The firm said on  April 11 that it was assessing the future demand for Covid-19 vaccines. Moderna’s decision comes after questions over delays in acquiring land for the project in a special economic zone on the outskirts of Nairobi, the country’s capital. 

The company said it has not received vaccine orders from Africa since 2022 and has seen orders worth over $1 billion cancelled as risks associated with the virus wane. 

“Given this, and in alignment with our strategic planning, Moderna believes it is prudent to pause its efforts to build an mRNA manufacturing facility in Kenya. This approach will allow Moderna to better align its infrastructure investments with the evolving healthcare needs and vaccine demand in Africa,” the company said in a statement on Thursday.

Moderna has been working on several other vaccines based on mRNA technology, including cancer, shingles, and HIV. It recently announced a breakthrough in the development of a vaccine for cancer.

The company’s move is a blow to President William Ruto, who, since coming to power, has been courting foreign firms to drive his manufacturing agenda. In 2023, the Moderna deal accounted for the largest portion of Kenya’s $861 million in foreign direct investments (FDI).  

The facility, which was to be Moderna’s first manufacturing plant in Africa, was expected to position Kenya as a pharmaceutical and vaccines hub in the region with a capacity to produce 500 million doses annually.

The country’s inflation dropped to 3.3% in March from 3.4% in February, driven by a reduction in food inflation which dropped to -0.4% from 0.5%. Still, the policymakers maintained that elevated inflation risks persist due to global factors and exchange rate woes.

Michael Atingi-Ego, BoU deputy governor, said in a virtual briefing on Monday that the country’s core inflation is projected to rise between 5.5% to 6% in the next 12 months, and will return to the 5% target in the second half of 2025.

“The evolution of inflation remains challenging, influenced by factors such as the shilling exchange rate, supply-side shocks, global inflation, and domestic food supply. Forecasts have been adjusted downwards to the previous round, largely due to [the] relative stability of the shilling exchange rate,” Atingi-Ego said.

The BoU’s raise is expected to continue shoring up the Ugandan shilling, which has been in a free fall since February. Atingi-Ego said that the shilling’s drop was caused by foreign investors withdrawing funds from Uganda to look for higher yields in other markets.

The local currency, one of the best performing in Africa at the start of the year, has dropped by 4% despite the central bank’s interventions. 

“The recent CBR increase has had a spillover effect of stabilising the shilling exchange rate. However, the shilling remains vulnerable due to outflows of short-term foreign investor funds from the domestic market in search of attractive yield in other markets and strong domestic demand by corporates,” Atingi-Ego said.

The BoU’s growth forecast for the country’s economy for the current fiscal year that ends in June remained at 6% despite the challenging macroeconomic environment.

The Ethiopian Securities Exchange (ESX) last year set to raise $11.07 million to start operations as part of a larger push by Prime Minister Abiy Ahmed to liberalise and modernise the economy.

“We are thrilled to have exceeded all our expectations in terms of the capital raise and are excited by the overwhelming confidence shown by investors in the long-term prospects of both ESX,” said Tilahun Kassahun, ESX chief executive.

The Ethiopian government will hold a 25% stake in the ESX through the Ethiopian Investment Holdings (EIH) and its subsidiaries including Ethiotelecom and Commercial Bank of Ethiopia, while private and institutional investors will be allocated a 75% stake.

NGX Group is among the top institutional investors that have injected capital into the operationalisation of the bourse alongside FSD Africa, a UK-backed non-profit financial institution, and Trade and Development Bank Group (TDB), the financial arm of the Common Market for Eastern and Southern Africa (COMESA) trade block.

“Strategic foreign investments by TDB, FSD Africa, and [the] NGX Group are particularly important in allowing the transfer of technical know-how and best practices as well as other areas of long-term strategic value that we will explore,” Kassahun added.

The NGX is one of the largest securities exchanges in Africa with a market capitalisation of ₦58.66 trillion ($41.8 billion) and will support ESX with technical experience in developing the bourse structure, trading rules and marketing segments.

The collaboration with the NGX has already helped the ESX develop a rule book to guide its operations. 

The ESX also closed the fundraising with commitments from domestic investors including 16 local banks, 12 insurance firms, and 17 private entities. The exchange is expected to launch sometime this year, further attracting foreign investors into the populous Horn of Africa nation.

While PM Ahmed has moved to liberalise Ethiopia’s economy since coming to power, it is still largely controlled by the state with little private sector involvement. For instance, Ethiopia has no investment banks–suggesting that businesses can only raise capital from commercial banks.

