...CONTENTS 2 Introduction: Kenya Economy (Sub-Saharan Africa) 3 Objective of the study 4 Macro Economic Indicator Table 5 GDP Trend 6 Trade and Industrial Policy 9 Exchange rate policy 17 Monetary policy & Fiscal Policy 21 References: 26 Introduction: Kenya Economy (Sub-Saharan Africa) Kenya is considered by many today to be the heartland of East Africa. It has a total area of approximately 580,000 km2, making it slightly smaller than the state of Texas. The country's southeastern border is defined by the Indian Ocean, and its southwestern border includes a small portion of Lake Victoria. Kenya's climate changes from tropical along the coast to arid in the interior. Although Kenya is located on the equator, temperatures of many of its cities are moderate because they were built at high altitudes. The terrain consists of low plains, central highlands, which are separated by the Great Rift Valley, and a fertile plateau. However, as little as 3% of the total land area of the country is arable (able to support a crop). It is the 47th largest country in the world in terms of land area; Major agricultural products in the country are tea, coffee, wheat, sugar cane, dairy products and eggs. Important industries of the country are cement, tourisms, oil refining, and consumer goods. Kenya's economy relies heavily on agriculture and tourism Currency: Kenya shilling. National accounts base year: 2001. SNA price Kenya’s economy suffers from...
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...Financial Liberalisation and Price Stability in Kenya[1] Anders Isaksson Department of Economics, Göteborg University Box 640 S-405 30, Göteborg, Sweden. Abstract It has been postulated in the literature that attempts to liberalise the financial sector when inflation is high can lead to high interest rates and even higher inflation. Thereafter. when inflation is fought, a period of low inflation and high real interest rates follow. Since Kenya experienced this sequence, it appears that prices were unstable before and during the financial liberalisation. This paper argues that this was not the case as evidenced by cointegration between the involved variables and the abliltv to estimate a stable inflation model over the period 1970-91. When the cointegrating relationship breaks down, which it does in Kenya after the financial liberalisation, economic agents can no longer forecast inflation with confidence using Historical data. This breakdown of the cointegratina vector implies that agents switch to forward-looking behaviour, perhaps an indication of lack of credibility, in the financial liberalisation process. JEL Classification numbers: E31, E44 and O11 Kevwords: Kenya, Price stability, Financial liberalisation, Cointegration, VAR. 1. Introduction As part of its financial-sector reform, Kenya liberalised interest rates between January 1988 and July 1991[2]. Subsequently, market interest rates skyrocketed, while inflation rose even further. When undertaking financial...
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...UNIVERSITY OF NAIROBI INSTITUTE OF DIPLOMACY AND INTERNATIONAL STUDIES Implications of Global International Monetary Policy Decision on Economic Systems in East Africa: A Case Study of Kenya NAME: LILLIAN WACHIRA REG NO: R50/63875/2010 Supervisor: Dr. Gerrishon Ikiara A Research Proposal submitted in partial fulfillment of the Degree of Masters of Arts in International Studies (MA IS) DECLARATION I declare that this research proposal is my original work and has not been presented for a degree in any other university. NAME: LILLIAN WACHIRA REG. NO: R50/63875/2010 Sign: ………………………………… Date: ……………………… This research proposal has been submitted for examination with my approval as university supervisor SUPERVISOR: Sign: ……………………………… Date: …………………………. DEDICATION I dedicate my project to my lovely mother Beatrice, my brothers Edwin and Eric whose prayers words of encouragement and push for tenacity ring in my ears. ACKNOWLEDGEMENT I would like to express my sincere gratitude to my supervisor Dr. Gerrsihon Ikiara for the continuous support and guidance while carrying out my project, for his patience, motivation and immense knowledge. I would also like to thank the participants in my survey, who have willingly shared their precious time during the process of interviewing. I...
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...The Bottom Billion The development of the poor countries has been a challenge during the past decades. The world consists of one billion rich people and five billion poor people. Most of five billion live in countries that are developing. However, there are one billion people that live in countries that are falling behind and even apart. These countries are facing a bigger problem that one can imagine. The world is becoming globalized. Countries are reducing import quotas and export fees facilitating trade with each other. Also, countries are starting to provide resources, materials and technology to each other allowing them to develop at amazing speed. On the other hand, the bottom billion countries are diverging from this economy, since they are stuck in one of the four traps. The four traps are the conflict trap, the natural resource trap, the trap of being landlocked and the trap of bad governance in a small country. These traps will not allow billion bottom countries to become globalized; however, it can be argued that some of these traps can facilitate the incorporation of a country to world’s economy. Currently, most of the bottom billion people live in African countries. The major problem with these countries is not that they are poor, but that they are not developing. In fact, most of the bottom billion countries are experiencing negative growth and the living standards are lowering each year. These countries are declining on average 0.5 percent per year. Furthermore...
