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The Nairobi Securities Exchange (NSE) is developing East Africa's first exchange-traded fund built around artificial intelligence stocks, with a target launch before the end of 2026, chief executive Frank Mwiti told Reuters on August 5.
The product would give Kenyan investors a locally traded route into global AI companies that currently sit outside the reach of the domestic market. The NSE draws a considerable share of foreign equity investment on the strength of the country's banking sector and telecoms operator Safaricom, but it has offered no direct exposure to the AI theme that has dominated global markets over the past two years.
"We want essentially to be able to bring a product to our market where the underlying basket is a reflection of companies that have a direct exposure to AI," Mwiti said. He named Microsoft, Anthropic and OpenAI as possible reference companies for the fund's composition, though the final basket has not been settled.
A Regulator-Dependent Timeline
The exchange is currently in discussions with Kenya's Capital Markets Authority (CMA) over the structure of the proposed fund, and Mwiti was candid that the timeline is not fixed. He said the NSE intends to watch the global AI rally closely and would delay the launch if conditions suggest valuations have become stretched.
"There is a vibe in the market that there might be a bubble around AI, so maybe there is also an aspect of waiting and seeing," Mwiti said.
That caution matters for a market the size of Kenya's. An ETF is a fund holding a basket of underlying assets, typically equities, that itself trades on an exchange the way an ordinary share would. For a first-of-its-kind product in the region, launching into an overextended market carries reputational risk beyond the usual price exposure any investor accepts.
Mwiti indicated the fund would most likely be denominated in Kenyan shillings rather than US dollars, a design choice intended to shield local investors from currency conversion costs and exchange-rate risk when buying into the product, even though the underlying holdings would remain foreign assets.
Why Now: A Younger, More Active Investor Base
The push for an AI ETF is tied to a broader shift in who is trading on the NSE. Safaricom's M-Pesa mobile money platform began offering stock trading in February 2026, and Mwiti said that single feature brought in roughly a million new investors, many entering equity markets for the first time.
That new cohort skews younger and, according to Mwiti, is driving demand for thematic products that are not currently available on the exchange. Kenyan investors already buy AI-linked shares and funds through offshore brokerages, including exposure to chipmakers such as SK Hynix and Samsung riding AI-driven demand, but the NSE has had no equivalent instrument of its own. Mwiti framed the ETF plan as an attempt to keep that capital, and the trading activity around it, inside the domestic market rather than ceding it to foreign platforms.
"Kenyans are actually investing in foreign markets because of lack of product diversity here," Mwiti said, according to Reuters.
Part of a Broader Product Push
The AI ETF is not an isolated initiative. Mwiti said the NSE is also weighing a cryptocurrency ETF referencing Bitcoin, Ethereum and other digital assets, a proposal that would sit alongside Kenya's newly completed legal framework for virtual assets. The Virtual Asset Service Providers Act, 2025, which President William Ruto signed into law in October 2025, was operationalised in July 2026 when the National Treasury gazetted the accompanying regulations under Legal Notice No. 134. Under that framework, the CMA regulates exchanges, token issuance platforms and tokenisation activity, while the Central Bank of Kenya oversees virtual asset-to-fiat conversion and stablecoin issuers. A crypto ETF from the NSE would need to move through that same regulatory structure before it could reach the market.
The exchange's broader ambitions come against a backdrop of a strong year for Kenyan equities. Mwiti pointed to a rally of just over 30 percent in the market so far in 2026, which he attributed to solid corporate earnings and comparatively stable inflation and currency conditions. The NSE's total market value has climbed toward the 4 trillion shilling mark, and Mwiti said the exchange is targeting 5 trillion shillings by year-end.
Whether the AI ETF meets its year-end target will depend on how quickly the CMA moves on approvals and on how the global AI trade behaves in the meantime. Mwiti's own framing, that the exchange would rather wait than launch into a bubble, suggests the NSE is treating the timeline as a target rather than a commitment.
If it goes ahead as planned, the fund would mark one of the more significant product launches in the NSE's recent history: the first instrument on the exchange built specifically to track a global technology theme, rather than a basket of listed Kenyan or regional companies.
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