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The government of Kenya is partially divesting from Safaricom Plc, offloading a 15.0% stake to Vodafone Kenya Ltd in a Kes 204.3 billion (US$1.6 billion) deal (see quoted tweet for details). Four years ago, I sat down with the then Ag. Director General Public Investments & Portfolio Management at...

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Julians Amboko

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50,277 просмотров • 9 месяцев назад •via X (Twitter)

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This morning I argued that Kenya Pipeline's Kes 9.0/share presents a relatively steep/high valuation for the company's IPO, especially given the Safaricom plc valuation in light of the ongoing divestiture (see quoted tweet). Safaricom Plc's management appeared before the National Assembly's Finance & Planning Committee this afternoon & didn't expect to have the Kenya Pipeline valuation hand them a 'booby trap'. Here's the breakdown: · Peter Ndegwa & his team were asked whether, given the metrics informing Kenya Pipeline's IPO (22.0x P/E ratio), Kes 34.0/share represents a fair value of the business. · A very good question indeed, especially given Safaricom Plc is an entity that has been in the market for 20 years & proven its earnings & dividend track record. Kenya Pipeline is a utility that is new to the market · Peter Ndegwa says that the divestiture of 15.0% by GOK is a shareholder-to-shareholder transaction & Safaricom Plc was not involved in the process. · Peter Ndegwa & his team say that they have their own view as to how the business should be valued & it always informs their half year & full year earnings briefings to investors & the general public
4:45

This morning I argued that Kenya Pipeline's Kes 9.0/share presents a relatively steep/high valuation for the company's IPO, especially given the Safaricom plc valuation in light of the ongoing divestiture (see quoted tweet). Safaricom Plc's management appeared before the National Assembly's Finance & Planning Committee this afternoon & didn't expect to have the Kenya Pipeline valuation hand them a 'booby trap'. Here's the breakdown: · Peter Ndegwa & his team were asked whether, given the metrics informing Kenya Pipeline's IPO (22.0x P/E ratio), Kes 34.0/share represents a fair value of the business. · A very good question indeed, especially given Safaricom Plc is an entity that has been in the market for 20 years & proven its earnings & dividend track record. Kenya Pipeline is a utility that is new to the market · Peter Ndegwa says that the divestiture of 15.0% by GOK is a shareholder-to-shareholder transaction & Safaricom Plc was not involved in the process. · Peter Ndegwa & his team say that they have their own view as to how the business should be valued & it always informs their half year & full year earnings briefings to investors & the general public

Julians Amboko

30,117 просмотров • 7 месяцев назад

UPDATE: GOK's US$1.91 billion partial divestiture in Safaricom Plc approved The National Assembly's Public Debt & Privatization Committee Chair Hon. Abdi Shuriye has moved a motion for the House to adopt a joint report by his Committee & that of Finance and National Planning on the Partial sale of Safaricom shares owned by the Government. The two committees recommend: · The National Assembly approves the proposed US$1.6 billion (Kes 204.3 billion) partial divestiture by the government to Vodafone Kenya · The effective date of the National Assembly approval be April 1st, 2026 or any other later date pegged on the prerequisite approvals · The transaction shall be undertaken & concluded through the block trade platform of the Nairobi Securities Exchange · The government shall receive US$ 309 million (Kes 40.2 billion) upfront payment in lie of future dividend payments · All proceeds to be wired into the National Infrastructure Fund · There shall be no redundancy as part of this partial divestiture · There shall be no material change to the current Safaricom Plc ecosystem within 10 years of this partial divestiture
2:02

UPDATE: GOK's US$1.91 billion partial divestiture in Safaricom Plc approved The National Assembly's Public Debt & Privatization Committee Chair Hon. Abdi Shuriye has moved a motion for the House to adopt a joint report by his Committee & that of Finance and National Planning on the Partial sale of Safaricom shares owned by the Government. The two committees recommend: · The National Assembly approves the proposed US$1.6 billion (Kes 204.3 billion) partial divestiture by the government to Vodafone Kenya · The effective date of the National Assembly approval be April 1st, 2026 or any other later date pegged on the prerequisite approvals · The transaction shall be undertaken & concluded through the block trade platform of the Nairobi Securities Exchange · The government shall receive US$ 309 million (Kes 40.2 billion) upfront payment in lie of future dividend payments · All proceeds to be wired into the National Infrastructure Fund · There shall be no redundancy as part of this partial divestiture · There shall be no material change to the current Safaricom Plc ecosystem within 10 years of this partial divestiture

