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People in Equity Bank at Kenyatta Avenue branch in Nairobi, Kenya. PHOTO | NMG

A second global ratings agency has maintained its outlook on Kenya’s banks at ‘B’ with a negative outlook, citing the high volumes of non-performing loans.

A ‘B’ rating is considered highly speculative. This means that although the issuer can meet their financial obligations, they are also vulnerable to adverse economic shocks.

Fitch Ratings Ltd said the country’s banking sector has high exposure to public sector debt arrears due to delayed government payments to contractors.

“Loan quality has been affected by the public sector arrears, where delayed government payments to contractors have forced them to run overdue on existing loans to local banks. As a result, the sector regulatory NPL ratio increased by 170 basis points in the first nine months of 2023 to reach 15 percent at the end third quarter of 2023,” said Fitch in its analysis.

Read: Kenya lenders plan to step up asset seizures over bad loans

“The most affected sectors were manufacturing and building and construction, where the absolute amount of NPLs increased by 50 percent in the first nine months of 2023,” it added.

This comes barely two weeks after another global ratings agency, Moodys issued a similar warning and revised its outlook on Kenya’s lenders to negative from stable, citing concerns about high volumes of non-performing loans despite solid profitability and liquidity levels.

“Despite solid economic growth, an array of challenges will weigh on borrowers’ creditworthiness and create difficult operating conditions for banks through 2024,” said Moody’s in its analysis.

“These challenges for borrowers encompass rising interest rates, increased taxes, reduced government spending, high inflation, foreign-currency shortages, and government delays in settling outstanding bills. Consequently, problem loans will rise.”

The volume of NPLs in the local banking sector rose by Ksh133.6 billion ($912 million) to Ksh621.3 billion ($4.24 billion) in the 12 months to December 2023, accounting for 14.8 percent of the sector’s loan book, compared with 13.3 percent in 2022.

Fitch expects retail loans to be significantly impacted by the decline in real disposable incomes as a result of the recent tax increases by the government.

Read: EA banks open to loan restructuring amid surge in defaults

It is also feared that continuing depreciation of the shilling would bolster inflation and exert additional pressure on borrowers’ repayment capacity.

“We expect increased debt servicing costs due to higher interest rates and delayed repayments by government contractors and parastatals to increase sector non-performing loans in the first half of 2024,” Fitch said.

“Impairment charges are the main source of vulnerability for Kenyan banks’ performance. We expect them to increase further as asset-quality risks crystallise.”

The majority of retail loans bear floating interest rates, meaning that debt-servicing costs have materially increased as interest rates have risen.

Higher interest rates have been accompanied by a reduction in households’ real disposable income due to higher inflation and a sharp increase in income taxes.

The Kenyan shilling depreciated 21 percent in 2023 becoming the worst-performing currency in the East African region.

Central Bank increased the policy rate by 375 basis points (BP) in 2023 and a further 50bp in February 2024 to 13 percent to address inflationary pressures and support the shilling.

“We expect the high-interest rates to add to the already-high banking sector non-performing loans ratio,” said Fitch.

Read: Moody’s sounds warning on Kenyan banks' defaults

The increase in policy rate saw lenders such as Equity Bank issue a public notice to the effect that it was increasing its lending rate to 18.24 percent from 17.56 percent.

Fitch, however, expects the Kenyan banking sector’s strong profitability and reasonable capital buffers to weather moderate asset quality deterioration in 2024, and provide room for healthy loan growth.

The agency rates three Kenyan banks— KCB, NCBA, and I&M — their local banking subsidiaries, and Stanbic Bank Kenya Ltd (SBK) at the level of Kenya’s ‘B’ long-term issuer default rating (IDR).

This is largely due to their heavy exposure to sovereign risk as a result of massive investment in government securities. IDR is a measure of the borrower’s vulnerability to default on its financial obligations. The borrower can be a corporate or sovereign country.

“Negative outlooks on the entities’ ratings mirror that on the sovereign Long-Term IDR, reflecting our view that the entities’ ratings are capped by the sovereign rating due to the concentration of operations within Kenya and significant sovereign exposure,” Fitch said.BY James Anyanzwa, The East African

By WILFRED CLARKE 

From Kapital Radio’s Mic 1 To Mic 2 Of Think Media Expert studios, Korsi Asiseh comes out as Korzai with a new ‘banger’ of some sort. Namely, ‘Something Something’. 

Kwame Adinkra as a media personality did it with songs such as NuNu Me, Afrakoma, Piipi, Mmotiahene ,Fiona, and many others. 

Captain Smart made it by Fabewoso, while Andy Dosty sung Aden and 1K. Now, Korsi Asiseh takes over the baton and banter with his ‘Something Something’. 

As a media personality who has crossed carpet from radio to the singing booth, telling the notion that prompted the song, Korsi Asiseh said: “The song is about life and how certain endeavours or situations don’t give the expected outcome. 

“And how some of them don’t have answers. Like humans’ purpose on earth and what happens after life.”

Any proper project should have a mission and that of ‘Something Something’ according to Karzai :“It’s to set people thinking and dancing at the same time.”

Some years back, in his teachings, he did not tell us about 'The Thing' and Atumpan ‘The Talking Drum’ was allowed to 'escape' or 'dodge' his fans and the public as to whatever that thing was. 

