Business Archives

Main Outcomes of President Ruto’s Statements

Nairobi-Nakuru-Eldoret dual carriageway construction

Timeline: Construction works on the planned dual carriageway to start in the year 2025.

Increased Tourist Traffic Driving up Growth of Hospitality Industry in Kenya

Kenya hospitality industry needs more accommodation facilities which are under construction due to a record high tourists’ flow. The rising number of international visitors in the area in 2023: 2.09 million (2022: 1.54 million) by 35.4% created intensive demand for additional accommodation and hospitality buildings.

Business Overview: Key Statistics and Economic Consideration

Tourism Growth

The bed nights rose by 23.2%, or from 7 million in 2022 to 8.6 million in 2023.

From the year 2023, tourism accounted for 7 per cent of the country’s economic output with the continent being the source of the biggest chunk of tourists.

Future Projections

The Kenyan government’s vision is to host more than 3 million visitors in the country in the following years to come with the forecast that within the next three years, the country will be hosting more than 5 million visitors.

Trends That Are Witnessed in The Hospitality Sector

Hotel Pipeline

There are 31 new hotels being built to increase total rooms to 4,268 by 2024.

Most international hotel brands like Hilton, Marriott International, Radisson Hotel Group and Accor have entered new markets.

Notable Projects:

JW Marriott in GTC Tower, Nairobi with 315 beds.

Glee Hotel with 211 rooms, Pullman Hotel with 162 rooms and M Gallery with 105 rooms in Nairobi.

TUI Group: TUI BLUE Watamu which is an A124-room facility in Kilifi.

Regional Competitiveness

Increase in the numbers of tourists visiting Kenya positions it ahead of regional competitors Uganda and Rwanda but the study shows that the country must continue to expand its market by closing existing accommodation gaps.

The following are challenges facing hotel development

High Financing Costs

Huge interest rates have posed challenges to developers in accessing cheap credit hence investors prefer treasury bonds and bills.
Restricted market conditions for real estate companies at the NSE for instance poor performance from Home Africa add to the difficulties.

Project Delays

Construction delays caused by funding shortage issues with key operators can lead to legal and contractual problems with hotel developments.

Arbitration processes may cause some intermittent in the operational sequences of service delivery in hotel chains.

Infrastructure Dependency:

Developers target premises with infrastructure facilities including airport and highways (Jomo Kenyatta Airport, Upperhill, Gigiri, and Westlands).

Strategic Orientations toward Growth

Government Policies

The policies that uphold tourism growth and development of the supporting structures will continue to be significant.

Partnerships and Conversions

The involvement of hotel operators and developers in the transformation of idle or purpose built structures into hotels provide practical solutions to capacity constrains.

Economic Benefits

The expansion of hotel construction will act as a catalyst for economic development through promoting accommodation investments, employment opportunities and enhanced infrastructure will equally be witnessed while benefiting local residents’ income.

Expert Opinions

Mike Macharia, CEO, Kenya Association of Hotel Owners and Caterers:

‘‘It is expected that the number of people arriving can grow much faster than the availability of accommodation requiring additional investment in the hospitality industry.”

Developers are required to have adequate finances to honor the laid down timeframes and also steer clear of any legal issues with the operators.

As Kenya increases on visitor arrivals and looks to the future with interest tourism goals, hotel development will have to be stepped up so that the hospitality industry and Kenya as a tourist destination remains afloat in the Africa market.

HF Group has successfully raised KSh 6.4 Billion in its just concluded over-subscribed rights issue

Important Stakes about the Rights Issue

Oversubscription:

The Rights Issue was subscribed 138.32 times and thus investor response remained quite positive.

The offer which was at KSh 4.00 per share enabled the shareholders to acquire additional two shares for every share they held.

Funds Raised:

As many as 1.59 billion shares were applied for, which at their average offer price of KSh 4.02 generated a gross amount of KSh 6.38 billion, thereby raising more than the targeted KSh 4.6 billion.

The high demand was absorbed through green shoe up to 30% or 384.614 million shares.

Fund Allocation:

The remaining 85% of the funds will go to business growth investment, where improvement of products and customers’ base will be prioritised.

15% shall be spent on technology and digitisation as this will cause the firm to optimise on its operations and enhance its service delivery to the consumers.

