The KENYA INSTITUTE for PUBLIC
POLICY RESEARCH and ANALYSIS
Thinking Policy Together
OCTOBER – DECEMBER 2023
www.kippra.or.ke
 
 
 
 
 
QUARTERLY 
MARKET ANALYSIS REPORT 
 
 
OCTOBER – DECEMBER 2023 
 
 
 
by 
 
KENYA INSTITUTE FOR PUBLIC POLICY RESEARCH AND ANALYSIS 
Bishops Garden Towers, Bishops Road, P.O. Box 56445, Nairobi, KENYA 
Tel: +254 20 2719933/4, Fax: +254 20 2719951, 
Email: admin@kippra.or.ke 
Website: www.kippra.org 
  
 
TABLE OF CONTENTS 
1. PERFORMANCE IN THE REAL SECTOR ......................................................................... 3 
2. INTERNATIONAL MARKETS .......................................................................................... 11 
3.MONETARY AND FINANCIAL SECTOR ......................................................................... 18 
4.FISCAL PERFORMANCE ................................................................................................. 23 
5.CAPITAL MARKETS .........................................................................................................30 
6.RISK-RELATED FACTORS .............................................................................................. 36 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
1. PERFORMANCE IN THE REAL SECTOR 
Global growth, projected at 3.1 per cent for 2023, is expected to maintain this level in 2024 
before experiencing a slight increase to 3.2 per cent in 2025. Compared to the World Economic 
Outlook (WEO) of October 2023, the forecast for January 2024 is approximately 0.2 
percentage points higher, reflecting improvements in China, the United States, and significant 
growth in emerging and developing economies. However, global growth in 2024 and 2025 is 
anticipated to be lower than the historical annual average of 3.8 per cent from 2000 to 2019, 
due to tight monetary policies, the withdrawal of fiscal support, and low productivity growth. 
Advanced economies are expected to experience a slight dip in growth in 2024 before 
rebounding in 2025, while emerging and developing economies are projected to maintain 
steady growth through 2024 and 2025, with regional variations reflecting the growth effects 
observed in 2023. 
The domestic economy grew by 5.6 per cent in the first three quarters of 2023. This growth 
comprises of 5.5 per cent growth realized in the first quarter, 5.4 per cent in quarter 2 and 5.9 
per cent in quarter 3. The 5.9 per cent growth in quarter 3 was 1.6 percentage points above the 
4.3 per cent growth realized in a similar quarter in 2022. Growth in the third quarter of 2023 
was propelled by a combination of factors. A strong resurgence in agricultural activities, 
facilitated by ample rainfall throughout most of 2023, played a crucial role. Additionally, a 
government-initiated subsidy programme effectively reduced fertilizer costs, further 
bolstering the agricultural sector. The recovery in accommodation and food services activities 
was largely driven by an influx of tourists into the country, and improved performance of the 
financial and insurance sectors. However, certain factors did exert downward pressure on the 
economy, including high fuel prices that saw deceleration in transport and storage activities. 
Moreover, a general slowdown in external demand, a consequence of subdued global growth, 
also weighed on the economy.  
Monthly inflation slowed to 6.9, 6.8 and 6.6 per cent in October, November, and December 
2023, respectively, with an average quarterly inflation of 6.8 per cent. This was a significant 
decline compared to 9.6, 9.5 and 9.1 per cent in a similar period in 2022. The contribution to 
inflation in the quarter was highest from fuel inflation at 13 per cent followed by housing, 
water, electricity, gas and other fuels, food and non-alcoholic beverages, clothing and foot 
wear, and health with 8.2, 7.7, 3.1 and 2.6 per cent, respectively. Countries in the East African 
region, including Uganda and Tanzania, experienced relatively low inflation levels of 2.5 and 
3.2 per cent, respectively, which was attributed to decline in international food prices and 
improved weather conditions that enhanced food production, thus moderating prices. 
  
3 
 
a. GDP Performance  
Figure 1: GDP growth, inflation, and stock market performance 
12 4500
10 4200
3900
8
3600
6
3300
4 3000
2 2700
2400
0
2100
-2
1800
-4 1500
-6 1200
Quarterly GDP Growth (%) Overall Inflation (%) NSE20 Index
Data source: Kenya National Bureau of Statistics Quarterly GDP and Consumer Price Index 
(Various issues); Nairobi Securities Exchange daily stock performance 
  
4 
 
Inflation and quarterly GDP growth rate (%)
NSE20 Index
Figure 2: Quarterly GDP growth rates for selected advanced and emerging 
markets 
9.5 8.6
7.5 6.9 6.6 6.5
5.4 5.4
5.5 4.6
3.8 4.0 3.73.4
3.5 2.9 3.0
2.3 2.32.3
1.4 1.7
1.0 1.31.5 0.9 0.9 1.0
0.4 0.6 0.50.6 0.5
-0.5 Kenya USA UK Japan China France Mexico Brazil S. Africa
-0.8 -0.9
-2.5
-2.3
-3.5
-4.5
-6.3 -4.3 -4.4
-6.5
Oct- Oct- Oct- Oct-Dec 2023
Dec Dec Dec
2020 2021 2022
Data source: World Economic Outlook October 2024 Update  
5 
 
Figure 3: Global annual growth projections 
8.0
6.7
6.2
6.0 5.4
4.7
4.14.0 4.3 4.3 4.1
4.0 3.5 3.1 3.3 3.1 3.1
2.6
2.0 1.6 1.6 1.7
0.0
2020 2021 2022 2023 2024* 2025*
-2.0 -1.6
-2.0
-4.0 -3.1
-4.5
-6.0
Global economy Advanced Economies Emerging Market and Developing Economies Sub-Saharan Africa
 