Julians Amboko

14,271 просмотров • 5 месяцев назад

Still on GOK'S partial divestiture from Safaricom Plc, Sandeep Main appearing on behalf of ICPAK asks why GOK didn't invite alternative bids & opted for a direct sale to Vodafone Kenya. He asks how certain GOK is that alternative bids would not have unlocked a much higher premium than the Kes 34.0/share on offer from Vodafone Kenya & whether the US$ 1.6 billion (Kes 204.3 billion) offer from Vodafone Kenya reflects optimal value for money. Earlier, the National Treasury CS stated that the reason for bypassing open bidding & opting for a direct sale to Vodafone Kenya was anchored on fears that opening the transaction to competitive bidding presented valuation risk. The concern was that suppose the open market process yielded bids that were priced lower than Vodafone Kenya's Kes 34/share, it would create challenges in walking back to Vodafone Kenya scouting for premium valuation. See quoted tweet for GOK's position on opting for the direct sale.
1:41

Still on GOK'S partial divestiture from Safaricom Plc, Sandeep Main appearing on behalf of ICPAK asks why GOK didn't invite alternative bids & opted for a direct sale to Vodafone Kenya. He asks how certain GOK is that alternative bids would not have unlocked a much higher premium than the Kes 34.0/share on offer from Vodafone Kenya & whether the US$ 1.6 billion (Kes 204.3 billion) offer from Vodafone Kenya reflects optimal value for money. Earlier, the National Treasury CS stated that the reason for bypassing open bidding & opting for a direct sale to Vodafone Kenya was anchored on fears that opening the transaction to competitive bidding presented valuation risk. The concern was that suppose the open market process yielded bids that were priced lower than Vodafone Kenya's Kes 34/share, it would create challenges in walking back to Vodafone Kenya scouting for premium valuation. See quoted tweet for GOK's position on opting for the direct sale.

Julians Amboko

38,880 просмотров • 7 месяцев назад

An interesting revelation was made before the National Assembly's Finance & Planning Committee yesterday regarding GOK's partial divestiture from Safaricom Plc. The National Treasury CS told the Committee that the key benefit of partially divesting (from 35.0% to 20.0%) from Safaricom Plc is staving off the risk of dilution in future. The CS holds that should a cash call be made, given the heavy capex involved in telcos, it is likely GOK would not be able to meet its share of the ask at a 35.0% stake, in view of the tight fiscal space, & would therefore risk dilution. He then goes further to argue that Kenyans can look back to the KCB experience to know that this risk isn't far fetched, it has actually happened in the past. I see a challenge with this argument & the example used. Musings: · The CS is rightly pointing out that KCB offers a case study · He is referring to the 2004 & 2008 rights issues where the government opted not to take up its full rights & therefore its stake in the bank was diluted · The two instances were more about the Kibaki regime's promotion of public participation in the capital markets. At the time, a huge part of the reform agenda was getting government out of commercial enterprise · It explains why the two happened within the same environment that GOK offload a partial stake in Kengen (2006) & Safaricom (2008)
1:47

An interesting revelation was made before the National Assembly's Finance & Planning Committee yesterday regarding GOK's partial divestiture from Safaricom Plc. The National Treasury CS told the Committee that the key benefit of partially divesting (from 35.0% to 20.0%) from Safaricom Plc is staving off the risk of dilution in future. The CS holds that should a cash call be made, given the heavy capex involved in telcos, it is likely GOK would not be able to meet its share of the ask at a 35.0% stake, in view of the tight fiscal space, & would therefore risk dilution. He then goes further to argue that Kenyans can look back to the KCB experience to know that this risk isn't far fetched, it has actually happened in the past. I see a challenge with this argument & the example used. Musings: · The CS is rightly pointing out that KCB offers a case study · He is referring to the 2004 & 2008 rights issues where the government opted not to take up its full rights & therefore its stake in the bank was diluted · The two instances were more about the Kibaki regime's promotion of public participation in the capital markets. At the time, a huge part of the reform agenda was getting government out of commercial enterprise · It explains why the two happened within the same environment that GOK offload a partial stake in Kengen (2006) & Safaricom (2008)