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...Kenya Vision 2030 A Globally Competitive and Prosperous Kenya October 2007 THE NATIONAL ANTHEM Swahili Ee Mungu nguvu yetu Ilete baraka kwetu Haki iwe ngao na mlinzi Natukae na undugu Amani na uhuru Raha tupate na ustawi Amkeni ndugu zetu Tufanye sote bidii Nasi tujitoe kwa nguvu Nchi yetu ya Kenya Tunayoipenda Tuwe tayari kuilinda Natujenge taifa letu Ee, ndio wajibu wetu Kenya istahili heshima Tuungane mikono Pamoja kazini Kila siku tuwe na shukrani English O God of all creation Bless this our land and nation Justice be our shield and defender May we dwell in unity Peace and liberty Plenty be found within our borders Let one and all arise With hearts both strong and true Service be our earnest endeavour And our homeland of Kenya Heritage of splendour Firm may we stand to defend Let all with one accord In common bond united Build this our nation together And the glory of Kenya The fruit of our labour Fill every heart with thanksgiving FOREWORD The unveiling of Kenya Vision 2030 marks an important milestone in our country’s development as it comes soon after the successful implementation of the “Economic Recovery Strategy for Wealth and Employment Creation” (ERS) over the period 2003 to-date. The Kenya economy has now recovered from the slow growth rate of 0.6 percent in 2002 to a projected growth of over 7 percent in 2007. Indeed, the last five years represent the best phase of sustained economic growth in our country in all sectors of our economy notably; agriculture...
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...22 FIGURE 1.23 FIGURE 1.24 FIGURE 1.25 FIGURE B1.9.1 Despite some Q1 weakening, business sentiment in Europe and the US signals further expansion Economic activity is strengthening from very weak levels in Europe Inflation and unemployment trends are on divergent paths across major economies Net capital flows and net financial exposures (width of arrows proportional to amounts in billions of U.S. dollars) Developing country activity is strengthening but at a modest pace Manufacturing surveys are pointing to continued expansion in East Asia and South Asia Output gaps remain small in most developing regions Capital flows have recovered strongly after a steep fall in February Currency depreciations were more modest during the winter turmoil among countries that reduced external imbalances Distribution of changes in developing country bilateral exchange rates with the US$ Most developing country equity markets have fully recouped losses since mid-2013 Borrowing costs have fallen since the start of the year for developing countries Metal prices have extended their falls while food prices have turned up Commodity exporters have suffered significant terms of trade losses over the past year If 2014 is an El Niño year, global grain yields could suffer, pushing up prices The contribution of high income countries to global trade volumes will more than double China is a major export destination for many developing countries Growth in East Asia has remained robust despite a slowing in China...
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...|Terminology |Definition | |Absolute Advantage |Absolute Advantage occurs when one country can produce more of a good or service with the same or resources | | |and more cheaply than another country | |Absolute poverty |Absolute poverty describes the amount of people living on less than $1.50 a day | |Ad Valorem Tax |Ad Valorem Tax is levied as a percentage of the price of a good or service. Currently in England, the | | |Value-Added Tax is 20% of the price of goods and services. It is an indirect tax collected by a third party, | | |usually the seller, who in turn add the tax to the cost of the goods. | |Aggregate Demand (AD) |AD is the total demand for goods and services in the economy: AD= C+I+G+(X-M). | | |C= Total consumption /Expenditure in the economy | | |I= Total investment | | ...
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...Macroeconomics - The US Dollar Appreciating Versus Other Currencies Economic statistics link trade deficits to investment prospects and fiscal growth. A rise in the budget deficit of the U.S. government causes a rise in actual interest rates. Capital inflows affect such trade balances for example, if the U.S. economy offers better investment opportunities than other nations, the country’s capital flow will increase significantly. With flexible exchange system, the capital inflow tends to increase the value of the U.S dollar in correlation to other currencies. This rise in value of the dollar consequently makes U.S. exports rather less appealing to foreigners and U.S. imports become relatively less expensive; thus, net exports go down. Since 2008, the global economy has gone through significant changes influencing crosscutting growth in all the regions. However, Africa has been resilient in the face adverse challenges such as domestic conflict, worldwide headwinds, and internal supply shocks. Thus, Africa has experienced robust economical growth over the past decade. Africa’s fiscal growth has drastically increased over the past decade. This robust economic growth has seen the continent become a hub of new commercial vibrancy. Figure 1.0 below illustrates Africa’s GDP trends between the years 2001 and 2012, with projections for 2013-2014. The figure illustrates an average growth of Africa’s economic performance since the year 2001, averaging above 5%. It also approximates the...
