Tues 10th August 2027, Election Day
Sugar at 175 per kilo. Unga past 150.Mafuta 300 per litre
But Pundit says the Kenya economy looks more rosig than even the days of Kibaki in 2004.Quote from: gout on June 12, 2025, 09:41:59 PMSugar at 175 per kilo. Unga past 150.Mafuta 300 per litre
A Sh253 billion revenue shortfall, barely two months from the end of the current financial year on June 30, 2025, points to heightened borrowing in the medium term to plug financing holes.Documents submitted by the National Treasury show that the Kenya Revenue Authority (KRA) collected Sh2.26 trillion by April against a target of Sh2.51 trillion.“We have prepared the supplementary estimates III to accommodate the changes and align the budget with the new developments,” National Treasury Cabinet Secretary John Mbadi in a memorandum to the Supplementary Budget III budget tabled in Parliament.The missed revenue targets have seen the government review the ordinary revenue target downwards to Sh2.49 trillion from the projected Sh2.58 trillion in the supplementary estimates III before the National Assembly with the Appropriation in Aid (AiA) projected at Sh489 billion.Mr Mbadi attributes KRA’s below-target performance to a shortfall registered in the collection of ordinary revenue by Sh195.3 billion and a shortfall in AiA of Sh57.7 billion.The shortfall means that the government cannot increase taxes to finance the government operations, but has the only available option of borrowing locally and in the international market. This will see the country’s fiscal deficit hit Sh797.7 billion.
“The business crisis seems to be unravelling because it is no longer just the traditional high-risk sectors that are taking a blow. The mess seems widespread because we have manufacturers and even service providers caught up,” Peter Njinu, a business strategist, said.For example, Kenya’s oldest bus and truck body manufacturer, Labh Singh Harnam Singh Limited (LSHS), has been placed under the administration of Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli over a Sh1billion KCB bank debt.The High Court also placed giant cereals manufacturer Proctor & Allan East Africa under the receivership of Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli, effective February 24, 2025, after it failed to service a KCB Group loan estimated at Sh3.7 billion.PwC is in control of East African Cables Plc (EAC, Kenya), which is currently under administration over a Sh2.2 billion Equity Bank loan that had run into default in 2023. PWC has also taken over TransCentury Plc (TCL Plc), which is currently under receivership.Further, PKF Consulting Limited’s Peter Kahi took over as an administrator of Africa Spirits Limited (ASL) on June 17, 2025, following appointment by the firm’s directors. Accounting consultancy firm Anant Bhatt LLP has also bagged receivership deals by the National Bank of Kenya (NBK) with the back-to-back takeover of Nairobi Upper Hill Hotel and Nyakoe Hotel.NBK placed the Nairobi Upper Hill Hotel under receivership over a long-running dispute over a debt estimated at Sh447 million. Kamal Anantro Bhatt and Jai Kamal Bhatt of Anant Bhatt LLP were also appointed by Equity Bank as joint receiver managers of Eastland Hotel, which is based in Nairobi’s Kilimani area over debt.
Banks’ lending slumps, cash piles to record levels in tough economy Commercial banks have raised the cash holdings on their books to record levels amid slow growth in lending to the private sector, in a tough economy where businesses and individuals have struggled to service loans.Central Bank of Kenya (CBK) data shows that the average liquidity ratio for commercial banks stood at 59.8 percent at the end of August—up from 54.3 percent a year earlier—, the highest recorded and against a regulatory requirement of 20 percent.The liquidity ratio captures the amount of cash or near cash assets held by banks in comparison to their short term deposits – reflecting how efficiently a bank is deploying customer savings to make profits.The growing cash pile therefore shows that banks have been slow to convert deposits from customers to loans, with the ratio of loans to deposit shrinking to 71 percent compared to averages of over 85 percent in the pre-Covid-19 period.The slowdown follows cautious lending by banks due to high defaults by businesses and individuals, with the stock of bad loans hitting a record Sh731.8 billion, or 17.6 percent of the total loans issued as at August.Equity Bank Kenya, which released its third quarter results at the end of last month, had a liquidity ratio of 78.4 percent, with management stating it was seeking to issue more loans.“It's a flat balance sheet reflecting the environment. We are trying very hard to give loans,” said Equity Group Chief Executive James Mwangi during an investor briefing on October 28.“We have this Sh1 trillion shillings (in deposits) and if you look at our lending, we are lending only Sh400 billion, so we are left with Sh600 billion. I want to appeal to Kenyans that we understand the environment but there is hope (come borrow),” he added.Cooperative Bank of Kenya, in its quarter three financials published on Sunday, disclosed a liquidity ratio of 59.3 percent, with a loan book of Sh381.9 billion against a deposit base of Sh511.4 billion.Banks held Sh5.89 trillion in customer deposits in August while loans issued were Sh4.16 trillion. The industry loan book grew by three percent in the year to August while deposit grew at a faster pace of 4.7 percent leading to higher liquidity levels.
