kenya's total debt 2020

The NASI performance was driven by losses recorded by large-cap stocks, with the highest declines being recorded in NCBA, Bamburi, ABSA and Safaricom, which lost by 4.5%, 3.9%, 3.4% and 1.8%, respectively. They showed that as at 31 March 2018, Kenya owed China KSh534.1 billion, or 72% of the country’s total bilateral debt of KSh741 billion. Also during the week, Stima Sacco, a local deposit-taking SACCO, announced that it had retracted its plans to raise Kshs 5 bn through a corporate bond to finance its mortgage business. Investors have little confidence in the Kenyan capital markets due to losses that have been experienced in the past, and. The city will comprise of commercial and residential buildings expected to accommodate approximately 28,000 residents. During the week, liquidity in the money market increased leading to a decline in the average interbank rate to 1.8% from 1.9% recorded the previous week while the average interbank volumes increased by 156.0% to Kshs 9.8 bn, from Kshs 3.8 bn recorded the previous week. The trajectory is for the debt-GDP ratio to grow to close to 70% by 2020. In Q1’2020 Equity group’s borrowing stood at  Kshs 52.6 bn, with the Kenyan subsidiary receiving an additional Kshs 5.3 bn from the International Finance Corporation (IFC) to be used for onward lending to Small and Medium Enterprises (SMEs) impacted by the pandemic. Landing costs for diesel increased by 32.2% to USD 302.2 per cubic meter in June 2020, from USD 228.6 per cubic meter in May 2020. Restructuring the debt mix: the government should go for more concessional borrowing to reduce the amounts paid in debt service. A 67.0% decline in the services trade balance (the difference between the imports and exports of services) to Kshs 20.4 bn, from Kshs 61.9 bn. According to Moody’s, the large borrowing needs, the negative fiscal outlook, will and continues to expose Kenya to exchange and interest rate shocks thus threatening any fiscal consolidation measures that had been set by the government. On a positive note, the agency notes that Kenya’s strong Agricultural and service sectors, as well as Kenya’s flexible monetary setting, will help cushion the economy from the effects of the COVID-19 pandemic. As per the Central Bank of Kenya, commercial banks’ excess reserves came in at Kshs 10.9 bn in relation to the 4.25% Cash Reserve Ratio. During the week, Equity Group disclosed it was seeking to raise up to Kshs 50.0 bn in long term debt from international financiers in the next three years as it seeks to boost its liquidity and capital positions. Under this, we shall cover: The national budget has continued to grow, with total expenditure growing at a 6-year CAGR of 7.3% to an estimated Kshs 2.7 tn in FY’2020/21 according to the 2020 Budget statement, from Kshs 1.8 tn as at the end of FY’2015/16. Having a high debt level means there will be fewer options. It is key to note that: Source: Central Bank of Kenya & National Treasury. According to the IMF, the Kenyan economy is expected to grow at 1.0% in 2020, while the National Treasury expects the same to come in at 2.5%. ... "Kenya's debt is sustainable, we are not feeling any distress,” Yatani said. Similarly, the government has also made some tax amendments to help boost revenue collection and at the same time cushion the economy from the adverse effects of the coronavirus. The city will comprise of commercial and residential buildings, accommodate approximately 28,000 residents. Below are some of the risks that the high debt levels open the economy to: To determine whether the current debt is sustainable, we have put together a table of metrics indicating the level of concern based on the current and projected situation. Additionally, the global rating agency, Standard and Poor’s (S&P) also lowered its outlook on Kenya’s economy to “negative” from “stable” while affirming the country’s rating at ‘B+/B’, mainly due to the fallouts from the pandemic which have slowed down the country’s growth and weighed down on its already weak public finances. At its 27 January meeting, the Monetary Policy Committee of Kenya’s Central Bank opted to keep the Central Bank rate unchanged at 7.00%, marking the sixth consecutive hold after having cut it by 125 basis points during March–April 2020. January 27, 2021. This publication is meant for general information only and is not a warranty, representation, advice, or solicitation of any nature. For an exclusive tour of Cytonn’s real estate developments, visit: We continue to offer Wealth Management Training daily, from 9:00 am to 11:00 am, through our Cytonn Foundation. The 2019 Ratio is estimated to come in at 62.1%, up from 45.9% in 2014; and well above the IMF threshold of 50.0%. In terms of y/y performance, diaspora remittances increased by 6.2% to USD 258.2 mn in May 2020, from USD 243.2 mn recorded in May 2019. The oversubscription is partly attributable to increased liquidity in the money market with the average interbank rate coming in at 1.8% from 1.9% recorded the previous week. As such, the financing of these deficits will increase Kenya’s debt levels as well as increase the country’s external vulnerabilities. Kenya’s