The Kenyan Eurobond – Time To Invest!

eurobondThe recent debut of Kenya’s 10-year Eurobond has many implications to investor decisions mainly tied to the interest rates.

The oversubscribed bond-by 500%- fetched 770 billion against the planned 176 billion. This is a clear indication of the faith foreign investors still have in the Kenyan economy despite prevailing uncertainties.

With the government’s domestic borrowing on the decline, domestic interest rates are to set to go down.

“By accessing these external funds, we will reduce government borrowing from the domestic markets, thereby helping drive down interest rates which should boost investment, spur economic growth, provide more employment opportunities to our people,” the president promised. This is the green light for the private sector to rush to the commercial banks, borrow and invest.

With a relatively stable shilling and a single digit inflation rate; things are looking up for Kenya. The government should however move to insulate the economy from external shocks and curb the menace that is insecurity.

Author: Harriet Chesang

Kenya Airways New CEO: Mbuvi Ngunze’s Rich Profile

kqIts time to retire for one Mr.Titus Naikuni. Whether he is tired of his position as the CEO of Kenya Airways is not anything to discuss at this juncture now that the hammer has fallen. And taking his place as from 1st December 2014 is none other than his Chief Operations Officer Mr. Mbuvi Ngunze.

The rich profile of the incoming president at KQ as outlined in the Kenya Airways website is as follows:

Mbuvi holds a Bachelor of Commerce degree accounting option from the University of Nairobi. He is a Chartered Accountant (England and Wales) and is also a graduate of the Harvard Business School’s Management Development Program (PMD75).

He joined Price Waterhouse in Nairobi in 1990 and was seconded to Manchester in the United Kingdom where he was articled. In the UK, he started of as an Audit Assistant and left 5 years later as an Assistant Manager. In 1995, he rejoined Price Waterhouse in Kenya as Audit Manager, leading audits of various blue chip companies, and also involved in training and recruitment.

In 1998, he joined Bamburi Cement (a Lafarge subsidiary) as Finance Manager and was promoted to the Finance Director’s position in February 1999. He held this position up to March 2002 when he was appointed Managing Director Hima Cement Uganda (Lafarge). In May 2006, he moved to the headquarters of Lafarge in Paris. He first took up the role of Mission Director in the Group Audit Department for six months, and then was appointed Group Vice President Internal Communications in November 2006.

In March 2009, he was appointed General Manager for Lafarge’s operations in Tanzania (Mbeya Cement). He joined Kenya Airways in September 2011 as Chief Operating Officer. Mbuvi has extensive Board room experience having served on the Board of Bamburi Cement (from 1999), Hima Cement, Mbeya Cement, and serving as Secretary to the East African Cement Producers Association.

 

Courtesy: Kenya Airways

The First Foreign Terror Attack on Kenya

The history of terror attacks in Kenya begins with a narration of the famous Entebbe Operation by the Israeli terrorgovernment in Uganda on 4th July 1976. This was one of a kind operation that was aimed at rescuing Israeli hostages from Palestinians terrorists who had hijacked their plane and diverted its course to Entebbe Airport in Uganda.

With a motorcade similar to that of the then Ugandan president Id Amin landing at the Entebbe Airport and driving to where the hostages were held at the airport; the operation that was planned for 1 week and lasted only 53 minutes saved all the 102 hostages alive with 3 dead. The only one Israeli commando who died was Yonatan Netanyahu who was the lead commander of the operation; and the older brother of the current Israeli Prime Minister Benjamin Netanyahu.

On the other side the Israeli commandos in a troop of 100 men managed to kill about 45 Ugandan military men and destroyed 11 Ugandan Air Force military jet fighters during the night raid.

Just how does terror on Kenyan grounds come into the picture from this operation in another country? This is how..
For the Israeli commandos to rescue the hostages from Entebbe, they needed a place to refuel their military jets. Although no country wanted to assist the Israeli government for fear of a counter attack by Id Amin’s administration; the owners of the Block Hotels in Kenya managed to convince the then president of Kenya Mzee Jomo Kenyatta to do the Israeli the favor.

Being of Jewish origin and using their political and economic influence they managed to have their wishes granted by the president. The Israeli military jets had stop overs in Kenya for refueling both when coming for the operation and after the rescue.

This then happened to be the beginning of the terror troubles for Kenya. The grudge was held for four years until 1980 when the Palestinian terrorists had their revenge on Kenya. On 31 December 1980, the Norfolk Hotel then owned by the Block Hotels with Jewish links was bombed. 13 people of different nationalities were killed while 87 others were wounded from the retaliatory attack for the Kenyan and Jewish support during the Entebbe Operation.

That attack on the Norfolk Hotel became the first foreign act of terror on Kenyan grounds and probably marked the beginning of war with the terrorists.

Click the following link to read more on the Entebbe Operation.

Kenya’s Economy in the Past Week

economy kenyaAs political tensions heightened and temperatures rose, the past week had a lot to offer to the Kenyan economy. Among the many things that happened, three caught my attention and in my opinion they were significant to our economy.