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...P1 – Explain the effects of changes in the economic environment on a selected business. D1 – Evaluate the impact of changes in the economic environment on a selected business In this part of the assignment I am going to be researching the economic factors of Barclays as a business. The Business cycle All of these factors have an enormous impact on my selected business (Barclays) as the economy goes from growth and decline. As well as many others, Barclays is majorly affected as it is in the financial industry. These different factors appear throughout what is called the ‘Business Cycle’. The cycle shows the fluctuation of the activity within the economy over a period of time and consists of 4 main stages; as well as many others, Barclays as a business is majorly affected as it operates in the financial industry. These different factors appear throughout what is called the ‘Business Cycle’ and also known as the ‘Economic Cycle.’ The cycle shows the fluctuation of the activity within the economy over a period of time and consists of 4 main stages; Growth, slowdown, Recession and Recovery as shown below: Supply and demand and GDP (gross domestic product) 'Gross Domestic Product - GDP' the monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. Forces of demand and supply interact to create a market place. This is for many different reasons, for example: Factors...
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...DFI 503 FINANCIAL INSTITUTIONS AND MARKETS COURSE FACILI TATION MATERIAL COMPILED BY ANGELA M. KITHINJI UNIVERSITY OF NAIROBI UNIVERSITY OF NAIROBI SCHOOL OF BUSINESS DFI 503: FINANCIAL INSTITUTIONS & MARKETS COURSE OUTLINE COURSE FACILITATOR MRS KITHINJI [Financial Markets, Financial Institutions, the Power of Information, and Financial Policies] WEEK 1. An Overview of Financial Institutions and Markets • The Financial System of an Economy • The Structure of a Financial System • The Stock Market 2. Emerging Markets, African Markets and Capital Market Development • Financial Markets and the Organized Exchange • Characteristics of Emerging Capital Markets • Indicators of Capital Market Development 3. Financial Regulation, Intermediation, Capital Market Structures and Development • The Players in a Typical Capital Market: - Capital Market Intermediaries - The Regulator: The Capital Market Authority - The Stock Exchange [NSE] - Investors - Government • The Institutional, Regulatory and Legal Framework in Financial Markets - Types of Regulations in Financial Markets - Market Based Banking Regulations - Crisis in Banking Regulation. 4. Securities and Their Characteristics • Shares, Fixed Income Securities, Derivatives • Challenges of Trading of securities in the Stock Market • Why Derivatives Trading is Absent in Most Emerging Markets 5. Financial...
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...Outlook, as the global economy remained weaker and some African countries saw severe domestic problems of various natures. But the world economy is improving and if the AEO 2015 predictions are right, Africa will soon be closing in on the impressive growth levels seen before the 2008/09 global economic crisis. Figure 1. Africa’s economic growth, 2002-16 0 1 2 3 4 5 6 7 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(p) 2016(p) Africa Africa excluding Libya Growth rate (%) Note: (e) estimates; (p) projections. Source: Statistics Department, African Development Bank. West Africa achieved relatively high growth of 6% in 2014 despite its battle with the Ebola virus (Box 1). Nigeria’s growth of 6.3% came mainly from non-oil sectors showing that the economy is diversifying. But Southern Africa’s growth fell below 3% as the key South African economy only grew by 1.5%. Overview ii African Economic Outlook © AfDB, OECD, UNDP 2015 iii Table 1. Africa’s growth by region, 2013-16 (Real GDP growth in percent) 2013 2014 (e) 2015 (p) 2016 (p) Africa 3.5 3.9 4.5 5.0 Central Africa 4.1 5.6 5.5 5.8 East Africa 4.7 7.1 5.6 6.7 North Africa 1.6 1.7 4.5 4.4 Southern Africa 3.6 2.7 3.1 3.5 West Africa 5.7 6.0 5.0 6.1 Memorandum items: Africa excl. Libya 4.0 4.3 4.3 5.0 Sub-Saharan Africa (SSA) 4.7 5.2 4.6 5.4 SSA excl. South Africa 5.4 6.2 5.2 6.2 Note: (e) estimates; (p) projections. Source: Statistics Department, African Development Bank. Domestic demand has continued to boost...
