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To find out more, read our updated Privacy Policy Ok * * Corporate Companies Enterprise Health Industry Transport Technology Boss Talk All Stories COMPANIES Relief for teachers as Equity's Spire bank deal gets Treasury nod BOSS TALK BOSS TALK: Anti-counterfeit boss on Kenya's plan to combat fakes at the source COMPANIES Lawyer Adil Khawaja replaces Uhuru ally as Safaricom chair COMPANIES Postbank picks former SRC boss Serem as board chair * Markets & Finance Capital Markets Commodities Currencies Global Markets Market News Real Estate Fund Management All Stories CAPITAL MARKETS CBK faces debt payment pressure on forex reserves CAPITAL MARKETS Four unit trust schemes lose Sh1.1bn assets in three months COMMODITIES Galana-Kulalu to offer private firms 5,000 acres in February CAPITAL MARKETS Use of shares as loan security drops further to 45pc * Economy All Stories ECONOMY Divorcing couples must prove contribution for equal property share ECONOMY Banks’ Sh224bn record profits signal bonus, dividends boom ECONOMY KRA to monitor telcos’ daily sales in tax evasion fight ECONOMY Kenya plans special tariff for electric cars * Life & Work BD Life Arts Fashion Homes Gardening Food & Drinks Wellness & Fitness Weekend with the CEO Personal Finance Profiles Heritage Travel Books Careers Workplace All Stories ARTS Voting open for best shows, actors till February 13 ARTS Entanglement: Potentially a great play that needs better scripting PERFORMING ARTS Seroney: Multi-genre artiste sets career on right trajectory with record deal VISUAL ARTS Timothy Brooke: The giant among Kenya's great artists * Opinion Columnists Editorials Letters All Stories COLUMNISTS WACHIRA: Create economic value out of the 15 billion tree planting campaign COLUMNISTS ALOO: Roll out technology in rural areas to spur growth of digital economy COLUMNISTS MWANYASI: Africa film and how to raise money from the entertainment sector EDITORIALS EDITORIAL: Kenya Power’s push for higher tariffs ill-advised * Videos All Stories VIDEOS Government announces plans to put fishermen under Saccos VIDEOS Examinations results for HR practitioners released VIDEOS Duo seeks to Africanise centuries old yoga practice VIDEOS Bouncers create union to sanitise industry * Special Reports All Stories SPECIAL REPORTS MUGAMBI: Regulations overdue for nascent carbon markets SPECIAL REPORTS Synnefa charts a food security path with smart greenhouses SPECIAL REPORTS 748 Air plans bio-fuels switch to offset emissions SPECIAL REPORTS KenGen takes leader position in e-mobility transition race * Corporate * Markets & Finance * Economy * Life & Work * Opinion * Videos * Special Reports Menu * * Corporate Companies Enterprise Health Industry Transport Technology Boss Talk All Stories COMPANIES Relief for teachers as Equity's Spire bank deal gets Treasury nod BOSS TALK BOSS TALK: Anti-counterfeit boss on Kenya's plan to combat fakes at the source COMPANIES Lawyer Adil Khawaja replaces Uhuru ally as Safaricom chair COMPANIES Postbank picks former SRC boss Serem as board chair * Markets & Finance Capital Markets Commodities Currencies Global Markets Market News Real Estate Fund Management All Stories CAPITAL MARKETS CBK faces debt payment pressure on forex reserves CAPITAL MARKETS Four unit trust schemes lose Sh1.1bn assets in three months COMMODITIES Galana-Kulalu to offer private firms 5,000 acres in February CAPITAL MARKETS Use of shares as loan security drops further to 45pc * Economy All Stories ECONOMY Divorcing couples must prove contribution for equal property share ECONOMY Banks’ Sh224bn record profits signal bonus, dividends boom ECONOMY KRA to monitor telcos’ daily sales in tax evasion