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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenyan economy projected to expand by
5.8 per cent during third quarter of 2019

by Ronald Njoroge NAIROBI (Xinhua) -- Kenya’s economy is expected to expand by 5.8 percent in the third quarter of 2019, an analyst predicted on Wednesday.

Churchill Ogutu, senior research analyst at Genghis Capital said in a statement released in Nairobi that growth of the gross domestic product (GDP) for the second quarter was estimated at 5.4 percent which trails the five year historical trend of 5.7 percent.

"We attribute this to the spillover effect of delayed rains on the agricultural sector coupled with sluggish demand pressure," Ogutu said.

For the third quarter, the analyst projects real growth will be driven by the service sectors.

"Notably, the accommodation and restaurant sector will be buoyed as we enter the high-peak tourism season," he added.

Ogutu said that the bullish tone on the private sector at the tail end of the second quarter will likely spill into third quarter of 2019.

According to the analysts, a cloud of uncertainty engulfs the parliament duel between the national assembly and the senate on the Division of Revenue Bill which decides the amount of budgetary transfers to the 47 counties.
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UPDATES:

Kenyan shilling falls to two-year low gainst the U.S. dollar

NAIROBI (Xinhua) -- Kenyan shilling declined to a two-year low on Thursday against the U.S. dollar weighed down by graft charges facing top Treasury officials amid increased liquidity in the market.

The Central Bank of Kenya quoted the currency on Thursday at 104.03 to the dollar, the level last recorded on June 27, 2017.

The currency had been on the decline in the past weeks, sliding from 100 against the dollar where it started the year, but its downward trend has been accelerated this week by graft charges facing former Treasury Cabinet Secretary Henry Rotich, among others.

The high liquid in the market is largely supported by government payments, according to the apex bank.

But as the shilling declines, the central bank has high levels of forex reserves that stand at 9.6 billion U.S. dollars or six months of import cover to cushion it.

"This continues to provide adequate cover and a buffer against short-term shocks in the foreign exchange market," said central bank governor Patrick Njoroge on Wednesday.
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Kenya Central Bank retains benchmark lending rate at nine percent

NAIROBI (Xinhua) -- The Central Bank of Kenya (CBK) on Wednesday maintained the benchmark lending rate at 9 percent due to the relatively stable inflation rate.

Patrick Njoroge, CBK governor, who chaired the Monetary Policy Committee (MPC) meeting in Nairobi said that the inflation expectations remained well anchored within the target range, and that the economy was operating close to its potential.

"The MPC will continue to closely monitor developments in the global and domestic economy, including any perverse response to its previous decisions, and stands ready to take additional measures as necessary," Njoroge said in a statement issued in Nairobi.

The monetary policy organ met to review the outcome of its previous policy decisions as well as the recent economic developments against a backdrop of domestic macroeconomic stability, increased optimism on the economic growth prospects, and increased global uncertainties.

Njoroge said there is need to be vigilant on the possible effects of the recent increases in fuel prices, the ongoing demonetization, and the increased uncertainties in the external environment.

The committee noted the gradual demonetization through the withdrawal of the older 1,000 shilling notes (10 U.S. dollars) and the close monitoring by CBK will ensure that the process is not disruptive to the economy.

The governor noted that month-on-month overall inflation remained relatively stable and within the target range in May and June 2019.

"The inflation rate stood at 5.7 percent in June compared to 5.5 percent in May.

However, food inflation rose to 6.6 percent in June from 6.0 percent in May, reflecting increases in the prices of non-vegetable food crops particularly maize, due to uncertain supply," Njoroge said.

According to the MPC, non-food-non-fuel inflation remained below 5 percent, indicative of muted demand pressures and spillover effects of the recent rise in fuel prices.

"Overall inflation is expected to remain within the target range in the near term largely due to expectations of lower food prices following improved weather conditions, and lower electricity prices with the reduced reliance on expensive power sources," Njoroge observed.

The governor added that the economy remained strong in the first quarter of 2019, despite the effects of the delayed long rains on agricultural production.

The MPC noted that the leading indicators of economic activity point to stronger growth in the second quarter of 2019.

"Consequently, growth in 2019 is expected to remain strong, supported by agricultural production, strong growth of micro, small medium enterprises and the service sector, foreign direct investment, and a stable macroeconomic environment," he added.

The apex bank said that the real GDP growth stood at 5.6 percent, reflecting a stronger than expected performance of agriculture and a resilient services sector, particularly information and communication, accommodation and restaurants, and transport and storage.

