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Relief as High Court Declares Minimum Tax Unconstitutional

The high court has declared minimum tax provisions unconstitutional and its tax guidelines void. In its judgement, the High Court has issued an order restraining the Kenya Revenue Authority(KRA) from implementing, further implementing, administering, applying or enforcing section 12D of the Income Tax Act, chapter 470 of the laws of Kenya as amended by the Tax Laws ( Amendment) No.2 Act, 2020 by collecting or demanding payment of the minimum tax. The move has offered...

China Accounts for 70% of Kenya’s Debt Says CBK

China has been named the leading bilateral lender to Kenya by the Central Bank of Kenya (CBK) accounting for 67% of its external debt followed by Japan(14%), France(7%) with other countries accounting for 11%. A new analysis of the composition of Kenya’s bilateral lenders by the Central Bank of Kenya (CBK) shows that China controlled less than one per cent of Kenya’s external debt portfolio in 2006. By June 2011, however, the Asian country was...

Pain as Fuel Prices Shoot up in the Latest EPRA Review

The Energy and Petroleum Regulatory Authority (EPRA) has raised the prices of super petrol by Kes.7.58 per litre to past Kes.130 per litre, an all-time high cost for the commodity in its latest price review. This is while the cost of diesel and kerosene shoots by Kes.7.94 and Kes.12.97 per litre to Kes115.60, and Kes110.82 per litre respectively in Nairobi. A litre of petrol in Kenya’s Capital Nairobi will now cost Kes.134.72 rising from Kes.127.14....

Kenya’s Forex Reserves Dip by 11.3 Billion as CBK Increases Dollar Liquidity

Forex exchange reserves dipped by over Kes. 11.3 billion after the Central Bank of Kenya (CBK) released more dollars into the market to cushion the Kenyan shilling. The banking regulator has however not given reasons for the huge drop but says reserves remain adequate and are within the statutory import cover of at least four months. According to the latest central bank weekly bulletin, the foreign exchange reserves fell to Kes. 977.1 billion from Kes....

KBA Report shows Banks Contributed 27 % of Total Corporate Taxes in 2020

A report by the Kenya Bankers Association (KBA) showed that commercial banks contributed 27 % of all corporate taxes paid in Kenya in 2020 despite the adverse effects of the COVID-19 pandemic, which caused a 12 % overall decline in their contribution to the exchequer compared to the year 2017 to 2018. A new report compiled by audit firm PricewaterhouseCoopers (PwC) on behalf of the Kenya Bankers Association (KBA) attributes the reduction to lower tax...

KRA Records 29% Jump in Tax Collection in for July to Kes 121.8 Billion

The Kenya Revenue Authority (KRA) has seen its rebound in tax revenue collections continue into the new financial year booking tax revenues of Kes.121.8 billion at the end of July,  a 28.9 per cent rise in returns for the revenue agency from a lower Kes .94.5 billion collected last year according to new data from the National Treasury released on Friday. “We are of the view that the tax measures introduced at the front end...

Fuel Prices to Remain Unchanged as EPRA Retains Prices in Latest Review

The Energy and Petroleum regulator(EPRA) has held fuel prices constant in its latest review, the second time in a row since its last price increase set in July 2021. The prices are set to prevail between August 15th and September 15th 2021. Daniel Kiptoo the Energy and Petroleum Regulatory Authority (EPRA) Director-General in a statement said the prices will remain constant, despite the rise in the landing costs. A litre of Petrol in Nairobi will...

Relief as EPRA Maintains Fuel Prices in Latest Review

Relief for Kenyans after the government retained fuel prices at the same levels as last month in the July review. In new retail prices announced today, the Energy and Petroleum Regulatory Authority (EPRA) retained super petrol prices at Kes127.14 per litre, diesel at Kes107.66 and kerosene at Kes 97.85 in Nairobi. This is despite the increase in the cost of importing a cubic-metre of petrol by 4.8 per cent to $520.04 last month from $496.1...

EU to Engage Kenya Directly on Trade Talks after EAC Fails to Endorse Deal

The European Union is set to engage Kenya directly in signing the Economic Partnership Agreement (EPA) following failure by other East African Community members to endorse the deal. Valdis Dombrovskis the union executive vice-president and commissioner for trade said the bloc will engage kenya after the EAC members allowed individual countries that are ready to enter into an agreement with the EU to proceed. “The EU will now engage with Kenya, which has already signed...

