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Taming the Banks
Kenya's #1 newsletter among business leaders & policy makers
Howdy! It's Brian again.
In today's edition of ‘The Daily Brief’, the Central Bank has cut interest rates again. But has announced new plans to pressurize banks to tow the line.
We also report on the new committee set up by the National Treasury, intended to determine how the local finance market can be lured into Public-Private partnerships (PPP) projects…
These…and more stories…
ECONOMY
“We have slashed interest rates, slash yours too. Or else…” - CBK
The Central Bank of Kenya
After yesterday's Monetary Policy Meeting, the Central Bank of Kenya (CBK) reduced the benchmark interest rate from 11.25% to 10.75%. Now it is time for commercial banks to make a similar decision…and to make sure they do, the CBK will start inspecting banks to ensure they lower their lending rates. Despite previous rate cuts, banks have only marginally reduced their lending rates, with the average rate declining from 17.22% in November to 16.89% in December. While 23 banks reduced their rates in December, 14 increased them, and some, including major banks like KCB and Co-operative Bank, raised their rates after the last rate cut.
⏱️ Also Watch
PUBLIC FINANCE
Can the local finance market sustain Public-Private partnerships?
Below the Nairobi Expressway
The Kenyan government has appointed over 30 financial sector experts to develop a plan for mobilizing long-term local financing for strategic projects. Led by Dr. Hosea Kili and Tom Mulwa, the committee will assess Public-Private Partnership (PPP) structures to attract local investors and identify regulatory barriers to investment. The initiative aims to reduce reliance on foreign financing, which has often led to costly and controversial deals, such as the scrapped agreement with India’s Adani Group. The government seeks to raise KSh 150 billion through PPPs, mainly for transport and energy projects. While local financing could reduce debt dependence, concerns remain about transparency, potential cost inflation, and corruption risks.
Today's Poll
Do you think the CBK will succeed in coercing banks to reduce interest rates in line with its decision? |
Yesterday's Poll Results
How do you think the Kenyan private sector will perform this year?
Fair leading with 34.62%
CAPITAL MARKETS
A New NSE Listing?
The Nairobi Securities Exchange (NSE)
The Kenyan government is considering listing Kenya Pipeline Company (KPC) on the Nairobi Securities Exchange (NSE) to attract private investment and strengthen the capital markets. National Treasury Cabinet Secretary John Mbadi confirmed ongoing discussions about an Initial Public Offering (IPO) while receiving a KSh 3 billion interim dividend from KPC. This move aligns with the Ruto administration’s privatization agenda, which aims to sell state-owned enterprises like KPC, National Oil Corporation, and Kenya Literature Bureau to improve efficiency and reduce fiscal strain. However, opposition groups and civil society have raised concerns, leading to legal battles and delays, though recent political cooperation may accelerate privatization efforts in 2025. If successful, KPC’s listing could provide capital for expansion, enhance NSE liquidity, and offer investors access to a profitable state-owned enterprise with a strong regional presence.
📈 On the Trading Floor
How the NSE performed today
News Desk
Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver
Have a great evening!