Kenya’s Nairobi Securities Exchange is preparing to launch East Africa’s first exchange-Traded fund focused on artificial intelligence, according to a report by Reuters. The move signals a significant deepening of the region’s capital markets and positions Kenya at the forefront of thematic investing on the continent.
The planned AI-focused ETF would offer local and international investors a regulated vehicle to gain exposure to the rapidly expanding artificial intelligence sector, which has dominated global market narratives but remains largely inaccessible through structured products in East Africa. By listing such a fund, the NSE aims to diversify its product suite beyond traditional equities and bonds, catering to growing demand for technology-linked assets.
The initiative comes as African exchanges modernize infrastructure to attract younger, tech-savvy retail participants and institutional capital seeking frontier-market exposure to global megatrends. An AI-themed fund would track a basket of companies involved in the development, deployment, or enablement of artificial intelligence technologies, potentially including global tech giants alongside emerging regional players.
Regulatory approval from the Capital Markets Authority will be required before the product can list. The exchange has been engaging stakeholders on the framework for thematic ETFs, a category still nascent in Kenya despite the success of the first gold-backed ETF launched in recent years. Market operators note that investor education and liquidity provision will be critical to the new fund’s viability.
The development underscores Nairobi’s ambition to serve as a financial innovation hub for the East African Community. If successfully launched, the AI ETF could pave the way for a series of thematic funds targeting sectors such as green energy, Fintech, and agriculture technology, further integrating the region into global capital flows.