On Wednesday, the apex bank noted that the headline inflation eased to 5.7%, the lowest in two years, as the costs of most food items including maize flour, wheat flour, kales, spinach, and cabbages dropped.

The CBK’s Monetary Policy Committee (MPC) exercised cautious optimism despite the shilling rallying against the dollar and inflation easing within the regulator’s 2.5% to 7.5% range.

“The MPC noted that its previous measures have lowered inflation, addressed the exchange rate pressures, and anchored inflationary expectations. Therefore, the MPC concluded that the current monetary stance will ensure that overall inflation continues to decline towards the 5.0 per cent midpoint of the target, and thus decided to retain the Central Bank Rate (CBR) at 13 per cent,” CBK said in a statement on Wednesday.

The Kenyan shilling has rallied 18%, addressing inflation caused by imports. The central bank on Wednesday quoted the shilling against the dollar at KES 131.48 from a record high of KES 160.18 in February–representing a 17.9% appreciation in the past month.

The CBK said that leading economic indicators point to “continued strong performance of the Kenyan economy in the first quarter of 2024,” buoyed by agriculture, the service sector, and ICT.

The March 2024 Agriculture Sector Survey conducted ahead of the MPC meeting indicates that food prices will fall in the next three months supported by favourable weather conditions, stronger shilling, and dropping fuel prices.

Katherine Tai, the US trade representative, has revealed in the 2024 National Trade Estimate Report on Foreign Trade Barriers [pdf] that US firms have expressed concerns over the opaque nature of the procurement processes in the two countries, which has slowed foreign investments.

“Corruption remains a substantial barrier to trade and investment in Nigeria. Corruption and lack of transparency in tender processes have been great concerns to U.S. companies. U.S. firms experience difficulties in day-to-day operations as a result of inappropriate demands from officials for ‘facilitative’ payments,” Tai said in the report about Nigeria.

In Kenya, the report noted that foreign companies willing to bend the law and have local connections were faring better than US companies scouting for opportunities in East Africa’s biggest economy.

“U.S. firms continue to report challenges competing against foreign firms that are willing to ignore legal standards or engage in bribery and other forms of corruption. Corruption is widely reported to affect government procurements at the national and county levels,” the report said.

The assessment of Nigeria, which is the biggest economy in Africa, noted that the country’s effort to root out corruption was being hampered by internal wrangles in the government and partisan politics.

Nigeria and Kenya are considered among the world’s most corrupt nations, ranked 145 and 126 respectively, out of 180 countries by Transparency International.

While the report raised questions about Nigeria’s judicial system’s ability to convict and sentence corruption-related crimes, the US trade representative noted that political interference in the judiciary is encouraging the vices in Kenya’s case.

“While judicial reforms are moving forward, bribes, extortion, and political considerations continue to influence court cases. As such, foreign and local investors risk lengthy and costly legal procedures,” Tai noted.

The report, however, observed that Nigeria has made modest progress in opening government tenders to foreign firms and levelling the playing field.

Enforcement of intellectual property (IP) rights and data protection laws in the two countries have also been cited as a barrier to US investments. However, Nigeria has made some remarkable progress on this front, passing legislation to combat idea theft.

“In 2019, Nigeria enacted the Federal Competition and Consumer Protection Act, which includes provisions designed to combat trademark counterfeiting, and in 2021, Nigeria enacted the Plant Variety Protection Act, creating a legal framework and administrative structure for the protection of plant varieties. In March 2023, the Nigerian President signed the Copyright Act 2022 into law,” the report remarked.

In a circular sent to banks seen by TechCabal, the apex bank increased the minimum capital requirement to $364.56 million or naira equivalent of ₦500 billion by March 31, 2026, to address rising macroeconomic challenges in Africa’s largest economy.

“The prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks have underscored the need for banks to raise and maintain adequate capital to enhance their resilience, solvency, and capacity to continue to support the growth of the Nigerian economy,” CBN said in a circular on Thursday.

Access Bank, Nigeria’s third most capitalised bank with $190.6 million (₦251.8 billion), would need to raise an additional $187.8 million (₦248.1 billion) to meet the new recapitalisation requirements of the central bank. 

On Thursday, the Holdco, Africa’s largest consumer bank, said that it will ask its shareholders to authorise the plans at an annual general meeting set for April 19.

Access’ wants to raise part of the funds by increasing its issued shares from ₦17.7 billion to ₦26.6 billion. The company has asked for regulatory authorisation to raise capital of up to ₦365 billion by way of a rights issue on such terms and conditions and on such dates as may be determined by the directors.

