Author: Martin Mwita

• Experts warn South Africa’s growth is too low to create enough jobs to absorb new workers entering the labor market.
• The country’s fiscal position is projected to deteriorate due to weakening mineral revenue. Utility Eskom’s debt bailout, wage bill, and rising debt pile more pressure.
• As a result, public debt is not expected to stabilise. And headline inflation will return to the midpoint of the target range by end 2024.

South Africa’s real GDP growth is projected at 0.1 percent in 2023, reflecting a significant increase in the intensity of power outages, and weaker commodity prices and external environment.

According to the International Monetary Fund (IMF), annual growth is expected at about 1.5 per cent over the medium term. The country is under vice-like grip of long-standing structural impediments.

South Africa’s power outage woes

For instance, South Africa is struggling with product and labor market rigidities. It …

• Middle East carrier Qatar Airways will get 3,000 metric tonnes of neat Sustainable Aviation Fuel (SAF) from oil giant Shell.
• The contract running through 2023-2024, is part of a wider effort initiated by the Oneworld Alliance.
• CEO Al Baker says the airline remains steadfast in its ambitious target of 10 per cent SAF use by 2030.

Middle East carrier Qatar Airways has entered into an agreement to use 5 per cent sustainable aviation fuel (SAF) in a deal with energy giant Shell signed at Amsterdam.

The contract running through the fiscal year 2023-2024, is part of a wider effort initiated by the Oneworld Alliance. The agreement has a set target of using 10 percent sustainable aviation fuel by 2030.

Qatar becomes the first carrier in the Middle East and Africa to procure huge SAF in Europe beyond government mandates. Sustainable aviation fuel offers significant potential for decarbonisation. This is because …

• Leaders are meeting in Nairobi for the Eastern Africa ‘Waste is Wealth’ conference.
• The inaugural Waste is Wealth Series is organised by Taka Ni Mali, East African Business Council, and Alliance for Science.
• The three-day conference is themed: Promoting Effective Waste Management Practices for Environmental Conservation and Climate Change Mitigation.

The concept of a circular economy is fast gaining momentum in East Africa with both the private sector and government’s stuck on the drawing board shaping policies and regulations to help realise the shift.

World business leaders, policy makers, academics and NGOs have argued that a move towards a more circular economy is necessary to help solve global environmental and economic challenges.

Moving towards a more circular economy could increase competitiveness, and stimulate innovation. It will also boost economic growth and create jobs across economies.

Waste is Wealth

It is against this background that leaders are meeting in Nairobi for …

Kenyan manufacturers have raised concerns over several proposals in the Finance Bill 2023. The country looks forward to the next financial year’s budget that the treasury cabinet secretary will table in June. The country’s National Treasury has proposed several new tax measures. Under these measures, the public and private sectors will cough more taxes to fund the 2023/24 budget.…

• With tightening monetary policies globally, many African economies are struggling with falling forex reserves.
• Low reserves have sent governments back to the drawing board strategising on how to survive future trends while balancing trade.
• With this, leaders and policymakers in Africa are engaging in the de-dollarisation conversation.

Kenya has sent a strong message to economies in Africa on the need to accelerate dedollarisation of cross-border trade, further amplifying the global conversation on reducing reliance on the US dollar as the main mode of payment.

For over a decade, China and Russia have sought to drastically lower their usage of the US Dollar in what is commonly referred as “dedollarisation”.

This is in a move intended at shielding their economies from possible trade-limiting US sanctions. The strategy also reduces their exposure to adverse effects of US economic and monetary policy, while also asserting global economic leadership.

China, Russia slowly cutting dollar

• About 84% of millennials and Gen Zs consume media at home. A  majority (88%) of them use data bundles to access content online.
• About 44 percent spend over four hours a day on social media. This is more than triple the number of millennials and Gen Zs spending over four hours on radio (13%) and TV (12%).
• More than half (55%) are spending 6-9 hours a day online while a further 20 percent spending over 10 hours per day.

A new survey has revealed a number of media usage behavioral traits that brands and companies keen on attracting millenials and Gen Z need to know.  Their by leveraging their media consumption patterns, brands would easily optimise their content to inform positioning their products and win this new market base.

Gen Z, millennials spend 10 hours online

About 8 out of 10 or 84 percent of millennials and Gen Zs usually …

• Weaker currencies make the fight to tackle inflation harder given Africa’s dependence on imports.
• According to the IMF, the average depreciation for the region since January 2022 is about eight percent, but events vary by country.
•  Ghana’s cedi and Sierra Leone’s leone depreciated by over 45 percent. An analysis by The Exchange Africa shows the Kenya shilling has shed about 18.4 per cent since May last year.

Most African currencies have weakened against the US dollar, fanning inflationary pressures across the continent as import prices surge, IMF now says. This, together with a growth slowdown, leaves policymakers with difficult choices as they balance keeping inflation in check with a fragile recovery.

According to the IMF, the average depreciation across Africa since January 2022 is about eight percent though events vary by country. Ghana’s cedi and Sierra Leone’s leone depreciated by more than 45 per cent.

An analysis by The Exchange …

• The Middle-East market is showing great potential as the period from January to March 2023 witnessed a 20 percent jump in arrivals. 
• Building on this positive trajectory, Kenya aims to expand the Middle-East market by 30 percent by June 2024. 
• Authorities are leveraging partnership with Kenya Airways, travel agents, and private sector players.

Tourist numbers from the Middle East are registering an impressive pattern in Kenya, pointing to a key emerging source of holidaymakers, a trajectory that could drive arrival numbers, shoring up the country’s forex earnings.

To drive international arrival numbers, the Kenya Tourism Board (KTB) is strategically positioning itself. The latest developments indicate KTB is harnessing recently-launched Mombasa and Dubai direct flights to woo tourists. With wide offerings for Mombasa-bound holidaymakers, Kenya could tap Middle-East market and boost inbound tourism.

Rising tourist numbers from the Middle East

The Middle East market is showing an immense potential on boosting …

• Kenya’s forex reserves dipped to $6.2 billion on May 19, an eight-year low, before a slight improvement to $6.4 billion on May 26.
• At $6.4 billion, Kenya’s reserves are just 3.60 months of import cover, which is below the Central Bank of Kenya’s desired target.
• What’s more, the reserves are below the East Africa Community preferred threshold of 4.5 months of import cover, hence exposing the country to high volatilities in the global market.

A dip in export earnings, coupled with reducing diaspora inflows at a time of huge debt repayments have left Kenya grappling with low forex reserves, raising concerns on the health of East Africa’s economic powerhouse.

The low forex reserves are further compounding the dollar shortage problem that has been gripping importers for months. Importers, mainly in the manufacturing and the energy sectors, have been struggling to secure the greenback to replenish their suppliers.

Kenya’s forex reserves

• An IMF team was in Nairobi from May 9 – 22, 2023, for the fifth review of Kenya’s economic program.
• After engagements, Kenya secured a $544.3 million loan from the International Monetary Fund. 
• The parties also agreed to extend the duration of the EFF/ECF arrangements by 10 months to April 2025.

Kenya has secured about $544.3 million loan from the International Monetary Fund (IMF) representing 75 percent of the country’s quota. The deal follows staff-level agreement between IMF staff and the Kenyan authorities on economic policies and reforms. It marks conclusion of the fifth reviews of Kenya’s Extended Credit Facility and Extended Fund Facility arrangements.

In the deal, Kenya secured an extension of the program and augmentation of access under those arrangements. The credit is also anchored on a set of reforms under a 20-month Resilience and Sustainability Facility.

Kenya’s economy, the largest in East Africa, has been strained by …