Wednesday, February 28

Money Deals

digital agricultural innovation
  • Africa continues to grapple with food insecurity exacerbated by climate change and inadequate access to financing for both startups and food producers alike.
  • In response, innovators and bold entrepreneurs are going digital, devising modern solutions to enhance food production.
  • At the Africa Tech Summit in Nairobi, agri-innovation startups Homemade by Dropp, Koolboks, Samalife, BWS, Hello Tractor, Seabex and ReNile shared their entrepreneurial journey and reasons why they need financing to create value for farmers and consumers.

A number of startups with a focus on digital agricultural innovation in Africa are seeking fresh financing to scale and accelerate their growth across the continent, which is curradidas yeezy boost 350 turtle dove yeezy shoes under 1000 air max 270 women asu football jersey sac eastpak brock purdy jersey penn state jersey custom sublimated hockey jerseys 8 ft kayak dallas cowboys slippers mens custom nfl football jerseys johnny manziel jersey dallas cowboys

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income streams for kenyans / Kenya's eurobond
  • Kenya’s Eurobond will positively impact the exchange, inflation, and interest rates.
  • Diamond Trust Bank revealed that Kenya’s $1.5 billion Eurobond attracted more than $6 billion in demand.
  • Kenya’s $1.5 Billion Eurobond will also be used to offset $2billion Eurobond maturing in June. 

The issuance of Kenya’s $1.5 Billion Eurobond is likely to ease concerns about the debt situation and lift the overall outlook for the country, one of the country’s banking industry players has said.

Diamond Trust Bank revealed that the new $1.5 billion Eurobond, which attracted demand of more than $6 billion, is likely to positively affect the exchange rate, inflation, interest rates, and government spending in the payment of debts and development.

Speaking at DTB’s Economic and Sustainability Forum, the bank’s Group CEO and Managing Director Nasim Devji said the recovery will be felt more in the second half of the year, and the economy will grow …

non-performing loans in kenya
  • Non-performing loans in Kenya surged to a 16-year high of 15 per cent in August 2023.
  • The Kenya Bankers Association had called for further monetary policy tightening by the CBK, terming it a cure to elevated non-performing loans.
  • According to the CBK data, forex pressure cut lending to the private sector to 8.3 per cent during the review period.

The banking sector regulator has said that Kenya’s private sector players resorted to alternative funding sources to avoid the high lending rates, leading to a drop in non-performing loans during the holiday season.

The continued surge in bank interest rates has hit individuals and businesses hard on the back of the Central Bank of Kenya’s (CBK) elevated benchmark interest rate. This has happened thrice since Governor Kamau Thugge took office, citing the need to support the country’s struggling shilling.

On Tuesday this week, the Central Bank of Kenya increased the benchmark …

social bond
  • The AfDB’s mandate for a three-year social bond was announced on Wednesday, 17th January 2024.
  • This issuance is a significant highlight amid a dynamic week in the USD SSA markets, witnessing the launch of eight benchmarks totaling US$17.25 billion within a span of two days.
  • This new three-year Social Benchmark is the Bank’s first global benchmark of the year.

The African Development Bank has issued its first ever three-year social bond targeting to raise US$2 billion under its recently established Sustainable Bond Framework, which was launched in September 2023.

Set to mature on February 25, 2027, the Sustainable Bond Program seamlessly integrates and strengthens the African Development Bank’s existing Green and Social Bond initiatives, streamlining the issuance of green bonds, social bonds, and sustainability bonds.

This new three-year Social Benchmark is the Bank’s first global benchmark of the year, strategically aligning with the robust reopening of primary markets in January …

Kenya's Debt Repayment
  • Kenya’s debt repayment in 2023 was majorly from the Consolidated Fund. 
  • The country has faced liquidity challenges due to uncertainty in accessing funding from global financial markets.
  • Analysts, however, maintain that the practice of taking on debt to pay debt is unsustainable.

