Author: David Indeje

Manufacturers, retailers, and suppliers have voluntarily signed up to the Code of Practice to guide Prompt Payment making it difficult for Kenya’s retail sector to engage in unfair trading practices. This is a relief for the suppliers who in the past have had to content from payment delays and defaults. The rules, proposed by the Ministry of Industry and Trade in collaboration with stakeholders, cut the average payment period in the retail sector to 30 days from the current 180 to 240. Majority of the stakeholders include the Association of Suppliers of Kenya, the Kenya Association of Manufacturers (KAM) and…

Tullow Oil plc (Tullow) targets to start transferring 2,000 barrels of crude oil from Turkana to Mombasa starting April. “This is expected to increase to 2,000 bopd from April 2019. Currently, there are 60,000 barrels of oil stored in Mombasa with a maiden lifting expected in the first half of 2019,” said the UK Based Oil company in its trading statement and operational update issued Wednesday. It stated that the transfer of stored crude oil from Turkana to Mombasa by road continues as part of the Early Oil Pilot Scheme with an average of eight trucks being dispatched every two…

Moody’s Investors Service has downgraded Kenya’s sovereign creditworthiness to a negative rating of B2 stable due to rising liquidity risk, increased external vulnerability and higher reliance on commercial external debt. In its “Sovereigns — Sub-Saharan Africa: 2019 outlook, it states that Kenya “will likely rely on cuts to capital expenditures rather than reducing recurrent expenditures or increasing revenue mobilization to achieve their fiscal targets.” This is similar to 2018 where the firm maintained Kenya’s credit scores at B2 stable after putting its earlier score of B1 on downgrade review in October 2017. In December 2018, the firm said Kenya’s debt…

Kenyan legislator has made a proposal that would allow SMEs and unsecured individual borrowers to negotiate risk-based interest rates above the normal cap. Gatundu South MP Moses Kuria in a proposal to the speaker of the National Assembly Justin Muturi,  says the risk negotiation window should be up to 6% above the lending cap for SMEs. “Unsecured individual customers should negotiate pricing based on their risk profile and on a willing buyer, willing seller basis,” Kuria proposes in a letter dated 14 January 2019. “The amendment will go a long way to free credit to the SMEs, discourage government borrowing…

Property analysts have mixed views on the outlook for the real estate in Kenya this year across its segments with an overall neutral sentiment and only selected markets continuing to exhibit high returns. Juster Kendi, a Research Analyst at Cytonn Real Estate, sees the residential sector and retail sector as neutral, mixed-use developments as positive with the commercial office sector being given a negative outlook. “Our outlook for Real Estate is neutral, as the slowdown in demand for property persists amid increasing supply. We expect a positive performance in sectors like Mixed Use Development, Land and Hospitality, and negative performance…

Kenya’s National Treasury has projected an overall budget deficit of 5.0% for the 2019/2020 fiscal year from a revised deficit of 6.3% of GDP in the 2018/19 fiscal year according to Draft 2019 Budget Policy Statement. “The deficit is projected to decline from 7.2% in FY 2017/18 to 6.3 in FY 2018/19 and further to 3.0% of the GDP in FY 2022/23,” said Treasury. Henry Rotich, the Treasury CS says, “The fiscal policy in this BPS targets to support rapid and inclusive economic growth while ensuring a sustainable debt position and lower fiscal deficits.” The BPS is themed ‘Harnessing “The…