Njoroge added that the alignment of the 2019/20 financial year government budget to the Big 4 priority sectors is expected to boost economic activity in manufacturing, agriculture, construction and real estate, and health sectors.
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EARLIER REPORTS:

Kenya to begin oil exports in the third quarter 2019

NAIROBI (Xinhua) -- Kenya is expected to begin oil exports in the third quarter 2019, British firm Tullow oil said on Wednesday.

Mark MacFarlane, executive vice president for east Africa of Tullow Oil, said in a statement that in May the Early Oil Pilot Scheme (EOPS) production was increased from 600 barrels of oil per day (bopd) to 2,000 bopd and, to date, more than 200,000 barrels of oil have been delivered to the port of Mombasa.

"Tullow expects east Africa’s first export cargo of oil to be sold and lifted in the third quarter of 2019," MacFarlane said.

In 2012, Tullow oil discovered commercial oil deposits in the east African nation that are currently estimated at 750 million barrels.

The EOPS is being undertaken by the Kenya joint venture partners comprising of Tullow Oil, Africa Oil and Total Oil and the Kenyan government who own the Blocks 10BB and 13T in northwest Kenya.

MacFarlane said that in the first half of the year, front end engineering design (FEED) studies for both the upstream and midstream have been finalized.

He added that these studies, together with recent market soundings, have given the joint venture partners greater confidence in the project’s estimated capital expenditure and construction timetable that is expected to see first oil three years after the final investment decision (FID).

He noted that the upstream and midstream environmental and social impact assessments (ESIAs) are expected to be submitted to the National Environmental Management Agency by the end of the third quarter 2019.
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Kenya encourage more Indian investors to help boost exports

NAIROBI (Xinhua) -- Kenya on Wednesday encouraged Indian investors to set up manufacturing plants locally that will help to boost the country’s exports in order to reduce the bilateral trade deficit.

Betty Maina, principal secretary in the Ministry of Industry, Trade and Cooperatives told journalists in Nairobi that India is one of Kenya’s biggest sources of imports.

"We are seeking for additional Indian investments that will enable Kenya to produce more goods that can be sold competitively to India," Maina said when Kenya hosted a high-level business delegation from India.

The Indian trade mission was facilitated by the United Nation’s International Trade Center (ITC) and represented companies in tanning, footwear and leather goods manufacturing and are in Kenya to explore investment opportunities.

Under ITC’s Supporting Indian Trade and Investments in Africa (SITA), East African nations including Ethiopia, Kenya, Uganda, Rwanda and Tanzania will receive support to boost their exports to India.

Maina said that Kenya is keen to have Indian companies to form joint ventures with their Kenyan counterparts so that the East African nation can benefit from advanced expertise and technology.

Government data indicates that Kenya imported goods worth approximately 160 billion shillings (1.6 billion U.S. dollars) from India in 2018 and exported merchandise valued at about 60 million dollars in the same year.

According to the ministry of industry, India is a key bilateral partner of Kenya because it is the third leading source of foreign direct investments into the country.
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President Kenyatta urges Botswana investors to set up businesses in Kenya

NAIROBI (Xinhua) -- Kenyan President Uhuru Kenyatta has called on Botswana investors to explore the emerging trade and investment opportunities available in the country.

Kenyatta who hosted visiting Botswana President Mokgweetsi Masisi to a state banquet on Tuesday evening assured the foreign investors of a conducive environment for their businesses to thrive.

"You (investors) will also find a supportive government that believes in a strong Africa that gives priority to trading with its continental neighbors," he said in a statement issued on Wednesday.

"In Kenya you will find welcoming and entrepreneurial people, eager to work hard and to embrace new partners," Kenyatta said.

He lauded the government of Botswana for the ongoing successful efforts to attract investments from Kenya, through the Botswana Investment and Trade Centre, in areas such as financial services, agro-processing, animal feeds, ICT, hotels and lodges.

He expressed satisfaction with the ongoing efforts to further strengthen bilateral ties between Kenya and Botswana following the conclusion of the fifth session of the Joint Permanent Commission for cooperation.

"I call upon the respective authorities from our two countries to fast-track the implementation of the various frameworks agreed upon," Kenyatta urged.

Masisi who is in the country on a three-day state visit, his first such visit to Kenya, said the high level engagements between the two countries accords them the opportunity to renew their friendly ties as well as revitalize their bilateral cooperation.

"The onus is now upon us to uphold the good legacy that our forefathers have left us for posterity," Masisi said.

             

 

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