Data source: World Economic Outlook October 2024 Update 
 
Figure 4: Cement production and consumption (‘000 MT) and index of value of 
building plans 
950 28500
27000
900
25500
850 24000
22500
800 21000
19500
750 18000
16500
700
15000
650 13500
12000
600 10500
9000
550 7500
6000
500
4500
450 3000
1500
400 0
Cement Production ('000 MT) Cement Consumption ('000 MT) Index of Value of Building Plans (Dec 1972=100)
 
Data source: Central Bank Monthly Economic Indicators   
6 
 
Cement production, Consumption
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Index Value of Building Plans
Figure 5: Kenya Housing and Property Indices 
500
480
460
440
420
400
380
Hass Composite Property Sales Index Hass Composite Property Rental Index
 
Data source: Hass Composite Property Sales Index: Year 2000 = 100 Data Source: Hass 
Property Index (http://hassconsult.co.ke/real-estate/hass-index/) 
 
Figure 6: Intake of processed milk in the formal sector (million litres) 
80
75
70
65
60
55
50
45
40
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 2021 2022 2023
 
Data source: Central Bank Monthly Economic Indicators   
7 
 
Hass Composite Index
Milk Intake in the formal sector(Million Liters)
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Figure 7: Monthly tourist arrivals (number) 
220000
170000
120000
70000
20000
-30000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 2021 2022 2023
 
Data source: Central Bank Monthly Economic Indicators  
b) Price movement  
Figure 8: Comparative inflation for selected countries in Africa 
41
39
37
35
33
31
29
27
25
23
21
19
17
15
13
11
9
7
5
3
1
-1
-3
-5
Kenya Uganda Tanzania Rwanda Burundi
S. Africa Namibia Zambia Nigeria Ethiopia
Data source: Central banks for various countries  
8 
 
Inflation rate (%)
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Figure 9: Domestic wholesale agriculture commodity prices (Ksh/Kg) 
100 160
90 150
80 140
70
130
60
120
50
110
40
100
30
20 90
10 80
0 70
Kales Cereals Tubers Fruits & Vegetables Legumes
Data source: Calculated by KIPPRA using data from Ministry of Agriculture 
Figure 10: Contribution of selected CPI baskets to overall Inflation (%) 
16 12
15
14 10
13
12
8
11
10
6
9
8
4
7
6
5 2
4
3 0
Food & Non-Alcoholic Beverages Fuel Inflation (%)
Housing, Water, Electricity, Gas and other Fuels Clothing & Foot-wear
Health
 
Data Source: Kenya National Bureau of Statistics Consumer Price Monthly Rates Central 
Bank of Kenya monthly Economic Indicators various issues  
9 
 
Food,Non-Alcoholic Beverages and Fuel Inflation Kales, Cereals, Tubers, Fruits&Vegetables
Jan-20
Jan-20
Apr-20 Apr-20
Jul-20 Jul-20
Oct-20 Oct-20
Jan-21 Jan-21
Apr-21 Apr-21
Jul-21 Jul-21
Oct-21 Oct-21
Jan-22 Jan-22
Apr-22 Apr-22
Jul-22 Jul-22
Oct-22 Oct-22
Jan-23 Jan-23
Apr-23 Apr-23
Jul-23 Jul-23
Oct-23 Oct-23
Health, Housing,water & Electricity, Clothing &footwear Legumes
Figure 11: Average domestic pump prices and global crude
240 135
220
115
200
180 95
160
75
140
120 55
100
35
80
60 15
Motor Gasoline Premium (Kes/L) Light Diesel Oil (Gasoil) (Kes/L)
Illuminating Kerosene (Kes/L) Opec  basket Crude Oil Prices (US$/Barrel)
 
Data Source: Kenya National Bureau of Statistics; Energy and Petroleum Regulatory 
Authority; https://www.opec.org/opec_web/en/data_graphs/40.html 
Figure 12: Consumer Price Index and Producer Price Index 
140 150
138 148
136 146144
134 142
132 140
130 138
128 136134
126 132
124 130
122 128
120 126124
118 122
116 120
114 118
112 116114
110 112
108 110
106 108
104 106104
102 102
100 100
Producer Price Index Consumer Price Index
 
Data source: Kenya National Bureau of Statistics CPI and PPI Monthly Rates. CPI base year: 
February 2019 = 100; PPI base year: March 2019 = 100 *Producer Price Index  
10 
 
