known activist Mr Okiya Omtatah into active politics.

Mr Omtatah represents a shift in how to do politics from the reliance on political figureheads to using constitutional provisions to claim resources for the county.

While his position as a senator holds no budgetary allocation, Mr Omtatah has instead leveraged his legal crusade to secure additional resources accruing to Busia. He said he once had to demonstrate that Busia had been neglected for ten years to secure a road from Kenya’s development partners and has had areas of Busia included as arid and semi-arid areas (ASAL) by altering the country’s policy definition.

Senator Omtatah

ASAL status and affirmative funds are given to counties with more than 30 percent experiencing insufficient rainfall, but Mr Omtatah has lobbied to have the status determined by the amount of rain in each ward that saw Samia and Bunyala get included as beneficiaries.

He told residents that for eight years, he fought to restore public land at the 850-acre Nasewa Nucleus Estate, fighting off powerful politicians currently in government, who had grabbed the land and also helped reclaim Busia Airstrip.

Now, perhaps to slow down the litigious senator, the government has pledged to put in Kes3 billion for the Financial Year 2023/2024, whose commissioning would be graced by none other than President William Ruto, keen to keep the senator busy.

“You know you have given me strength, I came and did not belong to either political affiliations, so when the people in Nairobi saw you gave me more votes than anyone here, than even the governor they are afraid of me,” Senator Omtatah said.

He told Bunyala residents that he was a leader with a difference who believed the time to deliver for constituents is now, and that he will not engage in 2027 politics. All he required was petitions, petitions, petitions, signed along identity card numbers and phone contacts.

Petitions for opening up channels to drain water from swamping the fields, to extend the Lake Victoria ring road to Busia, return of Bulala FM as an early warning system under the meteorological department, and getting Kenya Bureau of Standards accreditation for our tribal pastime, brewing changaa.

Impact of devolution

Mr. Omtatah’s aggressive involvement in local politics has had another impact as political competition has seen Busia county surge ahead with a more ambitious county government. Where former Governor Sospeter Ojamong had lamented the state of the highway for a decade, his successor Mr. Paul Otuoma is working with the National government to expand the road four meters on each side to accommodate trailers that have been a constant traffic problem in the tiny town of Busia.

Mr Otuoma has also demolished illegal structures in the entire town, bringing down several buildings to pave the way for planned road sections that had been encroached into.

The governor has also stepped up revenue mobilization and digitization of records to boost own-source revenues to mitigate delays in the disbursement of state funding so as to avoid staff crises like the medical workers' strikes.

The competition in Busia between politicians and business leaders is bringing back the real impact of devolution as counties in the periphery of the country concentrate on local politics given the current exclusionary tribal presidency at the center.

At the local level, groups like Bunyala Professionals have an outsized impact, serving both as a venue to grow the economy but also a breeding ground for leaders like Mr. Alianda, through whom they can influence policy.

With a very inclusive strategy of community consultations channeling petitions through the activist, the group threatens to shift political bargaining from personality-led brokerage to one where the community can secure their resources and reap the rewards of direct action.

[email protected]