Debt Levels: Are we on a Sustainable Path? and is part of its expansion plan to further strengthen their share in Kenya’s rapidly growing fast-food sector. KMRC is expected to advance cash to financial institutions at an annual interest of 5% for onward lending to homebuyers at 7%, nearly half the current market rates. We expect continued pressure on the shilling due to: The shilling is however expected to be supported by: During the week, the Energy and Petroleum Regulatory Authority (EPRA) released their monthly statement on the Maximum Retail Prices in Kenya for the period 15th July 2020 to 14th August 2020. The high debt levels in the country have become a point of concern with both the debt to GDP ratio as well as the debt service to revenue ratio having exceeded the recommended threshold. For example, the Exim Bank of China is set to receive Kshs 43.2 bn in debt payments for the SGR in the current fiscal year despite the project facing a variety of challenges such as low cargo volumes. During the week, Shelter Afrique, a Pan-African housing development financier, announced plans to issue a bond in the Nairobi Stock Exchange (NSE) aimed at raising funds to develop new real estate projects. Existing Eurobonds of $6.1 billion accounted for 60% … Artcaffe first opened shop in Kenya in 2009 and has expanded rapidly with new openings in Nairobi’s high-end shopping malls. The government should take a more proactive stance in enforcing the recent tax policy changes to prevent tax avoidance and evasion, recent policies such as the introduction of digital tax which are geared towards widening the tax base. The country’s debt composition has evolved with the exposure to bilateral and multilateral development institutions declining, to a much more commercial funding structure comprising of Eurobonds and syndicated loans. The charts below indicate the historical P/E and dividend yields of the market. External Debt in Kenya increased to 3793.29 KES Billion in December from 3771.81 KES Billion in November of 2020. Consequently, the ratio of domestic to foreign debt will come in at 56:44. The oversubscription is partly attributable to increased liquidity in the money market with the average interbank rate coming in at 1.8% from 1.9% recorded the previous week. Cold Solutions Kenya Limited is a portfolio company of ARCH Cold Chain Solutions East Africa Fund, a private equity fund who will be backed by the African Development Bank (AfDB) for the project. The 15,000 SQM cold storage complex is set to be developed on 6 acres at Tatu City and is expected to be commissioned in 12 months, where it will provide storage for fresh fruits, vegetables, perishable goods, pharmaceuticals, and, vaccines. Locally, the Central Bank through the Monetary Policy Committee has continued to support the economy through the policy rate and the Cash Reserve Ratio and is confident that the measures put in place are having the desired effect. Kenya's debt stood at 61.7 per cent of GDP at the end of last year, ... Central Bank of Kenya (CBK) data shows total debt stood at Sh6.28 trillion in March, ... 12 May 2020 - … Given the marginal difference in the current ratio, the government has the option of being prudent in reducing the amount borrowed externally. Earlier in May, Moody’s Credit Agency released its rating outlook where it changed Kenya’s sovereign credit outlook to “negative”, from a previous outlook of “stable”, but affirmed the earlier on B2 credit rating. See further details here: During the week, Equity Group disclosed it was seeking to raise up to Kshs 50.0 bn in long term debt from international financiers in the next three years as it seeks to boost its liquidity and capital positions. Demand from merchandise and energy sector importers as they beef up their hard currency positions amid a slowdown in foreign dollar currency inflows. We have seen a couple of rating agencies relook at the country’s Sovereign Credit Outlook and change them to a more negative outlook. Debt Mix – Commercial vs. Concessional Loans, The increase in contribution of commercial loans to 33.0% of total external debt in March 2020, from 20.1% in June 2015, has resulted to a higher debt service to revenue ratio for the country since commercial loans attract higher interest rates when compared to a concessional loan. DEBT STATISTICS 2020. International Debt Statistics 2020. International Debt Statistics ... Kenya 82 Kosovo 83 Kyrgyz Republic 84 Lao People’s Democratic Republic 85 Lebanon 86 ... countries had accumulated a total of $387 billion external debt stock, more than double the level of The changes in prices have been attributed to the increase in the average landing cost of imported super petrol by 12.6% to USD 279.6 per cubic meter in June 2020 from USD 248.2 per cubic meter in May 2020. The other aspect is that, as the Kenya shilling continues to weaken against the dollar, Kenya does not only add more than Sh30 billion to its overall public debt … During the week, Nairobi Metropolitan Services (NMS) Director-General, Mohammed Badi, announced the formation of the Railway City Development Authority (RCDA), a special purpose vehicle created under the State