Revisit the top stories that captivated our readers in 2023, covering major financial events, market trends, and developments in Kenya
Top sector highlights of events that captured the attention of readers in Kenya’s business landscape, as covered by The Kenyan Wallstreet’s newsroom, provide unparalleled insight into the key trends and challenges that shaped the business and financial markets in Kenya in 2023.
Here are some of our top stories that attracted the most attention from our readers in 2023.
Why the Government is Selling KICC, 10 others
In 2023, the government finally pushed through a new privatisation law that kickstarts the process of privatising some state owned enterprises, including the iconic KICC complex.
- •Big names in the programme include Kenya Pipeline Company, New Kenya Cooperative Creameries (NKCC), Kenyatta International Convention Center (KICC), National Oil Cooperation, Kenya Seed Company and the Kenya Literature Bureau (KLB).
- •In justifying privatization of the enterprises, the government argued that the move will unlock working and investment capital for the entities following dwindling state resources.
- •The move will also address limited expertise in government on business and commercial operations.
Weakening Kenya Shilling Exchange Rate
In 2023, the Central Bank of Kenya(CBK) and policy mandarins at the National Treasury struggled to deal with the issue of the Kenya Shilling depreciation against the US dollar and other major currencies.
- •Kenya’s Central Bank Governor, Dr Kamau Thugge, has disclosed that the Kenya Shilling exchange rate against the US dollar and other hard currencies has been artificial and overvalued, exerting extreme pressure on the country’s forex reserves.
- • “For several years, the Kenyan economy has had an overvalued exchange rate. Some 5 or 6 years ago, the IMF and the World Bank argued that the Kenya Shilling exchange rate was overvalued by anything between 20.0% and 25.%., “said Governor Dr Kamau Thugge. [The IMF put it at 17.5% in its 2018 Article IV Report]
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Kenya seals a trade deal with the European Union
Kenya and the European Union (EU) have signed an Economic Partnership Agreement (EPA) to boost bilateral trade in goods, increase investment flows, and contribute to sustainable economic growth.
- •The deal provides a platform to support job creation in Kenya and the EU, along with targeted cooperation to enhance Kenya’s economic development.
- •This agreement is considered the most ambitious trade deal yet ever signed by the EU with a developing country with provisions such as climate and environmental protection, labor rights, and gender equality.
Kenya’s Inefficient Sugar Sector Gets Another Two-Year Import Safeguard
Kenya has secured yet another 2-year extension of the sugar of safeguard measures by COMESA’s Council of Ministers This is the 7th such extension of the Common Market for Eastern and Southern Africa (COMESA) safeguard measures.
Kenya has been granted this two–year extension of the sugar safeguards measures meant to protect the sugar industry from the adverse effects of liberalization. Kenya secured a sixth extension in December 2022, which ran from March and expired in November 2023.
Following consultations between the Government of Kenya and the COMESA Secretariat, the Government of Kenya applied for protection for the sector by way of a safeguard under Article 61 of the COMESA Treaty so that sugar exports from COMESA to Kenya are subject to customs duties. At present, Kenya’s sugar market is protected by safeguards against any duty-free imports from COMESA.
More Kenyan Firms Issue Profit Alerts as 2023 Business Environment Toughens
The year 2023 has seen profit warnings issued by some of the listed blue chip firms in Kenya, signaling a tough business environment that has hit their operations hard.
- •On the list of firms that will see a dip in profits or run into loss territories include Crown Paints Kenya, WPP ScanGroup, Nation Media Group, Sasini, and Car &General among others.
- •The media industry has been struggling with Media Edge Interactive Limited and Redhouse Group Limited, leading public relations and marketing communications firms, being the latest casualties after being placed under receivership due to financial problems.
- •Figures from Kenya’s Purchasing Managers Index(PMI) show a decline in business condition in 2023, with the averaging 48.70 in H1’23 from 49.25 in H1’22. The PMI is expected to remain below the 50-point threshold in the short term on the back of high input costs and depreciation of the shilling, but gradually improve in the long term.
CAK Slaps Retailer with the Biggest fine Yet
The Competition Authority of Kenya (CAK) has fined Carrefour KSh. 1.1bn for “separately abusing its superior bargaining power over two of its suppliers.”