Julians Amboko

11,526 просмотров • 7 месяцев назад

National Treasury CS has appeared before the National Assembly's Finance & Planning Committee explaining why GOK's choice path for divestiture of its 15.0% stake in Safaricom Plc is to Vodafone Kenya & not any other investor (see quoted tweet). He makes a few points: · GOK feared that opening the transaction to competitive bidding presented valuation risk. The concern was that suppose the open market process yielded bids that were priced lower than Vodafone Kenya's Kes 34/share, it would create challenges in walking back to Vodafone Kenya scouting for premium valuation · He argues that opting for a private equity entity presented the challenge of onboarding a risk averse shareholder who will not understand the business & be unwilling to pay a premium. It's an interesting argument given GOK's history/experience with Helios on Telkom Kenya · Selling to minority shareholders was not an option on the table given fears of a discount to the market price. GOK argues that going the minority shareholders route would necessitate underwriting as part of the deal, something the state wasn't ready for · GOK was also worried that potentially taking the 15.0% stake to market in close proximity to listing Kenya Pipeline would 'saturate' the market & necessitate underwriting · The liquidity question loomed large & GOK was worried about inability to secure an investor willing & able to plough in the US$1.909 billion (Kes 244.5 billion) to consummate the transaction · GOK argues that an existing shareholder enjoys incumbency & is therefore already has familiarity with the business hence presenting a strong case for continuity
5:32

National Treasury CS has appeared before the National Assembly's Finance & Planning Committee explaining why GOK's choice path for divestiture of its 15.0% stake in Safaricom Plc is to Vodafone Kenya & not any other investor (see quoted tweet). He makes a few points: · GOK feared that opening the transaction to competitive bidding presented valuation risk. The concern was that suppose the open market process yielded bids that were priced lower than Vodafone Kenya's Kes 34/share, it would create challenges in walking back to Vodafone Kenya scouting for premium valuation · He argues that opting for a private equity entity presented the challenge of onboarding a risk averse shareholder who will not understand the business & be unwilling to pay a premium. It's an interesting argument given GOK's history/experience with Helios on Telkom Kenya · Selling to minority shareholders was not an option on the table given fears of a discount to the market price. GOK argues that going the minority shareholders route would necessitate underwriting as part of the deal, something the state wasn't ready for · GOK was also worried that potentially taking the 15.0% stake to market in close proximity to listing Kenya Pipeline would 'saturate' the market & necessitate underwriting · The liquidity question loomed large & GOK was worried about inability to secure an investor willing & able to plough in the US$1.909 billion (Kes 244.5 billion) to consummate the transaction · GOK argues that an existing shareholder enjoys incumbency & is therefore already has familiarity with the business hence presenting a strong case for continuity

Julians Amboko

50,900 просмотров • 7 месяцев назад

Airtel Kenya says it is not opposed to GOK's partial divestiture from Safaricom Plc. The say shareholding may not have any bearing on the competitive landscape. However, it raises concerns about the market & the case for a level playing field for all competitors. They raise two issues: · The mobile termination rates, given the design of the market, end up with a scenario where smaller players pay far much more to Safaricom Plc than Safaricom Plc pays them. They say this inhibits the capacity of small players investing in their infrastructure. Airtel Kenya wants the mobile termination rates lowered. Last time we saw mobile termination rates being lowered was March 2024 when this was lowered to Kes 0.41/minute from Kes 0.58/minute · Mobile money. Airtel says it is working with the Central Bank of Kenya on " a lot of things" to ensure "that side is also taken care of"
4:35

Airtel Kenya says it is not opposed to GOK's partial divestiture from Safaricom Plc. The say shareholding may not have any bearing on the competitive landscape. However, it raises concerns about the market & the case for a level playing field for all competitors. They raise two issues: · The mobile termination rates, given the design of the market, end up with a scenario where smaller players pay far much more to Safaricom Plc than Safaricom Plc pays them. They say this inhibits the capacity of small players investing in their infrastructure. Airtel Kenya wants the mobile termination rates lowered. Last time we saw mobile termination rates being lowered was March 2024 when this was lowered to Kes 0.41/minute from Kes 0.58/minute · Mobile money. Airtel says it is working with the Central Bank of Kenya on " a lot of things" to ensure "that side is also taken care of"

