The economy is growing, but where is the money?

[RVtitem]

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jobless growth

http://www.capitalfm.co.ke/business/2016/11/economy-growing-money/2/

[Georgesoros]

Lots of unemployed Kenyans. Invested thousands in education but still waiting for a job, even menial.

[gout]

It is a very hard to understand society, we are always drinking while talking about how things -biashara, family/national budgets... are bad.

[hk]

 Non performing loans are going up either because of economy weakness or better reporting http://www.businessdailyafrica.com/Borrowers-hit-hard-times-as-bad-loans-rise-to-Sh207-billion/539552-3475134-snau0x/index.html . Also credit growth has slowed down. Then government is only spending less than 75% of its small development budget http://www.businessdailyafrica.com/Kenya-to-spend-40pc-of-tax-revenue-on-servicing-public-debt/539552-3470912-juq1fh/ .  The kenya economy might be sputtering.
Something simple like building pedestrian bridges to remove bumps that create traffic jam on thika road was announced in january almost an year later nothing. Development funds absorption is low . Drinking also has been greatly affect especially mainstream brown bottles type of beer, EABL is producing less beer than it did in the 90s more people have shifted to cheap spirits and keg.   

[Globalcitizen12]

HK,
I think the growth of non-performing personal loans has been going up since Kibaki boom years.. I remember seeing the staggering growth on CBK books back in 2002. I think some of these loans went to investments that never materialized.. Also, there is a big chuck of this money tied in Real estate. Until we have a vibrant trustworthy capital markets the economy will continue to be anemic..there has to be a better investment vehicle than real estate to be offered to people looking for passive income generation. All the retirement money has gone to land speculation and real estate.. Now the glut is real.. the ROI on Real estate is low and some people are having a tough time servicing their debt. Too much money chasing few opportunities resulting in inflation in housing, food retail sector which erodes savings and consumer confidence.

[MOON Ki]

Lots of unemployed Kenyans. Invested thousands in education but still waiting for a job, even menial.

A ticking time-bomb, but the coming disaster could have a positive outcome--when the masses of unemployed youth realize that they have been conned, that a few shillings and busaa to create chaos at political events will not do, that they cannot survive on petty crimes or the "service economy" of selling illegal brews in dens or mandazis by the roadside, dot, dot, dot.    Then, if they have the brains, they will decide to forcefully grab a bigger share and rudely awaken the looters they have so far been supporting in the "our man" spirit. Until then, we have some words from the Hon. M. Kibaki: kazi iendelee. Kazi ya nyama.

[Georgesoros]

My relatives complain of unemployment since finishing college. For a growing economy that' should not be. You see all these politicians running all over making deals with each other but you don't see major highway construction except maybe SGR where landowners got lotsa money and used it to get more wives. Private sector is doing well but infrastructure is 10yra behind. So businesses are not sure whether to expand into NKR due to limited infrastructure.  Uhuru borrows money for good use but it ends up being misused in buying crappy health containers at inflated prices. Meanwhile the borrowing continues.
20billion of NRB county money can't be accounted for??????. And that's just one county

[gout]

The unemployment numbers in Kenya will never make sense- First Kenyans do not consider Jua Kali sector jobs as employment- Mimi ni kushikilia tu. Majority of young Kenyans can't hold a job for more than two years especially in the Jua Kali sector. Reason is not the incomes but the push to get the 'opportunity' to make/scheme/steal/deal/hustle easy monies from their employer/well to do relatives/ sponsors/government tenders. Despite the untaxed good incomes whether manning a bus/matatu/stall/all sort of IT jobs; everybody is looking for major breakthrough or serious marupurupu   

About credit majority of micro, small, medium and even NSE listed firms are under-capitalised. Even real estate is still undercapitalised. There can never be anything as a 'glut' given that only a small portion of Kenya is served with proper infrastructure. Corruption also means land and real estate are among the best bets across Africa.

[hk]

Non performing loans shot up from 120b in 2015 to 207b in 2016 thats an increase of about 80% either this is because better stringent reporting by banks being enforced by CBK or companies aren't able to service the loans. After capping the interest spread the non-performing loans should be going down.
Glut of real estate if its there is mainly in upper middleclass areas and malls. The lower income areas are under-served and a lot of investment is actually needed. The fastest growing companies are borrowing outside kenya e.g tropical heat http://www.businessdailyafrica.com/Corporate-News/World-Bank-unit-IFC-to-lend-Tropical-Heat-Sh450m-for-factory/539550-3357816-yrgbl9z/ cause its a lot cheaper.  Maybe one of the reason why companies are under capitalized is cost of acquiring capital.

[Empedocles]

Interesting blog to follow regarding the Kenyan Economy:

Factors affecting the Kenyan economy

[Globalcitizen12]

Non performing loans shot up from 120b in 2015 to 207b in 2016 thats an increase of about 80% either this is because better stringent reporting by banks being enforced by CBK or companies aren't able to service the loans. After capping the interest spread the non-performing loans should be going down.
Glut of real estate if its there is mainly in upper middleclass areas and malls. The lower income areas are under-served and a lot of investment is actually needed. The fastest growing companies are borrowing outside kenya e.g tropical heat http://www.businessdailyafrica.com/Corporate-News/World-Bank-unit-IFC-to-lend-Tropical-Heat-Sh450m-for-factory/539550-3357816-yrgbl9z/ cause its a lot cheaper.  Maybe one of the reason why companies are under capitalized is cost of acquiring capital.

The lower income areas of rents going for $3k to 6K is where the beef is. the problem is that you have to target a specific area as mobility for this group is limited so expect to pay high for land.. plus you got cut corners to make this work..since cost is a factor on the return.. personally I am not ready to risk in this market

Cash flow is a serious threat.. I remember in the beginning of Uhuru term a SME telecom company I know well was having serious cash flow issues due to non-pay by GOK enterprises .. So in turn employees were not getting paid, suppliers were not getting paid, rent by employee was not getting paid.. so it is multiplier effect

[Georgesoros]

since kibaki left bills have not been paid. many contractors n suppliers just can't survive.

Non performing loans shot up from 120b in 2015 to 207b in 2016 thats an increase of about 80% either this is because better stringent reporting by banks being enforced by CBK or companies aren't able to service the loans. After capping the interest spread the non-performing loans should be going down.
Glut of real estate if its there is mainly in upper middleclass areas and malls. The lower income areas are under-served and a lot of investment is actually needed. The fastest growing companies are borrowing outside kenya e.g tropical heat http://www.businessdailyafrica.com/Corporate-News/World-Bank-unit-IFC-to-lend-Tropical-Heat-Sh450m-for-factory/539550-3357816-yrgbl9z/ cause its a lot cheaper.  Maybe one of the reason why companies are under capitalized is cost of acquiring capital.

The lower income areas of rents going for $3k to 6K is where the beef is. the problem is that you have to target a specific area as mobility for this group is limited so expect to pay high for land.. plus you got cut corners to make this work..since cost is a factor on the return.. personally I am not ready to risk in this market

Cash flow is a serious threat.. I remember in the beginning of Uhuru term a SME telecom company I know well was having serious cash flow issues due to non-pay by GOK enterprises .. So in turn employees were not getting paid, suppliers were not getting paid, rent by employee was not getting paid.. so it is multiplier effect