Consumer Price Index Average local retail prices (Ksh/Litre)
Jan-20 Jan-20
Apr-20 Apr-20
Jul-20 Jul-20
Oct-20
Oct-20
Jan-21
Jan-21
Apr-21
Apr-21
Jul-21
Jul-21
Oct-21
Oct-21
Jan-22
Apr-22 Jan-22
Jul-22 Apr-22
Oct-22 Jul-22
Jan-23 Oct-22
Apr-23 Jan-23
Jul-23 Apr-23
Oct-23
Jul-23
Jan-24
Oct-23
Producer Price Index OPEC basket crude oil prices (US$/barrel)
2. INTERNATIONAL MARKETS 
Global coffee exports decreased by 7 per cent to about 6 million metric between 
January and October 2023 compared to about 6.5 million metric tons in a similar 
period in 2022. In October 2023 (first month of October-December quarter of 2023), 
global coffee exports amounted to 571,800 metric tons compared to 581,400 metric 
tons in a similar period in 2022. The average global coffee composite prices, however, 
declined to an average of US cents/lbs 156.7 in the October-December quarter of 2023 
from US cents/lbs 167.6 in a similar period in 2022, a decline backed by low demand 
and a projected surplus of the commodity in the world market occasioned by a better 
crop in Brazil and Central America.  
The Kenya Shilling weakened against the US Dollar, depreciating by 27.6 per cent from 
the quarter ending in December 2022 compared to a similar period in 2023, mainly 
due to increased demand for hard currency from oil and manufacturing importers. In 
the same period, regional currencies depreciated against the US Dollar. For instance, 
the Ugandan Shilling, Tanzanian Shilling, Rwandan Franc, and Burundian Franc all 
depreciated against the US Dollar by 2.1 per cent, 8.4 per cent, 18.2 per cent, and 37.7 
per cent, respectively, a trend equally attributed to the dollar scarcity. The US Dollar 
index remained above the 100-mark throughout the quarter to close at 101.4, implying 
that the US Dollar appreciated by 2 per cent against the basket of currencies making 
up the US Dollar Index. This has implications on the continued depreciation of the 
Kenya Shilling against the dollar and other regional currencies.  
Diaspora remittances remain critical in improving the country’s balance of payments 
and increasing foreign reserves. In the October-December 2023, diaspora remittances 
totaled to about US$ 1.1 billion compared to about US$ 1.0 in a similar quarter in 2022. 
The monthly remittances were at million US$ 356, 355 and 373 in October, November 
and December of 2023, respectively, compared to million US$ 333, 345 and 357 in 
similar respective months in 2022. Foreign Exchange Reserves in terms of months of 
import cover declined to an average of 3.6 months in October-December 2023 from 
an average of 4.3 in a similar period in 2022. Foreign Reserves in months of import 
cover remained slightly above the CBK’s statutory requirement of at least 4 months for 
the October-December quarter and the whole of 2023.  
11 
 
Figure 13: Trends in coffee and tea production (MT), exports (Ksh 
millions) and auction prices (Ksh/Kg)  
Figure 13(a): Monthly coffee production (MT) 
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 2021 2022 2023
 
Data source: Kenya National Bureau of Statistics; Nairobi Coffee Exchange 
(http://nairobicoffeeexchange.co.ke/) 
Figure 13(b): Monthly coffee exports (Ksh million) 
6000
5000
4000
3000
2000
1000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 2021 2022 2023
 
Data source: Kenya National Bureau of Statistics; Nairobi Coffee Exchange 
(http://nairobicoffeeexchange.co.ke/)  
12 
 
Coffee production (MT)
Figure 13(c): Comparison between global coffee exports (MT) and Kenya coffee 
exports (% of global total exports) 
 850,000  1.2
 1.1
 800,000
 1.0
 750,000  0.9
 700,000  0.8
 0.7
 650,000  0.6
 600,000  0.5
 0.4
 550,000
 0.3
 500,000  0.2
Global Coffee Exports Kenya Coffee Exports  as a % of global exports
 
Data source: Kenya National Bureau of Statistics; Nairobi Coffee Exchange 
(http://nairobicoffeeexchange.co.ke/); International Coffee Organization 
(http://www.ico.org/coffee_prices.asp) 
Figure 13(d): Monthly Kenya coffee auction prices (Ksh/Kg) and global 
composite prices (US cents/lb) 
 250  900
 800
 200  700
 600
 150
 500
 400
 100
 300
 50  200
 100
 -  -
Kenya Coffee Auction Prices (KSh./Kg), 2020
Kenya Coffee Auction Prices (KSh./Kg), 2021
Kenya Coffee Auction Prices (KSh./Kg), 2022
Kenya Coffee Auction Prices (KSh./Kg), 2023
Global Coffee Composite Prices (US cents / lb), 2020
Global Coffee Composite Prices (US cents / lb), 2021  
Data source: Kenya National Bureau of Statistics; Nairobi Coffee Exchange 
(http://nairobicoffeeexchange.co.ke/); International Coffee Organization 
(http://www.ico.org/coffee_prices.asp)  
13 
 
Kenya Coffee Auction Prices (Ksh/Kg) Global Coffee Exports (MT)
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Global Coffee Composite Prices (US cents / lb) Kenya Coffee Exports (% of Global 
Exports) 
Figure 13(e): Monthly tea production (MT) 
 65,000.00
 55,000.00
 45,000.00
 35,000.00
 25,000.00
2020 2021 2022 2023
 
Data source: Kenya National Bureau of Statistics; East African Tea Trade Association 
Figure 13(f): Monthly tea exports (Ksh million) 
25,000
20,000
15,000
10,000
5,000
0
2020 2021 2022 2023
 
Data source: Kenya National Bureau of Statistics; East African Tea Trade Association 
14 
 
Figure 13(g): Monthly Kenya tea auction prices (Ksh/Kg) 
340
320
300
280
260
240
220
200
180
2020 2021 2022 2023
 
Data Source: Kenya National Bureau of Statistics; East Africa Tea Trade Association; 
Mombasa Tea Auction 
Figure 14: The exchange rate of Kenya shilling to global currencies 
220 120
200 115
110
180
105
160
100
140
95
120
90
100 85
80 80
US Dollar Index KES/USD KES/STG-POUND KES/EURO
 
Data source: Central Bank of Kenya; Kenya National Bureau of Statistics; 
https://www.investing.com/quotes/us-dollar-index-historical-data  
15 
 
Units of KES for 1 USD/STG-POUND/EURO
Prices in Ksh./Kg
January
February
March
April
May
June
July
August
September
October
November
December
US Dollar Index
Figure 15: The exchange rate of Kenya shilling to regional currencies 
 0.14 9
8
 0.12
7
 0.10
6
 0.08 5
 0.06 4
3
 0.04
2
 0.02
1
 - 0
02-Dec-19 02-Dec-20 02-Dec-21 02-Dec-22 02-Dec-23
USHS/KES TSHS/KES RWF/KES BIF/KES KES/SA RAND
 