Julians Amboko

59,361 просмотров • 7 месяцев назад

The Governor of the Central Bank of Kenya says proceeds from the state's partial divestiture from Safaricom Plc are "just about to" hit the state coffers & should vault the fx reserve position to ~ US$16.0 billion (7.0 months of import cover). As expected, the Governor says the latest upswing we have seen in fx reserves (+ US$954.0 million over the last fortnight) is attributable to World Bank DPO VII & Kenya Pipeline divestiture proceeds. He says the US$855.0 million acquisition of a 66.0% stake in NCBA Group by South Africa's Nedbank should provide further fx buffer.
2:36

The Governor of the Central Bank of Kenya says proceeds from the state's partial divestiture from Safaricom Plc are "just about to" hit the state coffers & should vault the fx reserve position to ~ US$16.0 billion (7.0 months of import cover). As expected, the Governor says the latest upswing we have seen in fx reserves (+ US$954.0 million over the last fortnight) is attributable to World Bank DPO VII & Kenya Pipeline divestiture proceeds. He says the US$855.0 million acquisition of a 66.0% stake in NCBA Group by South Africa's Nedbank should provide further fx buffer.

Julians Amboko

61,487 просмотров • 1 месяц назад

The Central Bank of Kenya yesterday appeared before the National Assembly's Finance & Planning Committee on GOK's partial divestiture from Safaricom Plc. The Central Bank argues that proceeds from the partial divestiture (US$1.6 billion + US$309.0 million in advance dividend payment) will provide a further boost to Kenya's FX reserves position & vault it to 6.2 Months of import cover from the current 5.3 The Central Bank is backing the deal for 3 reasons: 1. Increased FX reserves 2. Exchange rate stability 3. Additional fiscal space created
1:25

The Central Bank of Kenya yesterday appeared before the National Assembly's Finance & Planning Committee on GOK's partial divestiture from Safaricom Plc. The Central Bank argues that proceeds from the partial divestiture (US$1.6 billion + US$309.0 million in advance dividend payment) will provide a further boost to Kenya's FX reserves position & vault it to 6.2 Months of import cover from the current 5.3 The Central Bank is backing the deal for 3 reasons: 1. Increased FX reserves 2. Exchange rate stability 3. Additional fiscal space created

Julians Amboko

19,240 просмотров • 7 месяцев назад

I have come to realize my MP, Ndindi Nyoro, is the biggest HYPOCRITE in Kenya's political history. This is him advising the government to sell just a section of Safaricom as a strategic and innovative way to mobilize KES 300 billion instead of borrowing. Today, he's opposing the same thing he said.
0:30

I have come to realize my MP, Ndindi Nyoro, is the biggest HYPOCRITE in Kenya's political history. This is him advising the government to sell just a section of Safaricom as a strategic and innovative way to mobilize KES 300 billion instead of borrowing. Today, he's opposing the same thing he said.

Bianca™

75,347 просмотров • 9 месяцев назад

Ministry of Transport has announced that the Kenya Roads Board has mobilised Kes 139.0 billion (US$1.07 billion), in Tranche II of securitisation of the Roads Maintenance Levy for settlement of road contractor arrears. The TDB arranged transaction is a build up to the Kes 175.0 billion (US$1.35 billion) raised in Tranche I (see quoted tweet) that enabled settlement of arrears to March 2026. Payments attached to Tranche II are slated for the first week of September. TDB is speaking of unlocking an additional Kes 50.0 billion having "optimising" the securitised Kes 7.0 from the Roads Maintenance Levy. I am not sure what that means.
4:51

Ministry of Transport has announced that the Kenya Roads Board has mobilised Kes 139.0 billion (US$1.07 billion), in Tranche II of securitisation of the Roads Maintenance Levy for settlement of road contractor arrears. The TDB arranged transaction is a build up to the Kes 175.0 billion (US$1.35 billion) raised in Tranche I (see quoted tweet) that enabled settlement of arrears to March 2026. Payments attached to Tranche II are slated for the first week of September. TDB is speaking of unlocking an additional Kes 50.0 billion having "optimising" the securitised Kes 7.0 from the Roads Maintenance Levy. I am not sure what that means.

