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. Continue reading »
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. Continue reading »
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. Continue reading »
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. Continue reading »
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. Continue reading »
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? Continue reading »
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? Continue reading »
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. Continue reading »
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. Continue reading »
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: Continue reading »
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. Continue reading »
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). Continue reading »
Kenya’s central bank shocked markets on Tuesday by raising its benchmark policy rate 550 basis points to an eyewatering 16.5 per cent. The central bank’s monetary policy committee, led by Njuguna Ndung’u, vowed to continue tightening monetary policy to fight inflation and further rate hikes cannot be ruled out.
Kenya’s rate hike followed Uganda’s 3oobp interest rate increase to 23 per cent earlier in the day, as both countries struggle to contain rampant inflation driven by soaring food and fuel costs. Kenya’s central bank also raised its cash reserve ratio by 50bp to 5.25 per cent. Continue reading »
In a year’s time Kenya’s president, Mwai Kibaki, will stand down and the government he heads will be dissolved. As rivals position themselves for the election-battle, Kenya, and east-Africa generally, will face arguably its most important period since independence from Britain nearly 50 years ago.
An FT Special Report on doing business in Kenya looks at the difficulties facing a country riven by political and economic challenges. Continue reading »
At last. After nine months of weak-willed interest rate rises and even the odd misplaced reduction, Kenya’s central bank has finally hiked base rates by a figure worth writing home about: 400 basis points.
The move takes base rates to 11 per cent and is a belated effort to rescue the shilling, which has the dubious honour of world’s worst performing currency this year, having falling about 30 per cent. Last week, it fell beyond 100 shillings to the dollar, a painful psychological threshold, to an all-time low of 104.15. Continue reading »