Hello and welcome to the Tuesday edition of the Evening Brief Newsletter where our debt has been slashed significantly.
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Kenya’s External Debt Slashed
Following weeks of successive strengthening of the shilling between January and March, the Controller of Budget has reported a significant reduction in Kenya's external debt.
According to the report that reviewed the budget for the first nine months of the 2023/2024 financial year, the external debt portfolio has reduced by 15 per cent.
As detailed in the report by Margaret Nyakang’o, Kenya owed foreign creditors Ksh6.08 trillion in December 2023. However, that figure dropped significantly to Ksh5.1 trillion in March 2023.
To be precise, the drop amounted to Ksh959,830,408,584.
Explained: The drop in the external debt portfolio is attributed to the fluctuations in the exchange rate. Secondly, most of Kenya's foreign debt is dominated by foreign currencies, especially the US dollar.
For instance, in December 2023, when the debt stood at Ksh6.08 trillion, the dollar was trading at Ksh156.
Conversely, in March 2024, when the debt portfolio dropped to Ksh 5.1 trillion, the dollar was trading at Ksh132.
"During the reporting period, the value of the Kenyan Shilling increased by 24.66 points compared to the US Dollar, causing a 15 per cent reduction in the external debt portfolio in the three months from 1st January to 31st March 2024.
"The fluctuation of foreign exchange rates significantly impacts the cost of servicing the external debt," read the report in part.
The Bad News: Despite the drop in the debt portfolio, the amount could rise should the shilling weaken against the greenback. As of the end of June, the dollar was trading at Ksh131.36.
The Good News: The World Bank ranked the shilling as the best-performing currency in Sub-Saharan Africa. This was attributed to several factors including the repayment of the Eurobond which was due in June this year.
"The Kenyan shilling is the best-performing currency in the subcontinent as it recorded an appreciation of 16 per cent so far this year. After strengthening by 14 per cent by mid-February, the Zambian kwacha has lost some ground and recorded a year-to-date appreciation of 2.4 per cent as of mid-March.
"In both cases, the monetary authority hiked interest rates to defend their currencies. The Bank of Zambia additionally raised commercial banks’ reserve ratios. In Kenya, securing funds to repay its Eurobond falling due in June 2024 restored confidence and increased the demand for local currency," read the World Bank report.
Breakdown of Kenya's External Debts:
- Ksh 1,135,498,510,000 - Bilateral debt (loans taken from foreign governments i.e China)
- Ksh 2,654,283,080,000 - Multilateral debt (loans taken from financial institutions such as World Bank & IMF)
- Ksh 1,359,058,410,000 - Commercial banks
- Ksh 14,583,340,000 - Debt owed to suppliers
From Frying Pan to Fire
Along the corridors of justice, things have worsened for the 19-year-old who was filmed beating a traffic cop at Mirema junction on Kamiti Road, Nairobi, on June 2.
Following his manhunt and arrest, police finally arraigned the teen driver at the Milimani Law Courts where he was charged with three offenses.
Among the charges preferred against him were; robbery with violence, resisting arrest and causing grievous harm to the officer.
"On the 2nd day of June 2024 at Kamiti Road in Kasarani Sub County within Nairobi County jointly with others not before court robbed No. 67839 Cpl. Jacob Ogendo of a battery of police communication gadget and mobile phone make Samsung Galaxy note | valued at Ksh50,000 and immediately before or immediately after the time of such robbery wounded the said No. 67839 Cpl. Jacob Ogendo," read the charge sheet in part.
The Catch: Following the charge of robbery with violence, the 19-year-old could face the death penalty should he be found guilty.
"If the offender is armed with any dangerous or offensive weapon or instrument, or is in company with one or more other person or persons, or if, at or immediately before or immediately after the time of the robbery, he wounds, beats, strikes or uses any other personal violence to any person, he shall be sentenced to death," reads part of the Penal Code.
Notably, the Supreme Court declared the mandatory death penalty unconstitutional. However, a judge could still impose the death penalty as was witnessed in the case of Joseph Irungu, alias Jowie.
Here are the top stories for the day:
- Media Personality and Reggae MC Mary Njambi Koikai dies while undergoing treatment at a hospital in Nairobi.
- President William Ruto secures a Ksh63.5 billion (USD485 million) concessional loan from South Korea.
- DCI arrests two senior land officials for allegedly planning to defraud a company of a Ksh1 billion prime land within Nairobi.
- Narok County Government bans the use of private cars in the Maasai Mara National Reserve.
- Investment tip: How you can make over Ksh90,000 a month from snail farming.
This newsletter was written by Washington Mito and edited by Brian Muuo.
Derrick Kubasu contributed to the content.
Graphics prepared by Adongo Kyalo and Ronnie Mbugua.