Data source: Central Bank of Kenya 
Figure 16: Performance of select currencies against the US dollar 
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
Dec 2018-Dec 2019 Dec 2019- Dec Dec 2020-Dec 2021 Dec 2021-Dec Dec 2022-Dec
(%) 2020 (%) (%) 2022(%) 2023(%)
UGX/USD TZS/USD RWF/USD BIF/USD S.A Rand/USD KES/USD USD index
 
Data source: Country Statistics Offices; https://www.investing.com. Percentage change in 
currencies against the US Dollar measured as end of period changes  
16 
 
USHS/KES, TSSHS/KES, RWF/KES, 
BIF/KES
KES/SA RAND
Figure 17: Months of import cover and diaspora remittances 
400 7.0
6.5
350
6.0
300 5.5
5.0
250 4.5
4.0
200
3.5
150 3.0
Diaspora Remittances (USD '000,00) Months of Import cover
Data Source: Central Bank of Kenya  
17 
 
Diaspora Remittances
Months of Import Cover
3. MONETARY AND FINANCIAL SECTOR 
In December 2023, the Monetary Policy Committee of the Central Bank of Kenya made 
the decision to raise the Central Bank Rate (CBR) by 200 basis points, bringing it to 
12.5 per cent. This decision was driven by the need to stabilize the Shilling amidst 
ongoing depreciation. Meanwhile, other nations in the East African region, including 
Uganda, Tanzania, and Rwanda, opted to maintain their central bank rates at their 
existing levels of 9.5 per cent, 5.0 per cent, and 7.5 per cent, respectively. 
The lending rate averaged 14.2 per cent in October 2023, up from an average of 12.4 
per cent in the corresponding month of the previous year. Furthermore, the weighted 
average interest rates for Treasury Bills across the 91-day, 182-day, and 364-day 
periods have been on a rising trend. These rates increased from averages of 8.2 per 
cent, 9.0 per cent, and 9.9 per cent in 2022 to 12.2 per cent, 12.4 per cent, and 12.7 per 
cent in 2023, respectively. By the end of 2023, the Treasury bill rates for the 91-day, 
182-day, and 364-day periods had reached 15.7 per cent, 15.8 per cent, and 15.8 per 
cent, respectively, showing a significant increase from the 2022 closing rates of 9.3 per 
cent, 9.8 per cent, and 10.2 per cent, respectively.  
The banking sector's total credit increased by 13.5 and 14.0 per cent in October and 
November 2023, respectively, rising to Ksh 6.1 trillion in October 2023 from Ksh 5.4 
trillion in October 2022 and Ksh 6.2 trillion in November 2023 from Ksh 5.4 trillion 
in November 2022. Private sector credit increased by 12.5 and 13.2 per cent in October 
and November 2023, compared to 36.9 and 12.5 per cent  in October and November 
2022. Furthermore, the proportion of public sector credit was 37.4 and 37.7 per cent 
in October and November 2023, compared to 36.9 and 37.2 per cent in the same 
months in 2022. In both October and November 2023, credit to the manufacturing 
sector accounted for approximately 0.1 of total credit, which was higher than the 0.09 
percentage in equivalent months in 2022.  
The sector's liquidity fell to 49.4 and 50.7 per cent in October and November, 
compared to 52.3 and 51.2 per cent in October and November 2022. The Non-
Performing Loans to Gross Loans ratio further grew dramatically to 15.3 and 15.2 per 
cent in October and November 2023, up from 13.8 per cent in both October and 
November 2022. The banking sector's return on assets was 2.7 and 2.8 per cent in 
October and November 2023, down from 3.2 and 3.5 per cent in the respective months 
in 2022, a trend that has continued in 2023 and is attributed to the effects of the Kenya 
shilling depreciation on private equity funds during investment and distribution 
periods.  
18 
 
Figure 18a: Repos and Reverse Repo interbank rates 
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Reverse Repos Repo (7-days) % Interbank %
Data source: Central Bank of Kenya 
Figure 18b: Commercial bank rates and Central Bank rate 
10 16
9
8 14
8
7 12
6
5 10
4
4 8
3
2 6
Deposit Rate Savings Rate Lending Rate Central Bank Rate
 
Data source: Central Bank of Kenya 
19 
 
Deposit and Saving rates (%)
Jan-19
Mar-19
Jan-20
May-19
Apr-20 Jul-19
Sep-19
Jul-20
Nov-19
Oct-20 Jan-20
Mar-20
Jan-21 May-20
Apr-21 Jul-20
Sep-20
Jul-21 Nov-20
Jan-21
Oct-21
Mar-21
Jan-22 May-21
Jul-21
Apr-22
Sep-21
Jul-22 Nov-21
Jan-22
Oct-22 Mar-22
Jan-23 May-22
Jul-22
Apr-23 Sep-22
Nov-22
Jul-23
Jan-23
Oct-23 Mar-23
May-23
Jan-24
Jul-23
Sep-23
Lending rates, Central Bank rates (%) Nov-23
Figure 19: Monetary policy stance for selected countries in Africa 
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
Kenya Uganda Tanzania Rwanda
Ghana Nigeria Zambia S. Africa
 
Data Source: Country Central Banks 
Figure 20: Treasury bill weighted average rate (%) 
17
15
13
11
9
7
5
91-Day 182-Day 364-Day
 
Data source: Central Bank of Kenya  
20 
 
Weighted Average Interest Rate (%) Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Jan-24
Figure 21: Banking sector credit 
40
14
36
13
32
12
28 11
24 10
20 9
16 8
7
12
5
8
4
4 3
0 2
Private Sector Credit Growth (%)
Credit to Public Sector Proportion of Total Banking sector credit (%)
Manufacturing sector credit proportion of Banking sector credit (%)
 
