David Musyoka NAIROBI (Xinhua) -- Kenya Vision 2030 Delivery Secretariat (VDS),
which is implementing the country’s economic blueprint Vision
2030, said on Monday that economic growth will not be derailed
by the current political activities.
General Julius Muia said investment activities in Kenya will
increase significantly after the Oct. 17 repeat presidential
elections on the back of significant appetite by foreign
investor for a piece of the mega infrastructure projects in
confidence shown by investors following a historic Supreme
Court ruling, resilience of the stocks market and stellar
performance of the shilling against the U.S. dollar are key
developments that give us confidence in the stability of
economic performance,” Muia said in a statement issued in
sentiment, Muia said, is anchored on the expected development
dividend that will accrue as the country embarks on
implementing the projects outlined in the Medium Term Plan (MTP
The MTP III, which
lays emphasis on structural transformation and a strong growth
in the manufacturing and industrial sectors, is expected to
boost the country’s export and improve the performance of the
Muia also singled
out Lamu Port South Sudan Ethiopia Transport (LAPSSET) as one
of many transformational projects where investors have
expressed overwhelming interest, especially in high technology
components that involve development of what will be the
country’s biggest steel mill operation.
“A project of the
LAPSSET magnitude is very important to the economy as it will
open up two-thirds of the country’s investment space and will
stir activities that will spark an uptick in economic growth,”
predicted a slight drop in the growth of the economy to 4.9
percent, down from 5.5 percent last year, citing prolonged
politicking in the country.
previous electoral cycles, this dip is relatively low and
signals the divorce of the economy from politics.
According to Muia,
consistent implementation of large developmental projects and
substantial investments in capital, technology and expertise
in new sectors such as mining, oil and gas as well as the blue
economy are expected to kickstart, once the repeat
presidential election is held, bringing an end to a prolonged
The aspirations of
Kenyans still remain true: that the economy will enjoy a high
economic growth rate to propel the country to upper middle
income status and enable the citizens to enjoy decent lives.
On Friday, Cabinet
Secretary in the National Treasury Henry Rotich said the
prolonged electioneering period caused by nullification of the
Aug. 8 presidential polls by the Supreme Court is negatively
affecting the business climate.
adopting a wait-and-see approach toward new projects and this
has forced the government to revise downwards its economic
growth forecast for 2017 to 5.5 percent, Rotich said.
Kenya’s central bank retains
benchmark rate at 10 pct
NAIROBI, (Xinhua) --
The Central Bank of Kenya (CBK) on Monday
maintained the benchmark lending rate at 10 percent in order
to anchor inflation expectations.
Patrick Njoroge, who chaired the Monetary Policy Committee (MPC),
said that an MPC Private Sector Market Perception Survey
conducted in September shows that inflation was expected to
decline due to lower food prices occasioned by the expected
short rains and government subsidies on some food items.
“The committee has
therefore concluded that the current policy stance remains
appropriate,” Njoroge said in a statement. “However, the CBK
will continue to closely monitor developments in the global
and domestic economy, and stands ready to take additional
measures as necessary.”
The MPC met on
Monday to review the outcome of its policy decisions and
recent economic developments against a backdrop of general
macroeconomic stability, a prolonged election period, and
continued uncertainties in the global economy.
overall inflation rose to 8 percent in August, from 7.5
percent in July, reflecting limited supply of some food items,
particularly tomatoes, following transport difficulties in the
immediate period after the general elections.
The governor said
that non-food-non-fuel (NFNF) inflation has remained stable
below 5 percent, suggesting that demand pressures in the
economy were muted.
exchange market has remained relatively stable, supported by
resilient tea and horticultural exports, diaspora remittances,
and a strong recovery in tourism, Njoroge said.
current account deficit widened slightly to 6.4 percent of
gross domestic product (GDP) in July 2017, from 6.2 percent in
May, largely due to short-term import demand for cereals and
sugar, and Standard Gauge Railway (SGR) related transport
equipment, he said.
current account deficit is expected to narrow to 5.8 percent
of GDP by December 2017 as the bulk of SGR-related imports are
completed, while the expected favorable weather conditions
will improve food production and reduce reliance on imports,”
record declined profitability in 2017
by Ronald Njoroge
NAIROBI (Xinhua) -- Kenya’s listed banks recorded a
13.8-percent decline in core Earnings Per Share (EPS) growth
for the first six months of 2017, compared to 15.5 percent in
a similar period last year, a report released on Monday shows.
The assessment by
Nairobi-based investment firm Cytonn Investment noted that the
poor performance of the banking sector was primarily on the
back of an 8.1-percent decline in Net Interest Income (NII)
following the capping of interest rates in 2016.
industry’s loan growth came in lower as private sector credit
growth slowed to 2.1 percent in the first half of 2017, below
the government’s set target of 18.3 percent, with banks
adopting a more prudent credit risk assessment framework to
ensure quality loan books,” said Cytonn’s 2017 Half year
Banking Sector Report.
allocation to government securities by banks rose to 32.2
percent between January and June 2017, up from the 29.4
percent experienced in a similar period in 2016,” noted Cytonn.
Deposits for the
banking sector grew at 14.4 percent during the first half of
the year, a faster rate than loans, which grew by 9.3 percent.
The sector has remained resilient by adopting a disciplined
The firm noted
that consolidation is set to gather pace as key issues such as
increased loan loss provisioning and the regulated loan and
deposit pricing framework prevail in this challenging
“This will in turn
transit the industry into one with fewer but stable banks,
leading to a more efficient and stable banking sector,” says