Corporations Act and under the Companies Act, which is expected to lead the implementation of the Nairobi Railway City, a 425-acre urban development on the area between Haile Sellasie Avenue, Uhuru Highway and Bunyala Road that is part of the Nairobi integrated urban development plan. During the week, T-bills remained oversubscribed, with the subscription rate coming in at 271.5% down from 358.2% the previous week. Your email address will not be published. Going forward we are pessimistic on the government’s ability to meet its revenue collection targets given the current environment, Total Public Debt Mix – Domestic vs. Phase 1 of The Alma is now 100% sold with early buyers having achieved up to 55% capital appreciation. The company’s plans to return to the bond market as it turns profitable. Cytonn Money Market Fund closed the week at a yield of 10.52%. In the retail sector, Artcaffe restaurant opened its third store in Nairobi’s Central Business District (CBD), located in Chester House, along Kimathi Street, whereas in the industrial sector, Cold Solutions Kenya Limited, a leading temperature-controlled warehouse and logistics service provider, announced that it will invest Kshs 7.5 bn in constructing a grade ‘A’ temperature-controlled cold storage warehouses in Tatu City Development special economic zone; Over the past few years, Kenya’s Public Debt has been a point of discussion due to the continuous growth in the debt levels, a result of the government’s ambitious development agenda evident in the country’s budgets over the last ten years. Equities turnover declined by 20.3% during the week to USD 31.9 mn, from USD 40.1 mn recorded the previous week, taking the YTD turnover to USD 889.4 mn. In 2019, Kenya's debt had risen to an absolute amount of US$50B against a GDP of US$98B. To invest, just dial *809#; Cytonn High Yield Fund closed the week at a yield of 13.39% p.a. The figure for 2019 is estimated at 45.2% up from 35.6% in 2018 and above the 30.0% IMF threshold. The coupon rates for the bonds are 11.7%, 12.5% and 12.9%, for the 5-year, 10-year and 15-year bonds, respectively. ... Kenya's total catch reported in 2004 was 128,000 metric tons. Continue Reading This Story source: … The group anticipates the impact of the pandemic to last for at least 18 months and with Kshs 22.9bn (43.5%) of the Kshs 52.6 bn of long- term borrowing expected to mature in March 2023, it is our view that the additional liquidity injection will boost the group’s liquidity and capital position in both the short and long term as it tries to mitigate effects of the pandemic. Artcaffe first opened shop in Kenya in 2009 and has expanded rapidly with new openings in Nairobi’s high-end shopping malls. The project is estimated to take 20 years (2020 to 2040) and will be implemented in 3 phases at an estimated cost of Kshs 27.9 bn. Fitch Ratings similarly revised the outlook on Kenya’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to negative from stable, affirmed the Issuer Default Rating at ‘B+’, and downgraded the country’s ceiling to ‘B+’ from ‘BB-‘. The facility will be the second grade ’A’ warehouse facility in Tatu City after Africa Logistics Properties’ (ALP) ALP North warehouse, a. Olander also shared a link to a November 2020 Bloomberg news article that cited Kenya treasury data and gave this debt as $6.7-billion. Once operational, we expect KMRC to partner with local primary lenders to create liquidity making it possible for mortgage originators to offer long-term mortgages, at relatively low-interest rates and better terms and conditions. Kerosene prices also increased by 4.8% to Kshs 65.5 per litre from 62.5 per litre, previously. The continued expansion of Artcaffe and other restaurants such as Java in Nairobi is also expected to result in increased uptake of retail real estate developments thus improving the overall performance of the sector. According to the National Treasury, the debt to service revenue ratio is estimated at 45.2% at the end of 2019, higher than the recommended threshold of 30.0% and as such elevating the risks of repayment following shocks arising from the ongoing pandemic and low revenue collection. In our view, given the negative impact on revenue collection from the pandemic, Kenya’s fiscal consolidation will remain elusive. In the long-term, the Kenya Government Debt to GDP is projected to trend around 69.00 percent in 2021 and 73.00 percent in 2022, according to our econometric models. During the week, Cold Solutions Kenya Limited, a leading temperature-controlled warehouse and logistics service provider, announced that it will invest Kshs 7.5 bn in constructing, grade ‘A’ temperature-controlled cold storage warehouses in Tatu City Development special economic zone. The country’s total public debt as at March 2020 stood at Sh6.3tn, with the country having raised the debt ceiling to the absolute figure of Sh9tn from the initial 50% of GDP in October 2019. We expect the real estate sector to continue on an upward trajectory with activity driven by demand for affordable housing and differentiated concepts coupled with the expansion of local retail stores and the continued development of high-quality warehousing. The truth: ... worse (an analysis for a different story). This sentiment has been echoed by various authoritative bodies, pointing to a possible further downgrading of Kenya’s creditworthiness. Below is a summary of those: Essentially, the rating downgrades may influence the country’s cost of borrowing in the international financial markets and make it harder for the country to borrow from the international market. Fitch projects that the ratio will reach 70.0% by June 2021 unless decisive policies are implemented by the government. 