The Illusion of Momentum...

In today’s newsletter, we unpack how Kenya’s economic growth masks a deepening fiscal bind, and examine how a rising packaging firm is sprinting to the stock market, on legs wobbly with debt.

I am Brian from The Kenyan Wall Street and these are our day's business stories:

Economy 

The Illusion of Momentum : Kenya's Fiscal Swamp 

Kenya’s economic expansion is choked by the same engine meant to power it.

By Harry Njuguna 

Kenya’s 4.6% GDP growth in 2024, while not insignificant, is a brittle scaffold atop a dangerously fragile fiscal structure, according to the African Development Bank’s latest assessment.

Despite years of digitized tax reforms, the government’s revenue base remains dismally thin, only 13% of GDP, leaving the country with too little to fund itself, and too much owed. Debt servicing alone consumes 60% of tax income, a number that speaks more loudly than any growth figure. External loans now make up nearly half of Kenya’s debt, making every global tremor a domestic risk.

Meanwhile, devolution has dispersed power without discipline, as counties burn through funds with little to show but ballooning recurrent costs and underutilized development budgets. The AfDB warns that inefficiencies, national and devolved, drain 5% of GDP each year, making the economy’s forward motion feel eerily like treading across a swamp. Read full article >>>>>

Capital Markets 

Countdown to SKL Public Listing : Proceed with Caution

SKL heads to the market with swelling profits, and swelling debt.

By Harry Njuguna

Shri Krishana Overseas PLC, a family-owned packaging company with roots in Kenya’s industrial belt, is preparing to list on the NSE; not to raise capital, but to begin trading its tightly held shares.

Its revenues have tripled since 2021, yet the gains conceal a liquidity crunch driven by an aggressive, debt-fueled expansion. Net profits may be rising, but operating cash flow fell 93% last year, and its cash balance is now firmly in the red.

Long-term debt exploded more than seventeenfold, with interest costs eating into margins that otherwise show promise. The company’s new Kisaju plant is central to its growth ambitions, boosting capacity sevenfold but the expansion is still underway, and demand hasn’t caught up. If SKL’s public debut is a milestone, it’s one planted firmly on a road paved with risk. Read more here >>>>>

Editor's Picks 

🛃 Customs Nets KSh 2.5Bn Daily, Seizes 40,000L of Illicit Ethanol

By Harry Njuguna 

Kenya’s customs machinery has never run smoother and harder. The Kenya Revenue Authority’s border arm raked in a record KSh 879.33 billion last year, bolstered by AI scanners, tighter risk profiling, and a nose for ethanol smugglers.

Non-oil imports carried much of the weight, with duties swelling as the state rolled back generous tax exemptions. Meanwhile, levies on fuel surged after a price hike tucked quietly into the fine print of national budgeting. Even Turkana, long on the periphery, now hosts clearance centers feeding a Northern Corridor pulsing with taxable trade. Read more »»»»»»

🏠 📈 Nakuru, Tigoni, Runda Lead Kenya’s Real Estate Surge, Coastal Rentals Take Off

By Fred Obura

Land, in Kenya, is once again a mirror of ambition. Tigoni has surged 80% in value in just two years, Nakuru continues its march with a 20% leap, and the Coast has quietly become a haven for short-term rental investors riding the global tourism rebound.

Runda, ever the aristocrat, still holds steady as Nairobi’s diplomatic sanctuary, while commercial plots in Eastleigh and South B are brushing against the billion-shilling mark per acre. Meanwhile, Nyali and Bamburi shimmer with coastal promise, buoyed by occupancy rates and sun-chasing money. Read more »»»»»

Also Read…

Lifestyle

On your watchlist

This week, TKWS founder Erick Asuma sits down with Former WPP Scangroup veteran Sandeep Madan, Co-founder & CEO of The Partnership Africa

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