• 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 …

• Italy’s initial pledge of €5.5 billion ($5.95 billion) also includes guarantees, according to Italian Prime Minister Georgia Meloni.
• AU Commission Chairperson Moussa Faki welcomed the pledge, while noting that prior consultation on the Mattei plan with the African continent would have been desirable.
• The plan was named after Eni’s founder, Enrico Mattei, the initiative which seemed to be aimed at encouraging a holistic approach to dealing with African countries of interest to Italy.

Italy has unveiled a close to $6 billion funding plan to support African development, a move geared towards strengthening bilateral ties. The Italian government noted that the funding would go a long way to curb African emigration to Europe.

The funding was unveiled during the one-day Italy-Africa summit that took place in Rome, Italy, bringing together several African heads of state and high-profile global leaders in the development space.

The initial pledge of €5.5 billion ($5.95 billion), …

• Cameroon is highly vulnerable to climate change, with risks from recurrent droughts, floods, landslides, and coastal erosion.
• The funding will play an important role to support the country’s efforts to adapt to and mitigate the impact of climate change and replace more expensive financing.
• The reform measures under the RSF are also expected to reinforce the growing engagement of development partners and other stakeholders

The International Monetary Fund (IMF) has approved an 18-month arrangement worth $183.4 million for Cameroon under the fund’s Resilience and Sustainability Facility.

The allocation is equivalent to 50 per cent of quota, with disbursements to start when the first review of the arrangement is completed.

IMF highlights Cameroon as highly vulnerable to climate change, with risks from recurrent droughts, floods, landslides, and coastal erosion.

It however says the funding will play an important role to support the country’s efforts to adapt to and mitigate the impact …

• The IMF anticipates a peak in interest rates at the beginning of 2024, following a slower climb in 2023 across major economies.
• This will likely exert pressure on already struggling currencies across Africa.
• Notably, the US Federal Reserve is expected to witness interest rates reaching around 5.4%, with plans for rate cuts in Third Quarter.

Pressure on the weakening local currencies in African economies may persist for much of this year, with further depreciation against major currencies anticipated until the third quarter.

According to the International Monetary Fund (IMF), their latest interest rates forecast update for major economies covering the period from 2024 to 2028 projects a peak in interest rates at the beginning of 2024. This comes after rates continued to climb at a slower pace late last year.

US Federal Reserve interest rate

For instance, the US Federal Reserve is expected to witness interest rates peaking around 5.4 …

• 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 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 …