Julians Amboko

17,632 просмотров • 13 дней назад

EABL Plc CFO, Risper Ohaga, on the new Kes 11.0 billion 11.8% Tranche 1 MTN. She makes four points that are of interest: · It's fundamentally a balance sheet optimisation execution. This point goes back to my jan 31st conversation with her (see quoted tweet) where I was asking whether the yield environment presented an opportunity for early redemption. So pay down the 2021 note early, get something that's longer · Why go for a Kes 20.0 billion programme when the immediate tap is Kes 11.0 billion? Two reasons. The first & key one is that the present yield environment presents an opportunity to lock in a large portion of the firm's debt requirement at a good rate. The second is to ensure as & when need arises the company doesn't have to navigate the process afresh · She mentions that this issuance is to a large extent about matching funding with the life of assets. Essentially, the struggle with commercial bank financing is the extent to which it tends to be short-term yet being deployed to assets whose useful life is long drawn out. Cash generation vs debt repayment alignment is a key play here · Risper says the new note is already attracting favourable sentiment from investors. I am one of those who were quick to ask whether the 11.8% was an offer too close to the sovereign from a risk premium optic. She says EABL has a good track record & that's a key factor with this issuance
3:51

EABL Plc CFO, Risper Ohaga, on the new Kes 11.0 billion 11.8% Tranche 1 MTN. She makes four points that are of interest: · It's fundamentally a balance sheet optimisation execution. This point goes back to my jan 31st conversation with her (see quoted tweet) where I was asking whether the yield environment presented an opportunity for early redemption. So pay down the 2021 note early, get something that's longer · Why go for a Kes 20.0 billion programme when the immediate tap is Kes 11.0 billion? Two reasons. The first & key one is that the present yield environment presents an opportunity to lock in a large portion of the firm's debt requirement at a good rate. The second is to ensure as & when need arises the company doesn't have to navigate the process afresh · She mentions that this issuance is to a large extent about matching funding with the life of assets. Essentially, the struggle with commercial bank financing is the extent to which it tends to be short-term yet being deployed to assets whose useful life is long drawn out. Cash generation vs debt repayment alignment is a key play here · Risper says the new note is already attracting favourable sentiment from investors. I am one of those who were quick to ask whether the 11.8% was an offer too close to the sovereign from a risk premium optic. She says EABL has a good track record & that's a key factor with this issuance

Julians Amboko

24,087 просмотров • 10 месяцев назад

My key take aways from National Treasury CS, John Mbadi's, update on the government's partial divestiture from Safaricom Plc. · This is part of the state's growing leaning towards non-tax revenue in domestic resource mobilisation as it slow pedals on tax revenue. Key thing to remember here is that we saw this with both the Tax Laws (Amendment) Acts '24 & more recently the Finance Act '25. 2025/26 AIA is projected at Kes 567.0 billion. · The proceeds from this engagement ( ~ US$1.91 billion inclusive of the dividend swap arrangement) will be seed capital for both the Infrastructure Fund & the Sovereign Wealth Fund. Key thing to remember here is that the projected matching associated with the Infrastructure Fund is 1:10 (i.e. for every Kes 1.0 from privatisation proceeds, the state will seek to crowd in Kes 10.0 worth of private institutional capital. Also, whereas we have seen the Draft Sovereign Wealth Fund Bill '25, we are yet to see the Draft Infrastructure Fund Bill '25. · The transaction is geared towards strengthening Safaricom's capacity for the investment required for future developments (5G roll out & regional expansion are mentioned) · It's a shareholder level adjustment that isn't expected to affect the company's day-to-day operations · At any given time, the Chairman & CEO of Safaricom Plc will be Kenyan citizens · Independent Directors will at all times have Kenyans being the majority
5:19

My key take aways from National Treasury CS, John Mbadi's, update on the government's partial divestiture from Safaricom Plc. · This is part of the state's growing leaning towards non-tax revenue in domestic resource mobilisation as it slow pedals on tax revenue. Key thing to remember here is that we saw this with both the Tax Laws (Amendment) Acts '24 & more recently the Finance Act '25. 2025/26 AIA is projected at Kes 567.0 billion. · The proceeds from this engagement ( ~ US$1.91 billion inclusive of the dividend swap arrangement) will be seed capital for both the Infrastructure Fund & the Sovereign Wealth Fund. Key thing to remember here is that the projected matching associated with the Infrastructure Fund is 1:10 (i.e. for every Kes 1.0 from privatisation proceeds, the state will seek to crowd in Kes 10.0 worth of private institutional capital. Also, whereas we have seen the Draft Sovereign Wealth Fund Bill '25, we are yet to see the Draft Infrastructure Fund Bill '25. · The transaction is geared towards strengthening Safaricom's capacity for the investment required for future developments (5G roll out & regional expansion are mentioned) · It's a shareholder level adjustment that isn't expected to affect the company's day-to-day operations · At any given time, the Chairman & CEO of Safaricom Plc will be Kenyan citizens · Independent Directors will at all times have Kenyans being the majority

