East Africa Economic Report

Over the last seven years, I have attended several investor conferences in Kenya in which, western and Chinese investors among others, were invited. One thing stood out that explains the growing Chinese presence in Africa . Africa urgently needs investment in infrastructure (roads, rail roads, oil pipelines, Hydro-electric dams, name them) and other economic resources-be they mines or factories. Western investors do not appreciate this urgency. Many want ideal conditions that perhaps do not exist elsewhere. Others are plainly cynical. In a 2004  investor conference in Nairobi sponsored by Financial Times, European investors could not believe that the Nairobi stock exchange in Kenya, can raise US$100 million in three-weeks. Roads under construction in Kenya by Chinese contractors.  We  shall assess Chinese workmanship a year down the roa d Yet the bourse had just two months earlier mobilized US$300 million in just the same period for the local electric...

Demand for infrastructure exceeds Govt.’s ability to finance An Estate: This 500 unit estate will use several septic Tanks  A fter the massive construction of Major roads and other transport infrastructure, Kenya is set to  embark on another round of developments of social infrastructure. The country is experiencing a major shortage of houses which has buoyed activity in the housing development sector. Demand for houses, says the government’s official data is 150,000 units a year while supply is just about 30,000 to 40,000 units a year leaving a yawning gap of 110,000 units. Activity in the housing sector has been boosted by the development in roads which has opened up many areas within Nairobi City and its satellite towns. Still demand is way ahead of supply. Adding to the pressure is the new constitution that has devolved governance to the regions creating 47 county governments. These new governments and their attendant bureaucracy will demand offices an...

Omar El-Bashir: Sudanese President   Tension between South Sudan and the Northern Sudan is unlikely to be resolved anytime soon, South Sudanese government sources say. There may be temporary truces, but the tensions will remain and could sometimes explode into full scale military combats, said the source. The bone of contention is the $20 billion a - year-oil wealth. Before South Sudan seceded from the then Republic of Sudan in July this year, the country was producing some 0.5 million barrels of crude every day. That earned the country an estimated US$ 54 million per day at the price of US$108 per barrel or $1.62 billion a month. Shared equally between the North and the South that meant a whopping $810 million in its coffers a month or $9.72 billion a year. Before the 2005 CPA, Khartoum used to pocket the whole lot, the equivalent of US$19.44 billion at current prices. Hugging or Back stabbing: with Salva Kiir President of South Sudan The secession of ...

A Kenyan High Court ruling made last week spawned a noisy exchange between the executive and the Judiciary. The ruling, in response to an application by an NGO, ordered the government to arrest the Sudanese President, Omar El- Bashir, and hand him over to the ICC “should he visit Kenya .” The government immediately rejected the ruling thus opening the noisy exchange with the judiciary and some human rights activists. It also opened a diplomatic spat between Kenya and Sudan . The three- pronged spat has raised critical Questions among Kenyan analysts. The first is; for who does the Kenyan law and the Kenyan Judiciary exist? Whose interests should come first in the dispensation of justice? What does the independence of a judiciary mean? What should it limits be and who defines such limits? What is the role of the Judiciary in the protection of Kenyan interests world-wide? When it come to arbitrating international disputes what should be the guiding yard stick? In attempt ...

The Kenya shilling: used by nearly 60 million people in the bloc Will a monetary union benefit the East Africa Common Market?  Can it succeed? These are questions many “an expert and observer” have asked in the recent past. The economic conditions in East Africa , says critics, are not favourable for a Monetary Union come mid–next year. The experts do not foresee the bloc being ready for a monetary Union until after 2015. What are the problems cited: Weak domestic currencies, rising inflation, economic disparity within the member-states and among the states and general unpreparedness-whatever that means. The Tanzanian Currency: the third weakest currency in EA  Just the same problems the pro- monetary union lobby says a single currency would solve.  The single–currency school accuses the critics of  “crying wolf.” Of creating mountains out of Mole hills.To be sure, the single -currency school avers, inflation in East Africa is high, ranging betwee...

President Jakaya Mrisho kikwete: Combative  president combative Country? Tanzanians have, as usual, stalled the negotiations on the creation of Monetary Union in East Africa . Media reports say that the Tanzanian delegation to the task force on the creation of a monetary union, at Entebbe , Uganda , opposed every item in the background Paper. The background paper will eventually become the protocol for the East African Monetary Union.  At the table for discussion was Article 24 which proposes a universal monetary and fiscal policy. President Kibaki of Kenya: The Giant of the region worrying Tanzania The delegation also stalled article 17, which proposes that member states coordinate tax policies at the community level. This will require that partner states to disclose fiscal policies to other partner states. These two proposals mean that member-states will have to cede some of their sovereign power to a regional authority such as an East African Central ...

Kenya Soldiers on Ground in Somalia. Will she tame Al Shabaab? Will Kenya succeed where others failed? This question has been asked by many a writer in the last one month. Depending on where one comes from, the answer has been to show that defeating a rag-tag army called Al shabaab will be an herculean task for the Kenyan Military. The Kenyan defense Forces invaded Somalia on October 15 th 2011, in a bid to destroy this terrorist group which was accused of breaching Kenyan territorial integrity.  It was blamed for kidnapping tourists from Isolated Kenya tourist resorts which was a threat to her US$1 billion- a-year industry. The attack has spawned a series of questions among them: what was Kenya ’s agenda and whether it will succeed where others failed? Granted.  Ethiopia invaded Somalia in 2006 and was humbled by the militias. Two years later, Ethiopia withdrew its forces, citing the heavy cost of keeping soldiers in Somalia . More than 10 years earli...

Nairobi has emerged as the financial hub of the East Africa Common market bloc, we can report. Thanks to the rapid expansion of homebred multinational banks and the consolidation of the management of foreign transnational banks from Nairobi The foreign banks have actually lost their dominance of the local financial market both in profitability and branch network in the region to indigenous banks. The indigenes have since the mid-2000s taken the foreign banks head on in terms of branch network expansion and innovation. This has made the Kenyan financial market and by extension East African financial market the pitch for stiff competition driven by Kenyan banks. The front runners are Kenya Commercial Bank, the oldest bank in the region, and Equity Bank, ironically the youngest and the most aggressive bank in the region.  In fact, Equity is now the largest bank in sub-Saharan Africa in terms of customer base, boasting of a whopping 6.7 million accounts. The Multi n...

EA Money Market  Uganda Forex Rates Currency Buy Sale US$ 2580.00 2590.00 EUR 3499.00 3513.15 GBP 4084.44 4,100.23 KES      27.53      27.64 TSH        1.18        1.50 Evidence is emerging that the real estate developers whose homes were flattened by government’s bulldozers in yokimau, were in fact land grabbers. The evidence suggests that the developers were duped into buying government land reserved for the Jomo Kenyatta International Airport in Nairobi Tanzania forex Rates Currency Buy Sale US$ 1653.44 1668.78 EUR 2207.80 2253.02 GBP 2575. 77 2628.83 KES      17.51      17.83 ZAR    200.67    204. 45  The disputed plot is not in Syokimau farm but is sandwiched between the Airport and the farm. Previously that land belonged to th...