Author: Otiato Guguyu

IMF Board Kenya
EconomyNews
Otiato Guguyu

IMF sees loans to Kenya’s private sector declining

The International Monetary Fund (IMF) sees loans to Kenya’s private sector declining to a single digit growth this year signaling a dim view of economic activity as the country struggles with weak demand and crowding out effect of the debt paying government. The Fund indicated that credit to the private sector is expected to plunge from 12.5 percent to 9.5 percent. This signal banks will be more willing to lend to the government than to private businesses and individuals. Private sector suffering The IMF Board, which yesterday gave Kenya access to $415.4 million programme loans and additional support as well as new credit line of…

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William Ruto
MarketsNews
Otiato Guguyu

Investors seek clarity on opaque state dollar deals

Foreign investors are seeking clarity on the state oil import deal and plans to repay the Eurobond which will have a huge impact on Kenya’s currency affecting investments. Ronak Gadhia, CFA, Director of Frontier Banks for EFG Hermes Research said investors are keen on establishing how Kenya will pay for the oil. Investors note that it may impact dollar reserves in KEnya ahead of a huge Eurobond payment this year. Kenya signed a State-backed deal with Saudi Aramco, Emirates National Oil Corporation (Enoc) and Abu Dhabi National Oil Corporation Global Trading (Adnoc) in April to buy fuel in credit for up to six months lower…

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Kenya Parliament
NewsPolitics
Otiato Guguyu

Why Kenya wants fingerprints of British pensioners

Kenya’s Parliament is demanding biometric data of British and Asian colonial civil servants, who continue to draw pensions in the country. The National Assembly says the Asians and Europeans, who retired from the colonial government to pave the way for Africans, were born in the 1930s. There is, therefore, every reason that Kenya should see their pension bill reducing. Instead, their allocations had grown from Kes100 million to Kes150 million in 2022 up to 2026. This is implying that ‘no natural attrition’ will occur over the next three years. The colonial civil servants collect their pension through Crown Agents, a British firm that recently moved…

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Safaricom theft
EconomyNews
Otiato Guguyu

Fraud and theft cases rise on tough economy

Kenyans are opting to cut corners to survive the surge in living costs spiking cases of fraud and theft among corporates and famers. Companies have reported cases of increasing internal fraud, contraband and theft of produce in recent weeks indicating a growing trend of errant behavior. British American Tobacco (BAT) Kenya claims that illegal cigarette sales ate up about 25.5 percent of the market last year. In comparison, the menace consumed 11.3 percent of the multinational’s market in 2021, resulting in heavy revenue losses. Part of the reason illegal sales are picking up is due to jump on excise duty that is pushing up prices…

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IMF Kenya
EconomyNews
Otiato Guguyu

IMF Board to decide Kenya fate next week amidst Finance Act court case

The International Monetary Fund (IMF) will meet next week on Monday to review Kenya’s application for extending the programme, accessing additional funds and negotiating a new funding line, even as the country litigates the Fund’s sponsored tax laws. The meeting is also expected to review requests to waive application of some conditionalities and a clause to consult the fund on making monetary policy decisions. Kenya which is in dire need of IMF funds to plug budget holes due to inability to afford commercial loans is keen on accessing an extra $1.1 billion (Kes152 billion) and expand the Fund programme by another two years after reaching a staff…

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Borrowing rate Kenya
MarketsNews
Otiato Guguyu

Government three-month borrowing rate rises to cost of consumer loans

Banks are rushing to increase cost on their loans after the rates at which the government borrows for three months rose to near average consumer loans’ lending rates. Banks and pension funds have increased the rates on risk free government debt from 9.4 in January to 12 percent signaling a rise in borrowing rates for individuals and corporates that stood at 13.1 percent in April. Equity Bank was the first lender to abruptly increase rates from 12.5 percent to 14.6 percent in January. Borrowers will pay over 20 percent once risk and premiums are factored into the loan price. A note from NCBA to customers…

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Kenya Somalia border
EAC & The HornNews
Otiato Guguyu

Kenya reverses border decision as Amisom exits Somalia

Kenya has reversed its decision to re-open its borders with Somalia after a spate of terror attacks inspired by the return of vegetation providing cover on the end of drought and the opportunities presented to the terrorists on withdrawal of Africa Union (AU) troops. Already, Somali forces have assumed security responsibilities in five of six sectors where AU troops have been deployed ahead of the scheduled withdrawal of 2,000 AU soldiers by the end of this month. The withdrawal of troops coupled with returning vegetative cover following the end of a long drought has seen the terrorist group Al Shabab hold daring attacks on Kenyan…

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Kenya Tea
MarketsNews
Otiato Guguyu

A bitter cup of tea for DP Gachagua conference

Kenya’s tea sector is facing multiple headwinds. A decline in prices, constrained export markets and local political clashes are threatening the country’s leading export. This comes ahead of the much publicized tea conference set to be graced by Deputy President Rigathi Gachagua. A new report by the Tea Board of Kenya (TBK) shows that the average monthly auction price for tea at the Mombasa auction stood at $2.39 (Kes334.6) per kg in April. This was lower than the $2.53 (Kes354.2) for the same period of 2022. Prices in January and February averaged $2.32 (Kes324.8) per kilo. In April, sales at the tea auction also dropped…

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President Ruto
MarketsNews
Otiato Guguyu

Kenya turns to Mecca as one year Eurobond deadline starts ticking

Kenya wants to go the Egypt way in settling the Eurobond next year, indicating the government is exploring investors in the gulf countries who funded Cairo through a Sukuk bond. Egypt raised $1.5 billion in a maiden Sukuk bond, a sharia complaint bond targeting a new base of investors in the Gulf countries and East Asia, as well as European countries and the United States. Last week, the National Treasury told Parliament Public Debt and Privatization committee, the sovereign bond maturing in 2024 will be rolled over with a coupon of 11 percent based on the Republic of Egypt most recent issuance. Amidst the geopolitical…

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