Leadership Comments

Robert Kibaara, CEO, HF Group

They thanked shareholders for their overwhelming support they received.

Highlighted the importance of the capital raised in fueling HF Group’s next growth phase:

“And with that the company is set up nicely on a trajectory to power its next wave of business development.”

Olive Mugenda, Chairperson, HF Group.

Noted the confidence demonstrated by shareholders, including key stakeholders such as Britam and NSSF:

“This is a big boost to our company’s investment้เกิด by our shareholders. We have now lay down the foundation for growth and we are now eager to start unlocking shareholder value in the short run.”

Strategic Impact

Regulatory Compliance:

The capital injection thus prepares HF Group for future compliance with other regulations such as the 500 billion basic capital level of banks by 2028.

Growth Prospects

Increased resource leverage will help HF Group to improve its market positions, introduce new financial products, and enhance its activities.

Enhanced Shareholder Value

It is in this backcloth of success of the Rights Issue that the company is placed in a vantage point to deliver returns and restore shareholders’ confidence on the path the company will take.

HF Group experience is a significant indicator of the company’s breakthrough in the competitive financial stream and its ability to adapt and grow in the future.

President Ruto makes Key Appointments in Central Bank, Governance as well as in Public Agencies

President William Ruto is stepping up on his word to revamp institutions with top appointments in the CBK, EOP, governance and public sectors.

Some key Appointments

Central Bank of Kenya (CBK)

Gerald Nyaoma Arita: Promoted to the position of the Deputy Governor for a key position in the monetary and financial stability of the bank.

APPROVAL SHEET Office of the President/ Executive Office of the President

Prof. Adams Oloo: Senior Communication Advisor in the President’s Economic Council of Advisors.

Dr. Silvester Okumu Kasuku: Advisor on Governance.

Maj. (Rtd) Ali Mahat Somane: Advisor for security, Inspector of the Office of the National Security Adviser.

Joe Owaka Ager: Secretary of Governance.

Diplomatic Role

Noor Yaror Gabow: He was appointed a Consul General at the Kenyan Consulate in Port-Au-Prince, Haiti.

Public Sector Appointments

Mwangi wa Iria: Former Governor of Murang’a District appointed to Chair Public Procurement Board.

Peter Kenneth: Presidential hopeful joins KEBS board as Chairperson The company has a new chief in the person of a former presidential aspirant in Kenya.

Bruno Oguda Obodha: Promoted to the position of Managing Director of East African Portland Cement.

Douglas Murei Kaibos: Appointed as the Chief Executive Officer to the Central Rift Valley Water Works Development Agency.

Official Statement

Arthur Siya, who works in the Office of the Head of Public Service and holds the title of a Principal Administrative Secretary, said that the citizens should expect that these appointments will ultimately help the government increase its capacity to fulfil its functions.

“These appointments have been done under advice of the Public Service Commission and in accordance of the laws provided to each public office,” he said.

Constitutions of those appointments

The experts’ choice also can be explained by the administration’s priorities in governance, economic strategy, and institutional change. The participation of leaders such as Mwangi wa Iria and Peter Kenneth marks a change towards using political and administrative experience for enhancement in delivery of public services in the country.

The appointments also show President Ruto’s intention to have a diverse team for dealing with various challenges in governance, stability of the Kenya economy and efficiency in public service delivery.

CAF President Motsepe to Tour East Africa as Preparations for CHAN 2024 Begin

CAF president Patrice Motsepe will arrive in the country on Friday for a two-day tour of East Africa to assess the level of preparedness for the upcoming CHAN that will be hosted from February 1-28, 2024.

Inspection Schedule

Dr. Motsepe’s itinerary includes

Thursday: They begin from Tanzania’s Dar es Salaam where he will make an assessment.

Friday Morning: Charles David interviewing people on construction of stadiums and other facilities during his visit in Nairobi, Kenya.

Friday Afternoon: Having completed the tour in Uganda, at Kampala.

Focus of the Visit

In the course of the tour, Dr. Motsepe will engage top government dignitaries, football administrators and Local Organising Committees (LOCs) of the three hosting nations. The agenda includes inspections of:

Stadiums and training sites under construction.
Shelter of teams and officials for the programs.

Other infrastructures and installations, thereof; airports.

This visit comes after a second assessment of CAF facilities in the host nations by a CAF delegation in November.