Data Source: Central Bank of Kenya  
Figure 22: Mobile money transactions 
250 790
200 690
150 590
100 490
50 390
0 290
Mobile Money Subscriptions (Millions) Number of Transactions (Millions) Value of Transactions (KSh Billion)
 
Data source: Kenya National Bureau of Statistics, Central Bank of Kenya 
21 
 
Subscriptions & No. Transactions (millions) Public and manufacturign sector proportion of 
banking sector credit (%)
Jan-20 Jan-20
Apr-20 Apr-20
Jul-20 Jul-20
Oct-20 Oct-20
Jan-21 Jan-21
Apr-21
Apr-21
Jul-21
Jul-21
Oct-21
Oct-21
Jan-22
Jan-22
Apr-22
Apr-22
Jul-22
Jul-22
Oct-22
Oct-22
Jan-23
Jan-23
Apr-23
Apr-23
Jul-23
Jul-23
Oct-23
Oct-23
Jan-24
Jan-24
Value of Transactions (Billions) Private sector credit growth (%)
Figure 23: Kenya banking sector performance  
Figure 23(a): Return on asset (%) 
4
4
3
3
2
2
1
1
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 2021 2022 2023
Data Source: Calculated using data from Central Bank of Kenya 
Figure 23(b): Liquidity ratio and ratio of gross Non-Performing Loans (NPLs) to 
gross loans 
16 60
15
15 58
15
56
14
14 54
14
14 52
13
50
13
13 48
12
12 46
Ratio of Gross NPL/Gross loans Liquidity Ratio (%)
 
Data Source: Calculated using data from Central Bank of Kenya   
22 
 
Ratio of Gross NPL/Gross loans(%) Return on Assets (%)
Liquidity Ratio (%)
4. FISCAL PERFORMANCE 
By the end of December 2023, the total revenue collected for the fiscal year 2023/2024 
amounted to Ksh 1.4 trillion. This represents 33.7 per cent of the projected annual target of 
approximately Ksh 4.3 trillion. The composition of this revenue was primarily tax revenue, 
which constituted 72.9 per cent of the total, with domestic and external borrowing accounting 
for 19.0 per cent and 5.4 per cent, respectively. In the second quarter of the fiscal year 
2023/24, revenue collection for October, November, and December was Ksh 194.1 billion, Ksh 
243.1 billion, and Ksh 258.7 billion, respectively. This is a decrease compared to the Ksh 256 
billion, Ksh 295 billion, and Ksh 219 billion collected in the same months of 2022, indicating 
a lower revenue collection in the second quarter of the fiscal year 2023/2024. 
Government expenditure for the fiscal year 2023/24 up to December 2023 totaled Ksh 1.4 
trillion, with development expenditure representing about 11 per cent of the expenditure 
performance. The exchequer issued Ksh 1.3 trillion to the national government and Ksh 142.5 
billion to county governments during this period. The exchequer balance as a percentage of 
actual revenue, a key indicator of fiscal health, was quite low at 0.1 per cent as of December, 
indicating the government’s capacity to support various programmes and services despite 
limited revenue availability. 
The average proportion of Treasury bonds in domestic debt rose to 84.7 per cent in October-
December 2023 from 82.9 per cent in the same period in 2022. Despite a declining trend over 
time, banking institutions continued to hold the largest share of domestic debt, averaging 45.4 
per cent in the October-December 2023 quarter. The share of pension funds decreased to 30.2 
per cent in the October-December quarter of the fiscal year 2023/2024, compared to 32.8 per 
cent in the same period of the fiscal year 2022/2023. Since June 2023, the government has 
been tracking IMF funds on-lent to the government as a domestic financing instrument to 
provide financial assistance and ensure responsible spending.  
23 
 
Figure 24: National revenue (Ksh billions) 
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2020/2021 Actual revenue 2021/22 Actual revenue 2022/23 Actual revenue
2023/24 Actual revenue 2020/2021 Target revenue 2021/22 Target revenue
2022/23 Target revenue 2023/24 Target revenue  
Data Source: Monthly Gazette Notices, The National Treasury and Planning Quarterly 
Economic and Budget Review 
Figure 25: Composition of government revenue (Ksh billions) 
100%
12%
90% 13% 15% 16% 8%17% 18% 16% 18% 14% 15% 18% 18% 16% 16% 15%
24% 18% 15%
80%
70%
60%
50%
84% 88% 84% 89%40% 81% 83% 81% 81% 81% 85% 83% 81% 81% 84% 84% 85%
75% 80% 79%
30%
20%
10%
0%
Tax Revenue Other Revenue Total grants
 
Data Source: Calculated using data from the Central Bank of Kenya and The National 
Treasury data published on monthly Kenya Gazette Notices
24 
 
Revenue (Kshs. Billions)
July
August
September
October
November
December
January
February
March
April
May
June
Figure 26: Growth in tax revenue (%) and quarterly GDP growth (%) 
40.0
30.0 31.4 29.8
24.4 23.7
20.0
11.6
10.0 9.7 10.88.6
6.7
4.0
0.0
-4.20
-6.0
-10.0
-11.6
-14.7
-20.0
Nominal  GDP Quarterly Growth Nominal Tax Revenue Growth
 
Data Source: Kenya National Bureau of Statistics and Central Bank of Kenya 
Figure 27: Exchequer issues to National government (Ksh billions) 
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Actual  2020/2021 Actual  2021/2022 Actual  2022/2023 Actual  2023/2024
Target  2020/2021 Target  2021/2022 Target  2022/2023 Target  2023/2024
 