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...PRINCIPLES OF MARKETING NOTES BST 2220 LECTURER: MS CHEGE PRINCIPLES OF MARKETING Marketing is a discipline that identifies customer needs and wants, determines which target markets the organization can serve best and designs appropriate products, services and program to serve these markets. It is a philosophy that guides the entire organization. Marketing aims to create customer-satisfaction profitably through a constant relationship with the target customers and timely production of products and services. However, the marketing department cannot do all these alone; hence, it works with other departments and their team members in the organization. Therefore, it is the total business activities that must be executed by all and sundry in the organization and maintain a good relationship with the outside world. LESSON 1: INTRODUCTION TO MARKETING This course is principally concerned with management and exchange and the process between a firm and its customers. A firm offers a product or a service to the potential customer who has a need for it. The marketing process matches the firm s offer and the customer s need in such a way that both benefit one in terms of profit and the other in terms of need satisfaction. OBJECTIVES peninahwchege@gmail.com Page 1 PRINCIPLES OF MARKETING NOTES BST 2220 LECTURER: MS CHEGE After studying lesson 1, you should be able to: i. Define the term marketing ii. Outline the concepts of needs, wants and demands iii. Discuss the importance of marketing...
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...Sector Report Fast-Moving Consumer Goods in Africa kpmg.com/africa The series has the following reports: • Oil and Gas in Africa • Private Equity in Africa • Manufacturing in Africa • Luxury Goods in Africa • The African Consumer and Retail • White Goods in Africa • Insurance in Africa • Agriculture in Africa • Power in Africa • Construction in Africa • Banking in Africa • Healthcare in Africa Contents Introduction and Overview 1 Key Drivers 2 Market Size 2 Market Concentration 2 Related Industries 4 Spending Power 4 Buying Habits 5 FMCG in Africa 6 Food 6 Beverages 6 Personal Care Products 8 Home Care Products 8 FMCG Growth Spots in Africa 6 Ghana 9 Kenya 10 Nigeria 14 Sources of Information 16 Contact Details back page 1 | Fast-Moving Consumer Goods in Africa Introduction & Overview The fast-moving consumer goods (FMCG) sector, also called the consumer packaged goods (CPG) sector, is one of the largest industries worldwide. FMCGs are generally cheap products that have a short shelf life, and are purchased by consumers on a regular basis. Profit margins on these products are usually low for retailers, who try to offset this by selling large volumes. Some of the most well-known FMCG companies in the world include Unilever, The Coca-Cola Company, and Johnson & Johnson. The FMCG sector comprises a large variety of products, with...
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...7 Balance of Payments 7.1 Global Economic Review The global economy was facing two major threats at the start of FY13: the possible demise of the Euro, and a big fiscal contraction in the US, caused by the ‘fiscal cliff’.1 However, timely policy actions were taken to address these issues. In the EU, for instance, Outright Monetary Transactions (OMTs) were launched to lower the long-term yields on sovereign bonds; there was a restructuring deal of Greek public debt; and the agreement on Single Supervisory Mechanism (SSM) was reached, to help restore confidence in the viability of the European Union.2 Similarly in the US, a partial extension of Bush tax cuts was given under the American Taxpayer Relief Act 2012 (ATRA), to eliminate the revenue side of the fiscal cliff.3 Although these policy measures were able to restore some business confidence, these were, nonetheless, insufficient to pace up the economic recovery (Figure 7.1). In the EU, growth was constrained by fiscal consolidation; deleveraging; and tight credit conditions to repair balance sheets by financial institutions and households. In the US, growth remained lackluster throughout 2012 and early 2013, despite a pick-up in credit and housing following the launch of the third round of quantitative easing (QE3) in September 2012.4 Figure 7.1: Global GDP Growth World Emerging economies 8 6 percent Advanced economies 4 2 0 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 Source: World Economic...
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...INTRODUCTION Kenya vision 2030 aims to create a cohesive, equitable and just society based on democratic principles grounded in the existing, rich and diverse cultures in Kenya. The vision 2030 is based on three pillars namely Economic, Social and Political. The economic pillar seeks to ensure prosperity for all Kenyans through economic development programs in key sectors aimed at achieving an average gross domestic product (GDP) of 10% per annum up to 2030. The social pillar aims at building a just and cohesive society with social equity in a clean and secure environment. The political pillar aims at the realization of a democratic political system founded on issue based politics that respects the rule of law and protects rights and freedoms of every individual in the Kenyan society. Kenya envisages the achievement on vision 2030 through a series of successive five year medium term plans covering the span of the Kenya vision 2030 and the first having been implemented from 2008 up to this year 2012. Before the end of this year another 5 year Medium Term Plans will be produced covering the period 2013-2017 while subsequent Medium Term Pans will cover there are periods 2018-2022, 2023-2027 up to 2030. The MediumTermPlans are designed to fast track the flagship projects identified under vision 2030 various programmers and key policies. The medium term plans calls for increased levels of savings and investments to facilitate the economic growth and development envisaged...
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