Income Tax Collected Falls by 1.3% in First 11 Months of FY20/21

Data published on the Kenyan Gazzette shows Income Tax in Kenya for the first 11 months of the fiscal year 2020/2021 fell by 1.3% to Kes 1.313 trillion compared to Kes 1.329 trillion collected in the same period last year In May, the National Treasury announced the tax revenue dropped to Kes 123 billion from Kes153 billion that was collected in April, the first month on month decline this year despite the government’s effort to...

Finance Committee Rejects Tax on Bread and Motorcycles in Kes 3 Trillion Budget

The National Assembly Finance and National Planning Committee have rejected the imposition of tax on bread and the variation of excise duty on imported motorcycles. This comes as a relief to most citizens due to the hard economic constraints facing the country. The proposal by National Treasury earlier sought to impose higher taxes on bread, motorcycles, betting, imported jewellery, and nicotine pouches to fund President Uhuru Kenyatta’s Kes 3 trillion budget. However, The planning committee...

Kenya Picks Citi, JP Morgan As Lead Underwriters for its Dollar Sovereign Bond

Kenya has appointed Citi and JP Morgan as joint book-runners for a dollar-denominated sovereign bond issue, and I&M Bank and NCBA Group as co-managers. Meetings with investors have already started over the bond, which will have a 12 to 15-year tenor. What the Dollar Sovereign bond means for Kenya The Ministry first announced plans for the $1 billion Eurobond in March 2021 and a separate 1-billion-euro bond. According to the National Treasury and Planning 2021...

Super Petrol Prices up by 77 Cents, Diesel and Kerosene Constant in June Review

The maximum pump prices for a litre of Super Petrol has increased by Kes 0.77 per litre while that of a litre of Diesel and Kerosene remains unchanged. According to the latest fuel prices released by the Energy and Petroleum Regulatory Authority(EPRA), the pain at the pump has been kept minimal despite a steady increase in the price of imported Murban crude, which lifted in May 2021 was posted at $ 67.71 per barrel, increasing...

Kenya Receives $750 Million Loan From World Bank

Kenya has received a $750 million loan from the World Bank to support its budget and help the East African economy recover from the effects of the COVID-19 pandemic. The World Bank approved this development policy financing to support policy reforms that will strengthen transparency and accountability in public procurement and promote efficient public investment spending. The $750 million disbursements are part of the World Bank’s Development Policy Operations (DPO), which lends cash for budget...

Kenya’s Economy Set to Rebound 6.6% in 2021.

The Kenyan economy is expected to rebound to 6.6 percent in 2021 reinforced by the prevailing stable macroeconomic environment and the ongoing implementation of the strategic priorities of the Government under the “Big Four” Agenda and Economic Recovery Strategy. Speaking in Parliament during the 2021/2022 budget reading, Kenya’s Treasury Cabinet Secretary Ukur Yatani said,total expenditures in the FY 2021/22 budget are projected at Kes 3.03 trillion equivalent to 24.5 percent of GDP from Kes 2.89 trillion...

Gainers & Losers in Ukur Yatani’s Kes 3.6 Trillion Budget

The National Treasury Cabinet Secretary Ukur Yatani while presenting FY2021/2022 budget before Parliament acknowledged prevailing revenue collection challenges owing to the effects of COVID-19. In the coming financial year which begins on 1st July 2021,CS Yatani said the Kenya Revenue Authority (KRA) is expected to collect ordinary revenues amounting to Kes. 1.78 trillion in order to fund the Kes. 3.03 trillion budget. National Treasury expects to generate additional Kes. 8.7 billion through custom measures agreed...

Kenya’s Parliament Set to Review Debt Ceiling Upwards.

Kenya’s Budget and Appropriations Committee of the National Assembly is proposing an upward review of the debt ceiling to enable implementation of this year’s budget. Committee Chair Kanini Kega says by end of March this year the stock of public debt was Kes7.34 trillion shillings which is 82 percent of the current 9 trillion shillings Kenya’s debt ceiling, set by the lawmakers. This emerged during debate on the budget estimates on Wednesday in the National...

Kenya’s Inflation Rate Edges Higher to 5.87% in May Backed by Higher Fuel and Food Prices

The cost of living increased slightly in May to highs seen in March on account of the increase in fuel costs which consecutively increased food and transport cost The overall rate of inflation in May was 5.87 per cent, compared to the 5.76 per cent recorded in April. A monthly report from the Kenya National Bureau of Statistics (KNBS) attributes the modest increase to higher costs of transport, food and non-alcoholic beverages. The cost of food and...

