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Kenya’s revised budget projects deficit increase from 4.4% to 5.3%

Published

1 year ago

October 27, 2023

Kenya’s projected budget deficit for the July–June fiscal year of 2023–2024 has increased from 4.4% to 5.3% of GDP, according to a summary of updated spending estimates brought before parliament on Friday.

According to Finance Minister, Njuguna Ndung’u, the reason for the broader estimate was the Kenyan shilling’s depreciation versus the US dollar, which increased the anticipated amount of cash needed to pay off foreign debts during that time.

“The data we have has shown that approximately 145 billion shillings are accounted by increased interest costs on the external debt space as well as debt volume increase due to exchange rate depreciation,” he told journalists.

“(It is) Time to drop politics and look at the reality in the world economies,” Ndung’u said.

Among the debt the government must pay in foreign currencies is a $2 billion Eurobond that is due in June of next year. Investors are a little concerned about the bond’s maturity because the refinancing option was out of reach due to an increase in yields.

To reassure markets that it was serious about containing the skyrocketing debt, President William Ruto’s administration drastically reduced the budget deficit in June, when it was first presented to parliament.

Unfortunately, this attempt has been thwarted by a sharp depreciation of the shilling, which is currently down 18% versus the dollar this year.

In Africa, Kenya is among the countries struggling with debt. As per the official data, the country is presently facing financial difficulties because it needs to allocate nearly 50% of its earnings towards fulfilling approaching debts. A sharp devaluation of the Kenyan shilling, and foreign loan obligations have exacerbated the situation.

Related Topics:Budget Deficit 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.”