Kenya’s reliance on the international market for most of its goods continued in the last 10 months of 2018, with the country shipping in nearly a trillion-shillings worth of products.
During the period, Sh997.1 billion goods were imported compared to Sh291.8 billion exports.
This was a rise from Sh989.8 billion in imports and Sh281.4 billion in exports during the same period in 2017.
This means the trade deficit rose by about percent from Sh708.4 billion in 2017 to Sh715.7 billion.
According to the just released Leading economic Indicators (LEI, October 2018), exports grew by five percent or Sh14.2 billion to stand at Sh295.6 billion compared to 2017’s Sh281.4 billion.
China remained Kenya’s largest source of imports for machinery and transport equipment, accounting for Sh291.8 billion followed by India at Sh161.2 billion, Saudi Arabia (Sh138.4 billion) and UAE (Sh126 billion).
Japan sold to Kenya goods worth Sh78 billion, while South Africa brought in Sh54 billion worth of goods, US (46.3 billion), Germany (39.6 billion), UK (Sh26 billion) and the Netherlands, Sh16.6 billion.
The LEI October report showed that Pakistan remained Kenya’s biggest trading partner, buying fresh produce mainly tea, coffee and flowers worth Sh50.2 billion followed by Uganda (Sh42.2 billion), the US (Sh39.5 billion), the Netherlands (Sh38.9 billion) and United Kingdom at Sh37 billion.
Tanzania bought goods worth Sh22.5 billion, UAE (Sh19.5 billion), Egypt (Sh16.6 billion), Germany (Sh9.4 billion) while France settled for Sh6.7 billion.
While China remained a major infrastructural construction contractor, its imports dropped by 17.2 percent from last 2017’s first 10 months where imports, mainly machinery and transport equipment accounted for Sh341.9 billion.
Kenya has since initiated talks with Beijing for preferential trade terms to increase its negligible exports to the most populous country in the world by encouraging capital industrial investments by Chinese companies for China-bound Kenyan exports.
India brought in goods mainly drugs, machinery and electrical equipment worth 161.2 billion, being a 12.8 percent growth from Sh143 billion reported during a similar period in 2017.
A similar scenario abounds for Japan that increased its exports to Kenya, mainly motor vehicles, capital machinery and electronics by 15 percent to stand at Sh78 billion, up from Sh67.8 billion reported in 2017’s first 10 months.
US trade sanctions against Iran appear to have benefited Saudi Arabia, whose oil exports to Kenya grew by 46.5 percent from Sh94.5 billion in 2017’s first 10 months to last year’s similar period under review that recorded Sh138.4 billion.
Last November, President Uhuru Kenyatta led a trade delegation to the inaugural China International Import Expo, where he invited Chinese companies to form joint ventures with Kenyan enterprises to create more manufacturing bases.
“China now ranks as the number one trading partner with Kenya, accounting for 17.2 percent of Kenya’s total trade with the world.
“I encourage Chinese firms to establish joint ventures in Kenya that will increase the content of locally produced goods and services in their projects and industries in China,” he said in Shanghai.
During the visit, Kenya’s Ministry of Agriculture and China’s Customs Department signed several pacts to facilitate Kenyan exports of avocados, mangoes, peas, beans, green grams, flowers, vegetables, herbs, meat, hides and skins, bixa, nuts, gum arabica, myrrh, tea, coffee and honey to China.
Currently, Kenya exports only black tea, coffee and leather to China and mainly in raw form that attracts low returns while exporting jobs to China.
This is contrast to China’s fully processed ready-to-use goods that rake in billions for the Asian country’s exchequer and businesses.
Recently, China added fresh fish exports atop its multibillion-shilling exports to Kenya, amid a furore over alleged unwholesomeness of some of its fish.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.