Data Source: Monthly Gazette Notices, The National Treasury and Planning  
25 
 
Target and Actual  issues to National Government 
(Kshs. Billions
Figure 28: Exchequer issues to county governments (Ksh billions) 
450
400
350
300
250
200
150
100
50
0
Actual 2020/2021 Actual 2021/2022 Actual 2022/2023 Actual 2023/2024
Target 2020/2021 Target 2021/2022 Target 2022/2023 Target 2023/2024
 
Data Source: Monthly Gazette Notices, The National Treasury and Planning  
Figure 29: Exchequer balance as a percentage of actual revenue (%) 
42.0
40.0
38.0
36.0
34.0
32.0
30.0
28.0
26.0
24.0
22.0
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2020/2021 2021/22 2022/23 2023/2024
 
Data Source: Monthly Gazette Notices, The National Treasury and Planning Quarterly 
Economic and Budget Review  
26 
 
Exchequer issues to County governments 
(Kshs. Billions
Figure 30: Fiscal deficit (Ksh billions) 
200
0
-200
-400
-600
-800
-1000
July Aug Sept Oct Nov Dec Jan Feb Mar April May June
Fiscal Deficit 2019/20 Fiscal Deficit 2020/21 Fiscal Deficit 2021/22
Fiscal Deficit 2022/23 Fiscal Deficit 2023/24
 
Data Source: Calculated using data from Central Bank of Kenya and The National Treasury 
data published on monthly Kenya Gazette Notice  
Figure 31: Total debt (Ksh billion) and proportionate shares of domestic and 
foreign debt  
12000
10000
8000
6000
4000
2000
0
Domestic debt Public & Publicly Guaranteed External debt Total Debt
 
Data Source: Calculated using data from the Gazette Notices, Quarterly Economic and 
Budget Review and Central Bank of Kenya Monthly Economic Indicators  
27 
 
47.91% 52.09%
48.64% 51.36%
48.04% 51.96%
49.22% 50.78%
49.13% 50.87%
49.89% 50.11%
49.99% 50.01%
50.18% 49.82%
48.90% 51.10%
46.97% 53.03%
47.01% 52.99%
46.44% 53.56%
77.71% 22.29%
Figure 32: Composition of government domestic debt by instrument (%) 
100
90
80
70
60
50
40
30
20
10
0
Treasury Bills (excluding Repos) Treasury Bonds
CBK Overdraft to Govt Advances from Commercial Banks
IMF funds onlent to Government Other domestic debt  
Data Source: Calculated using data from the Central Bank of Kenya  
Figure 33: Composition of government domestic debt by holder (%) 
100
5.96.06.16.06.1 6.1 6.16.26.46.46.36.36.06.06.26.36.36.46.56.76.8 7.1 7.07.137.68.59.312.511.11.33
90
80
70
60
6.76.76.66.66.7 6.76.86.96.86.97.0
50 7.1 7.27.27.2 7.37.47.47.47.47.47.5 7.57.317.367.337.357.27.217.25
40
30
20
10
0
Banking Institutions Insurance Companies Parastatals Pension Funds Other investors
 
Data Source: Calculated using data from the Central Bank of Kenya   
28 
 
Figure 34: Composition of external debt: Proportionate shares of bilateral, 
multilateral, commercial bank, and export credit (%) 
100
90
80
70
60
50
40
30
20
10
0
Bilateral Multilateral Commercial Banks Export Credit
 
Data Source: Calculated using data from the Central bank of Kenya  
29 
 
32.7 33.0 33.8
33.0 33.0 33.4
30.0 38.8 30.7
30.4 39.4 29.8
30.4 39.7 29.5
29.6 40.7 29.2
28.3 41.8 29.6
28.2 42.2 29.3
27.8 43.2 28.7
27.3 44.5 27.9
26.7 45.3 27.8
26.2 46.1 27.4
26.3 46.7 26.7
25.4 48.5 25.8
23.8 49.8 26.1
5. CAPITAL MARKETS 
Foreign investors maintained a net selling position throughout the quarter, with 
foreign sales of approximately Ksh 3 billion and Ksh 2.5 billion in October and 
November 2023, respectively, compared to foreign purchases of Ksh 2.4 billion and 
Ksh 2.1 billion. The level of trading activity grew, with average investor participation 
rising to 55.1 per cent and 62.2 per cent in October and November 2023, compared to 
31.8 per cent and 60.5 per cent in October and November 2022. This is partly 
explained by the recovery of economic and trading activities at the national level, 
which has increased the economy's liquidity. 
The 2024 Eurobond yields for Kenya in the October-December 2023 quarter averaged 
14.3 per cent compared to a 9.7 per cent average in a similar period in 2022. The yields 
remained relatively high at 14.6 per cent in the months of October and November and 
13.8 per cent in December 2023. 
The regional and global markets showed a mixed performance in the October-
December 2023 quarter; for instance, the US stock markets showed an improving 
stock performance as reflected in the key indices; NYSE Composite, Nasdaq 100, and 
Dow Industrial Average. However, the European stock markets recorded a decline 
during the quarter as shown by the Euro Next 100 index and the London Stock 
Exchange FTSE100. In Africa, South Africa’s FTSE South Africa, and Kenya’s NSE20 
declined in performance while Egypt’s EGX30 and Nigeria’s NGSE30 recorded 
improvements.  
30 
 
Figure 35: Bond volumes traded (Ksh millions) and FTSE NSE Kenya 
government bond price Index 
1,520
1,510
1,500
1,490
1,480
1,470
1,460
1,450
 
Data Source: Nairobi Securities Exchange; Central Bank of Kenya Monthly Economic 
Indicators  
Figure 36: The 10-year Kenya Eurobond (2024) yield (%) 
25.0
20.0
15.0
10.0
5.0
0.0
 
