8th October 2021: Trade and Financial Services Round Up

October 8, 2021 - Reading Time: 6 minutes - By Amrit Labhuram


Controller of Budget Releases Implementation Report for June 2020 – June 2021 (Source: Office of the Controller of Budget)

As required by the Constitution of Kenya and the Controller of Budget Act, the Office of the Controller of Budget made public the budget implementation report for the period July 2020 to June 2021. 

According to the report, the following are the key highlights we are picking:

  1. Total receipts into the consolidated fund amounted to KShs. 2.82 trillion against a revised target of KShs. 2.95 trillion;
  2. Total exchequer issues amounted to KShs. 2.80 trillion; 
  3. Total expenditure amounted to KShs. 2.59 trillion;
  4. Development expenditure comprised KShs. 561 billion;
  5. Recurrent expenditure comprised KShs. 1.15 trillion ;
  6. Consolidated Fund Services (Public debt, pension etc) comprised KShs. 878.8 billion of which 80% or 765.9 billion was on public debt repayment; 
  7. The Office of the Controller of Budget calls for deferment of new projects to curb accumulation of pending bills;
  8. The Annual Budget Implementation report is not consistent with the Program Based Budget. The reporting does not include the non-financials as required by the PFM Act;
  9. The reporting of state corporations budget implementation status is commendable. However, more information is required for transparency and accountability; and
  10. On sector related expenditure:
    1. The State Department for Early Learning and Basic Education spent 73% and 93% respectively on development and recurrent funding; 
    2. The state department for vocational and technical training spent 94% and 71% respectively on development and recurrent funding; and
    3. The overall Agriculture, Rural and Urban Development sector spent 90% of the revised gross estimates.
Cytonn Administrator Appointed

On 07th October, 2021, the High Court at Nairobi Commercial and Tax Division ordered the appointment of Kereto Marima as Administrator of the property of Cytonn High Yields Solutions LLP in accordance with the provisions of the Insolvency Act. 

Auditor-General probes KShs. 7.7trn public debt (Source: Business Daily)

The Auditor-General has launched a comprehensive audit of Kenya’s public debt to determine the accuracy of the Treasury’s records of KShs. 7.7 trillion loans and whether they are being serviced in time.

Nancy Gathungu, the Auditor-General, says her office has finalised the June 2020 audit and started conducting the next round of yearly audits this month.

She told the Senate Finance Committee her office was currently conducting a comprehensive performance audit specifically on public debt servicing activities.

October bond attracts few takers on tight liquidity (Source: Business Daily)

The Treasury has recorded an under subscription in its monthly bond sale for the first time since March as liquidity in the money market tightened on the back of a Central Bank of Kenya (CBK) mop up.

Investors bid a total of KShs. 55.47 billion on the three-tranche October bond that sought Sh. 60 billion, bucking the recent trend of heavy oversubscriptions on the primary bond sales.

The Central Bank of Kenya took up KShs. 52.05 billion, leaving open the possibility of a tap sale in the coming days to close the gap on the targeted amount.

Analysts at AIB-AXYS Africa had projected the bond to be undersubscribed, citing tight liquidity in the market that has seen the interbank rate climb to 6.53 percent from 3.33 percent a month ago.

Forex reserves down Sh21bn in September (Source: Business Daily)

Kenya’s official forex reserves have fallen by KShs. 21 billion ($192 million) from the September 9 peak of KShs.1.064 trillion ($9.629 billion), reflecting possible intervention by the regulator to ward off shilling volatility and external payments.

The Central Bank of Kenya (CBK) said in a bulletin that the reserves stood at $9.437 billion (Sh1.043 trillion) as of September 30, enough to cover 5.77 months’ worth of imports.

The reserves had been boosted during the month by an allocation of $750 million (Sh. 83 billion) from the International Monetary Fund (IMF), this being Kenya’s share of the Special Drawing Rights allocations the body made to all members in the balance of payment support.


Government eyes jobs for Ugandans as it tables oil pipeline bill (Source: The Independent)

The government has tabled before Parliament a draft law through which Ugandans will be given priority for use of labour and other resources, during the construction of the East African Crude Oil Pipeline (EACOP).

The proposed law tabled by the Minister of State for Energy and Mineral Development, Opolot Okasai, seeks to fully implement the obligations of Uganda under the Intergovernmental Agreement signed between Uganda and Tanzania and the Host Government Agreement signed between Uganda and the East African Crude Oil Pipeline Company Ltd.

