Could AI Soon Become an Investment Option for Everyday Kenyans? What the New Proposal Could Mean for Investors.

Kenyan investors could soon gain exposure to the global artificial intelligence industry through a locally listed product, as the Nairobi Securities Exchange develops what would be East Africa’s first AI focused exchange-traded fund. NSE chief executive Frank Mwiti said the exchange wants to introduce the product before the end of 2026 and is discussing the proposal with the Capital Markets Authority. The fund would hold a basket reflecting companies with direct exposure to AI and would target, in particular, younger investors seeking alternatives to the NSE’s traditional banking, telecommunications and industrial shares.

The proposed fund would expand local investment choices, although it would not be the NSE’s first product offering exposure beyond ordinary Kenyan equities. The exchange already lists the NewGold ETF, whose value follows the international price of gold, and the Satrix MSCI World Feeder ETF, which gives investors exposure to large and mid sized companies across developed markets. An AI fund would be different because it would concentrate investors’ money in one fast growing theme instead of spreading it across the broader global market.

That concentration raises a crucial question: what would qualify a company for inclusion in the fund? Potential holdings could range from chipmakers and cloud computing groups to data centre operators and software developers. The exchange has not disclosed whether the fund would track an index or be actively managed, or what criteria would determine its holdings. Mwiti cited Microsoft, OpenAI and Anthropic as possible reference companies, but it remains unclear how those references would translate into investable holdings. Without clear rules, the ETF could become heavily concentrated in the same large technology companies that already dominate major global indices, leaving investors exposed if enthusiasm for AI weakens.

Currency treatment is another issue requiring clarification. Mwiti said the fund would most likely be denominated in Kenyan shillings, which he said would help limit foreign exchange risk. This would allow investors to buy the ETF without first converting their money into dollars. However, if the fund invests in US listed companies, returns would still be affected by movements in the dollar shilling exchange rate unless that exposure is hedged. A stronger shilling could reduce gains from rising AI shares, while a weaker shilling could increase their value in local currency terms. The NewGold ETF illustrates the distinction: it trades in shillings, but its price reflects both the international dollar price of gold and the prevailing exchange rate. Investors would therefore need to know whether the fund would hedge currency movements or simply make the investment easier to buy locally.

The NSE is also alert to concerns that the global AI rally may be forming a bubble, with share prices rising beyond what the underlying businesses may justify. Mwiti said the exchange could delay the fund’s launch if the rally appeared overdone. Even if the fund proceeds, Kenyan investors will still need details about its fees, minimum investment, holdings, manager, liquidity arrangements and dividend policy before deciding whether to invest. Those details will determine what investors are actually buying, how much it will cost to own the fund, how easily they can trade it and the risks they take in gaining exposure to the global AI industry.