fight ECONOMY Kenya plans special tariff for electric cars * Life & Work BD Life Arts Fashion Homes Gardening Food & Drinks Wellness & Fitness Weekend with the CEO Personal Finance Profiles Heritage Travel Books Careers Workplace All Stories ARTS Voting open for best shows, actors till February 13 ARTS Entanglement: Potentially a great play that needs better scripting PERFORMING ARTS Seroney: Multi-genre artiste sets career on right trajectory with record deal VISUAL ARTS Timothy Brooke: The giant among Kenya's great artists * Opinion Columnists Editorials Letters All Stories COLUMNISTS WACHIRA: Create economic value out of the 15 billion tree planting campaign COLUMNISTS ALOO: Roll out technology in rural areas to spur growth of digital economy COLUMNISTS MWANYASI: Africa film and how to raise money from the entertainment sector EDITORIALS EDITORIAL: Kenya Power’s push for higher tariffs ill-advised * Videos All Stories VIDEOS Government announces plans to put fishermen under Saccos VIDEOS Examinations results for HR practitioners released VIDEOS Duo seeks to Africanise centuries old yoga practice VIDEOS Bouncers create union to sanitise industry * Special Reports All Stories SPECIAL REPORTS MUGAMBI: Regulations overdue for nascent carbon markets SPECIAL REPORTS Synnefa charts a food security path with smart greenhouses SPECIAL REPORTS 748 Air plans bio-fuels switch to offset emissions SPECIAL REPORTS KenGen takes leader position in e-mobility transition race Menu Market Status: closed 27/01/2023 17:03 PM GMT+3 SCOM23.00 -1.08%KCB38.45 0.00%EQTY45.50 -0.11%BRIT5.20 0.00%CTUM8.60 -1.15%KEGN3.00 -2.60%NMG14.80 0.34%BAMB29.40 0.68%EABL173.50 2.81%ABSA12.40 0.40%JUB194.25 0.00%COOP12.60 0.80%DTK51.75 3.50%NCBA37.30 0.81%CIC1.90 2.15%ARM0.00 0.00%KPLC1.54 0.65%UNGA31.00 0.00%SCBK157.00 -0.16%SBIC112.00 -1.75%NBK0.00 0.00%NSE6.40 0.00%HFCK3.30 1.23%CABL1.00 7.53%LKL3.25 0.00%SCAN2.95 -1.67%EVRD0.70 0.00%TPSE12.00 0.00%MSC0.29 0.00%KQ3.40 0.00%NBV3.50 7.69%XPRS4.55 0.89%UCHM0.23 4.55%CARB12.35 0.00%OCH2.85 0.00%EGAD11.40 0.00%KAPC110.00 10.00%TOTL23.80 4.39%FTGH1.00 0.00%UMME8.78 0.00%SGL10.15 0.00%SASN21.00 0.00%TCL1.25 4.17%PORT6.26 -1.88%IMH16.90 -0.59%KUKZ420.00 0.00%FAHR6.40 0.95%KNRE1.76 -1.12%HAFR0.32 0.00%LBTY4.80 -3.81%CRWN39.00 8.94%BAT449.00 0.00%BOC70.00 0.00%CGEN37.00 -8.42%WTK160.00 3.23%GLD2350.00 0.00%LIMT420.00 0.00%BKG32.00 0.00%DCON0.00 0.00%KPLC4.11 0.00%KPLC0.00 0.00%KURV0.00 0.00%ORCH13.70 0.00%SLAM8.34 0.00%SMER2.20 -4.35%HBE0.00 0.00%CRWN0.00 0.00%UMME8.78 0.00%GLD2350.00 0.00%TCL0.00 0.00%LAPR0.00 0.00% SCOM23.00 -1.08%KCB38.45 0.00%EQTY45.50 -0.11%BRIT5.20 0.00%CTUM8.60 -1.15%KEGN3.00 -2.60%NMG14.80 0.34%BAMB29.40 0.68%EABL173.50 2.81%ABSA12.40 0.40%JUB194.25 0.00%COOP12.60 0.80%DTK51.75 3.50%NCBA37.30 0.81%CIC1.90 2.15%ARM0.00 0.00%KPLC1.54 0.65%UNGA31.00 0.00%SCBK157.00 -0.16%SBIC112.00 -1.75%NBK0.00 0.00%NSE6.40 0.00%HFCK3.30 1.23%CABL1.00 7.53%LKL3.25 0.00%SCAN2.95 -1.67%EVRD0.70 0.00%TPSE12.00 0.00%MSC0.29 0.00%KQ3.40 0.00%NBV3.50 7.69%XPRS4.55 0.89%UCHM0.23 4.55%CARB12.35 0.00%OCH2.85 0.00%EGAD11.40 0.00%KAPC110.00 10.00%TOTL23.80 4.39%FTGH1.00 0.00%UMME8.78 0.00%SGL10.15 0.00%SASN21.00 0.00%TCL1.25 4.17%PORT6.26 -1.88%IMH16.90 -0.59%KUKZ420.00 0.00%FAHR6.40 0.95%KNRE1.76 -1.12%HAFR0.32 0.00%LBTY4.80 -3.81%CRWN39.00 8.94%BAT449.00 0.00%BOC70.00 0.00%CGEN37.00 -8.42%WTK160.00 3.23%GLD2350.00 0.00%LIMT420.00 0.00%BKG32.00 0.00%DCON0.00 0.00%KPLC4.11 0.00%KPLC0.00 0.00%KURV0.00 0.00%ORCH13.70 0.00%SLAM8.34 0.00%SMER2.20 -4.35%HBE0.00 0.00%CRWN0.00 0.00%UMME8.78 0.00%GLD2350.00 0.00%TCL0.00 0.00%LAPR0.00 0.00% By DOMINIC OMONDI More by this Author ECONOMY IMF PROJECTS ETHIOPIA, ANGOLA ECONOMIES TO OVERTAKE KENYA Wednesday January 25 2023 President