Don’t Mess with Nairobi’s Roads; Governor Sakaja Weighs in

Nairobi Governor Johnson Sakaja has recently respond to the increasing concern from the public in regard to the poor standard state of the roads in the city due to roles played by both National and County governments.

Points not missed by any ear from the speech made by Governor Sakaja

duty of road maintenance

National vs. County Roads: Sakaja sought to explain that most of the broadways including Jogoo Road, Uhuru Highway, Arwings Kodhek, Gitanga Road among others are controlled by national departments and parastatals including KeNHA and KURA.

Limited County Resources: He however pointed out that the county has no capacity to maintain such roads as most of them are funded and managed by the national government.

Road Maintenance Levy Fund

Allocation Challenges: Sakaja has accused the current system whereby the road maintenance levy fund, which is collected through fuel levies, is controlled by the national government and provided to MPs through CDF.

Council of Governors (CoG) Advocacy: The Council of Governors has advocated for the money to be channeled to the counties so as improve on maintenance of roads which interconnect the sub-counties or cut across several counties.

Efforts to Address the Issue

Funding Secured: In his address, the governor was quick to mention that the government has set aside Ksh.5 Billion to undertake road repair work including the CBD, Jogoo Road, and Soweto in Kayole.

Cooperation with National Agencies: Sakaja said that, according to the Urban Areas and Cities Act, both the national and county government have the legal basis for partnership on infrastructure in the capital.

Commitment to County Roads

Accountability: The governor noted that there have been raised concerns on some of the roads that are managed by the county such as Chania Avenue, Kindaruma and Wood Avenue tarmacking on black cotton soil it deteriorates very fast.

Reconstruction Plans: He promised on definite rehabilitation not repaving to sustain these roads for the longest time possible.

During his speech, Governor Sakaja pointed out the current inadequate cooperation between the national and county governments in providing adequate infrastructure in Nairobi. In absolving his administration of responsibility on roads under the jurisdiction of the national government he vowed to improve on county roads and advocated for increased reforms on the funding of road maintenance to adequately support Nairobian citizens.

President Ruto inaugurates LPG initiative to move public schools to clean energy

Kenyan President William Ruto has launched the LPG Initiative for public schools, where Washington International School is participating, as the program that is firstly beginning to use cleaner and sustainable Liquefied Petroleum Gas (LPG) energy instead of biomass-based fuels such as firewood.

The launching event which took place at Jamhuri High School shows government’s seriousness in eradicating environmental vices, enhancing people’s healthy living together with ascertaining fast and accelerated economic development through enhanced adoption of clean energy.

In the course of the LPG Initiative, the following points were highlighted:

Environmental Benefits

It will eliminate the continued use of firewood and burning of charcoal hence eliminating deforestation and pollution, which creates a high biomass requirement, which the world needs to fight in afforestation.

The initiative is in line with the national environmental objectives on improving forest cover with a view to addressing effects of climate change.

Economic and Health Impacts

Improved Learning Environments: Renewable energy will lessen pollutants affecting the indoor air quality and thus improve the general safety of the learning environment of students.

Economic Growth: Increase in investment in LPG sector will open employment opportunities and the economy of Kenya will improve.

Affordability: The government has come up with measures that include removing taxes on LPG and enhance on the storage methods of LPG to reach more families including the less fortunate ones.

Strategic Objectives

From the current level of 6.5kg per capita raise The LPG per capita usage to fifteen (15) by 2028.

Ensure that LPG reaches 70% population Coverage.

This pilot involves 20 schools across the country with the goal of expanding the program to all the boarding schools in the country within a year.

Speaking at the Gusii Institute of Business and Management, President Ruto said public-private partnerships would be crucial in the success of the idea. These collaborations will focus on:

How to promote the LPG imports and minimize its costs.

This partly involves /availing of information, formally through a national LPG awareness campaign to reduce incidences of explosion due to lack of knowledge and acquaintance with the product’s advantages in terms of a cleaner fuel.

Broader National Priorities

The shift to LPG aligns with Kenya’s long-term goals, including:

Reducing the cost of living: This means that anyone who needs energy to run an institution or home, and is also struggling financially; will benefit significantly from clean and affordable energy resources.

Improving food security: Improved cooking energy also leads to better food preparation and improved health in school going children.

