Country UpdateMay 27, 2022
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Market Priceskenya sovereign
|KENGB 12.705 06/13/22 10YR||102||102.55||0||0||+0||2022-06-13|
|KENGB 12.5 11/07/22 15YR||102.95||103.5||0||0||+0||2022-11-07|
|KENGB 12.371 06/19/23 10YR||103.7||104.25||0||0||+0||2023-06-19|
|KENGB 12.18 01/15/24 10YR||104.6||105.15||0||0||+0||2024-01-15|
|KENGB 12 04/10/28 15YR||99.8||100.35||0||0||+0||2028-04-10|
|KENGB 12 11/01/32 20Y||93.7||94.25||0||0||+0||2032-11-01|
|KENGB 11.25 05/28/35 25YR||87.2||87.75||0||0||+0||2035-05-28|
|KENGB 12 01/21/41 30YR||88.3||88.85||0||0||+0||2041-01-21|
|KENIB 12.5 11/18/24 7YR||104||104.55||0||0||+0||2024-11-18|
|KENINT 6 7/8 06/24/24||93.45||94||3.13||267||+267||2024-06-24|
|KENINT 6 7/8 06/24/24||93.45||94||3.09||263||+263||2024-06-24|
|KENINT 7 05/22/27||89.15||89.7||5.27||407||+407||2027-05-22|
|KENINT 7 05/22/27||89.1||89.65||5.26||406||+406||2027-05-22|
|KENINT 7 1/4 02/28/28||87.65||88.2||5.7||455||+455||2028-02-28|
|KENINT 7 1/4 02/28/28||87.6||88.15||5.69||454||+454||2028-02-28|
|KENINT 8 05/22/32||86.95||87.5||6.65||510||+510||2032-05-22|
|KENINT 8 05/22/32||87||87.55||6.61||505||+505||2032-05-22|
|KENINT 8 1/4 02/28/48||77.6||78.15||7.53||572||+572||2048-02-28|
|KENINT 8 1/4 02/28/48||77.6||78.15||7.51||569||+569||2048-02-28|
Kenya's debt exceeded 70% of GDP by 2021 and is expected to continue growing in FY21/22.
Part of the measures to reduce debt vulnerabilities is to increase reliance on concessional loans and move away from high-cost commercial debt.
The government plans to go ahead with the USD 1 bn Eurobond issuance by the end of June, despite the rising yields.
Pressure grows on China, as one of the world's main creditors, to enter the DSSI without restrictions
The terms of China's agreements with emerging or frontier nations are extremely aggressive compared to members of the Paris Club
One issue to keep an eye on is the participation of Chinese state banks in the renegotiations, as these entities hold about 75% of the country's total debt
Chinese authorities have spoken with 20 countries about the DSSI, and it has approved relief for an amount close to USD 3 bn for 10 countries
Angola and Zambia are the countries that most urgently need to address a restructu...
The push to force private sector participation in the G20 Debt Service Suspension Initiative (DSSI) has mostly receded by now.
Rating agencies have recently made explicit that they won’t consider DSSI participation, in itself, as negative for credit ratings.
Recent academic studies show that restructuring debt owed to private creditors has a material long-term adverse effect, but a similar treatment of official debt doesn’t.
Some analysts believe that merely qualifying for the DSSI may have a material adverse effect over credit spreads.
If this is so, and DSSI participation does not lead to private secto...
Today, the Kenyan parliament approved KES 78,140 mn (USD 762.0 mn) in additional expenses requested by the Treasury in its revised budget for the fiscal year (Jul19/Jun20), which represents an increase of 2.5% with respect to the previously approved expenditure. Although the parliament approved the additional spending, the figure is lower than the one requested by the Secretary of the Treasury. On November 13, the Interim Treasury Secretary, Ukur Yatani, requested KES 86.6 bn (USD 844.5 mn) extra spending, which represented an increase of 2.8%.
Although the approved spending was lower than the one requested by the government, the par...
On November 13, the interim Treasury secretary, Ukur Yatani, expressed to the Senate budget committee his intention to extend spending for the fiscal year (from July 2019 to June 2020) to KES 3.13 tn (USD 30.6 bn). Which means an increase of KES 86 bn or 2.8%. This is the third time in the fiscal year that the government increases spending.
With the increase in spending, the fiscal deficit at the end of the period would increase to 6.3% of GDP from 6.2% estimated in October’s second review. The fiscal deficit has increased because revenues have been lower than expected. The accumulated income until September was KES 410.5 bn, b...
On October 29, the strategic advisor of the Ministry of Mining and Petroleum, Brian Muriuki, said that the second shipment of oil abroad will be 500,000 barrels and will take place in February 2020. The export volume will double the first shipment that was made in August. Both shipments are under the initiative of the Early Oil Pilot Scheme (EOPS), which aims to measure the quality of Kenyan oil.
On October 16, the International Monetary Fund (IMF) revised downward the projection of Kenyan economic growth to 5.6% from 5.8% April’s projection. This new estimate is 70 basis points lower than the 6.3% growth recorded in 2018 and differs from the 6.0% growth projection published in September by the Ministry of Finance.
The IMF cited the current trade war between United States and China and Global manufacturing downturn, as the main reason behind the growth forecast cut. By 2020, the IMF expects economic growth to accelerate to 6.0%, after the agricultural sector, fundamental to the country's economy, recovers from the n...
On October 1st concluded the withdrawing process of the KES 1,000 banknote, the highest-value Kenyan shilling banknote, that started on June 1st after a surprise call made by the Central Bank. The central bank said that during this period 96.6% of the banknotes in circulation as on June 1st were collected. The rest of the bills will remain invalid, approximately KES 7,386 mn.
On September 19, in a review of the 2019/20 fiscal year budget, the Finance Minister Ukur Yatani committed to reduce the government spending by 2.1% equivalent to KES 46 bn (USD 445 mn). Nevertheless, the public deficit target was not updated. It remains in 5.9% of the GDP having the goal of reducing it to 3.5% by 2022/23 fiscal year.
On August 30, the credit agency Fitch Ratings said that Kenya has the ability to meet long-term foreign loan payments. In assessing Kenya's economy, Fitch maintained its long-term foreign currency issuer rating at B +. This rating reflects the strong growth that the economy has had. In 2018, Kenya's GDP showed a growth of 8.4%, the highest record since 2010, driven by the agricultural and services sector. However, he stressed that the main risks are persistent current and budgetary account deficits coupled with high levels of public debt.
On August 26, Kenya made its first oil shipment abroad. The shipment was of 250,000 barrels. The oil was transported by truck to the port because there are no pipelines. The oil was sold to the ChemChina UK Ltd trading company as part of a pilot plan between the Kenyan government and its corporate partners that include Africa Oil Corp, British oil explorer Tullow Oil and France's Total SA.
On August 13, the Kenya Revenue Authority (KRA) announced that tax revenues reached KES 1.58 trillion (USD 15.3 billion) during 2018/2019 fiscal year (from July to June). Which represents an increase of 11% with respect to 2018/2017 fiscal year. James Githii Mburu, the general commissioner of the KRA, attributed the revenues increase to some initiatives that include the implementation of integrated load scanning solutions, regional electronic cargo tracking system to reduce load diversion and absorption of the iTax system that has increased the tax base.
In the last year, the Kenyan government has taken strict measures to fight corruption. The government has prosecuted dozens of officials of the current cabinet and previous periods for abuse of their office, conspiracy to steal public funds and preparation of false claims for compensation for land used for public works. The most recent arrest, and the most important so far, was that of the Minister of Finance, Henry Rotich, along with fourteen senior officials attached to this ministry, on July 22.