Kenya Set to Receive $750 Million Loan from the World Bank

Kenya expects to receive a loan of $750 million from the World Bank in the next two weeks to support its budget, the country’s central bank governor Patrick Njoroge said on Thursday. The funds are expected to fill a huge budget deficit as the Kenya budget cycle ends in June 2021. “There is a loan, the so-called DPO, of an amount of $750 million, which we expect over the next couple of weeks,”  Patrick Njoroge...

CBK to Supervise Digital Lenders Under New Bill

Digital mobile lenders will have six months to be licensed by the Central Bank of Kenya (CBK) if Parliament adopts a proposed law to see the regulator control their products, management, and sharing of borrowers’ information. The Bill tabled in Parliament by Gladys Wanga in her capacity as chair of the Committee on Finance, and National Planning said, “any person who before coming into force of this was in the business of offering credit facilities...

KeNHA Signs Kes 17.9 Billion LAPSSET Deal with Chinese Firm

The Kenya National Highway Authority (KeNHA) and China Communications Construction Company Monday signed a Kes 17.9 billion  (about 166 million U.S. dollars) deal to construct a 453-km road that is part of the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor project. In a statement, Peter Mundinia, the director-general of KeNHA, said the tender award agreement is for stage construction of the LAPSSET development project and spur roads in the country’s southeast region. The road construction comprises...

EPRA fails to Adjust Upwards the April-May Fuel Pump Prices

The Energy and Petroleum Regulatory Authority(EPRA) has retained Diesel, Petrol and Kerosene’s price between 15th April and May 14th, 2021. This is despite an increase in the landing cost of crude oil in March 2021. The constant fuel prices can be viewed against a strengthening Kenya Shilling against the US dollar, meaning the country uses fewer Shillings to import crude oil. The Kenya Shilling has been strengthening against the US dollar in recent months, from...

Kenya Business Activity Slows Sharply in March

Business activity in Kenya shrank sharply in March as the hike in fuel prices and COVID-19 restrictions hit key sectors of the economy, such as the hospitality and entertainment industry. The Stanbic Bank Kenya Purchasing Managers Index (PMI), which measures the private sector’s health, fell to a nine-month low of 50.6 in March, from 50.9 in February. Most businesses reported minimal growth in output and a slow down in new orders during the month, resulting...

IMF Advises Treasury to Impose 16% VAT on Fuel in the Kes 225 Billion Loan Programme.

The IMF has advised the Kenyan Treasury to impose a 16 per cent VAT on fuels from the current 8 per cent when crude oil prices fall. The IMF’s push for the fuel tax was revealed in an advisory to the government after the fund’s board approved a new loan for Kenya valued at $2.34 billion to help the country continue responding to the Covid-19 pandemic and address its debt vulnerabilities. Earlier last month, Super...

KRA Surpasses Monthly Target as Tax Collection hits Kes 144.6 Billion

The latest data from the Kenya Revenue Authority (KRA)  has shown that revenue collection increased to Kes 144.6 Billion for the month or March, a Kes.6.6 billion from a collection of Kes127.7 billion in February. This translates to a performance rate of 105.1 percent surpassing Kenya Revenue Authority’s February revenue collection target. This is the highest revenue performance rate since the beginning of the Financial Year 2020/2021. “Despite the slow economic progression, KRA registered 11.2%...

IMF Approves $2.34 Billion Loan Facility for Kenya

The Executive Board of the International Monetary Fund (IMF) approved 38-month arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for Kenya in an amount equivalent to SDR 1.655 billion (305 percent of quota or about US$2.34 billion) to support the next phase of the authorities’ COVID-19 response and address the urgent need to reduce debt vulnerabilities. Approval of the ECF/EFF enables immediate disbursement of about US$307.5 million, usable for budget...

Kenya Seeks Debt Service Suspension to June 2022

Kenya has sought the Debt Service Suspension Initiative (DSSI) extension to June 2022, a one-year extension from the earlier granted June 30, 2021, debt service suspension secured in January. Besides the relief under the DSSI, the country is also pursuing new limits access to IMF funds by reallocating existing special drawing rights and allocating new special drawing rights. Such will allow faster access of disbursements from the IMF Rapid Credit facility and the Rapid Finance Instrument,...