2020: September: 3,457,106.50: 3,663,491.22: 7,120,597.72: 2020: August: 3,402,500.73: 3,666,321.29: 7,068,822.02: 2020: July: 3,273,551.44: 3,638,506.49: 6,912,057.93: 2020: June: 3,178,421.28: 3,515,810.78: 6,694,232.06: 2020: May: 3,153,143.94: 3,496,428.84: 6,649,572.77: 2020: April: 3,119,415.80: 3,317,330.98: 6,436,746.77: 2020: March: 3,070,189.38: 3,212,634.23: 6,282,823.61: 2020: … Kenya's Public Debt Stock is forecasted to reach KSh 7.8 trillion at the end of the 2020/21 fiscal year and will account for approximately 69% of Gross Figures from the National Treasury Quarterly Economic Budgetary Review shows that Kenya’s total public debt more than doubled to KSh 7.1 Trillion at the end of September this year compared to KSh 3.1 Trillion in September 2019. The agency highlighted that the negative outlook was a result of rising financial risks brought about by the country’s large borrowing requirements especially during this time where the fiscal outlook is deteriorating, given the erosion of the revenue base and the high debt and increased interest burden. The SACCO has been developing residential properties for its members with the new plan meant to finance buyers by issuing long term mortgages of between 20-25 years. October 7, 2020. A significant amount of government spending has gone towards development projects whose expected economic return might not be able to finance the cost of financing. This site uses Akismet to reduce spam. Kenya's government aims to "reconfigure" its external debt, its central bank governor said on Thursday, without immediately elaborating. For this financial year, a total of Kshs 904.7 bn has been set aside for debt servicing from the Kshs 2.1 tn projected revenue collection. Once completed, we expect the city to transform the CBD and help solve persistent issues such as traffic congestion, lack of affordable housing, congestion, and, water supply problems, with the implementation of new infrastructure. Readers are advised in all circumstances to seek the advice of a registered investment advisor. The yield on the 30-year Eurobonds issued in 2018 remained unchanged at 8.5% similar to what was recorded the previous week. Late last year, the treasury amended the Public Finance Management (PFM) regulations to substitute the debt ceiling which was previously set at 50.0% of GDP to an absolute figure of Kshs 9.0 tn to plug the budget shortfalls without hurting the economy since there was no more scope to raise taxes. Crowding out of the private sector by the government which largely leads to lower projected economic growth which even impacts collections much further. This is the restaurant’s 30. ) The acceptance rate increased to 69.8%, from 53.8% recorded the previous week, with the government accepting Kshs 45.2 bn of the Kshs 65.2 bn worth of bids received, higher than the weekly offered amount of Kshs 24.0 bn. Restructure loans and cut commercial borrowing, Kenya told. With private sector credit remaining relatively low coupled with the high cost of borrowing, local development firms are bound to continue looking to the capital markets as an alternative way to fund projects such as capital market instruments. On 11 June, the government presented a KES 2.79 trillion (around USD 26 billion) budget for fiscal year 2020–2021, which will start on 1 July and run through to 30 June 2021. The group anticipates the impact of the pandemic to last for at least 18 months and with Kshs 22.9bn (43.5%) of the Kshs 52.6 bn of long- term borrowing expected to mature in March 2023, it is our view that the additional liquidity injection will boost the group’s liquidity and capital position in both the short and long term as it tries to mitigate effects of the pandemic. The highest subscription rate was on the 91-day paper which came in 746.9%, down from 948.1% recorded the previous week. Data are shown for 68 out of 73 eligible countries to 2020 Debt Service Suspension Initiative (DSSI) that report external debt to the World Bank’s Debtor Reporting System (DRS). Some of the Locally Issued Bonds Aimed Towards Real Estate, Financing sustainable and climate-resilient student accommodation in Kenya, Funding low-cost urban housing projects across Kenya. The lack of investor education for retail investors as some SMEs have a poor understanding of the capital markets and are unaware of ways in which they can use them to raise funds thus investor education/ awareness campaigns are important to educate SMEs on how they can use the stock exchange better and build their confidence in the financial system of the capital markets.

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