Author: Martin Mwita

Nairobi will continue purchasing fuel on credit from three state-owned Gulf oil marketers until December 2024 in a plan the government is banking on to ease piling pressure on Kenya’s forex reserves.
The move comes in the wake of high expenditure on oil imports even as Kenya remains a net importer grappling with a widening trade deficit that hit $10.8 billion last year. Last year, Kenya’s expenditure on imports rose by 17.5 per cent to $16.9 billion (KSh2.5 trillion), despite growing export volumes.…

• The EU is supporting efforts in the Horn of Africa that will boost regional economic integration and trade. 
• Djibouti’s major trading partner countries include Ethiopia and troubled Somalia.
• Trade Mark Africa is helping implement a single window system which is already in use across EAC.

The EU has expressed its support for Djibouti’s plan to enhance connectivity within the Horn of Africa, a move that will promote trade with Ethiopia, one of the region’s biggest trade partners.

This collaboration is in sync with the African Alliance for e-commerce, a consortium comprising 18 member countries, dedicated to advancing the Single Window concept. This alignment adheres to the recommendations set forth by international institutions.

A pivotal project within the Alliance is the establishment of a Regional Single Window, designed to seamlessly interconnect all national platforms. The overarching goal is to streamline trade processes, bolstering the competitiveness of African nations on the global …

The government has no option but to squeeze taxpayers further to raise revenues to meet budgetary obligations as the depreciating shilling worsens Kenya’s debt and economic struggles. This comes as the Kenyan shilling weakens against the US dollar and other major global currencies, pushing up the country’s spending on repayment. Kenya’s shilling has lost about 19 per cent of its value to the dollar year-to-date, exchanging at an average of KSh147.47 on Monday, September 25, 2023.
The weak currency has pushed the country’s public debt repayment bill by at least $4.67 billion (Sh690 billion) in the last eight months. Piling debt comes as the National Treasury went on a borrowing spree to bridge the budget deficit.…

Africa is home to nearly all the valuable minerals that are essential to generating wealth, producing commodities, and advancing technology. Approximately 30 per cent of the world’s mineral reserves are in Africa, but most mineral-rich countries remain poor with little to celebrate. Some of the key minerals found in Africa include oil, diamonds, gold, silver, copper, cobalt, coal, iron ore, uranium, and platinum.…

• Output and new orders increase slightly.
• Employment growth quickens amid improved outlook.
• Inflationary pressures remain at historic highs.

Business conditions in Kenya improved for the first time since January, the latest Purchasing Managers’ Index (PMI) indicates. August Stanbic Bank Kenya PMI pointed to a slight improvement in the health of the private sector for the first time in seven months, as output and new orders returned to expansion territory amid greater political stability.

Job creation accelerated and purchasing activity picked up, whilst firms grew more confident about their output prospects. That said, the improvement in business conditions was only mild, and continued to be weighed down by elevated price pressures.

Indeed, input prices continued to rise at an historically strong pace, leading to the fastest increase in selling charges since June 2022.

PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 …

• The country’s petroleum products distributor, Kenya Pipeline Company (KPC), is set to take over the refinery.
• It will utilize it for storage of super petrol, diesel, kerosene and the latest now being development of a bulk LPG (cooking gas) reserve.
• The Kenya Petroleum Refineries Limited was originally set up by Shell and British Petroleum Company BP to serve the East African region in the supply of a wide variety of oil products.

Kenya plans to fully turn its defunct oil refinery into a storage center for imported products, as the dream of refining its own crude oil fades ahead of commercial production projected to commence before 2027.

Both the government and British exploration firm, Tullow Oil, which is seeking joint ventures for the Turkana oil project, are hopeful Kenya will go into commercial oil production in the short-term.

However, it is now clear that the country has no plans …

• According to the Agriculture and Food Authority (AFA) there are 15 sugar factories in the country.
• Despite these investments, self-sufficiency in sugar has remained elusive over the years as consumption continues to outstrip supply.
• The deficit is met through imports mainly from COMESA states.

President William Ruto of Kenya has declared war on sugar cartels, who have been blamed for causing a collapse of state-owned factories, as private players flourish in the country.

This, even as imports continue to dominate the market, which has over years struggled with a shortage of the sweetener, owing to a low production capacity by local millers.

Kenya’s sugar industry cartels

​​After taking power in September 2022, President Ruto promised to revive the sugar industry. Among others, he offered to investing in new and modern milling machines besides providing affordable fertilizer to farmers.

And just last week, he promised to breathe life into Mumias Sugar, …

• Businesses in Kenya are facing the impact of tightened monetary policy that is resulting in high lending rates.
• The government is under increasing pressure from investors to settle huge pending bills.
• At the same time, the Kenya Shilling is steadily losing ground against major world currencies, piling pressure on external debt obligations.

In the second half of the year, business optimism for companies and sectoral growth prospects in Kenya appears to be subdued, largely influenced by the dual challenges of high taxes and a weakening Shilling.

The government’s task of balancing rising debt levels with tax revenue generation is taking center stage in a scenario complicated by other economic factors.

A confluence of high-interest rates within the banking sector, a politically sensitive environment, the accumulation of pending bills that impact private sector cash flow, and the depreciation of the Kenyan Shilling is painting a complex business environment.

The Shilling has …

International tourist arrivals grew 32 per cent in the half-year to June, closing at 847,810 as Kenya’s tourism sector growth continued post-Covid-19. This was up from 642,861 arrivals recorded in the same period last year, as official data from the Ministry of Tourism indicates.
The performance represents a 92 per cent recovery compared to the same period in 2019. The increased numbers came with higher earnings for the country and the sector.…

• Investment and trade between the two countries was valued at more than $600 million last year.
• Kenya’s exports last year increased to $7.9 million from $6.3 million in 2021, the country’s Economic Survey 2023 indicates.
• Imports from Indonesia were valued at $187.7 million having dropped from $307.5 million the previous year.

Kenya is now keen to increase trade volumes mainly exports to the Asean market, with its renewed ties with Indonesia. President William Ruto said investment scope will also be broadened to bring about a balance of trade that is currently in favour of the Southeast Asian country.

“We will seize our energies and create the necessary environment for increased trade between our countries,” President Ruto said on Monday.

Investment and trade between the two countries was valued at more than $600 million last year. Indonesian economy registered a growth of  5.3 per cent in 2022 compared to of …