By David Humphrey, Standard Bank Group
Sitting around a fire in the middle of the Namib Desert, western tourists can sample the twin delights of African cuisine and its staggeringly beautiful night sky. The Milky Way is a vibrant arc of white, the stars five times brighter than in Europe. It is one of the few places in the world where light pollution does not exist, which is another way of saying most of Africa lacks power.
Africa’s population of roughly 1bn people accounts for over a sixth of the world’s population, yet it generates just 4 per cent of global electricity supply. Excluding South Africa, the continent’s most advanced economy, the entire installed generation capacity of sub-Saharan Africa (SSA) is only 28 gigawatts, roughly equivalent to that of Argentina. The result is that just 24 per cent of the population of SSA has access to electricity compared to 40 per cent for other low income regions. 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
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
Lower-than-hoped growth rates in the second quarter of the year is the last thing Kenya needs following last week’s terror attack.
The national statistics bureau said on Tuesday that Kenya grew at 4.3 per cent in the second three months of the year, lower than the first quarter’s 5.2 per cent and well below IMF earlier predictions of at least 5.5 per cent for the year overall. Read more
By Clare Allenson of Eurasia Group
The attack on Nairobi’s Westgate Mall is a consequence of Kenya’s military presence in Somalia. As such, the attack does not represent an unexpected or unprecedented shock to the local economy, but highlights the very real security risks the country has faced, especially since entering Somali territory in 2011.
The attack’s most material implications are twofold. Read more
The huge fire at Jomo Kenyatta International Airport (JKIA) has resulted in its flights being cancelled and re-routed to other airports.
While the cause of the fire is unknown at this stage, the pictures show the extent of the blaze. So what might the effect on business and tourism be? Read more
When it comes to interest rates, Kenya is hard to predict. Having cut interest rates from 18 per cent in mid-2012 in great chunks of 150, 200 and 350 basis points to 9.5 per cent, Tuesday’s central bank rate decision was something of a guessing game.
In the end, the bank cut by another 100bp to 8.5 per cent, having held at its previous meeting in March. Around half the analysts polled in advance by Reuters and Bloomberg had predicted a hold in rates. At least no-one was predicting a rise. Read more
The Central Bank of India is on the hunt for business in Kenya. A government-controlled commercial bank whose branch network runs to 4,200, Mumbai-based CBI has become the east African country’s sixth foreign bank authorised to establish a representative office. Read more
Picture: Katrina Manson
Pupils at a school on the green slopes of Mount Kenya no longer have eyes for the blackboard. Instead they are transfixed by a $500 tablet.
Belinda, 19, touches the screen gingerly and is amazed to discover an icon that allows her to film herself within seconds of her first touch of a computer. So speedy is the take-up of tech know-how in Kenya’s first “white space” rural broadband pilot scheme, its backers hope the idea could one day be copied throughout the continent. Read more
Could there be a bigger show of bravado? While observers worry that Kenya’s economy could go awry come the March presidential elections, the monetary policy committee is feeling good.
For the fourth time in a row, it gave a vote of confidence to Kenya’s economy by lowering the central bank rate, this time taking it down 150 basis points to 9.50 per cent. This time last year it was 18 per cent. And not only did it lower the rate, but the 150bp reduction beat analyst predictions of 100bp. Read more
You know you’re in trouble when the World Bank counts on an election year to pull your economy out of the doldrums. Especially if you’re Kenya.
Thanks to “another difficult year” in 2012, the World Bank says Kenya will likely miss an earlier predicted growth rate of 5 per cent this year, managing only 4.3 per cent, a drop on the 4.4 per cent of 2011 and far too low to realise the country’s aim to become a middle-income country by 2020. Read more
Not for Kenya these small 25 basis point interest rate cuts. On Wednesday, the central bank cut its rate by a whopping 350bp from 16.5 per cent to 13 per cent, following an earlier 150bp cut back in July.
The main reason is inflation, which has fallen from nearly 20 per cent at the end of 2011 to single digits, with August’s year on year number coming in at 6.1 per cent from 7.7 per cent in July. So are we done yet? Read more
Konza, Kenya’s $7bn techopolis, has taken a significant step forward with the appointment of HR&A Advisors as initial developers for six months.
The US consultancy beat competition from Finland, Korea and Sweden to start work on the 5,000-acre project between Nairobi and Mombassa, which Kenya wants to be a tech cluster to rival that of Mauritius’ Cyber City, and even Silicon Valley. But after holdups, can the project get back on track? Read more
The World Bank has approved loans worth $684m for the Eastern Electricity Highway Project, which aims to transport Ethiopian power to Kenya and beyond.
The project is part of a $1.3bn plan to open up an eastern African power network, but has attracted controversy due to social and environmental worries over the knock on effects of hydro-power in Ethiopia. Read more
Kenya hiked its policy interest rate by 150bps to 18 per cent a year on Thursday as it intensified its fight against inflation, which hit 19.7 per cent in November. This is the central bank’s fourth consecutive interest rate increase and brings this year’s cumulative increase to a whopping 1100bps. Read more
Kibera, in the Kenyan capital Nairobi, is one of Africa’s largest slums, with an estimated population of anything up to 600,000 people. What is it like for the people who live there?Katrina Manson, the FT’s east Africa correspondent, reports.
Video after the break: Read more
At a leafy Nairobi private members club that so delights in a bygone era it bans telephones, Michael Joseph, former chief executive of Safaricom, is telling his well-to-do audience they don’t understand mobile money.
“Our target market was actually the guy standing outside there waiting to serve you dinner or drinks…we didn’t aim for you,” says the current strategy advisor to the World Bank and Vodafone. The UK company owns 40 per cent of Safaricom, the telephone company that launched a mobile money transfer service so successful it speedily took over Kenya’s economy and business school syllabuses worldwide. Read more
If proof were needed of the impact of Kenya’s collapsed shilling, look no further than half-year results for the country’s biggest telephone company.
Safaricom net profits for the six months to the end of September, out on Wednesday, are down 48.3 per cent, to 5.4bn shillings ($55m). Read more