The National Treasury has revealed that Kenya’s debt repayment surged to $3.69 billion (KSh600.73 billion) by December 2023. Despite an increase in revenue collection, Kenyans found little reason to rejoice as debt consumed 57 per cent of the government’s tax revenues, amounting to $6.14 billion (about KSh1.05 trillion).

Only 43 per cent of the generated revenue remained for development, salaries, and the state’s recurrent expenditure such as paying salaries.

The disclosure, titled “Kenya’s statement of actual revenues & net exchequer issues as of 31st Dec 2023,” signals a need for Kenyans to tighten their belts this year. President William Ruto’s administration anticipates higher repayments due to the devaluation …

West African Eurobond
  • Experts project that Côte d’Ivoire seeks to sell its Eurobond and around 8.50 per cent to 8.75 per cent for a ticket size of between US$1 billion to US$1.25 billion.
  • Ghana, Senegal, Nigeria, and Côte d’Ivoire have been key players, with the values of their Eurobond issuances typically ranging from $200 million to $1 billion.
  • The annual value of Eurobonds issued by West African governments witnessed a remarkable surge, increasing from $200 million in 2007 to $2.25 billion in 2014.

As the markets open in the new year, all eyes turn to Côte d’Ivoire, which has announced a plan to lead the continent in issuing a Eurobond—the first in Africa after a nearly two-year break.

Positioned on the verge of economic resurgence in 2024, Côte d’Ivoire is poised to become the first sub-Saharan African nation to issue a Eurobond as the global financial markets ease following a period of high …

fixed-income securities
  • Rising volatility in Kenya’s Fixed Income Market derives from a combination of global and domestic factors.
  • The yield curve soared fastest at the head and upper belly of the curve, rising by a cumulative 661bps on the three-month treasury bill.
  • There is hope as it is anticipated, that a rebound in trading activity will happen in 2024.

The Kenyan Fixed Income Market displayed remarkable flexibility last year to experience one of the most rapid annual increases in yields resulting in a notable inversion of the effective yield curve.

According to financial experts, the rising volatility in the fixed income space derives from a combination of global and domestic factors.

On the external front, the rapid monetary policy tightening in 2022 and 2023 led investors to price-in bearish capital gain expectations for bonds.

On the domestic front, the rising concerns around fiscal sustainability indicators, coupled with an elevated inflationary regime in …

IFC
  • International Finance Corporation targets specific projects in Côte d’Ivoire, Egypt, Kenya, Morocco, Senegal, and South Africa.
  • IFC’s $30 million (Sh4.8 billion), own-account investment will help Africa Infrastructure Investment Fund 4 Partnership (AIIF4) exceed its final close target of $500 million (Sh80.4 billion).
  • A pan-African infrastructure private equity firm called the Africa50 Infrastructure Acceleration firm I is raising up to $500 million for investments

Kenya is among six African countries that International Finance Corporation (IFC) will pump $30 million (about KSh4.8 billion) equity investment to fund works on essential infrastructure.

The fund, managed by Africa Infrastructure Investment Managers (AIIM), part of the Old Mutual Group, will support projects in the telecoms, renewable energy, and transport sectors across Africa but with a specific focus on Côte d’Ivoire, Egypt, Kenya, Morocco, Senegal, and South Africa.

In the telecoms sector, the fund will focus on financing data centers, fiber networks, and communications towers. In …

food security in Africa
  • The IMF’s support fund refers to the designated Special Drawing Right (SDR), which serves as an international reserve asset to supplement the official reserves of its member nations.
  • It represents a potential claim on the members’ freely usable currencies, primarily intended to provide liquidity to a nation in the event of an economic crisis.
  • As of September, Kenya’s SDR quota at the IMF stood at US$542.8 million, equivalent to KSh91.8 billion.

Leaders from developing countries continue to pursue the implementation of the proposed re-channeling of the IMF’s support fund through development banks, aiming for affordability and increased impact scale.

This was evident on the sidelines of the recent COP28 summit, where African leaders emphasized the acceleration of the process towards realizing the proposal. The summit took place between November 30 and December 12 last year in Dubai.

Proposal: IMF’s support fund to come through AfDB

African Development Bank (AfDB) Group …

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