Author: Martin Mwita

Martin Mwita is a business reporter based in Kenya. He covers equities, capital markets, trade and the East African Cooperation markets.

Mining of precious metals
  • Since 2014, AFC has invested over $1 billion in Africa’s mining of precious metals and critical minerals across several countries.
  • The latest partnerships will further strengthen the sector by driving significant capital flow into the continent. 
  • According to the United Nations Conference on Trade and Development (UNCTAD), two-thirds of developing countries depend on commodities.

Boosting the mining of precious metals in Africa

Africa’s mining sector is poised for significant developments as the Africa Finance Corporation (AFC) throws its weight behind the industry, a key driver of economic growth in commodity-dependent countries.

AFC, the continent’s leading instrumental infrastructure solutions provider, has announced several strategic partnerships on the sidelines of the recently concluded 2024 Mining Indaba conference in Cape Town to boost Africa’s mining sector, ushering the continent into a new era of growth and prosperity.

Since 2014, AFC has invested over $1 billion in Africa’s mining of precious metals and critical …

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AfDB | fastest growing economies 2024
  • According to the African Development Bank’s Macroeconomic report, Africa will dominate the world’s 20 fastest growing economies 2024.
  • According to the report, the medium-term growth outlook for the continent’s five regions is slowly improving.
  • The report forecasts more substantial growth for Africa in 2024, outpacing the projected global average; the continent is the second-fastest-growing region after Asia.

Fastest Growing Economies 2024

The African Development Bank Group’s latest Macroeconomic Performance and Outlook (MEO) indicates real Gross Domestic Product (GDP) growth for the continent is expected to average 3.8 per cent and 4.2 per cent in 2024 and 2025, respectively.

The report said this is higher than projected global averages of 2.9 and 3.2 per cent, with Africa remaining the second-fastest-growing region after Asia.

The top 11 African countries projected to experience economic solid performance forecast are Niger (11.2 per cent), Senegal (8.2 per cent), Libya (7.9 per cent), Rwanda (7.2 per …

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Diaspora remittances to Kenya
  • Official data shows that diaspora remittances to Kenya increased to $412.4 million in January 2024, compared to $372.6 million in December 2023.
  • This represents an 18% jump compared to similar month in 2022 as well as 10.7% month-on-month increase in inflows.
  • The cumulative inflows for the 12 months to January 2024 totalled $4.3 billion compared to $4 billion in the same period in 2023, an increase of 5.3 per cent.

Kenyans in the diaspora sent home more money in January compared to December, as the strong start of the year signals easing inflationary pressures, mainly in key source market, the United States.

The year-over-year inflation rate in the US, Kenya’s most significant source of remittances, fell to 3.1 per cent in January, the lowest since June.

This was down from 3.4 per cent in December, the Bureau of Labor Statistics said, but the annual inflation was higher than the …

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Kenyan Shilling
  • The Kenyan shilling has made a strong turnaround against the US dollar this week,
  • Last Tuesday, Kenya successfully raised $1.5 billion from its Eurobonds buyback offer initiated on February 7, reducing the chance of defaulting payment on its $2-billion-dollar debt due in June.
  • East Africa’s most robust economy plans to use the funds to repay its debut Eurobond issued in 2014.

The Kenyan shilling has made a strong turnaround against the US dollar this week, moving towards the most potent levels since March last year, mainly on investor confidence and increased inflows.

The shilling, which rallied against the dollar, gaining about 10 per cent, comes from a strong demand for the country’s Eurobond and an oversubscribed local infrastructure bond.

Last Tuesday, Kenya successfully raised $1.5 billion from its Eurobonds buyback offer initiated on February 7, reducing the chance of defaulting payment on its $2-billion-dollar debt due in June.

East Africa’s …

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Kenya’s capital markets is showing a sign of recovery this year with the Nairobi Securities Exchange (NSE) recording a gain in January, albeit minimal, as large stocks pay investors.
  • The latest Nairobi Securities Exchange monthly Barometer shows month-on-month growth comparing January this year and December last year, with prospects looking much better after a bear run last year.
  • Market capitalisation increased by 0.08 per cent in January to $9.11 billion from $9.05 billion in December 2023.
  • The NSE 20 and NSE 25 Share Index recorded increases in activity of 0.89 per cent and 1.32 per cent, respectively, while the All-Share Index experienced a 0.08 per cent increase.

