Snap shot on Africa economy

Despite a slow start this year, Sub-Saharan Africa economies have for the most part weathered the worst of the global financial crisis.The Nigerian Government  upgraded its estimate for GDP growth rate for Q2 from an initial 5.9% to 7.2%. This growth is supported by a recovery of the oil prices that rose from a low of US$40 a barrel in Q1 to an average of US$60 a barrel in Q2.

In Mauritius, GDP growth rate for Q1 2009 averaged 2.7% year-on year. The Mauritian Central Statistics Office expects overall GDP for 2009 to register a 2.8% growth up from a previous forecast of 2.7%. South Africa and Botswana experienced negative growth in Q1 2009,with their external sectors deeply imparted by the global slowdown.In Botswana,the Central Statistics Office reported that real GDP declined by 20.3% in the Q1 2009 compared to Q2 2008 resulting from weakness in the diamond mining sector which experienced production cut due to weak demand. On a positive note,the economy grew by 20.4% during Q2 2009.

Currencies in a number of Sub-Saharan Africa countries gained in during the quarter. This was partly attributed to the recent weakness of the US Dollar and also due to the rebound in commodity prices.The Copper prices gained by over 118% and this contributed to positive sentiment on the Zambian Kwacha as concerns of a widening current account deficit weer averted.

Inflation has been trending downwards across, the Sub-Saharan Africa region. In Botswana, consumer inflation rate for August dropped to 6.0% from 7.0% in June.Interestingly, in a bid to stimulate credit expansion and consumer spending the Bank of Botswana has over  the year lowered its bank rate by 400 basis points.Inflation in Ghana has over the recent past remained sticky above the 20% levels.However, recently released figures by the Bank of Ghana indicate the inflation has subsided  to 19.7%.

With the exception of Zambian and Mauritian stock markets, which are up by 12% and 40% year to date, most Sub-Saharan Africa stock indices are still posting negative performances. While most African markets were affected by the global financial markets meltdown in Q4 2008,it is encouraging to note that investor sentiment is gradually improving.


NB: Xmas gift from  friend,Edward Gitahi Investment Manager AIG.




When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!

We are a pretending nation (Vision 2030)

…………….because I am disgusted by our financial institutions and the little energy towards economic recovery, I have achieved the following:

(a) I had a wonderful telephone conversation with President Paul Biya of Cameroon. Yes, it’s a poor nation economically but they have what it takes to make it big in the world soccer extravaganza if the politicians and federations gatekeepers are kept at bay.


(b) This Xmas, am heading to Paris to meet Paul Guen (Indomitable Lions coach). French people are known to be very romantic. Of course, Paul can see the potential of becoming a reputable manager who utilizes the potential and opportunity given a chance.

Meanwhile we can continue to pretend seeing Vision 2030 and yet we are busy promoting Somali pirates and speculators in the property market (real estates). A country that suffocates and denies funds towards creativity, agility and dynamism is headed nowhere.

Why should the old businesses that were built through patronage want to control the new enterprises? The new enterprises are based on flexibility, adapting and the future. Just look around yourself ….the large number of people searching for jobs.

The work problem continues unabated ,the problem is piling up and nobody cares,only theatrics.



When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!

In case you were in Thierry Henry shoes

Two weeks after world-cup qualifies ended,Thierry Henry's pass to his compatriot(Gallas goal) that helped Les Blue  book Jo'burg ticket, the debate rages on. Some columnists and Irish,insists for a replay. But wait Fifa, don't act on heresy,but loves intrigues and controversy.

A business consultant wrote in local daily..."We ruined our private sector by allowing cheats to prosper. He add....we created a generation of businesses that prospered on patronage and tax evasion...A society that  aids and abet cheating is investing in its own downfall .Children, parents and teachers are now shamelessly cheating in public examinations every day,every month ,every year. Such a society stifles the very people who could make it great,law-abiding and hard-working".

Should Fifa consider Henry's call - a replay? ....because he confessed that it was not the "Hand of God". This could help settle the consciousness of the great French tallisman. 




When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!

When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!

Green shoots in Kenyan mart?

