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