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Kenyan banks cut lending to govt by 40%

Published

2 years ago

May 1, 2023

The state of public debt in Kenya has forced commercial banks in the country to make a decision to reduce lending to the Treasury by 40 percent, that is $964 million.

There are concerns that the government’s debt sustainability position and the rising interest rates could leave lenders with worthless papers.

According to Kenya’s Central Bank (CBK), lenders put only Ksh196.2 billion ($1.44 billion) in treasury bills and bonds last year compared with Ksh326.4 billion ($2.4 billion) in 2021.

“Quarterly growth in domestic credit extended by the banking system (to the government) moderated slightly to 1.8 percent in the fourth quarter (October-December) of 2022 from three percent in the previous quarter (July-September), largely reflecting reduced net lending to government,” says CBK.

Kenya has insisted that it would not default on its debt repayment obligations despite delayed payment of civil service salaries.

The head of the International Monetary Fund’s Africa Department, Abebe Aemro Selassie recently revealed that Kenya was not expected to seek a restructuring of its debt despite current strains and a looming bond payment.

Kenya in April revealed plans to issue a new Eurobond to manage 2024’s maturity of a Ksh270 billion ($2 billion) 10-year bond.

Related Topics:debt burden Featured Kenya

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Moroccan annual inflation rises to 0.8% in November

Published

2 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

3 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”