The stock market weakened in Q3 2009 after  having recorded some good gains in 2009.The volume of shares traded the period declined to 825.9 million compared to 983.75 in Q3 2008. The value of shares traded also dropped from $191 million in Q3 2008 to $131 million  in Q3 2009.Despite the lower activity ,foreign  participation  in the local equity market increased and constituted between 60% and 78% of the turnover in July and August.However, it was a decline in September. Although it is difficult to clearly assess the reason for the drop, the possibility was as a result of foreigners interest directed to the fixed income market.

The banking sector first half results reflected, a tough economic environment.Total operating income for the listed banks increased by 12% over the period, compared to 51% in 1H 2008.The subdued performance in 1H 2009 was mainly driven by increasingly cautious approach to leading by commercial banks and higher provisioning levels taken due to economic slowdown.It should be noted that the good performance in 1H 2008 had been driven by transactions related to the Safaricom IPO and the immediate business pick after post election crisis.

Earnings from the non-financial sector  especially the cement companies showed positive growth despite the economic conditions boosted by a boom in urban housing market and rising infrastructural spending .Results in the ICT sector were less impressive, attributed to increased depreciation for capital on rolling out the fibre optic cable(read speculative mentality of recouping the investments the same day).

The stock market will remain subdued for the rest of the year. However, there are signs of "green shoots" in the economy and we strongly believe this will trigger equity investments given that valuations  are at historical five year lows.   


When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!

A brief on Kenyan economy as the year ends

 After recording an impressive growth rate of 4.0% in Q1 2009, the economy grew by 2.1% in Q2 2009 compared to 2.2% over a similar period last year. The slow down can be attributed to the adverse impact of drought,power rationing and elevated inflation.

The 2009/10 budget unveiled a fiscal package that is widely expected to cushion the country from globe external shocks and domestic challenges.This requires efficient implementation of planned  expenditure.The process could be dogged by political uncertainty  still revolving around the constitutional review process.

The monetary policy intervention measures instituted by Central Bank to bolster liquidity in the system has borne fruits.Increased money market, liquidity helped maintain a stable interest rate environment  enabling the government to meet it's borrowing requirements with ease whereas low rates should  encourage commercial banks to extend credit to  businesses and households. This does not appear to be happening . The banks remains in their cocoons preferring to invest in the "less-risk" the government papers. Increased private sector lending in critical for economical recovery.

The high inflation level continue to pose serious risks to economic recovery. High inflation has been fueled by supply side constraints driven by inadequate foods,fuel and energy due to the failing long rains.
All in all, the outlook for the economy in 2009 remains challenging due to vagaries of weather,high energy costs,the high inflationary environment and intermittent political noise.However,provided the country receives adequate rains,inflation eases,banks enhance credit extension and improved political environment, the GDP could rise above 4.5% in 2010. 



When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!

The real world versus virtual world

The perception that internet is a world of scam is still a problem.The people(community) who believe that social media is the route to the future, have enormous responsibility to prove negative energies wrong.


I hope this does not end up producing snobbish and "fake" guys in town. However, nobody can "stop" technology because it's here with us and to stay..

The sailor saw it coming...Africa, it's doable-2010 world cup

The dice is cast and the wheat separated from the chuff. It's official, who represents Africa in 2010 World cup in Jo'burg.The sailors saw it coming >>>>Extravaganza:Jo'burg here we come and the expectations<<<<<<<.

But....the sailor is yet to take the first bowl of "Umgombothi"...it's African beer>>>>...She knows better...<<<<.

Reason....Africa teams must work extra hard to tame the South Americans and European might.Therefore, the hard work must begin in earnest.Africa, it's doable...!


Side Note: When i am not thinking future enterprises, ,i am sleeping the future of our children, eating soccer walking the talk and of course fun..!.

Positive revolution

A lot has been said about the "Social Media". The debate rages on whether "Social Media" is a "rebellion" or a "digital revolt" of the 21st Century.

In Kenya, we are still grappling with "authenticity and trust" .A begging question ,"why conduct business online and not face to face..?".People are naturally social.

There are claims that 800,000 Kenyans are registered in Face Book[FB]. Of course, majority of these individuals are there for fun. However, with the current economic trend ,there is going to be lots of business activities online.
Founders:As for the thinkers and advocates behind the "Social Media", off- my hat.

Success:As for how deep the "new media" will spur economic and business development, i leave that to the future historians and economists to judge

How can Nairobi River project be a success in the long-term?

Those who know Nairobi River well, can tell the filthy it was several months ago.

