Beyond Nairobi: The Rise of Secondary Cities as Business Hubs in Kenya

Introduction

For decades, Nairobi has been Kenya’s primary business hub. However, in 2025, secondary cities such as Mombasa, Kisumu, Nakuru, and Eldoret are emerging as major economic centers. Improved infrastructure, government incentives, and decentralization policies are fueling business growth in these cities.

This blog explores how Kenya’s secondary cities are becoming attractive for businesses, the opportunities they offer, and the challenges that need to be addressed.

Factors Driving Growth in Secondary Cities

1. Infrastructure Development and Connectivity

• Expansion of highways, rail networks, and airports has improved accessibility.
• Special Economic Zones (SEZs) in cities like Mombasa and Eldoret attract foreign and local investment.

2. Government Decentralization Policies

• Devolution has led to increased budget allocation for county governments, fostering local business environments.
• Regional trade agreements have boosted commerce in cities close to borders, such as Kisumu and Busia.

3. Affordable Real Estate and Business Costs

• Nairobi’s high cost of living and office space has pushed businesses to secondary cities where costs are lower.
• Industrial parks and technology hubs in Nakuru and Kisumu provide cost-effective business setups.

Challenges Facing Secondary Cities

1. Limited Skilled Workforce: Some regions still lack adequate training institutions to produce a skilled workforce.
2. Infrastructure Gaps: While development is ongoing, some cities still experience inadequate power supply and internet connectivity.
3. Investment Hesitancy: Some investors remain cautious due to historical economic disparities between cities.

Conclusion

Kenya’s secondary cities are rapidly transforming into thriving business hubs. With continuous investment in infrastructure, favorable government policies, and economic diversification, these cities will play a crucial role in the country’s future economic landscape.

References

1. Kenya National Bureau of Statistics – Urbanization Report (https://www.knbs.or.ke)
2. Ministry of Transport and Infrastructure – Development Plans (https://www.transport.go.ke)
3. Kenya Investment Authority – Business Opportunities in Secondary Cities (https://www.invest.go.ke)
4. World Economic Forum – Africa’s Urban Growth Trends (https://www.weforum.org)
5. United Nations – Sustainable Urbanization in Africa (https://www.un.org)