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Nairobi Metropolitan Area (NMA) Serviced Apartments Report 2023

Nov 26, 2023

In 2022, we published the Nairobi Metropolitan Area Serviced Apartments Report 2022, which highlighted that serviced apartment’s average rental yield grew by 0.7% points to 6.2% in 2022, from 5.5% recorded in 2021. This was attributed to an increase in average monthly charges per SQM by 6.6% to Kshs 2,716 per SQM, from Kshs 2,549 per SQM recorded in 2021, coupled with an increase in occupancy levels by 4.3% to 65.8% in 2022, from 61.5% recorded in 2021. The improvement in performance was attributable to increased demand for hospitality facilities and services as a result of the reopening of the economy, the return of international flights, and the improved rent collection amounts by serviced apartments that had previously been issuing discounts to attract and maintain clients. This year, we update our report using 202...

The Private Sector Credit Growth

Nov 19, 2023

In many economies, private sector credit forms a vital component due to its ability to effectively distribute resources for investment, thereby acting as a catalyst for economic expansion. Kenya is no exception to this, as improved access to private sector credit translates to real GDP growth in the country. With the government currently seeking to narrow its fiscal deficit, creating an enabling environment to spur the growth of the private sector, especially the micro, small and medium enterprises, will go a long way in boosting its revenue collection. The government can achieve this is by formulating polici to enhance the credit market as well as establishing sector-specific funds to stimulate business growth in key areas of the economy such as finance and insurance, agriculture, manufacturing, transport, and communication. The banking sector remains the largest contributor of credit to private businesses, con...

Nairobi Metropolitan Area (NMA) Infrastructure Report 2023

Nov 12, 2023

In May 2022, we released the Nairobi Metropolitan Area (NMA) Infrastructure Report 2022, which highlighted that there were 940.5 Km ongoing construction and rehabilitation projects in the NMA worth Kshs 97.3 bn. This was a slight increase from the 939.6 Km projects worth Kshs 162.4 bn that was recorded in 2021. Both water and sewer connectivity increased by 1.0% points to 55.8% and 19.0% in 2020 from 54.8% and 18.0% in 2019, respectively in the NMA. Kenya’s electricity coverage also stood at 70.0%, which represents a 0.3%-points increase from the 69.7% realized in 2019. These instances among many others signifies government’s efforts to better the country through infrastructure developments. As a follow up to the aforementioned infrastructure report, we shall focus on highlighting the status of infrastructure i...

Kenya’s Listed Insurance H1’2023 Report

Oct 29, 2023

Following the release of the H1’2023 results by Kenyan insurance firms, the Cytonn Financial Services Research Team undertook an analysis on the financial performance of the listed insurance companies and the key factors that drove the performance of the sector. In this report, we assess the main trends in the sector and areas that will be crucial for growth and stability going forward, seeking to give a view on which insurance firms are the most attractive and stable for investment. As a result, we shall address the following: Insurance Penetration in Kenya, Key Themes that Shaped the Insurance Sector in H1’2023 Industry Highlights and Challenges, Performance of The Listed Insurance Sector in H1’2023, and, Conclusion & Outlook of the Insurance Sector. Section I: Insurance Penetration in Kenya The rate of Insurance penetration in...

Kenya’s Public Debt Review 2023: Is Kenya’s Public Debt Level Sustainable?

Oct 22, 2023

Kenya is one of the fastest growing economies in Sub-Saharan Africa, having registered a growth rate of 5.4% in the second quarter of 2023. However, the country also faces significant challenges in managing its public debt, which has increased rapidly in recent years. According to the latest data from the Central Bank of Kenya (CBK), the total public debt stood at Kshs 10.2 tn as of June 2023, compared to Kshs 8.6 tn recorded in June 2022. This has in turn increased the debt to GDP ratio to 70.2% as of June 2023, 20.1% points higher than the International Monetary Fund (IMF) threshold of 50.0% for developing countries, up from the 66.7% recorded in June 2022. The public debt comprises both external and domestic debt, where the ratio of the external debt to domestic debt remains high at 54.3% to 45.7% as of September 2023. The government has been working on trimming the domestic borrowing so as to ease the pressure on interest rates, with the short-day papers all crossing the 15.0% m...