The ministry of environment has done a tremendous job- cleaning the river and rehabilitating the former glory.
(a)What are the best practices of maintaining a river cutting across human in habitation?
(b)Can the "filthy" river become a resource ? e.g.cafes along the river

What's your best idea for AFRICA? | Africa Rural Connect

What's your best idea for AFRICA? | Africa Rural Connect

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Cross-listing in Sub-Sahara Africa

The cross-listing of companies started when firms from Kenya,listed in both Uganda and Tanzania stock exchanges respectively. The signing of East Africa community Treaty in 1999 has gained much prominence in the recent past.

The firms that led the pack include Equity bank,Kenya Airways,East African Breweries Ltd and Jubilee Insurance all Kenya firms.

Rwanda and Burundi has since joined the fray to make a bigger trading block in Sub-Sahara Africa an interesting region to watch in the near future.

Mood of the mart - Kenyan equities

The stock market appears to have "bottomed-out" with some good gains recorded in June/July. A number of counters including Athi River Mining,Access Kenya,Barclays Bank, East African Breweries,Diamond Trust Bank,BAT Kenya and Kenya Reinsurance rose above their closing prices in December 2008 and March 2009.

As investors sentiment improved in the global markets,foreign participation in the local equities market increased. Foreign investors accounted for over 50% of the total market turnover in Q2 2008.The heavy trading of Safaricom shares on listing in Q2 particularly contributed to the distortion in the turnover traded.

During the 1Q 2009, bank released results that reflected what was expected in the coming days.Although earnings improved by 20%,the growth momentum has slowed down mainly as a result of low economic activity and less aggressive lending by financial institutions.In the same period,Safaricom released its full year results for ended March 2009 and its profitability declined by 24%,on account of increased competition in the industry as well as a shrinking share of consumers' disposable income.

If the fiscal measures proposed in the 2009/10 budget are implemented, they could provide the much needed stimulus to economic activity and boost overall profitability of listed companies.Although companies are still likely to face margin pressure due to rising input costs, a general improvement in the economic outlook should provide the impetus for higher earnings growth in 2010.

Capital market regulatory reforms unveiled by the Finance Minister during the budget are expected to play a crucial role in improving investor's sentiment. The proposed changes to rise minimum capital requirements for stock brokers and investment banks should strength these firms.The requirements of players to have professional indemnity insurance would also improve investor protection.

Going forward,there is likely to be increased demand for equity investments especially from long-term investors on account of the attractive market valuations.Although the stock market has risen by 17.5% in Q2, valuations are significantly below where they were 12 months ago.The market was trading at an average earnings multiple of 12.6x at the end of the quarter compared to 23.9x at a similar period last year.

A glance on Kenyan economy

The Kenyan Economic Survey 2009 confirmed that country's economy stalled in 2008 growing by a dismal 1.7% compared to a robust growth of 7.1% in 2007.This was occasioned by the post-election violence, inadequate rainfall in most part of the country, high inflationary environment after rapid rise in fuel and food prices and the external shocks associated with the global melt-down.

The construction sector was the best performer growing by 8.3% buoyed by increased infrastructural spending.The manufacturing sector posted a growth rate of 3.8% despite many challenges.Agriculture which accounted for 23 % of GDP declined by 5.1%.During Q1 2009,the economy grew by 3.9% compared to a decline of 0.6% over a similar period last year due to the negative impact of the 2007 post election crisis.

A key objective of the budget is to re-ignite economic growth through increased fiscal expenditure targeting employment generation,poverty reduction and enhancing food security.The total expenditure is projected at $11.4 billion with development expenditure budgeted at $3.5 billion (29.9% of total expenditure) while recurrent expenditure is estimated $ 7.9 billion.

High inflation remains a major threat to the economy.For the H1 2009,overall inflation averaged 23 supported by rising price of food,housing and medical services.Although the overall month-to-month inflation is forecast to remain high in 2009 as dry weather keep food prices high.The situation is worsened by power rationing.

During 2Q 2009, the Kenya shilling strengthened by 4.9% against the US Dollar while losing 11.6% against the Sterling Pound and 2.1% against the Euro.The relative strength against the USD was attributed to commercial banks unwinding their positions and the general weakness of US Dollar in the international markets.

The outlook of the is cautiously optimistic given the challenges of inadequate rains and possible increase in energy costs.

Good signs from emerging markets-Africa