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Chapter | Capital Markets from The Report: Kenya 2018

The market entered 2018 on the back of strong performance the previous year, in which the main index followed a broadly positive trajectory that continued into the first quarter. Though the markets saw some fluctuation over the following months, continuing legislative support and positive sector developments suggest a resilience going forward. At the same time, continuing regulatory support and a project pipeline that includes the continued launch of financial derivatives for equities, bonds and currencies, as well as the expansion of commodity derivatives, ensure the market will remain a driver in the region. This chapter contains interviews with Geoffrey Odundo, CEO, Nairobi Securities Exchange; and Geoffrey Gangla, CEO, Genghis Capital.

Chapter | Banking from The Report: Kenya 2018

As the full-year results for 2017 began to emerge, the effects of a new cap on lending interest rates become apparent, with most banks reporting reduced margins and profitability. A tighter lending environment, however, has encouraged banks to find alternative routes to revenue. Technological innovation, in particular, has received a fresh impetus as lenders reach out to prospective customers through new channels, such as mobile banking. However, despite the challenges of 2017, solid fundamentals point to continued positive performance in 2018. Increases in net assets and deposits, consolidation and the continued streamlining and digitisation of bank services have contributed to sector resilience. This chapter contains interviews with Patrick Ngugi Njoroge, Governor, Central Bank of Kenya; Joshua Oigara, CEO and Managing Director, KCB Group; Jeremy Awori, CEO, Barclays Kenya; and Kenneth Kaniu, CEO, Britam Asset Managers.

Chapter | Economy from The Report: Kenya 2018

After the costly drought and political uncertainty of 2017, the Kenyan economy appears to have stabilised on an upward trajectory in 2018, with most forecasts seeing a more robust expansion of economic activity. Indeed, Kenya’s diverse economy forms a solid platform from which the government can generate economic growth over the coming years. The resolution of the electoral process, improving business confidence and strong private consumption are likely to support GDP expansion over 2018 and into 2019. However, a structural fiscal deficit and an increasing public debt continue to pose significant challenges. Consequently, a sense of urgency surrounds the process of economic reform by which Kenya hopes to establish itself as a globally competitive, prosperous nation by 2030. This chapter contains interviews with Anne Kirima-Muchoki, Chairperson, Kenya Investment Authority; Carole Kariuki, CEO, Kenya Private Sector Alliance; and Ray W Washburne, President and CEO, Overseas Private Investment Corporation.

Chapter | Agriculture from The Report: Kenya 2018

Agriculture remains a significant part of the Kenya economy, however, growth was slowed by several hurdles, most prominently a drought that the state declared to be a national disaster. The drought restrained domestic production of staple crops such as maize, leading to food scarcity and steep rises consumer inflation. Despite the lower grain output, production of horticultural crops marked an all-time high and remained crucial sources of foreign exchange earnings. Meanwhile, meeting the ambitious target set by the Big Four agenda, which aims to transform Kenya from a state incapable of satisfying domestic demand into a food-secure country, will require mitigating dependence on rainfall, diversifying the nation’s staple basket and supporting smallholders. This chapter contains an interview with Agnes Kalibata, President, Alliance for a Green Revolution in Africa.

Chapter | ICT from The Report: Kenya 2018

Having earned the moniker Silicon Savannah – a status the country first actively sought in 2013 when it launched its economic development roadmap, Vision 2030 – Kenya has made significant strides in ICT. Vision 2030 included a technology development blueprint with the main objective of transforming the country into a global digital player. Progress in this regard is being fuelled by favourable government policy, investment in infrastructure and a vibrant entrepreneurial ecosystem. Improvements, such as the addition of four fibre-optic sea cables between 2009 and 2016, have stepped up the quality of connectivity and reduced costs for consumers and businesses. Value-added services supported by mobile money have enabled mobile operators to maintain profitability, as the industry’s focus has shifted, first from voice to SMS, then to the current era of data-driven growth. This chapter contains an interview with Joseph Mucheru, Cabinet Secretary, Ministry of ICT.

Chapter | Construction & Real Estate from The Report: Kenya 2018

Kenya’s construction and real estate sectors experienced slower growth in 2017 than in previous years, owing in part to uncertainty surrounding the contested August general elections, which translated in part, to no major government-led infrastructure projects being announced in the second half of the year. However, while the construction sector grew by less than the 9.8% recorded in 2016, healthy expansion of 8.6% was seen in 2017 for the sector to constitute 6.4% of that year’s GDP. Steady tendering activity is continuing, particularly for irrigation, transport and housing projects that are outlined in Vision 2030, the government’s long-term strategic planning document. Specifically, the real estate sector was marked by softening prices for prime residential and commercial properties. However, the outlook is brighter for the short-to-medium term, due to the government’s commitment to housing and the post-election resumption of normal commercial activity. This chapter contains an interview with Mucai Kunyiha, Chairman, Kenya Property Developers Association.