Julians Amboko

34,526 просмотров • 9 месяцев назад

The Director General, Public Investments & Portfolio Management was asked how it is that Kenya seeks to have a Sovereign Wealth Fund in place whilst running ballooning fiscal deficits (FYI, Supplementary Appropriations I 2025/26 is at Kes 1.3 trillion, 6.8% of GDP). See quoted tweet for the Controller of Budget's submission on the Sovereign Wealth Fund Bill.
1:41

The Director General, Public Investments & Portfolio Management was asked how it is that Kenya seeks to have a Sovereign Wealth Fund in place whilst running ballooning fiscal deficits (FYI, Supplementary Appropriations I 2025/26 is at Kes 1.3 trillion, 6.8% of GDP). See quoted tweet for the Controller of Budget's submission on the Sovereign Wealth Fund Bill.

Julians Amboko

26,170 просмотров • 4 месяцев назад

UPDATE: Supplementary Budget III 2024/25 approved by National Assembly Supplementary Budget III sailed through the National Assembly this morning. Quite some changes from what we saw come from the National Treasury. Here's the summary: · National Treasury had proposed a Kes 37.58 billion increase in recurrent spending via Supp. Budget III, the National Assembly has approved Kes 39.11 billion · National Treasury had proposed a Kes 18.63 billion cut in development spending via Supp. Budget III, National Assembly has approved a much leaner cut at Kes 3.38 billion · Overall, the National Treasury had proposed an overall increase of Kes 25.03 billion increase in the size of the budget (i.e. Supp. III vs Supp. II), National Assembly has bumped this up further to Kes 35.74 billion · So whereas National Treasury's proposal sought to increase the 2024/25 budget to Kes 4.032 trillion compared to Supp. Budget II adjustments, the National Assembly's adjustments have now pushed it to Kes 4.042 trillion
1:20

UPDATE: Supplementary Budget III 2024/25 approved by National Assembly Supplementary Budget III sailed through the National Assembly this morning. Quite some changes from what we saw come from the National Treasury. Here's the summary: · National Treasury had proposed a Kes 37.58 billion increase in recurrent spending via Supp. Budget III, the National Assembly has approved Kes 39.11 billion · National Treasury had proposed a Kes 18.63 billion cut in development spending via Supp. Budget III, National Assembly has approved a much leaner cut at Kes 3.38 billion · Overall, the National Treasury had proposed an overall increase of Kes 25.03 billion increase in the size of the budget (i.e. Supp. III vs Supp. II), National Assembly has bumped this up further to Kes 35.74 billion · So whereas National Treasury's proposal sought to increase the 2024/25 budget to Kes 4.032 trillion compared to Supp. Budget II adjustments, the National Assembly's adjustments have now pushed it to Kes 4.042 trillion

Julians Amboko

43,761 просмотров • 1 год назад

Someone needs to remind National Treasury (The National Treasury) officials that Kenya exceeding Ethiopia in GDP size is/was fundamentally an FX factor at play, not a growth factor. Part of the deal in the US$3.4 billion IMF programme was a raft of reforms including the sharp devaluation of the Birr. We need to stop hyping this GDP size thing.
0:24

Someone needs to remind National Treasury (The National Treasury) officials that Kenya exceeding Ethiopia in GDP size is/was fundamentally an FX factor at play, not a growth factor. Part of the deal in the US$3.4 billion IMF programme was a raft of reforms including the sharp devaluation of the Birr. We need to stop hyping this GDP size thing.

