The swelling debt tide

Kenya’s fiscal structure has undergone a dramatic shift in recent decades, with public debt interest payments rising at an unprecedented pace. In the first six months of current 2024/25 financial year, which begun in July 2024, Kenya has already paid KSh 585.63 billion in debt interest — comprising KSh 444.73 billion in domestic interest and KSh 140.90 billion in foreign interest.

Hello! It's Brian from The Kenyan Wall Street with the latest edition of our daily newsletter. Below are our stories for the day :

Economy  

THE SWELLING DEBT TIDE : Why Kenya risks devouring its future

Kenya is on course to spend over KSh 1 trillion on public debt interest in 2025, a record-breaking figure that reflects a deepening fiscal strain. In just the first half of the 2024/25 financial year, debt interest payments hit KSh 585.63 billion, outpacing development spending by more than double.

Domestic debt has surged past KSh 6.15 trillion, with a growing tilt toward expensive short-term instruments like Treasury bills. The rapid rise in borrowing costs, with some T-bill rates peaking near 17%, is squeezing the government’s ability to invest in vital public services.

Financial analysts warn that debt servicing is now consuming nearly 80% of ordinary revenue, crowding out both development and private sector credit. The mounting pressure on Kenya’s fiscal space has triggered calls for urgent reforms, including austerity and revenue mobilization. Without bold corrective action, experts fear the country may be locked in a ‘lost decade’ of limited growth and worsening debt vulnerability. Read the full analysis here »»»»»

Today's Poll 

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Banking

BETTING ON DIGITIZATION : CIB Kenya's Plan to Cross Capital Threshold

CIB Kenya is confident it will meet the new KSh 10 billion core capital requirement by 2029, thanks to proactive investments and a strong focus on digital banking. The bank, a subsidiary of Egypt’s CIB, plans to drive growth through fintech partnerships and support for Kenya’s SME sector. Rather than expanding branches, it is prioritizing mobile-first strategies to boost financial inclusion. Financial analysts expect the new capital rules to reshape Kenya’s banking sector through mergers, acquisitions, and capital injections. Meanwhile, Fitch warns smaller banks may struggle to comply without external support, raising the likelihood of consolidation. Read full article here»»»»»

More Stories on Banking…

Companies  

A BLAZING PARTNERSHIP : Why Airtel sees Starlink as an expansion opportunity

Airtel Africa has partnered with SpaceX’s Starlink to expand satellite internet services across 14 African markets. The deal aims to enhance connectivity in areas where traditional infrastructure is limited, with Starlink already operational in nine countries. The partnership will offer high-speed, low-latency internet, supporting digital inclusion across the continent.

In Kenya, Starlink has gained traction since its launch in 2023, despite earlier regulatory concerns. Airtel Africa, focusing on digital growth, views satellite internet as key to improving access for remote communities. Read more here »»»»»

More Stories on Companies

Markets 

🔴 𝐍𝐒𝐄 𝐃𝐞𝐫𝐢𝐯𝐚𝐭𝐢𝐯𝐞𝐬 𝐌𝐚𝐫𝐤𝐞𝐭 𝐐𝟏 𝟐𝟎𝟐𝟓:

➖ Turnover fell 30.7% QoQ to KSh 29.86M

➖ Deals dropped 65% to 545

➕ Contracts traded surged 162% to 505, signaling growing trader interest

Top contracts: KCBG, COOP Bank, and NCBA futures dominated trades.

🟢 𝐋𝐢𝐛𝐞𝐫𝐭𝐲 𝐊𝐞𝐧𝐲𝐚 𝐇𝐨𝐥𝐝𝐢𝐧𝐠𝐬 𝐖𝐢𝐥𝐥 𝐡𝐨𝐥𝐝 𝐢𝐭𝐬 𝟐𝟎𝐭𝐡 𝐀𝐆𝐌 𝐨𝐧 𝟐𝟑𝐫𝐝 𝐌𝐚𝐲 𝟐𝟎𝟐𝟓 (𝐕𝐢𝐫𝐭𝐮𝐚𝐥, 𝟏𝟏:𝟎𝟎 𝐚𝐦)

➖ Adopt FY2024 financial statements and auditor’s report

➖ Approve final dividend of KSh 1.00 per share (includes KSh 0.50 for exceptional performance)

➖ Approve special dividend of KSh 0.60 per share from Heritage Tanzania sale

➖ Elect and re-elect directors

➖ Appoint PWC as auditors

➖ Elect Audit Committee members

Today's NSE Gainers and Losers : 

Opinion & Commentary 

On your watchlist

In this episode of ‘Investing like an executive’, Anthony Muiyuro, Regional Director at Syntura, breaks down how AI is reshaping productivity, collaboration, and innovation across Kenyan workplaces.

Last Friday’s Poll Results

Between CBK and the Kenya Bankers Association (KBA), who do you think has presented a viable loan pricing model?

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