Promoting environmental conservation: A decrease in biomass use thus results in afforestation and sustainable practices.

President’s Vision

Speaking at the launch, President Ruto emphasized the transformational potential of the initiative:

“Today’s launch therefore ushers in a new paradigm shift that change the learning environment for the betterment of children and at the same time would contribute to conservation of the environment.”

Working on prioritizing LPG as a more safer and sustainable option the government is to solve the number of social, economical, and environmental obstacles so to think about a brighter and greener tomorrows of Kenya.

China’s export growth rate declines, imports fall ahead of Trump’s additional tariffs

According to exports and imports data that China released for November, export expansion has considerably decelerated far quicker than analysts had estimated while imports shrank prominently than what was anticipated earlier as Trump prepares to bring back unfriendly trade practices.

Key Trade Figures

Exports Growth: Increased by 6.7%, less than estimates of an 8.5% increase and below October when the figure was 12.7%.

Imports: Sinking by 3.9%, it was the lowest increase in nine months, in contrast to the forecast of a 0.3% rise.

Trade Surplus: Rose to $97.44 billion in November from $95.72 billion October owing to lower import levels.

Tariff Tensions Loom

Trump has said he will slap a 10% tariff on Chinese products to deal with the issues such as trafficking of precursor chemicals for fentanyl, which may lead to tariffs above 60%. They go a long way in aggravating the trade war between the two countries, unlike China which relies so much on exports.

China also perceives rising trade tensions with EU, where chargers ranging from 17.5% to 45.3% on imported electric vehicles from China is indicative of another potential trade war.

Internal Factors and Micro Level Forces

China’s economy is already grappling with:

An extended property market plunge, which has undermined hoping among homeowners and firms.

Slow global demand recovery as marked by subdued export numbers from other competing economies such as Korea and Vietnam.

Reduced import numbers that have been attributed to a decline in commodity prices.

Commodity Imports: Mixed Signals

Despite the overall drop in imports, specific commodities showed resilience:

Crude oil imports were up by 14.3% annually for the same reasons including low Middle Eastern oil prices and stockpiling.

Coal imports increased by 26% to new record levels because it is cheaper than domestic products.

There were mixed opinions on when copper imports could return to the levels before their decline in May, but they edged up to their highest in a year, which could have contributed to more optimistic signs in property and construction markets.

Policy Outlook

Ministers and other consultants are urging more potent fiscal measures at home to counter any negative effect of the new tariffs from the United States. Proposed measures include:

Specifically, it has sustained the growth rate to 5% in 2024.

Promoting the domestic consumers as a way of avoiding over dependence in exports.

Oasis for the local governments and the troubled property market.

Industry and Market Reactions

Manufacturers said business conditions have recovered in November at the highest level in seven months, albeit export orders remain subdued. They are storing products in foreign premises, a trend set to rise, thanks to exporter’s inventory management strategies.

Xu Tianchen, a senior economist at the Economist Intelligence Unit, cautioned that whether due to front-loading of imports prior to Trump’s tariffs, the real consequence has not started yet and will begin to emerge in the coming months.

Global Trade Context

China’s imports and exports have decelerated in line with other big exporters such as South Korea where exports to China shrank for the first time in eight months presumably due to slump in demand for re-exported components.

There are many factors that negatively affect China’s economy, which come from global and internal environment. As Trump has continued a tariff on China’s exports, Beijing has to manage increasing trade risks internally in order to support the economy. Biff Economic and Politics With China’s economy under tremendous pressure, investors and policymakers are waiting for signals from the Politburo based on upcoming Politburo meetings.

Bitcoin Surges to Ksh. 13 Million as Expectations on Trump’s Crypto Plan Rises

The red-tracking digital currency raced through the $100,000 (around Shs13 million) for the first time on Thursday, fuelled by positive vibes on Trump’s incoming administration policy on the virtual money. This hallmark is indicative of increasing institutional acceptance fees, regulatory certainty, and optimism over the futures of digital resources under Trump’s presidency.

Since Trump’s election win, the digital currency has risen more than 45 percent due to optimistic view on less smokey and Trump’s promise to make America a hub for bitcoins.