CBK Extends Loan Term Repayment by 3 Months

The Central Bank of Kenya (CBK) on Tuesday announced the extension of the loan repayment measures put in place for bank customers whose loans were performing before 2nd March 2020, which had lapsed earlier in the month for another three months to 3rd June 2021. This means, lenders have until then to regularize their loan repayments following the expiry of a one-year window through which the lenders had extended and restructured the loan repayments for...

Electricity Bills Expected to Rise as a Result of Hike in Fuel prices

Kenyan households are set for tough times as electricity bills are expected to rise in the March 2021 review. Electricity consumers are expected to pay kes 1.20 more per unit or an extra kes1 billion to Kenya Power this month on increased compensation to expensive diesel plants, the highest in nearly two years. This comes after Super Petrol prices rose by Kes 7.63 to retail at Kes 122.81 per litre following the latest Energy and...

Petrol Prices Hit Kes 122.8 Following a Leap in March Pump Prices

Super Petrol prices rose by Kes 7.63 to retail at Kes 122.81 per litre following the latest Energy and Petroleum Regulatory Authority (EPRA) review. The hike in pump prices also affected Diesel and Kerosene, whose prices leapt by Kes 5.75 and Kes 5.41 per litre respectively. In Nairobi, a litre of Diesel will retail at Kes 107.66 while that of Kerosene will retail at Kes 97.85 for the period between March 15 and April 14...

S&P Downgrades Kenya’s Sovereign Rating to ‘B’

Standard and Poor’s (S&P)  has downgraded Kenya’s sovereign rating to ‘B’ from ‘B+’ despite a deal with the International Monetary Fund and backed by World Bank support. “Our ratings on Kenya are constrained by the country’s low GDP per capita, high fiscal deficits and debt stocks, and its history of ethnic tensions,” S&P said in a statement. Standard and Poor’s said ratings in the country are supported by its diversified economic base, including its large...

Kenya’s Public Debt to hit Kes 7.8 Trillion in 2020/21, says PBO

Kenya’s Public Debt Stock is forecasted to reach Kes 7.8 trillion at the end of the 2020/21 fiscal year and will account for approximately 69% of Gross Domestic Product(GDP) and 87% of the Kes 9 trillion total debt ceiling. According to a Parliamentary Budget Office(PBO) report, these public debt levels is projected to double by June 2030, accounting for over 100% of GDP. Public Debt was Kes 7.12 trillion in September 2020 Available figures indicate...

IMF Raises Kenya’s Economic Growth Forecast for 2021 to 7.6%

The International Monetary Fund has raised Kenya’s 2021 economic growth forecast from 4.7% to 7.6% after reaching a financing agreement with Kenyan authorities. On February 16, 2021, the IMF revealed that it had reached a 3-year $2.4 billion financing agreement with Kenya to support the country’s COVID-19 response and reduce the level of debt relative to the GDP. The IMF program is based on revenue-led fiscal consolidation and strong economic growth. Kenya expects a steady...

Kenya to Raise Debt Ceiling Above Kes 9 trillion Mark

Kenya is expected to raise its debt ceiling of kes 9 trillion to accommodate growing expenditure needs amid underperforming tax collections. The National Treasury said the discussion was in the background as the public debt stock was fast approaching Kes 9 trillion’s statutory ceiling set out in the Public Finance Management Act, 2012. “As a result, the implementation of this strategy may require the revision of the debt ceiling through the amendment of the PFM...

Kenya Seeks to Raise Kes 248.1 Billion in Sovereign Debt

Kenya’s treasury aims to raise Kes 123.8 billion from sovereign bonds sold to foreigners in the next four months and an additional Kes 124.3 billion during the fiscal year starting in July to help finance the budget. In a medium-term debt management document submitted to the National Assembly, the Treasury said Commercial foreign loans will be limited to financing projects with high returns. It is tilting away from high-interest domestic borrowing to maximize concessional and...

IMF & Kenya Reach Staff Level Agreement on Kes 262.7 billion Loan

The International Monetary Fund (IMF) on Monday said it will soon disburse Kes 262.69 billion (USD 2.4 billion) to the Government of Kenya after it’s staff virtual visit and the Kenya treasury reached an agreement on a 38-month financial package. The IMF said that its team and the Kenyan officials reached an agreement on a 38-month program to help the next phase of the country’s COVID-19 response and a strong multi-year effort to stabilize and...

Super Petrol Prices Rise by Kes8.19 in February EPRA Review

The prices for Super Petrol, Diesel, and Kerosene have increased by Kes 8.19 per litre, Kes 5.51 per litre, and Kes 5.32 per litre, respectively. This means that between 15th February and 14th March 2021, Super Petrol will retail at Kes115.18, Diesel will retail at Kes101.91 while Kerosene will retail at Kes 92.44 in Nairobi. This takes into account the weighted average cost of imported refined petroleum products. “The prices are inclusive of the 8%...

