Author: Martin Mwita

• 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 …

• Major shipping lines among them Mediterranean Shipping Company (MSC) and Maersk have been avoiding the Red Sea and the Suez Canal route.
• This move follows attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships travelling to Israel.
• The Houthis have declared their support for Hamas in the ongoing war Israel war in Gaza that erupted following October 7 Hamas attacks.

The East African region remains exposed to high freight costs even as shipping lines indicate they are resuming voyages through the Red Sea after a hitch in December, caused by attacks by Houthi rebels.

Major shipping lines, including the world’s leading container carrier, the Mediterranean Shipping Company (MSC), and the second-placed Maersk, have been avoiding the Red Sea and the use of the Suez Canal.

This decision came after persistent attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships traveling towards Israel.…

• Burundi is the other country projected to record one of the fastest growing economies in 2024, according to the IMF.
• The Fastest Growing Economies in 2024 (real GPD growth) projections index places Rwanda ahead of her regional peers with a projected growth of 7.0% next year.
• Tanzania comes in closely with a projected growth of 6.1% while that of Burundi is forecast to grow at 6%.

Rwanda, Tanzania and Burundi will be the fastest growing economies in East Africa in 2024, the latest projection by the International Monetary Fund (IMF) indicates, with all countries posting economic growth above the world’s average.

The Fastest Growing Economies in 2024 (real GPD growth) projections index places Rwanda ahead of her East African Community (EAC) peers with a projected growth of seven per cent this year.

Tanzania comes in closely with a projected growth of 6.1 per cent while that of Burundi is projected …

• The collaboration seeks to play a significant role in closing the tech skills gap in Africa, fostering job creation, entrepreneurship, and empowering the continent’s youth with in-demand digital skills.
• Through the partnership, Microsoft and Gebeya aim to upskill 300,000 developers across eight countries over the next three years.
• They include Kenya, South Africa, Ethiopia, Democratic Republic of Congo, Lesotho, Nigeria, Egypt and Mozambique.

Microsoft and Gebeya Inc., the leading Pan-African SaaS-enabled tech talent marketplace, have partnered  to launch a new skills and jobs matching platform called Microsoft.Gebeya.com.

The collaboration seeks to play a significant role in closing the tech skills gap in Africa, fostering job creation, entrepreneurship, and empowering the continent’s youth with in-demand digital skills.

Through the partnership, Microsoft and Gebeya aim to upskill 300,000 developers across eight countries over the next three years, including Kenya, South Africa, Ethiopia, Democratic Republic of Congo, Lesotho, Nigeria, Egypt and Mozambique.

Applications …

Business conditions in Kenya remained in a steep decline halfway through the final quarter of the year, according to the latest Purchasing Managers’ Index (PMI) by S&P Global.

This comes amid sizeable falls in output, new orders, and employment in November, as indicated by the PMI, which closely monitors market-moving economic indicators, covering more than 30 advanced and emerging economies worldwide.…

• The Central Bank of Kenya benchmark rate has gone up to 12.5 per cent from 10.5 per cent.
• Developing economies including Kenya are paying dearly for geopolitical tensions.
• The current US policy rate at 5.25 per cent -5.5 per cent is the highest in 22 years, exerting pressure on economies.

Borrowers in Kenya are facing the prospect of more expensive loans following the country’s central bank’s decision to raise its base lending rate to a near 11-year high of 12.50 per cent. This marks an increase from the 10.50 per cent rate that has been in place since June this year, when it rose from 9.50 per cent due to a rise in non-performing loans in the banking sector.

The hike in rates occurs as Kenya, along with other economies in the region, continues to grapple with the impact of global factors, including elevated interest rates in the United States. …

• Annual tourist arrivals to the EAC are anticipated to increase to about 14.05 million by 2025, from the 7.2 million recorded in 2019. 
• Kenya targets 5.5 million international tourist arrivals and a $6.3 billion annual contribution by 2028.
• Fast-tracking of the EAC Single Tourism Visa remains critical to sell the region as a single tourism investment hub.

Diversification of products beyond traditional attractions and joint promotion of the region is a catalyst to revamping the East African Community as a single tourism market. This call on a single tourism market was underscored by regional Ministers responsible for EAC Affairs and Tourism and Wildlife Management who converged for the opening of the 3^rd EAC Regional Tourism Expo (EARTE’23) and the Magical Kenya Travel Expo in Nairobi, Kenya.

The three-day Expo that kicked off on Monday provides an opportunity for EAC Partner States to create awareness of tourism investment opportunities and …

• World Bank foresees $12 billion in support for Kenya between 2023 and 2026.
• This financing is subject to approval as East Africa’s economic powerhouse continues to depend on borrowing to bridge budget gaps in the wake of high recurrent expenditures and revenue shortfalls.
• The World Bank said it is fully committed to support Kenya in its journey to become an upper-middle-income country by 2030.

Kenya stands to benefit from up to $12 billion in financing from the World Bank over the next three years, as indicated by the global lender, ensuring continued support for the debt-saddled country.

This is subject to approval, the World Bank noted on Monday, as East Africa’s economic powerhouse continues to depend on borrowing to bridge budget gaps in the wake of high recurrent expenditures and revenue shortfalls. The World Bank stated that it is fully committed to supporting Kenya in its journey to become an …