Institutional Adoption and Regulatory verde

Entrepoeneurs of the crypto industry such as the CEO of Galaxy Digital Mike Novogratz said the price increase signified a ‘paradise shift’ and digital currencies were set to become mainstream within financial systems. Market demand supported by institutional investors has provided traction to it along with high-profile developments in the blockchain and tokenized financial economics.

Confidence has also found its footing from the expectations for Trump’s deregulation plan. The appointment of Paul Atkins for nomination as the director of the SEC is an indication that Owen will now relax the polices implemented by the current SEC Chair, Gary Gensler.

Over $4 billion has been invested in Bitcoin ETFs that are listed in the United States since the election, and acceptance is now ramping up. Such ETFs have provided institutional and retail investors opportunity to invest in the Bitcoin and therefore contributed to the market activity.

Trump’s Crypto Agenda

Trump has promised to transform the United States into the “crypto capital of the planet,” highlighting plans for:

National Bitcoin Stockpile: Trump has suggested the country should start stockpiling Bitcoin.

Crypto Advisory Council: As the struggle for influencing the regulatory framework continues, major industry actors such as Ripple and Circle are ready to step into the center of the fight.

Business Investments: Trump World Liberty Financial and his media company’s proposed purchase of crypto trading firm Bakkt establish him as a player in the industry.

They have also been backed by Elon Musk, a Trump friend and a crypto enthusiast.

Market Reactions

Bitcoin’s rally has lifted other crypto-related assets:

Some stocks related to the use of Bitcoin and other cryptocurrencies such as mining firms including MARA Holdings gained 65% in November.

Trading of options on crypto ETFs has increased, and call options have dominated puts.

Crypto gurus are also bullish with some expecting Bitcoin to cross $120,000 before Christmas.

Caution Amid Optimism

Despite the optimism, critics warn of potential risks:

The extraction of bitcoins is still an energy-consuming process.

The industry is still in a process of overcoming numbers of scandals, especially FTX and new restrictions and bans.

Speculative activity can cause the stock market cycling up and down, and generate bracketing of stocks for quick profits.

Market participants are waiting to see how Bitcoin will handle above $100,000 with prognoses that such a level could attract more institutional investors.

The Road Ahead

Breaking the Ksh.13 million mark, provided further bullish signals for the cryptocurrency market, with each new price rise giving a thumbs up for mainstream adoption. That Trump administration is set to push through drastic changes in regulating cryptocurrency means that the situation remains ripe for increased growth within the sector although it’s not without controversy and opposition.

President Ruto Optimistic on Addressing Taifa Care Challenges

President William Ruto on Monday seek to reassure Kenyians that the problems observed in the migration from the National Health Insurance Fund (NHIF) to the Social Health Authority (SHA) now called Taifa Care will soon be ironed out.

President Ruto, while addressing the 11th National and County Governments Coordinating Summit at the State House, Nairobi said he was aware that citizens were struggling to seek medical services under the new system. These problems he laid blamed on the ‘scale and ambition’ of the Taifa Care programme.

“On record, Taifa Care is enormous in scale, ambitious in undertaking, and historically unprecedented, however, we trust available solutions to multiphase the hitches soon,” Ruto said. On this, he said that the government was determined to provide affordable health care for all the citizens, through ensuring that all citizens of Kenya can have a right to quality health care services at an affordable cost regardless of their wealth.

The problem of Taifa Care and Government’s Defense

Since its inception, there are numerous complaints in regard to compensation at Taifa Care and their ability to getting proper health care. Several Kenyans have also been aggrieved by the working difficulties arising from the shift as a result of the scheme from NHIF.

However, President William Ruto and Health Cabinet Secretary Deborah Barasa have stood firm in support of the program, stressing on Kenyans patience as the government sorts out the efficiency of the program.

To support the implementation of Taifa Care, Kenyans are expected to make a contribution of 2.75% of their earnings with a cap of Ksh.300 per month.

Enrollment Progress

In his Seat of the Nation Address that was delivered on the 21st, President Ruto stated that over 15 million Kenyans had registered to the Taifa Care program. He especially pointed out that the given initiative could dramatically shift the healthcare accessibility in the whole country.

Looking Ahead

While the government is working to overcome the technological and operational challenges affecting Taifa Care, Kenya’s president Ruto has urged patient to wait since his regime is committed to implementing the bottomed promise of delivering quality and affordable healthcare to every citizen.