Kenya

“They’re coming up every morning, just like churches,” Peter Kari, a father of two living in Nairobi’s Kawangware slum, says of the private schools mushrooming in his neighbourhood. “They die as they’re being born. You can wake up one morning and see a tin shack. The other night it was a pub. Today, it’s a school.”

A ride down one of the main roads in Kawangware offers evidence for Kari’s claim. Within five kilometres, there are at least fifteen visible signs for private schools, with names like ‘Brightest Star,’ ‘Top Shine,’ ‘Springs of Wisdom,’ and one (see photo) unfortunately misspelt ‘Havard.’ Read more

It’s a few minutes into Marion Akinyi Onginjo’s social studies lesson at Bridge International Academy Gicagi in Nairobi and the class 4 teacher is being drowned out by loud cheers next door.

Bridge International Academy Gicagi, Nairobi. Photo: Tosin Sulaiman

Class 4 finally gets its chance to make some noise when one student, Margaret, correctly answers a question about subsistence crops. After Onginjo tells the class, “let’s give Margaret the cowboy cheer,” they stand up, spin imaginary lassoes in the girl’s direction and yell, “One, two, three, four, five, yee-hah.” Read more

At the entrance to Shomaa Impressive School, a compound of 11 classrooms built from thin wooden boards in the Lagos slum of Makoko, prospective parents are greeted with a banner showing four children in graduation gowns and the motto “Raising future professionals”. Just as the message is crafted to appeal to the aspirational market traders and fish sellers who send their children to the nursery and primary school, the daily tuition fees averaging less than $1 a day are also tailored to their modest budgets.

Schools like Shomaa, which has around 100 students, are contributing to a boom in private education in Lagos and other cities in Africa.

A pupil at Shomaa Impressive School, Makoko, Lagos. Photo: Tosin Sulaiman

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African dollar bonds are increasingly gaining mainstream acceptance as the continent’s brisk economic growth and low interest rates in the developed world help buoy demand for high-yielding debt.

The size of Africa’s dollar-denominated debt market, not including South Africa, is now more than $20bn, accounting for 6 per cent of JP Morgan’s EMBI index. In sub-Saharan Africa, issuance of international sovereign bonds hit a record $6.9bn this year, with offerings from Kenya, Ivory Coast, Senegal, Ghana, Zambia and South Africa.

But amid the excitement over Africa’s growing role in international capital markets, some are beginning to question just how healthy the dollar borrowing spree is. Read more

Kenya’s big twin deficits will become a heavier burden when higher US interest rates push up borrowing costs, Renaissance Capital warned on Monday. That would batter an economy already damaged by falling tea prices and tourism revenues.

In a note, Who’s hot and who’s not? in sub-Saharan Africa, RenCap predicted that

an increasing interest rate cycle in the US from 2015 will slow the flow of debt to Kenya, particularly the flow of external debt that finances the CA deficit and half of the budget deficit. Partly because of a higher cost of external borrowing, and fall in global appetite for EM and FM assets, as yields on US debt improves. Kenya’s capital inflows are likely to slow at a time when the CA is being undermined by insecurity, which is dampening tourism revenue.

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The number of middle class households in 11 key sub-Saharan African countries – excluding South Africa – are set to triple to 22m by 2030, creating a burgeoning consumer market for items such as vehicles, insurance policies, property and health products, according to a Standard Bank research report.

Simon Freemantle, senior political economist at Standard Bank and author of the report, said the prospective boom in middle class households – those earning between US$8,500 and US$42,000 a year – is also likely to be complemented by a swelling in the number of lower middle class households that earn between US$5,500 and US$8,500 annually. Read more

Kenya’s conservative but fast-growing $7.8bn pension fund industry has just taken a pioneering step. For the first time since the 1990s, a leading Kenyan pension fund is putting its cash into a private equity fund.

The pension fund for Kenya Power and Lighting Company, which has 6,000 workers and $300m under management, will invest $4m with Ascent Capital, a new regional private equity fund that makes its first close this week with $50m and will back companies in Ethiopia, Uganda and Kenya. Read more

If you want something done, do it yourself. That’s the approach taken by the Nairobi Securities Exchange, which, despite such appeal that it attracts 60 per cent of its value from foreigners, managed not a single IPO last year. That hardly fits with ambitious growth plans for the bourse of 60 or so stocks.

But, at last, the first listing of this year is nigh. And who should it be? The NSE itself. Read more

International bond investors may have given Kenya a vote of confidence when the east African regional hub launched the continent’s biggest debut Eurobond this month, but the World Bank has a decidedly less rosy view.

Its six-monthly economic update, out today, offers a sharply different growth trajectory to the one predicted by Kenya itself.

While finance minister Henry Rotich, who led the bond roadshow that wowed investors, says Kenya will grow at 5.8 per cent this year and 6.4 per cent next year, the World Bank forecasts it will grow at 4.7 per cent both this year and next. That’s a downgrade on its earlier 5.3 per cent prediction for this year. Read more

Henry Rotich, Kenya’s finance minister, said just about everything the country – and foreign investors – wanted to hear on Thursday when he announced Kenya’s new 2014/15 budget.

And no wonder – it comes at a sensitive time. Rotich is in the middle of trying to drum up $1.5bn-2bn from international investors for the east African hub economy’s debut eurobond. He abandoned his own much-delayed roadshow mid-trail on Wednesday night, flying in from London after days of presenting to investors across the US and will tonight fly back to rejoin his team. Pricing is expected early next week and, so far, investor appetite looks strong. Read more

After a deal-making spree in Africa in 2013 that included investments in Ghana, Cote d’Ivoire and Kenya, private equity group Abraaj is on track for an equally active 2014.

Abraaj, which has $7.5bn in assets under management and is based in Dubai, expects to complete four transactions in the region by the end of the year, including in South Africa, Nigeria and Kenya, partner Sev Vettivetpillai told beyondbrics. Read more

When a self-styled “twiplomat” – a.k.a the UK’s High Commissioner to Kenya – throws a tweet-while-you-eat dinner party for the twitterati of Nairobi, then a milestone of sorts may have been passed in Africa’s social networking journey.

Christian Turner, who has just shy of 30,000 Twitter followers, hosted the evening – called #EatTweet2 – to emphasise the growing importance of social media in Kenya’s political and social life. Attendees were encouraged to juggle forks and smartphones to keep a running commentary on Twitter as the conversation ebbed and flowed over curry and cheesecake. Read more

Kenya is extending a $600m syndicated loan due for repayment on Thursday by three months, following an eleventh-hour agreement after weeks of prevarication.

A Treasury official said negotiations with the three international banks underwriting the loan – Citigroup, Standard Bank and Standard Chartered – were concluded only on Tuesday, two days before the repayment date. Read more

Kenyan officials are on a round of investment meetings in London to discuss the country’s debut eurobond, pegged at $2bn, says the central bank. But market volatility is proving a nuisance and Kenya could be forced to delay the much-anticipated bond.

On Tuesday, analysts at Fitch Ratings said in a teleconference in London that the issue was unlikely to take place before April. Those remarks contrast with those of Kenyan officials, who reportedly said on Monday they were going ahead with plans to issue this month. So, is it going to happen? Read more

It would be exaggerated to call Davos the “money Oscars”, as Jon Stewart did on the Daily Show. But this year, WEF participants did like to think of countries as winners or losers, especially among emerging markets. In this last roundup, beyondbrics summarises who, to paraphrase the FT, “was hot – and who decidedly not.” Read more