Mizizi Africa Projects Kenya’s Real Estate to Grow in 2021

Kenya’s real estate market is projected to record positive growth this year with younger millennials and Gen-Z expected to play a key role in growing uptake of affordable housing units. Mizizi Africa Homes Chief Executive Officer, George Mburu says access to finances, among bigger barriers to entry for most first time home buyers in this generation have been eased significantly to favor uptake of affordable units. “We exited 2020 with a number of dynamics like...

Central Bank of Kenya Retains Benchmark Lending Rate at 7 Percent

The Central Bank of Kenya (CBK) Monetary Policy Committee (MPC) on Wednesday kept the benchmark rate unchanged at 7% in its sixth consecutive sitting amid concerns of slight rise in the cost of basic food items and services in coming months as a result of tax measures introduced on 1st January 2021. While signaling rebound in economic growth this year after a 0.6% contraction last year due to COVID-19, MPC says the rate retention stems...

Kenya’s Economy is Projected to grow by 6.4% in 2021

Kenya’s economy is projected to recover and grow by 6.4% in 2021. In a draft of the 2021 budget policy Statement by the treasury, they noted that the economy had been adversely affected by the worldwide pandemic Covid-19, resulting in the economy contracting. In 2020, the Kenyan economy was adversely affected by the outbreak of Covid-19 Pandemic and the swift containment measures, which have not only disrupted the normal lives and livelihoods but also to a greater...

October Diaspora Remittance Grow 17.3 Per Cent to Kes. 28.4 Billion

Kenyans abroad sent home a record Kes. 28.4 billion ($263.1 million) in October this year, a 17.3% increase compared to the same period last year when inflows for the month stood at Kes. 22.4 billion ($224.3 million) Data from the Central Bank of Kenya further indicate that cumulative inflows in 12 months ending October 2020 totaled Kes 324.6 billion outpacing last year’s performance when remittances amounted to Kes. 292.7 billion. Remittance inflows have continued to...

Tea Sector Posts Decline in Exports for First Eight Months

Tea exports fell by 14,000 tons in the first eight months of this year due to a drop in demand from traditional markets. Data from the Tea Directorate shows export volumes for Kenyan tea for the period between January to August dropped from 337,000 tons in 2019 to 323,000 tons in 2020. The global tea market size was valued at 55 billion dollars in 2019, and is projected to reach 69 billion dollars in seven...

Fitch Says Kenya’s COVID-19 Measures Will Lead to Faster Increase in Debt

Fitch expects Kenya's general government debt to continue rising through FY22 to reach about 70% of GDP. This is higher than our pre-coronavirus forecasts, which saw debt peaking at 65% of GDP. As domestic Treasury auctions are typically undersold, much of the increased borrowing in FY21 and FY22 will have to come from external sources, leading to an increase in Kenya's external debt, which is already high compared with 'B' rated peers.

Kenya to borrow 100 Billion from the World Bank

Kenya is in advanced talks with the World Bank for “a fairly priced” loan of up to 100 billion shillings ($991.57 million), nearly half of its required external funding this fiscal year, a senior Treasury official said on Friday. This is in line with the treasury’s plan to cut debt from overseas capital markets, after a borrowing spree in recent years, including Euro-bond offerings, a package of Chinese loans and syndicated commercial loans. The World...

Fitch Affirms Kenya at ‘B+’ Outlook Stable

The ‘B+’ rating reflects Kenya’s high public and external debt levels and the uncertain pace of fiscal adjustment balanced against a strong and stable growth outlook. Kenya’s public finances are a rating weakness. A combination of structural and administrative issues has caused revenue/GDP to stagnate in recent years. General government revenue has fallen to an estimated 17.5% in the fiscal year ending June 2019 from a recent high of 19% of GDP in FY15. Some...

Central Bank of Kenya Drops rate to 8.50%

Kenya’s Central Bank has today announced the reduction of the benchmark lending rate (CBR) to 8.5% from the previous 9.0% for the first time since July 2018. The bank took note that inflation expectations remained well anchored within the target range, and assessed that the economy was operating below its potential level. Furthermore, the Committee noted the ongoing tightening of fiscal policy and concluded there was room for accommodative monetary policy to support economic activity....

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