• Kenya’s Purchasing Managers’ Index (PMI) fell below the 50 points mark to 44.2 in August 2022, down from 46.3 in July, to indicate deteriorating conditions for businesses in the country
• Businesses in Kenya were negatively affected by the August 2022 general elections, further deepening woes currently being experienced in the country’s private sector
• The decline was the lowest seen since the lockdown hit a period in April 2021 and was led by the construction and manufacturing sectors

Kenya’s Purchasing Managers’ Index (PMI) fell below the 50 points mark to 44.2 in August 2022, down from 46.3 in July, to indicate deteriorating conditions for businesses in the country.

As indicated in the August 2022 PMI survey, businesses in Kenya were negatively affected by the August 2022 general elections, further deepening woes currently being experienced in the country’s private sector.

The decline was the lowest seen since the lockdown hit a period …

McKinsey’s report notes that the wages of consumers are steadily being eroded. Wages in the largest economies reportedly flatlined; in other words, no significant change in their levels was recorded. Prior to the pandemic, the same wages were said to have increased, giving workers the upper hand in negotiations. The pandemic, however, drastically altered that state of affairs. Wages in developed markets post the pandemic are also related, but the advent of inflation has checked that growth and, in some instances, set the trend backwards.

In the United Kingdom, there have been reports of wages being lower year on year.

The culmination of these factors is that the outlook for global economic growth will be lower this year than last. McKinsey expects central banks to increase interest rates more assertively to deal with inflationary pressure. The risk of recession is becoming more and more prevalent.…

If it so happens that the said stimulus package is financed by increasing the money supply. It may have unintended and unpleasant consequences.

Economists have a phrase that means the same as “in a perfect world”. Economists will often say “ceteris paribus”. In a perfect world, government expenditure would have been all that is necessary to fix the lingering economic problems confronting the world post-COVID. However, reality would beg us to consider that government expenditures of money that they did not have to jump-start economies that were in a prolonged period of stasis would invariably lead to inflationary pressures. The United States has been grappling with the problem of inflation throughout 2021.

Its inflation figures are the highest they have been in decades. The fascinating thing about this current brand of inflation is that it is multi-faceted. Granted, it began when governments decided to spend their way out of an …

• The International Finance Corporation (IFC) says it will extend USD 150.0 million (KSh 18.0 billion) to KCB Group as a senior unsecured loan 
• The credit facility would support the growth of the bank’s climate finance portfolio, which entails clients in sectors such as manufacturing, real estate and agriculture
• This is the third facility from IFC following a 10-year USD 150.0 million and a 7-year USD 75.0 million extended to KCB Group in 2020 and 2018, respectively
• The funding makes KCB Group the biggest borrower from IFC among tier one Kenyan lenders, with a cumulative amount of USD 375.0 million (KSh 45.0 billion)

The International Finance Corporation (IFC) has disclosed that it would extend USD 150.0 million (KSh 18.0 billion) to KCB Group in the form of a senior unsecured loan with a maturity of 7 years and a grace period of 2 years.

The credit facility is aimed at supporting …

• A new report by Knight Frank indicates that the ongoing war in Ukraine will affect Kenya’s overall gross domestic product in 2022 
• According to the Half-year report, Kenya’s gross domestic product is projected at 5.5 per cent in 2022, lower than last year’s 7.5 per cent
• While Kenya has no significant direct trade with Russia and Ukraine, its exposure – as a net fuel, wheat, and fertiliser importer – to the global price impacts of the Russian invasion of Ukraine remains telling

Kenya’s gross domestic product is projected at 5.5 per cent in 2022, lower than last year’s 7.5 per cent, owing to persisting drought and Russia’s invasion of Ukraine.

According to a Knight Frank finding, Kenya has no significant direct trade with Russia and Ukraine. In fact, only  2.1 per cent of Kenya’s trade between 2015 and 2020 was from Russia and Ukraine combined.

Nevertheless, the report noted that …

Southern Africa, East and West Africa saw their flows of FDI rise in 2021. It was only in Central and North Africa that flows of foreign direct investment were flat or declined, respectively. Flows to North Africa fell by 5 per cent to $9.3 billion.

Egypt saw its FDI drop by 12% as large investments in exploration and production agreements in extractive industries were not repeated. Despite the decline, Egypt has the second highest flows of FDI in 2021 on the continent.

UNCTAD reports that it expects FDI flows to increase in North Africa owing to pledges of as much as US$ 22 billion to the region from Gulf states. In Egypt, according to the UNCTAD World Investment Report 2022 tripled green field projects of US$ 5.6 billion and real estate projects of US$ 1.5 billion.

In Morocco, FDI flows increased by 52% to US$ 2.2 billion. This was driven …