The Weekly Brief, by The Kenyan Wall Street, is a newsletter that goes out every Monday morning at 9 am (EAT).

Welcome to the first issue of 2024.

2023 was a tough year for businesses and the economy, with multiple factors bearing down on revenues and profits, forcing enterprises to shelve growth plans and instead go into survival mode. Read our newsroom’s roundup of the important news of 2023 here.

We are one week away from the next fuel review, and the anxiety isn’t just because the shilling has continued its downward spiral; its also because prices are where they are because of subsidies sustained during the holiday season.

In this issue, Kenya’s visa free regime is complicated, politics in the Horn Africa threaten a delicate balance, and two tech CEOs resign.

When is a Visa not a Visa?

Kenya is now visa free for all travellers but you still need a visa, sort of.

The new system, which begun this January, is the Electronic Travel Authorisation for “visa-exempt foreign nationals travelling to or transiting” through Kenya.

• Under the new system, all applications cost a flat fee of $30.

• It applies to all foreign nationals, except for citizens of East African Community member countries.

• According to the Kenyan government, more than 9, 000 applications were received, and just a little under half processed in the first week of the system.

The Good

The idea of a visa free program has permeated African countries for decades, and Kenya’s eagerly awaited waiving of visas is bound to provide critical lessons for other countries.

• For citizens of 155 countries who had to pay $50 per application, the reduced cost is a win.

• The ETA reduces processing time to 72 hours from an average of 14 days.

• Kenya’s immigration department says the new system will benefit travellers, airlines, ease travel processes and boost e-government efforts.

The Bad

Before the ETA, citizens from 51 countries enjoyed visa-free entry into Kenya. This meant that they could simply show up at entry points and get their passports stamped, without having to go through any hassles of applying for entry permits.

• Under the ETA, they now have to apply and fill forms with “personal and relevant travel details.”

• The system requires confirmed flight itinerary and hotel booking copies, and bank statements and proof of finance in some cases.

• According to a statement by Julius Bitok, Principal Secretary in the Ministry of Interior and National Administration, this change is meant to address the country’s “security, infrastructure and insurance needs.”

The Ugly

“Kenya only renamed "visa" to "Electronic Travel Authorization" but almost everything else remains the same. The large print giveth, the small print taketh away,” CNN International Correspondent, and frequent traveller, Larry Madowo wrote on X (formerly Twitter).

• There are multiple risks with Kenya’s new system, top of which is reciprocity from countries whose citizens previously enjoyed visa-free exemptions.

• The added bureaucracy might also affect tourist numbers, an important concern in a country that depends heavily on tourism for foreign exchange and economic growth.

• It could also lower Kenya’s ranking in ease of doing business as business executives, investors, and other players might be put off by the added complexities.

Headlines You Might Have Missed

• Moi University Sacco, under liquidation since 2019, could rise again from the ashes if a rescue plan being drawn up by the state results in its revival.

• Africa’s natural gas sector is coming into shape in 2024, which is good news for the continent’s just energy transition, NJ Ayuk, Executive Chairman of the African Energy Chamber writes.

• The NSE’s next listing might be Marula Mining, a London-listed African mining and exploration company with operations in five countries on the continent, including Kenya.

• The Nairobi Coffee Exchange will soon be under the supervision of the Capital Markets Authority as it transitions to The Coffee Exchange.

• Money means different things to different people but has been proven to be an essential tool in helping individuals get the best out of life, Robert Ochieng, founder and CEO of Abojani, writes.

NEWS SNAPSHOT: Two Tech CEOs Resign

The CEOs of two leading tech firms quit in the first week of January, as the going gets tougher for startups due to economic pressures, a funding drought, and the complex relationship between investors, founders, and executives.

• Akshay Grover, who replaced co-founder Ken Njoroge as Cellulant CEO in 2021, is leaving the pan-African payment gateway firm. Cellulant said Grover had decided “to leave in order to focus on personal matters.” 

• Peter Njonjo, who replaced his co-founder Grant Brooke as Twiga Foods CEO in 2019, has resigned from the B2B marketplace platform’s board. His board resignation also revealed that a 6-month sabbatical the company announced he’d be taking was in fact a window for the board to find a new CEO.

• Although information on the reasons for the high profile exits is still scant, its clear that startups are in a bind as performance wanes, funding dries, and new and existing investors flex their shareholding to push for change.

The Horn of Africa is on Edge

On the first day of the year, Ethiopian Prime Minister Abiy Ahmed and Somaliland President Muse Bihi Abdi signed a deal that would see Addis get access to the Red Sea through the Berbera Port.