Julians Amboko

40,142 просмотров • 1 год назад

Last week I highlighted Safina Party's proposed switch from VAT to Sales Tax (see quoted tweet). This week, a few proposals from People's Party as revealed last evening: · Bump up the Inua Jamii Cash Transfer Programme to Kes 3,000 effective Jan 1st, 2028 & enhance it to Kes 4,000 effective Jan 1st, 2031 · GOK further divesting from Kengen by unwinding its stake from 70.0% to 35.0%. Also, accelerating Open Access in the power sector · Banking sector recapitalisation & a slow down in buyout of Kenyan banks by continental/international players Musings: · There's a case for rethinking Inua Jamii. Maybe an inflation indexed disbursement as opposed to a flat bump up would be a better route? Of course that has fiscal implications · The elephant in the room in the power sector is the Take or Pay Power Purchase Agreements. Notable progress has made on the Open Access front via the Energy Act 2019 & the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024 · GOK has repeatedly hinted at further unwinding from Kengen without executing it. The argument has been tabled that given that it supplies the bulk of the country's baseload power, a divestiture (potentially to a minority stake) translates to ceding national security interests · Banking is already on a recapitalisation path, including the latest changes that did away with the annual hurdles & extended the runway to the Kes 10.0 billion mark. I am keen to see the proposals around stemming the tide of foreign players buying out Kenyan banks
3:42

Last week I highlighted Safina Party's proposed switch from VAT to Sales Tax (see quoted tweet). This week, a few proposals from People's Party as revealed last evening: · Bump up the Inua Jamii Cash Transfer Programme to Kes 3,000 effective Jan 1st, 2028 & enhance it to Kes 4,000 effective Jan 1st, 2031 · GOK further divesting from Kengen by unwinding its stake from 70.0% to 35.0%. Also, accelerating Open Access in the power sector · Banking sector recapitalisation & a slow down in buyout of Kenyan banks by continental/international players Musings: · There's a case for rethinking Inua Jamii. Maybe an inflation indexed disbursement as opposed to a flat bump up would be a better route? Of course that has fiscal implications · The elephant in the room in the power sector is the Take or Pay Power Purchase Agreements. Notable progress has made on the Open Access front via the Energy Act 2019 & the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024 · GOK has repeatedly hinted at further unwinding from Kengen without executing it. The argument has been tabled that given that it supplies the bulk of the country's baseload power, a divestiture (potentially to a minority stake) translates to ceding national security interests · Banking is already on a recapitalisation path, including the latest changes that did away with the annual hurdles & extended the runway to the Kes 10.0 billion mark. I am keen to see the proposals around stemming the tide of foreign players buying out Kenyan banks

Julians Amboko

41,553 просмотров • 14 дней назад

National Treasury CS, John Mbadi, says that the team that was working on simulations on the impact of PAYE bands adjustments has concluded its work & now what remains is for a decision to be taken. On May 11th (see quoted tweet) he told us initial estimates showed that PAYE bands adjustments (zero rating for < Kes 30,000 & lower rate for Kes 30,000 - Kes 50,000) would translate into a Kes 35.0 billion worth of revenue forgone by the Exchequer.
0:28

National Treasury CS, John Mbadi, says that the team that was working on simulations on the impact of PAYE bands adjustments has concluded its work & now what remains is for a decision to be taken. On May 11th (see quoted tweet) he told us initial estimates showed that PAYE bands adjustments (zero rating for < Kes 30,000 & lower rate for Kes 30,000 - Kes 50,000) would translate into a Kes 35.0 billion worth of revenue forgone by the Exchequer.

Julians Amboko

64,005 просмотров • 3 месяцев назад

Some colour here about the much talked about National Infrastructure Fund (see quoted tweet) as explained by Dr. David Ndii: · The thinking is that the initial capitation will come from privatisation proceeds, starting with Kenya Pipeline Co · The idea is that proceeds from Kenya Pipeline's privatisation, as seed capital, will then crowd in private capital into the Fund, so we are looking at some sort of blended finance here · Dr. Ndii says that GOK's target is that for every Kes 1.0 raised by the state, they crowd in Kes 4.0 from private sector capital (an ambitious ratio in my view) · So if Kenya Pipeline Privatisation potentially raises Kes 100.0 billion as projected by GOK, the hope is that another Kes 400.0 billion of private capital can be crowded in · So the National Infrastructure Fund will almost play a fund manager role including portfolio origination · For roads infrastructure, tolling is earmarked to play a key role in this
3:00

Some colour here about the much talked about National Infrastructure Fund (see quoted tweet) as explained by Dr. David Ndii: · The thinking is that the initial capitation will come from privatisation proceeds, starting with Kenya Pipeline Co · The idea is that proceeds from Kenya Pipeline's privatisation, as seed capital, will then crowd in private capital into the Fund, so we are looking at some sort of blended finance here · Dr. Ndii says that GOK's target is that for every Kes 1.0 raised by the state, they crowd in Kes 4.0 from private sector capital (an ambitious ratio in my view) · So if Kenya Pipeline Privatisation potentially raises Kes 100.0 billion as projected by GOK, the hope is that another Kes 400.0 billion of private capital can be crowded in · So the National Infrastructure Fund will almost play a fund manager role including portfolio origination · For roads infrastructure, tolling is earmarked to play a key role in this