William Ruto with Ethiopian Prime Minister Abiy Ahmed in Addis Ababa in October 2022. PHOTO | PSCU By DOMINIC OMONDI More by this Author Kenya is set to be replaced as the third-largest economy in sub-Saharan Africa by Angola and Ethiopia, weakening the East African country’s power to tap investors enticed with a population that has more cash to spend. Faster GDP growth in Angola and Ethiopia will see Kenya relegated to number five in sub-Saharan Africa’s economic rankings, according to projections by the International Monetary Fund (IMF) that show Nigeria as the largest economy on the continent. A return to growth linked to higher oil prices saw Angola overtake Kenya last year, according to the IMF, after the nation—which is the continent’s second-largest oil producer after Nigeria—ended years of recession. Ethiopia is this year set to replace Kenya from position four on the back of easing armed conflict in the nation and the continuation of the ambitious economic reform drive aimed at opening up one of Africa’s fastest-growing but most closed economies. The IMF expects the economies of Ethiopia and Angola this year to expand by 13.5 percent and 8.6 percent respectively on dollar terms. However, Kenya is projected to record a slower growth of 2.4 percent in the review period as the country grapples with the aftershocks of the Covid-19 pandemic, drought, election jitters and disruption of global supply chains by the Russia-Ukraine war. RELATED STORIES * IMF warns of inflation threat * President, top officers’ wealth to be made public in IMF push Sub-Saharan Africa accounts for 46 of the continent’s 54 countries, excluding giants like Morocco and Egypt. The relegation of Kenya to position five will weaken its hand in the race for foreign direct investment (FDI), which is critical in easing the growing youth unemployment on the continent. So far, South Africa and Ethiopia have fared better than Kenya in attracting foreign investments eyeing a population that has more cash to spend. The IMF projects Kenya’s GDP to hit $117.6 billion this year, behind Nigeria ($574 billion), South Africa ($422 billion), Angola ($135 billion) and Ethiopia ($126.2 billion). From mobile phones, cars, food, and clothes to financial services and entertainment, multinational companies are homing in on lucrative new markets as millions of Africans aspire to claw their way out of still widespread poverty. Read: IMF downgrades Kenya's economic growth forecast African countries that promise to expand middle-class buyers with swelling disposable incomes are in a pole position to attract foreign investments. Oil-rich Angola will reclaim its third position, which it lost to Kenya in 2020 following years of contraction due to a slump in oil prices. Angola is the continent’s second-largest oil producer after Nigeria, according to OPEC, while Kimberley Process data ranks it as the world’s seventh-biggest producer of rough diamonds. After five years of recession, Angola’s GDP increased 0.7 percent in 2021, according to the World Bank. Long dominated by state-owned companies, a legacy of its socialist past, Angola has also embarked on ambitious privatisation programmes but progress has been slow. Wahoro Ndoho, an economist and past director-general of Public Debt Management for the Treasury, noted that Ethiopia has been on an upward trajectory owing to its aggressive industrialisation and Chinese-like State capitalism where the government cherry-picks sectors and projects to be prioritised. “But also it (Ethiopia) has a huge population. It was always going to overtake us because of its huge population base,” said Mr Ndoho. Until the civil war broke out in November 2020, Ethiopia — Africa’s second-most