Nairobi Securities Exchange showing recovery signs

Kenya’s capital market is showing a sign of recovery this year, with the Nairobi Securities Exchange (NSE) recording a gain in January, albeit minimal, as large stocks pay investors.

This is despite interest rates in advanced economies remaining high into 2024, a trend that has seen foreign investors focus on home markets, mainly the United States.

The latest NSE monthly Barometer shows month-on-month growth comparing January …

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Nigeria's economy
  • Like many other countries, the IMF has noted that Nigeria’s economy faces a complex external environment and wide-ranging domestic challenges.
  • External financing (market and official) is scarce, and global food prices have surged, reflecting the repercussions of conflict and geo-economic fragmentation.
  • Per-capita growth in Nigeria has stalled, and poverty and food insecurity are high, exacerbating the cost-of-living crisis, according to the global lender.

Nigeria’s economy is not yet out of the woods, the International Monetary Fund (IMF) has indicated, with a potential economic crisis despite government interventions to improve the economy.

This is even as the country’s real GDP is projected to grow by three per cent this year compared to last year’s projection of 2.9 per cent.

Like many other countries, the IMF has noted that Nigeria faces a complex external environment and wide-ranging domestic challenges.

External financing (market and official) is scarce, and global food prices have surged, …

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the cost of borrowing in Kenya
  • The cost of borrowing in Kenya has been going up since October last year, when it was at 10.50 per cent, before two consecutive raises.
  • This means banks are likely to adjust their interest rates upwards, pushing the cost of borrowing beyond the reach of many.
  • The majority of bank rates are currently above 20 per cent, amid a high default rate as banks struggle with Non-Performing Loans (NPLs).

Higher interest rates to raise the cost of borrowing in Kenya

The cost of borrowing in Kenya is set for yet another rise if banks are to factor in the latest Central Bank of Kenya increase in the base-lending rate.

The Central Bank of Kenya (CBK) has raised borrowing costs to highs last seen nearly 12 years ago, as it moves to try and contain the country’s inflation, which has started to pick.

On Tuesday, the Monetary Policy Committee, CBK’s top …

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unctad
  • UNCTAD estimates that the weekly transits going through the Suez Canal decreased by 42 per cent over the last two months.
  • The ongoing conflict in Ukraine has triggered substantial shifts in oil and grain trades, reshaping established trade patterns.
  • Simultaneously, the Panama Canal, a pivotal conduit for global trade, is grappling with diminished water levels, resulting in a staggering 36 per cent reduction in total transits over the past month compared to a year ago.

The escalating geopolitical tensions and climate change related issues affecting key shipping routes are now threatening global trade, the United Nations Conference on Trade and Development (UNCTAD) has warned, with potential to curtail economic development mainly in poor countries.

The United Nations trade and development body has expressed concerns over the disruptions, particularly stemming geopolitical tensions affecting shipping in the Black Sea, recent attacks on shipping in the Red Sea affecting the Suez

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Kenya's distressed debt levels
  • Kenya’s distressed debt levels are pushing the country in a tight spot following years of successive borrowing, the Institute of Public Finance (IPF) says in its latest Macro Fiscal Analytical Snapshot Report.
  • This is compounded by the inability of the private sector to create woefully insufficient jobs for millions of young people entering the job market annually.
  • The report notes that since 2014, persistent high fiscal deficits have resulted in a swift escalation of public debt, now standing at 70 per cent of the GDP.

Kenya risks missing its economic growth targets in the medium-term as the country grapples with high debt distress and a deteriorating macroeconomic operating environment.

According to the Institute of Public Finance (IPF) in its latest Macro Fiscal Analytical Snapshot Report, the country finds itself in a tight spot following years of successive borrowing.

This is coupled with the inability of the private sector to create …

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Kenyan Shilling
  • Kenyan Shilling, which has been on a free-fall against the Dollar since mid-last year, fell to a record-low of 162 to the greenback with projections it could tumble further into the year.
  • The unit has shed over 31 per cent of its value to the dollar year-to-date, as the Fed rate hikes in the US took a toll on currencies across the different markets.
  • According to Kenya National Bureau of Statistics (KNBS), the Kenyan shilling also ceded ground against the Euro, Pound Sterling and the Japanese Yen.

The Kenyan government is facing a major headache as the country’s currency continues to fall against the US Dollar and other major currencies, hitting a new low this week.

Kenyan shilling, which has been on a free-fall against the dollar since mid-last year, fell to a record-low of 162 to the greenback with projections it could tumble even further this year.

The local…

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