In 2016 the Kenyan banking sector experienced varying degrees of structural and regulatory turbulence. Following the receivership of Imperial Bank and Dubai Bank in 2015, the year started off with the fall of Chase Bank, a mid-tier lender, following liquidity challenges as a result of a bank run. This led to credit tightening in the inter-bank market, with smaller banks locked out. Additionally, a…
Annual bond turnover surged by 42% in 2016 to reach KSh434.7bn ($4.2bn), up from KSh306.2bn ($3bn) in 2015. The highest trading level was recorded in the second quarter, at KSh144.2bn ($1.4bn), on the heels of significant government security redemptions and government borrowing over the period. The heightened activity coincided with the “normalising” of the yield curve, which had inverted in the…
As part of Kenya’s Capital Markets Master Plan 2014-23, issued by the Capital Markets Authority (CMA), the country aims to deepen and expand its capital markets. The strategy outlines a number of reforms, but chief among them is the launch of new instruments, which it is hoped will not only attract new capital – both from retail investors, as with the M-Akiba mobile bond, and from institutional…
The Kenyan ICT sector has registered substantial growth over the years. In 2015 it contributed 0.9% to GDP. Telecoms continues to be an epicentre of growth, as witnessed in 2016. There has been enormous growth in the mobile communications industry, which has been a game changer. Kenya has seen consistent rapid internet and mobile phone growth. This can be explained by an increase in the number of…
There has been a re-emergence of political noise that has brought to the fore protectionism rhetoric, exemplified by the UK’s referendum on EU membership and the presidential election victory of Donald Trump in the US. The twin events foregrounded a nascent populism that may gain further momentum in the forthcoming elections in Europe. There several European elections taking place in 2017. The…
With small- and large-scale farming alike helping to drive growth, agriculture is big business in Kenya. The country shows immense potential for companies offering agricultural coverage. The sector contributes around 30% to GDP, and six out of 10 Kenyans depend on farming, livestock and fisheries, according to the World Bank. “The main backbone of the economy is agriculture,” Joseph Kamiri, director…
Increasingly a mainstay of the manufacturing and retail industries, Kenya’s fast-moving consumer goods (FMCG) have shown considerable expansion in recent years, buoyed by a rising middle class, significant opportunities for regional expansion and local brand loyalty. Spending Power Rising According to a May 2016 report by US think tank the Brookings Institute, Kenya’s demographics are the single…
Three years into its implementation, Kenya’s devolution project remains a work in progress. The country appears to be on track to reap the benefits of creating 47 new counties and devolving many of the national government’s powers to them, but not without some growing pains along the way. History When Kenya gained independence in 1963, the first constitution featured a similar sub-national structure,…
The market for government debt is changing across Africa, and in ways that pose risks for local banks as well as for their investors and customers. States are looking to their banks to help bridge funding gaps so they can better ride out the cycle of lower commodity prices and tepid global growth. That means it is harder to raise international funds – such as by issuing dollar-denominated eurobonds…
Several changes are under way in Kenya’s tax landscape for 2017. The Kenya Revenue Authority (KRA) is in the midst of implementing long-term and multi-pronged strategies to collect more revenue, and politicians are continuing to tweak the legal environment to serve the same goals. County-level politicians have joined the discussion as well in the last several years, with the early stages of devolution…
