FINANCE EA DAILY BUSINESS NEW SUMMARY
World Bank sees Kenya's economy slowing to 5.5 percent
The World Bank projects the Kenyan economy will slow down to 5.5 percent this year amid concerns over increased commodity prices including fuel and the effects of drought. The Bank said the country will receive below-average rains that will negatively affect agricultural performance leaving nearly 3.1 million Kenyans in need of food aid.
The country’s growth will also be dampened by high commodity prices triggered by global supply chain shocks following the war in Ukraine that is driving up inflation…The EastAfrican
MPs approve Treasury's proposal to raise debt ceiling to Sh10 trillion
The National Assembly yesterday agreed to raise the debt ceiling to Sh10 trillion in what is aimed at giving the National Treasury head-room to borrow more. With the current debt ceiling of Sh9 trillion, it means the country is Sh600 billion shy of breaching the limit with official data from the Central Bank of Kenya (CBK) showing the country’s public debt stood at Sh8.4 trillion by end of March.
The proposal by the National Treasury to push up the debt ceiling was, however, opposed by lawmakers allied to Deputy President William Ruto, who felt the changes only aggravate the country’s debt situation…The Standard
Banks set to review their lending charges after CBK rate hike
The move by the Central Bank of Kenya (CBK) to raise its lending rate from 7 to 7.5 per cent could force banks to also adjust their charges.
NCBA Bank, for instance, says it is keenly studying the current economic and financial situation before taking the next step. The bank opened its 83rd branch in Naivasha on Saturday…The Standard
Kenya spends Sh7.65bn monthly on fuel subsidy
Kenya spends an average of Sh7.65 billion ($66 million) every month to subsidise diesel, super and kerosene, highlighting the adverse impact of the fuel stabilisation programme on the country’s revenues.
The World Bank says that the monthly expenditure on the programme that started in April continues to hurt the country’s budget and planning, signalling its intention to push for the scrapping of the subsidy.
A rally in global prices of Brent has since the start of the year strained the kitty due to the increase in compensation margins for oil dealers to keep pump prices low, prompting the government to partially withdraw the subsidy, increasing a litre of super and diesel to Sh150 and Sh131 respectively in Nairobi…BusinessDaily
Pwani Oil closes plant, blames lack of dollars
Pwani Oil, the manufacturer of Freshfri, Salit and Fry Mate cooking oils, has temporarily shut down its oil plant due to shortage of raw materials which it blamed on difficulties accessing dollars to pay suppliers on time.
The consumer goods manufacturer said Friday its bankers were only processing half of the dollar orders it requires to pay the suppliers of crude palm oil imports from Malaysia amid stiff global competition.
“Getting sufficient amount of dollars required to support the factory in terms of getting sufficient raw materials is not happening. We are not even running the plant right now because of lack of raw materials [crude palm oil],” Pwani Oil Commercial Director Rajul Malde said…BusinessDaily
Foreign investor outflows at NSE hit Sh4.2bn in May
Foreign investors withdrew a net of Sh4.2 billion from the Nairobi Securities Exchange (NSE) last month, continuing the flight to western markets where interest rates have risen sharply in the last few months.
Net sales by foreign investors have been on the rise for the past three months, a period in which the US has increased its benchmark rates in line with a rise in inflation.
In March, they sold a net of Sh1.45 billion, rising to Sh1.74 billion in April and Sh4.2 billion last month.
Foreign investors normally trade almost exclusively on large blue-chip stocks at the NSE, with the selloff correlating to a fall in the share price of large firms such as Safaricom, BAT Kenya and Equity Group…BusinessDaily