An Unfair Downgrade

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January 28, 2025

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Hello there 👋🏿

It's Brian from The Kenyan Wall Street.

In today's edition of ‘The Daily Brief’, we examine why the African Union believes Kenya was unfairly graded in its credit-worthiness report.

We also highlight some changes in Kenya's Telco scene, the victory in court against a conservancy and the conflict in the DRC.

ECONOMY  

An ‘Unfair’ Downgrade

Moody's credit-rating agency

The African Union has faulted Moody’s latest revision of Kenya’s outlook from negative to positive, arguing that the change is an admission that the July 2024 downgrade was premature and incorrect.

The African Peer Review Mechanism (APRM) called out Moody’s for aggressively skipping from ‘negative’ to ‘positive’ without transitioning through a ‘stable’ outlook in an attempt to reverse its premature rating action in July 2024. However, this isn't the first time Moody's is on the firing line for allegedly inaccurate downgrades. It happened to Nigeria in 2023. But Moody's was not alone in downgrading Kenya's credit-rating last year. Fitch and S & P also made similar assessments due to fiscal risks.

Today's Poll

Do you agree with the African Union that Moody's credit-rating for Kenya last year was unfair?

Login or Subscribe to participate in polls.

Yesterday's Poll Results 

Do you think the current regime is capable of minimizing external debt this year?

⬜️⬜️⬜️⬜️⬜️⬜️ Yes (7.55%)

🟩🟩🟩🟩🟩🟩 No (92.45%)

COMPANIES  

Airtel Money on the ascent…

The growth of mobile money in Kenya | CA

Airtel Money’s market share rose slightly from 6.6% in the final quarter of 2023/2024 to 7.6% in three months to September 2024, according to sector statistics from the Communications Authority (CA).

Safaricom’s M-Pesa retained its dominance in the mobile money market but its market share slipped marginally from 93.4% in June 2024 to 92.3% in September 2024. Safaricom maintains its lead in mobile sim subscriptions with 65.7% in market share while Airtel has 29.6% market share, both networks recording slight decimal growth compared to the preceding quarter. Finserve (Equitel) mobile sim subscriptions overtook Telkom Kenya and Jamii Networks, recording 2.1% of the market share while its rivals took 1.7% and 0.9% in market share respectively.

⏱️ You may have missed…

Actis to Exit Java House to Two Africa-Focused PE Firms

Kenyan coffee chain Java House is up for sale by London-based Actis to Alterra Capital and Phatisa Group, two Africa-focused PE firms.

kenyanwallstreet.com/actis-to-exit-java-house-to-two-african-pe-firms

JUSTICE AT LAST  

Northern Rangelands Trust Loses Isiolo Conservancies

NRT Isiolo conservancy

Umbrella conservation group The Northern Rangelands Trust (NRT) has been dealt a blow after a court allowed a petition against the establishment of several conservancies on community land in Isiolo County.

Residents of Merti sub-county, Isiolo County are in a jubilant mood after their petition against the seizure of their community land by NRT was ruled as meritorious. Justices Angote, Yano, and Nzili also ordered that the process of registering the community land be expedited by the Ministry of Lands and the Isiolo County Government. The victory in court is a hopeful precedent for other communities who allege that NRT is an exploitative wagon that disenfranchises local communities and their daily pastoral livelihoods.

GEOPOLITICS  

Eyes on Kinshasa 

President William Ruto

President William Ruto has convened an extra ordinary regional summit tomorrow to discuss the ongoing war in the Democratic Republic of Congo (DRC).

Ahead of the meeting, President Ruto held talks with France’s President Emmanuel Macron and the US Secretary of State of Marco Rubio on the conflict, according to a statement by State House late Monday. Ruto said the EAC meeting will bring together Rwanda’s President Paul Kagame and DRC counterpart Felix Tshisekedi who have been at loggerheads as the former accuses the latter of supporting the resurgent M23.

On Sunday, the rebels overran the Eastern DRC city of Goma stirring tensions in the already volatile region. As the world clambers for a peaceful solution to the crisis, the implications for the East African Community (EAC) will be something to note.

🗞️ On the News Desk

World Bank, AfDB Commit $40bn to Improve Access to Electricity in Africa

The African Development Bank (AfDB) and the World Bank have committed US$ 40 billion to narrow the electricity access gap in Africa.

kenyanwallstreet.com/world-bank-afdb-commit-40bn-to-improve-access-to-electricity-in-africa

Kenya's 'Lost Decade' in Public Expenditure May Last Until 2028- IPF Analysis

Kenya's “lost decade” in public expenditure may last until 2028 due to large fiscal deficits and sluggish investment growth IPF has said.

kenyanwallstreet.com/kenyas-lost-decade-in-public-expenditure-may-last-until-2028-ipf-analysis

Kenya's 5G Footprint Grows By 25%, Broadcast Services Dip

Efforts by major telcos in Kenya to grow their 5G footprint are paying off as the number of subscriptions grew from 739,020 to 926,382

kenyanwallstreet.com/kenyas-5g-footprint-grows-by-25-broadcast-services-dip

Video of the Day

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Until the government starts to balance their budget they will continue to borrow more and more money that at some point has to be paid. Kenya doesn't have a revenue problem it has an expense problem.

~ A Kenyan Wall Street subscriber

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Adios!