The Weekly Brief, by The Kenyan Wall Street, is a newsletter that goes out to 25k+ subscribers every Monday morning at 9.00am (EAT).

Your March payslip has new deductions, as employers deduct housing levy and the social health insurance fund which came into effect this month. While the latter will replace NHIF, it is now a proportion of gross pay as opposed to the previous flat rates for different pay scales.

That aside, the markets open the week on a continuing high, with the shilling closing last week at KShs. 133.07 per US dollar, down from KShs. 137.49 per USD the week before. The NSE 25 and NSE 20 share price indices increased by 5.6% and 3.0% respectively.

In this week’s issue, Nairobi’s future is vertical, mobility startup Roam now has a shop in Nairobi, and Tanzania works to get itself out of dollar shortages.

Nairobi’s Vertical Compact Future

Nairobi’s future is vertical and compact, the capital’s governor Johnson Sakaja said on Sunday while outlining recent changes and proposals to allow densification in previously low-density areas.

• According to the governor, building height restrictions in some sections of the city have already been removed.

• A proposed reclassification before the city’s county assembly would allow construction of buildings up to 75 floors in some areas.

• Nairobi’s zoning has been a major issue in recent years, as the city’s construction boom has far outpaced zoning policy and infrastructure investments.

“Nairobi is 696 square kilometers. In 2050 it will have a population of 10.5million people,” Gov. Sakaja said, “Will we expand Nairobi? No, the only place we have to go is up.”

The height rezoning is likely to be controversial in areas such as Kileleshwa and Lavington, where residents have complained of the previously high end areas becoming “the new Pipeline”, in reference to the neighbourhood on the other side of the city with a high population density.

But the rezoning was long overdue, as sections of the areas already host buildings with over 10 floors. Nearby areas such as Kilimani, once exclusively high-end residential areas due to their proximity to the city, are now at best mixed-use neighbourhoods.

• In addition to the height, quality, and proximity of new buildings, Nairobi residents have also complained about noise pollution from night clubs and churches set up in residential areas.

• The capital’s last comprehensive zoning review was done in the 1970s, when it only hosted a fifth of the people it does today, with several piecemeal updates in the decades since.

• One direct result of construction and demand outpacing policy has been pressure on the existing infrastructure’s carrying capacity.

The concept of a vertical compact city holds that it is an easier and more sustainable land use than urban sprawl. But Nairobi is doing both.

The metropolis’ built up area grew by an average 5.14 square kilometers per year from 1988 to 2014, resulting in a 320% growth rate in three decades, according to a study by Charles N. Mundia from the Institute of Geomatics, GIS and Remote Sensing at Dedan Kimathi University of Technology.

Without a coordinated rezoning that includes sufficient and prompt investments in infrastructure and ecosystems, the current boom could negatively affect returns on investment (ROI) in the city’s residential and commercial units. In addition to the risk of a glut forcing investors to cut rents, lack of sustainable infrastructure could also lower land prices, further complicating the chances of recouping investments.

Headlines You Might Have Missed

• Roam has opened its first electric motorbike shop in Nairobi.

• KCB Group has confirmed that it has found a buyer for its struggling subsidiary, National Bank of Kenya, and plans to close the deal by the end of 2024.

• 60% of Kenyans who’ve signed up for digital credit use more than one digital lender, and more consumers are applying for loans for school fees in 2024.

• Tappi, a Kenyan digital commerce startup, has partnered with MTN as it enters the Ivory Coast market.

• Against the backdrop of shifting priorities among investors over the last two years, the recent African Pre-seed Podcast Live in Nairobi, Kenya, provided invaluable insights into how to navigate the funding landscape in 2024.

Tanzania Tackles Dollar Shortage, Credit Ratings Up

Tanzania’s central bank is selling dollars to commercial banks to stem the ongoing dollar shortage in the country, the institution said in a statement late last week.

• The country’s central bank sold $100mn to enhance dollar liquidity in the formal market last week, according to media reports.

• Other efforts have included increasing exports, providing export credit guarantees, and buying and holding gold within the country.

• But it is also facing down on hoarders and the blackmarket, the latter of whom have been selling dollars far above the official market rates.

While speaking to hoteliers in Arusha, Bank of Tanzania’s (BoT) governor Emmanuel Tutuba warned dollar hoarders that they risk “significant losses in the future because the economy is opening up and global economic risks are decreasing.” He also warned that the penalty for participating in the black market is a 14 year jail term.

Among other things, Gov. Tutuba is pushing for hoteliers to apply for forex exchange licenses within the next four months under a new policy meant to prevent dollar inflows via tourism, paid directly to hotels, from ending up in the blackmarket. Since the law was passed in 2023, only one hotel has applied for a license.

Meanwhile, global credit ratings agency Moody’s has upgraded Tanzania’s long-term issuer ratings from B2 to B1 and changed the country’s outlook from positive to stable. “A diversified economic base and exports, stable debt burden, limited contingent liabilities and Moody's expectation for a continuation of conservative fiscal policy supports the rating at the B1 level,” the ratings agency said in a statement on March 22nd.

Upcoming Events

Nairobi Global Business Expo and Conference: 11 April, Nairobi

East Africa Property Investment Summit: 17-18 April, Nairobi

AmCham Business Summit 2024: 24 April, Nairobi

Gitex Africa 2024: 29-31 May, Marrakech

Interview of the Week

Choosing the right capital in 2024: African Pre-seed Podcast Live in Nairobi.

Have a great week!