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The Weekly Brief, by The Kenyan Wall Street, is a newsletter that goes out to 27k+ subscribers every Monday morning at 9.00am (EAT).

One of the signs that we are firmly in Q2 territory are the ongoing Monetary Policy Committees (MPCs) in the region as central banks try to stem inflation and stabilise economies. Kenya’s central bank chose to maintain its central bank rate at 13 percent, Tanzania raised its interest rates, and Uganda will issue its statement today.

This month, the 11th annual East Africa Property Investment Summit is back at The Radisson in Nairobi. You can register for tickets here with our discount code TKWSD.

In this week’s issue, peacemaking between tech founders in the Maasai Mara, why the world’s largest asset manager thinks the NSE is undervalued, and Zimbabwe has a new currency.

How Pezesha, MarketForce CEOs Made Peace in Liquidation Dispute

By Ciku Kimeria

Digital financial marketplace Pezesha has dropped its liquidation suit against B2B marketplace Marketforce, after the founders of the two companies agreed to settle the dispute out of court.

• Pezesha filed the liquidation suit in August 2023, seeking the liquidation of MarketForce to settle outstanding debts. 

• MarketForce was already facing headwinds due to, among other things, unfulfilled capital commitments and the reduced investor appetite on the continent. 

• In a bid to survive, the B2B MarketForce scaled down operations to just two markets in late 2023. 

Pezesha CEO and founder Hilda Moraa and MarketForce CEO and co-founder Tesha Mbaabu reached an agreement on the sidelines of the Harambe Global Summit at the Maasai Mara in March 2024. The week after their meeting, the two sides reached a formal agreement which includes MarketForce using some of its intangible assets that are of value to Pezesha to fully settle the debt.

“We decided, let’s do it for us. Let’s do it for our future. Let’s do it because we both need this reconciliation,” Pezesha CEO Hilda said, “One of the biggest lessons I’ve taken out of this is it’s really important as a company and as a fintech person to really make sure that your risk appetite is aligned and you can understand it as you evolve and grow.”

“Hilda is an entrepreneur who I admire and respect. She’s built a great business and more importantly I acknowledge her efforts to resolve our situation. I am sure it was not easy,” Tesh Mbaabu said.

Guest contributor Ciku Kimeria interviewed both CEOs on the debt at the heart of their dispute, their settlement, and what the future holds for their companies. Read More.

Headlines You Might Have Missed

• Kenya led East Africa in M&As activity in 2023, with a total of 96 deals worth US$ 600.3 million.

• Kenya’s manufacturing industry is chocking under the overlapping mandates between agencies of national government and counties.

• Tanzania has raised its central bank rate (CBR) from 5.5 percent to 6 percent, in a move aimed at containing “lingering inflationary pressures.”

• Ethiopia’s stock exchange capital raising phase was oversubscribed by 240%, a key indicator of the vast investor interest in the country’s upcoming stock market.

• The remarkable turnaround of the NSE has rekindled investor interest, with the world’s largest asset manager saying that “perhaps it is time for investors to relook at the market.” This happened on the same week the NSE was upgraded by the FTSE Russell Index after fixing delays in repatriating capital.

Zimbabwe’s New Gold-Backed Currency

Zimbabwe has introduced a new gold-backed currency and slashed its central bank rate from 150% to 30% in a bid to control inflation and stabilise the economy.

• The new currency, known as Zimbabwe Gold (ZiG) will replace the Zimbabwean dollar (ZW$).

• It has denominations between 1 and 200.

• The Zimbabwean stock exchange will adjust trading on the bourse at the exchange rate of ZiG1 to ZW$2498.7242 beginning April 8th.

“All ZSE indices will be rebased to 100 basis points,” Justin Bgoni, CEO of the Zimbabwe Stock Exchange, said in a statement, “The rebasing is necessary to allow the indices to accurately reflect the performance of the market in the context of the new currency ZiG.”

The ZiG is Zimbabwe's latest monetary policy measure to try rein in runaway inflation, which has seen most people and businesses prefer to trade in foreign currencies. The country issued a 100-trillion-dollar note in 2008, and has since switched to foreign currencies, bond notes, gold coins, and a gold backed digital currency. In 2019, it revived the ZW$ with stringent rules, before permitting the use of foreign currencies in March 2020.

“The structured currency being introduced is anchored by a composite basket of foreign currency and precious metals (mainly gold) held as reserves for this purpose by the Reserve Bank,” Reserve Bank governor John Mushayavanhu said during the Monetary Policy Committee briefing on April 5th.

• According to the RBZ, the bank has reserves of USD 100 million in cash and 2, 522kgs of gold, amounting to more than three times cover for the new currency.

• The country will use a multi currency system until 2030 but the government said it will make it mandatory for companies to pay at least half of their tax obligations using the new currency.

• The MPC ordered banks to convert Zimbabwean dollar balances into ZiGs immediately, and gave a three-week window for ZW$ currency holders to deposit their notes and coins.

“The introduction of a structured currency should result in the dissipation of inflationary pressures in the short to medium term,” Gov. Mushayavanhu said.

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

Shikha Goyal, the venture partner at Imaginable Futures, discusses the company’s plans for the future.

Have a great week!

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