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IMF suspends Kenya’s $1.5 billion loan talks

The two-year standby loan facility, which expired in September last year, is intended to cushion the shilling against external shocks

Published

1 year ago

October 7, 2019

Nasir Agbalaya

IMF suspends Kenya's $1.5 billion loan talks

Kenya’s talks with the International Monetary Fund (IMF) for the renewal of a $1.5 billion standby credit facility have collapsed.

This follows the exit of the country’s treasury’s two most senior officials in an anti-corruption purge, leaving the country exposed to economic shocks.

An IMF delegation expected in Nairobi in July, cancelled the visit after Treasury Secretary, Henry Rotich and his Principal Secretary, Kamau Thugge were charged with corruption offences.

Collapse of the talks left in abeyance, the renewal of the standby credit facility intended to cushion the Kenyan shilling, which last week, depreciated to a four-month low against the US dollar.

The two-year standby loan facility, which expired in September last year, is intended to cushion the shilling against external shocks and raise the country’s credibility in the eyes of foreign lenders.

Rotich had in May this year, said that he expected to conclude talks with the IMF over renewal of the loan in two months.

“They did not come,” says Geoffrey Mwau, the Treasury’s director-general in-charge of budget, fiscal and economic affairs, while declining to disclose reasons for cancellation of the visit.

Being in good books with the IMF is considered a plus as it gives comfort to foreign lenders, who are currently holding in excess of $26 billion Kenyan debt.

The new Treasury Principal Secretary, Julius Muia in an interview says plans are underway to re-engage the IMF, with the possibility of resuming talks next month.

The new Treasury officials will be laying the groundwork for fresh discussions with the IMF during the Fund’s annual meetings in Washington starting October 14-20.

“We’re arranging for a detailed engagement with the IMF during its annual meetings in Washington starting from October 14, from there they will be coming in November, which is when we will kick off discussions in a structured manner,” Muia adds.

Kenya initially secured the two-year IMF precautionary facility in March 2016. It expired in March last year, but was extended up to September.

Business News

Nigerian Stock Exchange Starts Week With 0.04% Loss

Published

14 hours ago

November 23, 2020

Olorunwa Lawal

Nigerian Stock Exchange to complete public listing

The domestic equities market on Monday extended its losing streak with the All-Share Index dropping by 0.04 per cent, as the country officially entered recession.

Specifically, the All-Share Index lost 15.04 points or 0.04 per cent to close at 34,121.78 compared with 34,136.82 achieved on Friday.

The index was dragged by profit-taking on major financial services, among which are Zenith Bank, Lafarge Africa, Stanbic and Guaranty Trust Bank.

Consequently, month-to-date and year-to-date gains moderated to 11.8 per cent and 27.1 per cent, respectively.

Similarly, the market capitalisation dipped N7 billion or 0.04 per cent to close at N17.830 trillion from N17.837 trillion posted on Friday.

Market breath closed negative with five gainers in contrast with 46 losers.

Custodian Investment, Ardova, Honeywell Flour Mill, Lafarge Africa, Livestock Feeds and Transcorp led the losers’ chart in percentage terms, losing 10 per cent each to close at N5.85, N13.50, N1.08, N22.05, N1.26 and 90k per share, respectively.

Oando followed with 9.97 per cent to close at N2.89, while Neimeth International shed by 9.96 per cent to close at N2.17 per share.

Conversely, Airtel Africa dominated the gainers’ chart in percentage terms with five per cent to close at N525 per share.

BUA Cement trailed with 4.77 per cent to close at N56, while Dangote Cement rose by 3.42 per cent to close at N199.80 per share.

Nestle Nigeria chalked up 1.82 per cent to close at N1,400, while NEM Insurance appreciated by 0.78 per cent to close at N2.60 per share.

Meanwhile, the total volume of shares traded increased by 64.69 per cent to 568.04 million shares worth N7.33 billion in 8,928 deals.

This was in contrast with 344.90 million shares valued at N4.22 billion exchanged in 6,565 deals achieved on Friday.

Transactions in the shares of Zenith Bank topped the activity chart with 79.741 million shares valued at N1.913 billion.

FBN Holdings followed with 72.75 million shares worth N499.58 million, while Access Bank traded 65.74 million shares valued at N520.34 million.

United Bank for Africa traded 46.97 million shares valued at N360.04 million, while Guaranty Trust Bank transacted 37.09 million shares worth N1.27 billion.

Business News

Nigeria Enters Yet Another Recession

Published

22 hours ago

November 23, 2020

Samagbeyi afolasade

Nigeria has entered its worse recession in a decade; this follows the announcement by the Nigeria Bureau of Statistics over the weekend. The CEO, TrustBanc Asset Management Limited, Oluwaseun Adesoye explains the developments.

Business News

Business edge // Africa Continental Free Trade Area Agreement (AFCFTA)

Published

22 hours ago

November 23, 2020

Samagbeyi afolasade

On Business Edge, Tolulope Adeleru-Balogun and Nasir Afolabi Agbalaya discussed the Africa Continental Free Trade Area Agreement (AfCFTA) which is about to take off in the first quarter of 2021. Many African nations are boosting infrastructures and making other arrangements for their implementation.