Browsing: Kenya Association of Manufacturers (KAM)

private capital

Kenya’s private sector activities rise as input costs continue to ease

Countries
    • Output rises at the sharpest rate in 20 months.
    • New order volumes strengthen.
    • Input costs fall for the second month in a row.

    Kenya recorded an improvement in private sector business conditions during May, as falling cost burdens and rising new business contributed to a solid expansion in activity.

    The Latest Stanbic Bank Kenya Purchasing Managers’ Index indicates that activity’s upturn was the sharpest in 20 months, as was input buying growth.

    Job creation continued at a mild pace even as reductions in fuel prices and import costs led to a further drop in overall input prices in May, after the first decrease in nearly four years during April.

    Selling prices started to rise again, albeit slowly. The Purchasing Managers’ Index (PMI). Readings above 50.0 signal improved business conditions in the previous month, while readings below 50.0 show a deterioration.

    The latest headline PMI reading of 51.8 marked the index’s

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Costly voyages: Will EAC shoulder the burden of Houthi rebels in the Red Sea?

Regional Markets
  • Major shipping lines among them Mediterranean Shipping Company (MSC) and Maersk have been avoiding the Red Sea and the Suez Canal route.
  • This move follows attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships travelling to Israel.
  • The Houthis have declared their support for Hamas in the ongoing war Israel war in Gaza that erupted following October 7 Hamas attacks.

The East African region remains exposed to high freight costs even as shipping lines indicate they are resuming voyages through the Red Sea after a hitch in December, caused by attacks by Houthi rebels.

Major shipping lines, including the world’s leading container carrier, the Mediterranean Shipping Company (MSC), and the second-placed Maersk, have been avoiding the Red Sea and the use of the Suez Canal.

This decision came after persistent attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships traveling towards Israel.…

Kenya’s investment landscape amid high taxes, weakening Shilling

Countries
  • 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…

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Kenyan Shilling falls to all-time low as Fed rates take toll

Countries
  • The Kenyan shilling has fallen to a new low of 140.04 against the US dollar.
  • Central Bank of Kenya data shows the unit is also losing to other major currencies including British Pound and Euro.
  • Last year, the Kenyan shilling depreciated by about 7.5 per cent against the US dollar, the UAE dirham (7.5%), Saudi Riyal (7.4%) and the Chinese Yuan (3.1%), the Kenya Economic Survey 2023 shows.

As developing market currencies continue to suffer from the worldwide increase in interest rates, which is being spearheaded by the US Federal Reserve, the Kenyan Shilling has dropped to a historic low in relation to the US Dollar.

The Fed has increased the benchmark rate ten times in a row, or a total of five percentage points, since March of last year. In the last 40 years, these increases are the most abrupt. In an effort to combat US inflation, interest rates

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Kenyan manufacturers raise concerns on the Finance Bill 2023

Industry and Trade

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.…

How heavy taxation, illicit trade killing Kenyan industries

Investing
  • The country is considered East Africa’s strongest economy.
  • It is among countries facing a huge challenge of illicit trade, estimated to be valued at above USD6.34 billion (Ksh800 billion).
  • According to official government data, up to 70% of imported goods are counterfeits.

Kenya has a domestic market of over 50 million people and is among the leading economies in sub-Saharan Africa.

The country is considered East Africa’s strongest economy, with the region having a GDP of about USD163.4 billion (at purchasing power parity, about USD$473 billion), and the average GDP per capita is about USD941 (at purchasing power parity, $2,722).

In addition to the EAC market, investors in the partner States have access to other African markets such as COMESA, SADC and AfCFTA, as well as international markets through preferential trade arrangements.

The Common Market for Eastern and Southern Africa (COMESA) comprises 21 Member States with a population of 560…

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Kenya’s geothermal wells promises cheaper electricity to power the future

Investing
  • Public-Private Partnerships  have allowed  drilling and geothermal energy production capacity to rise.
  • Combined with hydro, these two sources contribute 65.62 percent of the total, while wind and solar account for 18.69 percent.
  • While Kenya Power has tried to revise energy prices in the country, analysts observe that expanding geothermal investments will provide the country with cheaper power for future expansion.
Kenya is the leading producer of geothermal energy in Africa and ranks seventh in the world, behind the United States, Indonesia, the Philippines, Turkey, New Zealand, and Mexico.
Ongoing investments, primarily through Public-Private Partnerships (PPPs), have allowed the country’s drilling and geothermal energy production capacity to rise.
Part of this investment is the development of a 35MW Menengai geothermal project is scheduled to begin this month, according to the London-based energy company Globeleq.
Toyota Tsusho Company (TTC) has signed an engineering, procurement, and construction (EPC) contract and a long-term service
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e-Commerce deal to link Kenyan SMEs to markets

Kenya

The Kenya Association of Manufacturers (KAM) has partnered with e-commerce players in Kenya to boost access of manufacturing SMEs to local and international markets through e-commerce.

This is in the wake of low uptake of e-commerce in Kenya despite its immense benefits.

The partnership, therefore, seeks to promote the uptake of e-commerce by SMEs to enable them to gain access to global markets and new international customers and reinventing their business models to align with changing technologies.

Speaking at the inaugural event, KAM Board Member and SME Hub Chair, Ms Ciiru Waithaka noted that the increased attention on SME growth, both at a national and global scale, points to a reckoning that the future of business hinges on their success.

“The unique and dynamic nature of SMEs in the manufacturing sector calls for an adaptive approach in developing policies and interventions that most importantly centres their needs and proposed solutions …

Why Kenya’s manufacturing is uncompetitive

Kenya

Over 50 per cent of Kenyan manufacturers feel the sector is struggling to compete with developed countries with equal pressure coming from regional states, a study has revealed.

This is in the wake of continued high costs of doing business in the country with the local market further being infiltrated by cheap imports mainly from China.

READ:What is hurting manufacturing in Kenya

The study has been unveiled by SYSPRO, a global provider of industry-built Enterprise Resource Planning (ERP) software for manufacturers and distributors, together with Strathmore University.

External factors

In the findings, energy leads as the top factor affecting businesses with a 54 per cent prevalence followed solely by the country’s political climate which accounts for 50 per cent of effect to investments.

The third most toxic factor affecting businesses is taxes with 43 per cent prevalence. Others are cheap imports (40%), exchange rates and raw materials each at …

Global oil prices pile pressure on Kenya’s economy

Kenya

Global oil prices which have been on an upward trend since January are putting pressure on Kenya’s economy, as the country’s population continues to dig deeper into their pockets to meet the cost of living.

This is in the wake of a rising inflation in Kenya which rose to 6.58 per cent in April from 4.35 per cent in March, the highest increase in the cost of living in 19 months, mainly driven by high food prices.

Crude oil prices have been on the rise since January after edging up from USD59.50 per barrel in December. In January, a barrel traded at USD60.95.This went up to USD66.35 in February, USD 68.60(March) and USD73.05 in April.

Brent, which is a benchmark crude, is currently trading at USD71.90, with overall oil prices projected to surge.

Kenya which prices its oil products on the previous month’s market prices (due to the import period), …