Reeling from that ambiguity, here comes Korzai with his 'Something Something'. So, what is the 'Something Something' he is talking and singing about. 

Probing him rigorously, he let slip the response saying: ‘Something Something, simply in Akan would mean Bribi Bi or in Pidgin English, some way bi. Meaning ambiguous as you rightly put it.” 

Laying his expectation and categorisation as to where the latest song should be placed in terms of genre, he affirmed: “I will classify the song as Afro fusion because it is a fusion of highlife and Afro-beat.” 

Knowing his position within the realm of the media landscape professionally as a media personality, he thinks this of the public with regards to their perceived reactions: “I would want them to react to the music as someone who loves music and is giving to the world what he has within him.” 

So, ‘Something Something’ was written by Korsi Asiseh and it was recorded on February 17 2024 at ‘Think Media Expert studios’ in Accra. 

As to whether there is a potential album in the proverbial pipeline, an Extended Play or just a single song on its own, Korzai said: “It’s a single for now.” 

Hammer of Pure FM in Kumasi and some other DJs are 'pushing' the song for the public to notice. 

And as an industry person he is getting it smoother with regards to Power Play of 'Something Something' on the Airwaves, comparatively to some new artistes. 

Responding to the statement above, Korzai replied: “Regarding airplay it’s cool. Because I am not expecting much. So far, so good, the music is being heard, so with time I know it will penetrate the market.” 

The production sounds unique but ‘radical’ in the nature and stature of a renowned producer’s artistry. Not knowing, it is by the hands of the famous broadcaster on the nation of Ghana’s television Breakfast Show, Kafui Dey. Kudus to that Something Something. 

Picking his views about the originality, focus and capability of the song’s general standings within Ghana contemporary music terrain, he said: “My thoughts about the music is that the song is interesting.” 

So, ‘Something Something’ is available on most of the digital music outlet for public purchase, download and listening.

 

The Nigerian Navy operations in the Niger Delta region between January and February 2024 have led to the arrest and recovery of stolen crude oil from different criminal gangs operating in the region.

This was confirmed in a statement by Rear Admiral AO Ayo-Vaughan, Director of Information of the Nigerian Navy.

The recovered items are 60,815.77 barrels of crude oil worth about $5.218 million (N8.12bn); 557,580 litres of illegally refined Automatic Gas oil (AGO) worth N497 million; Dual-purpose Kerosene (DPK) worth N5.5 million and 9,000 litres of premium Motor Spirits (PMS) valued at N5.490 million. 

Ayo-Vaughan said the oil thieves were denied about N8.6 billion, which could have been used to perpetrate criminal acts and threaten national security and prosperity.

He also said a total of 51 wooden boats were arrested while 105 illegal refining ovens, 85 reservoirs and 288 dugout pits were destroyed.

He added that 41 illegal refining sites, IRS, and three fibre boats were also destroyed during the operation. By Esther Chisom, Daily Post 

 

JUBA – South Sudan’s main armed opposition Sudan People’s Liberation Movement in Opposition (SPLM-IO) on Friday announced a boycott of the anticipated December 2024 elections, arguing the vote would violate the 2018 peace agreement.

Speaking during a press conference at the SPLM-IO headquarters in Juba, SPLM-IO deputy chair Oyet Nathaniel Perino said prerequisites for a “peaceful, transparent, democratic, free, fair, and credible” vote have not been met.

These, he said, include the unification of the rival forces, drafting a permanent constitution, holding a population census, settling refugees and internally displaced people, and addressing transitional justice.

“We will not engage in any process that undermines the peace agreement.  We refuse to participate in elections that are deemed sham, lacking in freedom and fairness,” Oyet said.

He added that the main armed opposition group is also concerned by delays in implementing process of the peace agreement roadmap agreed upon by the group and other peace partners on August 2022.

“We are worried that the Road-map concludes in twelve months without the completion of pending tasks and the essential prerequisites for elections mentioned earlier,” he added.

The comments by the senior opposition official comes days after the SPLM-IO leader called in a letter to Kiir for dialogue to discuss the path forward concerning the elections, warning that it would consider the peace agreement abrogated if elections were held without the prerequisites being met.

South Sudan’s transitional period was originally slated to end with elections in February 2023, but the government failed to meet key provisions on drafting a constitution and creating a unified army.

In August 2022, parties to the agreement extended the transitional rule by two years, with polls now scheduled for December 2024.

Observers have expressed doubt South Sudan is prepared for credible elections by that date, citing delays and the extensive requirements that remain unfulfilled. - Sudans Post

After a period of unnecessary turbulence following the postponement of Senegal's national elections, President Macky Sall has bought an end to speculation by confirming his date of departure from office.

"The National Dialogue has called for the 2nd of June 2024 as the new date for presidential elections in Senegal. I want to make it categorically clear that I will step down from office on the 2nd of April, as I have previously made clear. My departure date is absolutely firm," he tweeted on Thursday. 

That clarity is important for the country's usually optimistic business community, which feared that an extended period of uncertainty could hit confidence and weigh on growth. They hope that a peaceful and seamless transition to new leadership will enable the economy - projected by the IMF to expand this year at 8.8% - to continue on its bold upwards trajectory. With future oil and gas windfalls expected, a politically stable Senegal could play a leading role in West Africa. By Davis Thomas, African Business

 

 

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