Data Source: Central Bank of Kenya Monthly Economic Indicators  
31 
 
Figure 37: Stock market performance 
 3,000
 2,000
 1,000
 NSE20 Index  Mkt Cap (KSh Bn)
 
Data Source: Nairobi Securities Exchange 
Figure 38: Stock value turnover ratio (%) 
0.25
0.20
0.15
0.10
0.05
0.00
 
Data Source: Nairobi Securities Exchange; Calculated as equity turnover value (Ksh 
millions)/ Market capitalization (Ksh millions)  
32 
 
02-Jan-20 02-Jan-20
07-Feb-20 06-Feb-20
17-Mar-20 13-Mar-20
24-Apr-20 21-Apr-20
04-Jun-20 28-May-20
14-Jul-20 03-Jul-20
20-Aug-20 10-Aug-20
25-Sep-20 14-Sep-20
03-Nov-20 19-Oct-20
09-Dec-20 24 Nov 2020
18 Jan 2021 30-Dec-20
23 Feb 2021 04-Feb-21
31 Mar 2021 11-Mar-21
10 May 2021 19-Apr-21
17 Jun 2021 25-May-21
26 Jul 2021 30-Jun-21
31 Aug 2021 05-Aug-21
6 Oct 2021 09-Sep-21
15 Nov 2021 15-Oct-21
23-Nov-21
22 Dec 2021 30-Dec-21
28 Jan 2022 03-Feb-22
7 Mar 2022 10-Mar-22
12 Apr 2022 14 Apr 2022
25 May 2022 26 May 2022
1 Jul 2022 1 Jul 2022
10 Aug 2022 8 Aug 2022
16 Sep 2022 14 Sep 2022
26 Oct 2022 21 Oct 2022
1 Dec 2022 25 Nov 2022
13 Jan 2023 5 Jan 2023
20 Feb 2023 9 Feb 2023
28 Mar 2023 16 Mar 2023
9 May 2023 25 Apr 2023
15 Jun 2023 31 May 2023
28 Jul 2023 13 Jul 2023
4 Sep 2023 17 Aug 2023
10/11/2023 21 Sep 2023
11/20/2023 10/30/2024
12/29/2023 12/06/2023
Figure 39: Foreign trading in the stock market 
140
31,500
120
26,500
100
21,500
80
16,500
60
11,500 40
6,500 20
1,500 0
Average Foreign Participation to Equity Turnover (%)
Foreign Purchases (FP)
Foreign Sales (FS)
Equity Market Turnover (ET)  
Data Source: Central Bank of Kenya; Sterling Capital Ltd  
Figure 40: Stock market performance of selected advanced and emerging 
markets  
(a): USA stock markets 
18,000 39,000
37,000
16,000
35,000
14,000 33,000
31,000
12,000
29,000
10,000 27,000
25,000
8,000
23,000
6,000 21,000
NYSE Composite Nasdaq 100 Index (NDX) Dow Jones Industrial Average (DJIA)
 
Data source: Country Stock Exchanges; http://www.investing.com  
33 
 
NYSE Composite & Nasda 100
Foreign Purchases & Sales, Equity Turnover 
(KSh. Million
Jan-20
Apr-20
Jan-20
Jul-20
Apr-20
Oct-20 Jul-20
Jan-21 Oct-20
Apr-21 Jan-21
Jul-21 Apr-21
Jul-21
Oct-21
Oct-21
Jan-22
Jan-22
Apr-22 Apr-22
Jul-22 Jul-22
Oct-22 Oct-22
Jan-23
Jan-23
Apr-23
Apr-23
Jul-23
Jul-23
Oct-23
Oct-23 Jan-24
Average Foreign Participation to Equity 
Turnover (%)
Dow Jones Industrial Average
(b): European stock markets  
9,000 1,486
8,600 1,433
8,200 1,380
1,327
7,800
1,274
7,400 1,221
7,000 1,168
6,600 1,115
6,200 1,062
1,009
5,800
956
5,400 903
5,000 850
London Stock Exchange Group PLC (LSE) (FTSE 100) EuroNext 100 (N100)
 
Data source: Country Stock Exchanges; http://www.investing.com  
c): Asian stock markets 
3,950 35,400
34,200
3,675
33,000
3,400 31,800
3,125 30,600
29,400
2,850
28,200
2,575 27,000
25,800
2,300
24,600
2,025 23,400
1,750 22,200
21,000
1,475
19,800
1,200 18,600
Shanghai Composite (SSEC) SZSE Composite Index (SZSC) Nikkei 225 (N225)
 
Data source: Country Stock Exchanges; http://www.investing.com  
34 
 
London Stock Exchange
SSCE & SZSC
Nikkei 225 EuroNext 100
(d): African stock markets 
25,000
4,700 24,200
23,400
4,350 22,600
4,000 21,80021,000
3,650 20,200
3,300 19,40018,600
2,950 17,800
17,000
2,600 16,200
2,250 15,400
14,600
1,900 13,800
1,550 13,000
12,200
1,200 11,400
850 10,6009,800
500 9,000
FTSE South Africa (FTWIZAFL) NSE20 (Kenya)
NGSE30 (Nigeria) EGX30 (Egypt)
 
