Author: Martin Mwita

• 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 …

• 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 …

• 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 …

• Uganda has moved to the East African Court of Justice (EACJ) over alleged Kenya’s move to block it from importing its refined petroleum products.
• In 2016, Uganda opted to work with Tanzania to develop a pipeline to evacuate crude oil from its fields in Hoima, western Uganda.
• This dealt a blow to an initial plan to jointly construct a 1,500-kilometre-long pipeline from oil-rich Hoima to Kenya’s Lamu port, a project envisioned to cost about $2.5 billion.

Kenya’s fallout with Uganda on importing refined petroleum products has caused another rift between the neighbouring countries, threatening trade and bilateral relations.

On December 28, last year, Kampala lodged a case at the East African Court of Justice (EACJ) against Nairobi for blocking its plans to shift from purchasing petroleum products from Kenya to importing consignments.

Over the year, Oil Marketing Companies (OMCs) in Uganda have picked imports from Kenya Pipeline’s depots in Eldoret …

• The open Skies Policy in civil aviation aims to ease international airlines’ access to national airports to increase the flow of tourists and develop their potential as regional air hubs.
• Kenya is seen to warm up to more international carriers, with the latest being flyDubai, which is now flying directly to the Moi International Airport, Mombasa, after launching last week.
• Apart from attracting foreign carriers mainly from Europe and the Middle East, airlines from Kenya, Uganda, Tanzania, Rwanda, and other EAC states will operate across borders without restrictions.

The Open Skies Policy in Kenya

Kenya is slowly heeding calls by the private sector to open its skies to more international airlines seeking to fly directly to the country’s Coast, a leading beach destination preferred mainly by Europeans.

This comes as the government also banks on the recently unveiled “visa-free” to open the country to more visitors, aiming to grow the …

• Kenyans in the diaspora sent home $4.19 billion in 2023 as remittance inflows to the East African country hit an all-time high.
• The high numbers signal that Kenyans living and working in the diaspora defied the inflationary pressures they still experienced to send more money back home.
• Since the height of the COVID-19 pandemic, many Kenyans in the diaspora have had to cut spending to navigate inflationary pressures and afford to send money back home.

Kenyans in the diaspora sent home $4.19 billion in 2023 as remittance inflows to the East African country hit an all-time high, boosting foreign exchange reserves and support for families in the wake of tough economic times.

According to the Central Bank of Kenya (CBK), the figures are up by four per cent compared to the $4.02 billion sent in 2022.

“The inflows were strong in December 2023 at $372.6 million compared to $355.0 million …

• East Africa’s insurance sector regulators held the 7th Special Meeting of the Executive Committee (ExCo)of the East African Insurers Supervisors Association (EAISA) in Kenya on Friday.
• The East African insurance supervisors have resolved to promote the development of cross-border insurance products and services jointly.
• The members have also agreed to coordinate joint innovation initiatives relating to insurance development in member states.

Joint resolve for East Africa’s insurance sector supervisors 

The East African insurance supervisors have resolved to jointly promote the development of cross-border insurance products and services to address the challenges of low insurance uptake and penetration in the region.

The members have also agreed to coordinate joint innovation initiatives relating to insurance development in member states.

Working under the auspices of the East African Insurance Supervisors Association (EAISA), the supervisors, at their 7th Special Meeting of the Executive Committee (ExCo) meeting held in Eldoret, Kenya, also agreed to employ …

• The IMF loan to Kenya provides a much-needed shot in the arm as it navigates debt repayments, including the $2.0 billion Eurobond maturing in June this year.
• The country is expected to repay Eurobond debts of $1.96 billion in 2024, $880 million in 2027, and $978 million in 2028.
• Debt repayment has pressured Kenya as it consumes more of forex reserves and ordinary revenues, wiping out gains in diaspora remittances and tourism earnings.

The IMF loan to Kenya

The International Monetary Fund (IMF) has approved a $684.7 million loan facility for Kenya, giving the East African country the much-needed support to navigate financial pressures amid a maturing Eurobond.

The funds are part of the $941.2 million Extended Fund Facility (EFF) and Extended Credit Facility (ECF) program approved in April 2021 and extended by 10 months in July 2023 to April 2025.

The first review under the 20-month Resilience and Sustainability …

• Kenya’s input prices and output charges rise at much softer rates.
• New orders decrease slightly, survey shows.
• Declines in output and employment ease.

Kenya’s private sector business conditions showed a strong move towards stability in December 2023, as revealed by the latest Purchasing Managers’ Index findings, even though businesses remained less optimistic about the future into 2024.

According to the Stanbic Bank Kenya PMI compiled by S&P Global, rises in input costs and output prices were the softest since April of the previous year, having slowed markedly from record highs in October.

Kenya’s private sector experiences uptick in client spending

Consequently, many companies experienced a recovery in new work amid improved client spending, offsetting the impact of cost-of-living pressures. As a result, new orders, output, and employment all declined to lesser degrees.

The headline figure derived from the survey is the PMI. Readings above 50.0 signal an improvement in …

• The East African region and the Common Market for Eastern and Southern Africa (COMESA) were the single biggest trade blocs that consumed Kenya’s exports.
• According to the Kenya National Bureau of Statistics (KNBS), the value of Kenya’s exports to the EAC totaled $496.7 million (Ksh77.9 billion) up from $431 million (Ksh67.7 billion).
• There was an increase in earnings from exports to Uganda (27.7%), Tanzania (32.1%), South Sudan (64.4%) and the Democratic Republic of Congo (78.6%).

Kenya’s exports to her East African Community (EAC) neighbours increased in the third quarter of 2023, as the country continued to push volumes amid efforts to cut the high import bill.

This comes as Africa increasingly remained Kenya’s biggest export market, even as economies edge closer to operationalizing the African Continental Free Trade Area (AfCFTA).

The East African region and the Common Market for Eastern and Southern Africa (COMESA) were the single biggest trade …