Kenya’s Nairobi Securities Exchange (NSE) is preparing to launch East Africa’s first exchange-traded fund (ETF) focused on artificial intelligence (AI), marking a significant step in the evolution of the region’s capital markets as exchanges seek to align investment products with emerging global technology trends. The proposed fund, expected before the end of 2026, would provide local investors with exposure to leading global AI companies while broadening the diversity of investment products available on the Kenyan market.
Expanding Local Access to the Global AI Economy
According to NSE Chief Executive Frank Mwiti, the proposed ETF will track a basket of companies with significant exposure to artificial intelligence, potentially including technology leaders such as Microsoft, OpenAI and Anthropic. The fund is expected to be denominated in Kenyan shillings, enabling domestic investors to participate in the global AI investment boom while reducing foreign exchange risk associated with investing through overseas markets.
The initiative reflects growing demand among Kenya’s increasingly youthful and digitally engaged investor base for technology-oriented investment opportunities.
While Kenyan investors can already access AI-related securities through international brokerage platforms, the exchange believes a locally listed ETF would lower barriers to participation, improve accessibility and deepen the domestic capital market.
Balancing Innovation with Market Prudence
Despite enthusiasm surrounding artificial intelligence, the NSE has indicated it will proceed cautiously.
Mwiti acknowledged concerns that rapid gains in AI-related equities globally may have created speculative conditions and said the exchange could postpone the product’s launch if market valuations appear excessively inflated.
The proposal is currently under discussion with Kenya’s capital markets regulator as part of the approval process. The exchange is also exploring the possibility of launching a cryptocurrency ETF linked to Bitcoin, Ethereum and Solana, subject to the passage of legislation governing virtual assets in Kenya.
Kenya’s Capital Market Continues to Gain Momentum
The proposed ETF comes amid a strong performance by Kenya’s equity market.
The NSE has recorded gains of more than 30% in 2026, supported by improved corporate earnings, stable inflation and currency conditions. According to the exchange, the market capitalisation of listed equities has reached approximately KES 4 trillion, with expectations that it could approach KES 5 trillion by year-end if current momentum continues.
The introduction of stock trading through Safaricom’s M-Pesa platform has also expanded retail participation, bringing around one million new investors into the market and reinforcing efforts to democratise investment access.
Strategic Context: African Capital Markets Enter the Innovation Phase
Globally, thematic ETFs focused on artificial intelligence, robotics and digital technologies have become established investment vehicles, allowing investors to gain diversified exposure to rapidly growing technology sectors.
Africa, however, has remained relatively underrepresented in this segment of capital markets.
Kenya’s proposed AI-focused ETF signals a broader shift in which African exchanges are evolving beyond traditional equity listings to offer products that reflect global investment themes. As digital transformation accelerates across the continent, exchanges are increasingly competing not only on liquidity and listings but also on product innovation capable of attracting younger investors and retaining domestic capital.
The initiative also aligns with Kenya’s wider ambitions to position itself as a regional leader in digital innovation, fintech and artificial intelligence policy (source).
AFNIS Insight
The Nairobi Securities Exchange’s proposed AI-focused ETF represents more than a new investment product; it signals an important evolution in Africa’s financial architecture.
Historically, African capital markets have been dominated by banking, telecommunications and extractive industries. Introducing a thematic AI investment vehicle demonstrates how exchanges are adapting to changing investor preferences while creating pathways for African capital to participate in global innovation-driven growth.
The initiative could also strengthen market sophistication by expanding product diversity, encouraging greater retail participation and positioning Kenya as a regional hub for financial innovation. If successful, it may encourage other African exchanges to develop thematic funds linked to sectors such as renewable energy, critical minerals, biotechnology or climate technologies.
Nevertheless, the exchange’s cautious approach is equally significant. By recognising the possibility of excessive market valuations before launch, the NSE is signalling that innovation should be accompanied by prudent risk management. As Africa modernises its capital markets, maintaining investor confidence through disciplined product development will be as important as introducing new financial instruments.