MTN listing will double size of USE – regulator (Source: Daily Monitor)

Capital Markets Authority (CMA) has said MTN’s listing is expected to double the size of the Uganda Securities Exchange (USE).

The USE, according to daily trading reports, currently has a domestic market capitalization of about UGShs. 4.3 trillion.

Therefore, MTN’s listing, Mr Keith Kalyegira, the CMA chief executive officer, said will offer USE a marked improvement, which might push capitalisation to above Shs8 trillion.

MTN to open $1.2b Uganda IPO to investors in East Africa (Source: The East African)

MTN Uganda will sell a fifth of its stake to Kenyan and other East African investors when it floats its initial public offer (IPO) on the Kampala bourse.

The telecom, a South African MTN Group subsidiary, said Tuesday that it had received regulatory approvals to list 20 percent of its shareholding.

The firm said Tuesday that it would disclose details of the offer in its prospectus to be released on October 11.

Uganda’s Capital Markets Authority (CMA) Chief Executive Keith Kalyegira said the IPO is expected to raise about $1.2 billion.


India bank lost appeal on TShs.600m loan payment default (Source: Daily News)

The Bank of India (Tanzania) Limited has lost the appeal challenging the refusal by the High Court’s Commercial Division to order her three clients to pay interests for defaulting to repay a loan of over TShs. 600 million.

This followed the decision of the Court of Appeal to strike out the appeal under which the Bank, the appellant, had lodged against the three clients, Y.P. Road Haulage Limited, Lalit Ratilal Kanabar and Kiran Lalit Kanabar, the respondents, upon failure to serve them a copy of the notice of appeal in time.

Tanzania’s President Samia orders tax reduction on fuel (Source: The East African)

Tanzania’s President Samia Suluhu Hassan on Tuesday ordered reduction of taxes imposed on fuel totalling TShs 102 billion ($44.2 million) annually.

This will effectively reduce costs passed on to consumers.

The Head of State gave the directive after receiving an implementation report from Energy Minister January Makamba, and holding a meeting in Dodoma with the Attorney General and Ministers of Energy, Works and Transport, Industry and Trade, Local government and Regional Administration.


Safaricom shortlists Huawei, Nokia for infrastructure development (Source: Capital Newspaper)

Reliable sources told Capital that the company that was formed by African, European and Asian companies has shortlisted Nokia and Huawei to set up its infrastructure in the country.

Safaricom Ethiopia, which was formed by the amalgamation of Safaricom, Sumitomo Corporation, CDC Group and Vodacom, has secured operational license from the government early June officially to do business in Ethiopia as a second telecom company after the state owned Ethio Telecom.

To get the license it has paid USD 850 million to the government and promised to invest up to USD 8.5 billion in the coming decade including the license fee, which is a huge sum for the FDI history in the country to flow from a single business.

According to sources, the company has shortlisted Nokia Corporation a Finnish multinational telecommunication, information technology, and consumer electronics company; and Huawei Technologies of Chinese multinational technology corporation for the infrastructure development that it aspires to realize in the coming period.

One million jobs at stake if Ethiopia losses AGOA eligibility, business execs warn (Source: Capital Newspaper)

The American Chamber of Commerce has expressed its concern on the latest move of the US government on Ethiopia that threatens to impose economic sanctions and may suspend the country for African Growth and Opportunity Act (AGOA) pact.

Over a million employees will permanently lose their jobs, if the country becomes ineligible for the AGOA pact.

The business executives, at a press briefing that was held on Wednesday, September 29, 2021, at Radisson BLU Hotel, requested all relevant stakeholders to positively engage in a sustainable trade relationship between Ethiopia and US. The executives also urged the importance of US-ET trade connection and the critical need to renew Ethiopia’s AGOA eligibility in 2022 and beyond.


Kigali sets aside 6,000 hectares of subsidised land to fix housing shortage (Source: New Times)

Rwanda Housing Authority (RHA) has earmarked 6,100 hectares where the private sector will construct affordable houses as part of the 30-year plan to fix Kigali’s shortage of affordable homes.

The demand for affordable houses in Kigali is rising faster than its supply with various studies showing that the city needs at least 20,700 housing units every year or 310,000 units by 2032.

Rwanda, Mozambique ink trade, investment pact (Source: New Times)

Rwanda and Mozambique have signed an agreement that will boost their economic development through trade and investment activities.

The two countries through their respective institutions in charge of development, Rwanda Development Board (RDB) and APIEX of Mozambique signed a Memorandum of Understanding (MoU) on October 6.


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