populous country with over 115 million people — had been regarded by development economists as a success story. Its economy, driven by investment in agriculture, industry and infrastructure, grew on average 7.0 percent annually per capita in the 15 years to 2019, according to World Bank data -- one of the fastest rates in the world. Ethiopia’s Prime Minister Abiy Ahmed, who took office in 2018, launched an ambitious reforms drive aimed at opening up one of Africa’s most closed economies. It has started the process of privatising its telecoms, banking and sugar sectors. Fighting erupted in Ethiopia’s northern Tigray region in November 2020, hitting state economic programmes and deterring foreign investors. A ceasefire reached in November has raised hopes that Ethiopia’s economic momentum can be restored. The country is among Africa’s top recipients of foreign investments, becoming a magnet for manufacturers ahead of Kenya. While Kenya has struggled to retain and attract multinational manufacturers, it has recently become a magnet for technology firms and financial service companies seeking a hub for a larger share of the African market. Global tech giants, including Microsoft, Alphabet Inc and Facebook, have been increasing investment in Kenya in recent years to take advantage of growing economies with rising access rates to the Internet by a youthful population. But industrialists, especially multinationals, are constantly on the hunt for bargain production locations much like they do tax havens, a trend that has seen Kenya lose firms like Schneider Electric, Colgate Palmolive and Reckitt Benckiser. The IMF rankings, however, have been disputed in some quarters. Mark Bohlund, a Senior Credit Research Analyst at REDD Intelligence, an online information platform that provides intelligence and data on emerging market corporates, noted that the projections are likely to be incorrect. “Yes, the IMF forecasts are showing that both Angola and Ethiopia are going to be larger than Kenya in 2023 in nominal USD terms. However, these projects are likely to be incorrect as they are based on unrealistic FX estimates and forecasts for both Angola and Ethiopia,” said Bohlund in an email. Read: Mixed bag as Kenya races to implement Sh288 billion IMF plans According to Bohlund, the Angolan 2023 nominal GDP projection is based on a forecast of Angolan Kwanza (AOA)452/USD which is where the currency traded in October when the World Economic Outlook forecasts were released. “But it is now trading at AOA504/USD which leaves the Angolan economy just slightly larger than Kenyan in 2023, ceteris paribus (all factors constant),” said Bohlund. “The Ethiopian forecast is based on an assumption of ETH 65/USD, which is weaker than the official exchange rate but far stronger than the black-market rate which I believe currently is around ETH95-100/USD.” → dakure@ke.nationamedia.com IN THE HEADLINES RELIEF FOR TEACHERS AS EQUITY'S SPIRE BANK DEAL GETS TREASURY NOD By PATRICK ALUSHULA DIVORCING COUPLES MUST PROVE CONTRIBUTION FOR EQUAL PROPERTY SHARE By SAM KIPLAGAT KRA TO MONITOR TELCOS’ DAILY SALES IN TAX EVASION FIGHT By CONSTANT MUNDA BANKS’ SH224BN RECORD PROFITS SIGNAL BONUS, DIVIDENDS BOOM By PATRICK ALUSHULA Corporate Markets & Finance Economy Life & Work Opinion Videos Special Reports APPS * * INFORMATION * Contact Us * Frequently asked questions * NMG Privacy Policy * Terms and Conditions of Use * Our Blog Rules NMG SITES * Nation.Africa * Nation ePaper * Nairobi News * Business Daily * NTV * NTV Uganda * Daily Monitor * The Citizen * Mwananchi * Mwanaspoti * The Eastafrican * Nation Transitions * Nation Media Group FOLLOW US BUSINESS DAILY Please enable JavaScript to use this website.