• Ethiopia’s renewed quest to regain access to the sea, which it lost when Eritrea became independent in 1991, has now upended a delicate balance in neighboring Somalia and the Horn in general.

• The deal gives Addis, which already has a small navy and a profitable shipping company, access to commercial maritime services on 12kms of coastline for 50 years.

• Even more controversial is that it gives Addis the right to set up a millitary base on the concession.

The deal predictably triggered Mogadishu, which not only swiftly condemned the deal but also passed a law nullifying the “illegal MoU” on Jan 6.

Mogadishu, which exercises little authority over Somaliland, views the Jan 1 pact as “an act of aggression” and has raised issues of territorial integrity. It has also appealed for regional and international support, which has been checkered so far.

• The African Union, which is headquartered in Addis Ababa, has called for a deescalation and talks.

• Somalia’s allies, some of whom are Ethiopia’s competitors and adversaries, have supported Mogadishu.

• They include the Arab League, Turkey, Sudan, Egypt, and the European Union.

Meanwhile, the Sudan conflict between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) has entered a new phase as it enters its ninth month.

• The RSF now controls the capital, Khartoum, after a series of wins in late 2023 forced the SAF to retreat to Port Sudan.

• In mid-December, the RSF took Wad Madani, the capital of Gezira State, expanding the war front and severely weakening the SAF’s position.

• An attempt at peace negotiations in late December failed, and the situation continues to deescalate.

With the tide on his side, RSF leader Mohammed Hamdan Dagalo, known as “Hemedti” embarked on regional shuttle diplomacy in early January, making use of a chartered Emirati jet.

• Gen Abdel Fattah al-Burhan had embarked on shuttle diplomacy in August and September, including a visit to the UN General Assembly.

• So far, Hemedti has visited Uganda, Ghana, Djibouti, South Africa, Ethiopia, Kenya, and Rwanda.

• Each leader is trying to shore up regional support, including in the Middle East, to become Sudan’s recognised leader.

Why it Matters

The Horn of Africa has been volatile for decades, and the recent escalations only complicate an already complicated region. In addition to internal national concerns and regional dynamics, the presence, input, and influence of international players further muddies the waters.

• Eritrea is probably breathing a sigh of relief at the Ethiopia/Somaliland deal, as it had rightly suspected that Ethiopia would seek to restore its route to the sea through it.

• The Sudan situation has no clear winner so far, as each side seeks to shore up internal and external support for its legitimacy to govern the country.

• In each case, the situation has already become a diplomatic tiff of some sort: Mogadishu recalled its ambassador to Addis Ababa, and Sudan recalled its ambassador to Nairobi after Kenya rolled out the red carpet for Hemedti.

Any escalation into new or expanded conflicts has real consequences on businesses and economies in the region, as it will disrupt normal life and with it, supply chains and markets. The likelihood of escalations is bound to be a major concern in neighboring countries because of social, security, and economic reasons.

• Kenya, for example, has conflicting interests in the tiff between Mogadishu and Addis Ababa as it designed its LAPSSET project with Ethiopia in mind as the biggest landlocked neighbour.

• But its also likely breathing a sigh of relief at the opening of a new maritime front for Mogadishu, with which it has been engaged in a long-running tiff over the shared maritime border.

• Uganda’s interests are multi-faceted, and while they revolve first around security, they are also deeply economic in both Sudan and Somalia.

One glaring risk in the Somalia situation is that the tiff could reignite the jihadist cause of the terror group Al Shabaab, which has been on the retreat in the face of a multi-year, multi-national, multi-front assault. The group has carried out attacks on commercial centres in Mogadishu and neighboring capitals, and any events that could encourage renewed sympathies for the group will worry the region as a whole.

Upcoming Events

• Mozambique Energy & Industry Summit (MEIS): Cabo Delgado, Jan 13-14.

• Africa Tech Summit Nairobi: Sarit Expo Center, 14-15 Feb.

• Africa Agri Expo: Nairobi, 19-20 Feb.

What else we are reading

• Ghana expects to receive $1.15 billion in funding from Bretton Woods institutions by the end of February as bilateral creditors near agreement on the terms of a debt restructuring. Bloomberg (Paywall).

• Private equity (PE) and venture capital investments and exits led the way in deals activity in 2023, helping maintain the growth momentum seen from 2022. Business Daily.

• The business community initially welcomed South Africa’s Cyril Ramaphosa. But the past five years have disappointed — here’s why South Africa’s business community fell out of love with the president. Mail & Guardian. (Paywall).

Interview of the Week

Chilufya Mutale - Co-Founder & CEO of PremierCredit Zambia Limited

Have a great week!