Paving future roads...with debt

Hi there! It's Brian again.

In today's edition of ‘The Daily Brief’, Kenya's debt is bloating - with China resuming prominence in the latest figures. Also, have a look at the volume of January's diaspora remittances to Kenya and why banks are optimistic about the resurgence of the real estate market…

These…and more stories…

PUBLIC FINANCE  

Kenya's Debt: Borrowing Big, Paying Long

Kenya, ever the eager borrower, found itself signing no fewer than fifteen loan agreements with the China Development Bank, ranking it as the main source for the hefty KSh 68.7 billion obtained between September and December. A slice of this sum—a ‘modest’ KSh 1 billion—was earmarked for improving the Cess (Nghonji) Rekeke Lake Jipe Road in Taita Taveta, with repayments set to begin in 2027, because what is a road without a long financial tail? Meanwhile, European lenders—Italy, Germany, and France—stepped in with their own contributions, each tied to grand visions of sustainability, reform, and infrastructure.

Italy lent KSh 20.3 billion for Kenya’s green ambitions, with a leisurely repayment schedule stretching from 2032 to 2045, while Germany's KSh 8 billion aimed to steer the budget toward resilience and inclusivity. France, ever the pragmatist, provided KSh 4.6 billion for a state-of-the-art electricity control centre, with repayments rolling in like clockwork until 2045. All of this, of course, comes against the backdrop of Kenya’s already formidable debt—KSh 10.79 trillion as of September 2024—neatly split between local and external lenders, as if that makes it any less daunting.

Bottom line : In a bid to keep the financial house from toppling, the government’s 2025 debt strategy proposes fewer short-term Treasury bills, longer repayment periods, and a stronger reliance on domestic borrowing—because if you must owe, best to owe those closest to home.

Here is the full story»»»»»

Today's Poll

Last Friday's Poll 

Do you think the African Credit-rating Agency will do a better and fairer job than global rating agencies like Moody's and Fitch?

🟨🟨🟨⬜️⬜️⬜️ Yes (35.48%)

🟩🟩🟩🟩🟩🟩 No (64.52%)

ECONOMY  

Diaspora Dollars Dip, Gulf Remains Strong

Kenya’s diaspora remittances took a 4% dip in January, landing at KSh 55.2 billion, mainly due to a sharp 32% drop from Africa and a 4% fall from Europe. The US retained heavyweight status, sending KSh 29.4 billion — despite a 1.6% slowdown. Interestingly, Saudi Arabia held firm as the second-largest sender, reflecting shifting migration patterns as Gulf countries roll out the red carpet while Europe tightens its borders. Tanzania dethroned Uganda as Africa’s top contributor, even as the continent’s overall inflows were dragged down by South Sudan, Egypt, and Malawi. On the flip side, Bahrain, Oman, and the UAE chipped in more, highlighting new emerging sources. Remittances remain Kenya’s financial MVP, outpacing tourism, foreign investments, and even key agricultural exports.

Bottom line : "Kenya’s diaspora lifeline is shifting—adaptability will determine the next boom."

Here is the full story »»»»»

REAL ESTATE

Housing Hustle: Prices, Loans, and Hope

Real estate prices dipped in Q3 2024 as speculative buying cooled and credit tightened, but a lower interest rate climate may soon turn the tide. Banks are tweaking lending policies to rekindle demand, though developers are still struggling to secure financing. While construction shrank by 2%, cement consumption jumped—suggesting roads and bridges are thriving while new homes stalled. Townhouses remain the crown jewel, averaging KSh 38.63 million with the priciest hitting KSh 59 million. Apartments still lead in transactions, but buyers are eyeing Bungalows and Townhouses more than before. Builders are sweating, but buyers may soon get a break as banks loosen the purse strings.

Bottom line : If interest rates keep dropping, expect the market to roar back to life—at least for those who can afford it…

Here is the full story

ANALYSIS

Why Non-Oil Producing Countries Will Lead Sub-Saharan Africa’s Growth in 2025

Non-resource-intensive economies like Kenya, Ethiopia, and Côte d'Ivoire are expected to outperform oil-rich nations in 2025, benefiting from lower global oil prices and increased demand for key minerals like copper and cobalt. Oil-producing countries like Angola and Nigeria will face slower growth due to falling crude prices and infrastructure challenges. Despite easing inflation and fiscal deficit reductions, high government spending and security issues will constrain growth, with social unrest making it difficult for governments to implement effective policies.

More details in this article 

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