Julians Amboko

56,708 просмотров • 10 месяцев назад

GOK will press on with the switch auctions for FXD1/2024/03 (Kes 91.6 billion) & FXD1/2012/15 (Kes 144.5 billion) despite the abysmal 12.8% performance in the FXD1/2016/10 switch which attracted a meagre Kes 2.56 billion worth of bids. The Central Bank of Kenya Governor, Dr. Kamau Thugge, says that FXD1/2016/10's under-performance should be looked at in isolation & not representative of switch auctions as a liability management tool in the market. He attributes the FXD1/2016/10 under-performance to uncertainty & a wait & see stance by bondholders.
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GOK will press on with the switch auctions for FXD1/2024/03 (Kes 91.6 billion) & FXD1/2012/15 (Kes 144.5 billion) despite the abysmal 12.8% performance in the FXD1/2016/10 switch which attracted a meagre Kes 2.56 billion worth of bids. The Central Bank of Kenya Governor, Dr. Kamau Thugge, says that FXD1/2016/10's under-performance should be looked at in isolation & not representative of switch auctions as a liability management tool in the market. He attributes the FXD1/2016/10 under-performance to uncertainty & a wait & see stance by bondholders.

Julians Amboko

16,449 просмотров • 4 месяцев назад

UPDATE: Kenya's Successor Programme with IMF The Governor of the Central Bank of Kenya, Dr Kamau Thugge, has said that in the talks for a successor programme with the International Monetary Fund, the government is scouting for a programme under normal access terms. Musings: · On April 1st I penned a piece titled 'The end of the US$3.6 billion IMF programme & Kenya's St. Augustine moment' & this route was the first scenario I explored (see quoted tweet for full article) · What this means is that Kenya has ruled out the prospect of seeking exceptional access in the successor programme being pursued. Not entirely surprising, read my article via quoted tweet · Further, this means that Kenya is banking on a securing a funded programme (i.e, a programme that has a loan attached to it). Again, not entirely surprising · However, going for a funded programme under normal access terms translates to Kenya hoping for a relatively small loan from the Fund which presents a headache given the weight of outsized maturities further down the road · In the just ended US$3.6 billion programme, Kenya maxed out on its 600.0% of quota ceiling (i.e, about SDR 3,256.8 Million) · However, failure to consummate the 9th Review implies that Kenya does have some wiggle room for a funded · My math suggests as things stand Kenya has just about 68.0% of quota to toy with going the normal access route, translating to a minuscule US$492.75 million worth of a funded programme · I am really struggling with this position. Why would Kenya scout for a programme whose quantum is even smaller than the aborted 9th Review disbursement? Is that a programme or a disbursement being chased?
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UPDATE: Kenya's Successor Programme with IMF The Governor of the Central Bank of Kenya, Dr Kamau Thugge, has said that in the talks for a successor programme with the International Monetary Fund, the government is scouting for a programme under normal access terms. Musings: · On April 1st I penned a piece titled 'The end of the US$3.6 billion IMF programme & Kenya's St. Augustine moment' & this route was the first scenario I explored (see quoted tweet for full article) · What this means is that Kenya has ruled out the prospect of seeking exceptional access in the successor programme being pursued. Not entirely surprising, read my article via quoted tweet · Further, this means that Kenya is banking on a securing a funded programme (i.e, a programme that has a loan attached to it). Again, not entirely surprising · However, going for a funded programme under normal access terms translates to Kenya hoping for a relatively small loan from the Fund which presents a headache given the weight of outsized maturities further down the road · In the just ended US$3.6 billion programme, Kenya maxed out on its 600.0% of quota ceiling (i.e, about SDR 3,256.8 Million) · However, failure to consummate the 9th Review implies that Kenya does have some wiggle room for a funded · My math suggests as things stand Kenya has just about 68.0% of quota to toy with going the normal access route, translating to a minuscule US$492.75 million worth of a funded programme · I am really struggling with this position. Why would Kenya scout for a programme whose quantum is even smaller than the aborted 9th Review disbursement? Is that a programme or a disbursement being chased?

Julians Amboko

47,199 просмотров • 1 год назад