Data source: Country Stock Exchanges; http://www.investing.com  
35 
 
FTWIZAFL, NGSE30 &NSE20 indices
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Jan-24
EGX30 index
6. RISK-RELATED FACTORS 
The Stanbic Kenya Purchasing Managers’ Index (PMI) averaged 46.9 per cent in the 
October-December quarter of 2023 compared to a 50.9 average in a similar period in 
2022. The PMI index was at 46.2, 45.8 and 48.8 per cent in the respective months of 
October, November and December 2023 compared to 50.2, 50.9 and 51.6 per cent in 
a similar period in 2022. The average PMI index in from January to December 2023 
was at 48.1 per cent compared to 49.2 per cent in a similar period in 2022; this PMI 
reading of below 50 signifies deterioration. The relatively low performance in 2023 
compared to 2022 has been attributed to output contraction, lower demand, 
tightening inflationary pressures, low access to US dollars and depreciation of the 
Kenya Shilling against foreign currencies. 
The October-December 2023 short rains performed well, with an average of 747mm 
of rainfall compared to 298mm in a similar period in 2022 across weather stations in 
Kenya. Meru station recorded the highest rainfall in the October-December period of 
about 1,100mm of rainfall while Lodwar recorded the least rainfall of 30mm in the 
same period.  
The credit rating for Kenya was downgraded by Fitch ratings from B to B- in July 2023, 
largely due to fiscal deficit, relatively high debt and deteriorating external liquidity. 
IMF debt thresholds were exceeded, with the present value of external debt in per cent 
of exports, external debt service in per cent of revenue, external debt service in per 
cent of exports, and present value of total public debt in per cent of GDP recorded at 
347, 315, 21, and 68, respectively, in 2023 compared to 180, 18, 15, and 55 in 2022, 
respectively. The government faces elevated debt service obligations between 2023 
and 2024, with the anticipated maturity of US$ 2 billion Eurobond in June 2024, 
which will further exert pressure on international reserves. 
 
 
 
 
 
 
 
 
 
 
 
 
36 
 
Figure 41: Kenya purchasing managers’ index 
60
58
56
54
52
50
48
46
44
42
40
38
36
34
Data Source: Stanbic Bank  
(https://www.stanbicbank.co.ke ); IHS-Markit (https://ihsmarkit.com)  
Key: 50.0 = Neutral; Above 50.0 = Expansion; Below 50.0 = Contraction 
Figure 42: Mean annual and seasonal rainfall (millimeters) 
1600
1400
1200
1000
800
600
400
200
0
March-May June-August October-December Annual
2020 2021 2022 2023
 
Data Source: Kenya Meteorological Department Monthly Weather Forecast Reports 
37 
 
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Figure 43: October-November-December 2023 rainfall against October-
November-December LTM 
 
Data Source: Kenya Meteorological Department Monthly Weather Forecast Reports 
Figure 44: Average Monthly Temperature (Nairobi) 
40
30
20
10
0
Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23
Average of Nairobi Minimum Temperature (°C) Average of Nairobi Maximum Temperature (°C)
 
https://www.visualcrossing.com/weather/weather-data-services/nairobi?v=api  
38 
 
Table 1: Fitch rating for Kenya 
Type Current Rating  Prior Rating  
(as of 20 July 2023) (as of 22 March 2022) 
  Rating  Outlook Action Rating Outlook Action 
LTR (Long term  B Negative Affirmed B+ Negative Affirmed 
Issuer  
default rating)  
STR (Short-term B   Affirmed B   Affirmed 
Issuer default 
rating) 
Local Currency B   Affirmed B   Affirmed 
Short Term Issuer 
Default Rating 
Country Ceiling B   Affirmed B+   Affirmed 
Local Currency B Negative Affirmed B+ Negative Affirmed 
Long Term Issuer 
Default Rating 
Data source: https://www.fitchratings.com/entity/kenya-86485911#ratings 
Table 2: Some Eastern Africa countries IMF debt thresholds 
Country Date of Debt Present Present value External debt External debt Present value 
Publica carryin value of of external service in service in of total 
tion g external debt in percent of percent of public debt in 
capacit debt in percent of Revenue Exports percent of 
y percent of Exports  GDP 
GDP 
Thr Act Thres Act Thres Act Thres Act Thres Act
esh ual hold ual hold ual hold ual hold ual 
old 
Burundi Jul-22 Weak 30 17 140 226 14 0 10 0 35 68 
Djibouti May- Mediu 40 72 180 61 18 15 15 1 55 41 
20 m 
Ethiopia Apr- Mediu 40 28 180 316 18 315 15 21 55 46 
20 m 
Kenya Dec- Medi 40 32 180 347 18 315 15 21 55 68 
22 um 
Rwanda Dec- Strong 55 50 240 423 23 798 21 38 70 64 
22 
Somalia Jun-22 Weak 30 39 140 478 14 0 10 0 35 0 
Sudan Jun-21 Weak 30 44 140 368 14 500 10 50 35 128 
Tanzania Jul-22 Mediu 40 27 180 285 18 300 15 20 55 42 
m 
Uganda Mar- Mediu 40 28 180 312 18 180 15 12 55 51 
22 m 
Data source: IMF country debt thresholds 
39 
 
About the KIPPRA Quarterly Market Analysis Report
The KIPPRA quarterly market analysis report is one of the Institute’s policy 
intelligence publications that focuses on reviewing trends in performance 
in the real sector (gross domestic product, price movements, production, 
consumption); international markets (commodity markets, exchange rates, 
remittances); money market (interbank, treasury securities, banking sector 
performance, monetary policy); fiscal performance; capital markets; and 
risk related factors in Kenya’s economy and selected global markets in 
each quarter, with a view to identifying policy-related dimensions.
Kenya Institute for Public Policy Research and Analysis
Bishops Road, Bishops Garden Towers
P.O. Box 56445-00200, Nairobi
Tel: 2719933/4; Cell: 0736712724, 0724256078
Email: admin@kippra.or.ke
Website: www.kippra.or.ke
Twitter: @kipprakenya