- •The Carrefour franchise in Kenya is operated by Majid Al Futtaim Hypermarkets Ltd.
- •The two suppliers in question are Pwani Oil Products Limited, an FMCG company, and Woodlands Company Limited, a refined natural bee honey maker.
- •Carrefour has also been ordered to refund the two companies KSh. 16.76mn in rebates, and KSh. 500, 000 “that was billed as marketing support (Store opening/listing fees).
Change at the C-suite of Family Bank
Family Bank of Kenya has seen the exit of its illustrious and successful CEO Rebecca Mbithi, who steered the lender through a turbulent season that included the COVID-19 pandemic
- •She leaves the lender after a five-year term at the helm to pursue other personal interests.
- •She served as the Managing Director and CEO since 2019. She previously served the bank as the Company Secretary and Chief Legal Officer.
New broom takes over at the CA
David Mugonyi has taken over as new Director General of the Communications Authority of Kenya (CA).
- •Mugonyi’s appointment was formalized by Felix Kosgei, Chief of Staff and Head of the Public Service, and Eliud Owalo, Minister of ICT & Digital Economy following interviews conducted by the CA Board of Directors.
Kenya’s Slow Journey to Digital IDs Begins (Again)
First-time ID applicants in Kenya have begun receiving the Maisha Card this year in a pilot scheme that will introduce digital registration of persons in the country.
- •Also set to receive the new card with enhanced security are applicants seeking replacements for defaced or lost cards as the government tests the country’s preparedness for a full rollout of digital IDs.
- •Under a proposed plan, the government will gradually phase out the 2nd generation IDs in favour of the Maisha Card with the current ID number translating to Maisha Namba.
The Curtain Comes Down on State-run NHIF
The Cabinet has considered and approved 4 crucial Bills that promote healthcare, for transmission to Parliament.
- •This is in line with the Kenya Kwanza administration’s pledge to accelerate Kenya’s attainment of Universal Health Coverage (UHC) as set out under the Government’s Bottom Up Economic Transformation Agenda (BETA).
- •The Cabinet, while meeting in Kakamega approved the Primary Health Care Bill, 2023; The Digital Health Bill, 2023; The Facility Improvement Financing Bill, 2023; and The Social Health Insurance Bill, 2023.
- •These bills usher in a paradigm in the legal and institutional framework for healthcare in Kenya by repealing the current National Health Insurance Fund and establishing in its place the following funds: Primary Healthcare Fund; Social Health Insurance Fund; and Emergency, Chronic and Critical Illness Fund.
Britania Biscuits Bites the Dust
Britania Foods Limited, a household name that has been operating in Kenya for three decades and is known for its popular biscuits brand, has crumbled and is up for liquidation, 5 years after its factory shut down.
- •According to a notice appearing in the Kenya Gazette Vol. CXXV—No. 157 dated 7th July, 2023, the firm transitioned into liquidation with its former Administrator, Peter Kahi of PKF Consulting (K) Limited, as the Liquidator of the Biscuit maker. This follows the successful completion of the administration sale of the business and assets of Britania Foods Limited.
Court Dismisses Petition Challenging Lifting of GMO Ban in Kenya
A Nairobi court in October this year dismissed a petition filed by the Law Society of Kenya (LSK) seeking to quash a decision by the Cabinet to lift the ban on Genetically Modified Organisms (GMOs).
- •During a meeting in early October 2022, the Cabinet lifted the ban on Genetically Modified Crops (GMO). The ban had been in place for 10 years. The decision allowed farmers to cultivate and import food crops and animal feeds produced through biotechnology.
Pezesha Files Liquidation Petition Against Marketforce
Kenyan fintech firm Pezesha Africa Limited has filed a petition for the liquidation of Marketforce Technologies Limited, a B2B e-commerce platform, citing unpaid debts.
- •The insolvency petition, registered as E058 of 2023 in the High Court of Kenya at Nairobi Milimani Commercial and Tax Division, invokes the provisions of the Insolvency Act, 2015.
- •The court documents reveal that Pezesha Africa Limited, headquartered in Nairobi, is seeking a liquidation order against Marketforce Technologies Limited.
- •The petition alleges that Marketforce Technologies Limited owes a substantial amount to Pezesha Africa Limited, prompting the latter to pursue legal action to recover the outstanding debt.