Like the devil’s advocate, I will begin with the negative highlight of the week. The Mpeketoni attack that left more than 60 innocent Kenyans dead was a significant evil event in the week. The negative reputation it created for Kenya as an easy terrorist target with slow response from the security agencies; was not a good picture painted of us to the international community. These are the kind of things that scare away investors and tourists; who happen to be one of our major foreign income earners. Following the same, UK has issued fresh travel advisories to its citizens.

However, changing into the angel coming with good tidings, the positive highlights of the week that I considered significant were two. The first is the over-subscription of the Kenyan Euro bond floated in Europe. The overwhelming $8 billion offers, against the $2 billion needed was a sweet tide to ride on and boast of investor confidence in Kenya. Mark you the bond has a maturity period of 10 years; meaning investors have confidence in the Kenyan economy not only currently, but even into the far future.

The other smooth tide was the closing of a deal between Kenya and the European Union for a grant worth Kshs 52 billion. The grant that will go to support infrastructure and health related projects will be released in tranches over the next 7 years. Again, the West showed its solidarity with Kenya in matters finance and economics in a big way.

Those were my highlights; if you have any other that you feel was significant, share it below.

Enjoy your weekend.

Kenya Budget 2014/2015: Why You Should Read It

budgetOn 12 July 2014, the Finance Cabinet Secretary Mr. Henry Rotich will be presenting the 2014/2015 Kenyan Budget to parliament for approval. To many citizens looking forward to this budget reading, the cycle has always been the same over the years till it has lost meaning. But just what is a government and what does it entail? Or put otherwise, why should you even be concerned about the national budget at all?

This is why:

A budget is not merely a list of the government’s expenditures and revenues. In a broader sense, a government budget is the government’s national economic policy document for the next financial year. The documents puts forward what the government expects for the following financial year in terms of expenditure on its economic projects and social programmes and how to raise the money needed to fund all these. It also prioritizes the projects and allocates revenue as appropriate.

From the budget statement, the economic climate of the country for the next financial year can be predicted by other interested stakeholders. The budget therefore advices investors both local and foreign on their next move with regard to investing in the country. To a larger extent too, the budget may influence foreign relations policy when it touches on taxes for imports from its strategic trade partners.The two then have direct impact on economic growth for the country.

As the ordinary citizen that you are, the national budget helps you understand the government plans for the next financial year. You will find out the economic and social projects lined up by the government for you and be in a better position to stand to gain from them. The budget will also help you monitor the performance of the government and ensure there is transparency and accountability in service delivery by the government.

Besides, you will also get to know the taxes you shall be paying for the next financial year and include them in your personal financial planning; since they always reduce your disposable income significantly.

Simply put, the budget is a must read and understand document for every citizen since it directly and indirectly affects your economic standing for the next financial year. This thereby determines the quality of your life for the next financial year based on the vibrancy of the economy as set out in the government economic policy document: the Kenya National Budget 2014/2015.

Growing Economic Ties Between China & Africa

china 2One of the biggest trends in global economic and trade ties in recent years has been the growing relationship between China and Africa.

Trade between the two reached $210bn (£125bn) last year – up from just $10bn in 2000.

Africa’s exports to China are increasing by 25% every year. In some African countries, those exports account for more than a quarter of their gross domestic product (GDP).

Murat Ulgen, chief economist at HSBC, told Asia Business Report that the relationship is evolving beyond one based on mineral resources.

Courtesy BBC

From MDGs to Sustainable Development Goals (SDGs)

mdgsIn the 15 years running to 2015, the global development agenda was guided by as set of goals compiled by the UN which were dabbed Millennium Development Goals (MDGs). However, as the 15 years come to a close a new set of goals to guide the global development agenda are being put in place by the UN. These have been named as Sustainable Development Goals (SDGs).

In our Kenyan context, the MDGs involved 8 main goals including; elimination of extreme poverty and hunger; achieve universal primary education; gender equality and women empowerment; reduce child mortality; improvement of maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability and to develop global partnerships for development. To what extent we have been able to achieve them, I will allow you to be the judge.

As we move to SDGs era, the global development agenda will now be focused on three basic pillars as outlined by the UN council on sustainable development. These include: economic development; social development and environmental development. One may ask, why the three pillars?

Well this is why:

The UN council on development realized that when economically empowering individuals, global economies have been resulting to environmental degradation and disintegration of the social fabric in our society. These two then pose a very serious threat to the existence of our future generations as societal cohesion dies and depletion of economic resources in our environments continues to deepen.

In a bid to save our generation and the future generations to come, the council found it wise to come up with the sustainable development goals which will focus every nation towards that similar objective.

According to the International Institute for Sustainable Development (IISD), Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

It contains within it two key concepts:

• The concept of need, in particular the essential needs of the world’s poor, to which overriding priority should be given; and

• The idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.

As we all now shift focus to SDGs, our main development agenda as Kenyans should therefore be how to economically, socially and environmentally empower our generation and the future generations to come; not the daily mediocre political bickering we are experiencing currently.sdgs