Access’ decision to recapitalise comes amid a rapid expansion in Africa, including a recent acquisition of Kenya’s National Bank of Kenya (NBK) from KCB Group in a deal estimated at $100 million.

Paul Russo, KCB Group CEO, revealed that keeping NBK would have required the bank to inject up to $60.7 million, despite sinking $106.3 million since buying it in 2019. The war chest will allow Access to expand its footprint in East Africa’s largest economy with the NBK acquisition.

Already, the bank has operations in 15 African countries with a keen interest in revving up its presence and becoming the largest bank on the continent by 2027.

Equity’s stock of bad loans jumped to $874.8 million last year from $481.9 million in 2022, revealing struggling local economies and hurting the bank’s growth while forcing the lender to increase provision for non-performing loans (NPL) to $269 million from $117.5 in the period.

The Central Bank requires Kenyan banks to set aside funds to cover loans where borrowers fail to pay principal or interest for 90 days.

“The NPL trend is consistent with management’s view as at the investors 3rd quarter briefing that NPLs had peaked. Prudent risk management culture led the board to approve a proactive derisking of future performance by providing for the lifetime expected loss on outstanding NPLs,” James Mwangi, Equity Group CEO, said on Wednesday during the release of the results in Nairobi.

Mwangi added that the manufacturing, real estate, and logistics sectors accounted for the bank’s largest share of NPLs, pointing to a tough business environment for most local firms. Bad loans comprised 32% of the lender’s loan book.

Since the COVID-19 pandemic, NPLs have been rising amid a tough business operating environment escalated by the devaluation of local currencies, rising interest rates, and record-high inflation.

Rising taxes in Kenya have also eaten into the disposable income for most households and businesses, leading to loan defaults.

Despite the profit drop, the Nairobi Securities Exchange-listed firm has retained a dividend payout of KES4 ($0.03) per share to shareholders, amounting to 36% of the profit after tax.

The bank said interest income rose to $795.4 million up from $656.5 million while non-funded income grew 30% to $579.4 million. Kenya’s top lender by earnings also saw customer deposits grow by 29% to $9.9 billion.

Equity, which also operates in neighbouring Tanzania, Uganda, South Sudan, Rwanda, and DRC, is still ahead of its main rival  KCB Group in profitability. KCB reported an 8.3% drop in net profits to $285.9 million due to a jump in operating expenses.

The reclassification means the three banks can only accept customer deposits and hold savings accounts. However, they will not be able to open current accounts for customers or trade in foreign currency.

“The change of the status of the three commercial banks to credit institutions follows decisions by the respective boards of directors, to adopt a strategic shift and reposition these institutions to serve their core customer base,” BoU announced in a statement on Wednesday.

In 2023, Uganda’s finance ministry passed regulations requiring commercial banks operating in the country to have at least $38.6 million as a capital buffer, up from $6.4 million. The three lenders, fearing they could not meet the June 30, 2024 deadline, applied to be reclassified.

“These three institutions have been granted a transition period of three (3) months, starting from April 1, 2024, to June 30, 2024, during which they will make adequate arrangements to phase out products and processes that require a Tier I License,” BoU said.

The central bank added that GTBank, ABC Capital Bank and Opportunity Bank meet the capital requirements for a Tier II license.

In a statement seen by TechCabal, GTBank said it applied for the reclassification because it believes this is the right decision for the bank which is aligned with the objectives of its Holding Company, considering global economic realities.

“Continuing operations as a Tier 2 Credit Institution is within the Bank’s current capital base and will allow us play to our core strengths in Retail and SME Banking,” said Jubril Adeniji, Managing Director, of GTBank Kenya and Head of the East African region. “As we make this transition, we will continue to review our positioning within the Ugandan banking sector in line with our objective of maximising shareholder value.” 

Under the new regulations, the minimum capital requirement for a Tier II license is $6.4 million from $275,802. Other financial institutions affected by the new directives include microfinance deposit-taking institutions, which will now have to raise $2.5 million, and foreign exchange bureaus.

Overall, about seven banks have yet to meet the new capital requirements ahead of the deadline.

*Editors note: A previous version of this article showed that GTBank was downgraded. This has been adjusted.

KQ, listed on the Nairobi Securities Exchange (NSE), reported a net loss of $171.9 million, down 47%—even though its revenues improved by 53% to $1.35 billion.

The loss-making airline flew 5 million passengers in 2023, about 36% of Ethiopian Airlines’ (ET) passenger traffic in the 2022/23 financial year. ET is the carrier’s main competitor in the region.

“In the near term, the focus is on completing the capital restructuring plan whose main objectives are to reduce the Group’s financial leverage, fund growth, and increase liquidity to ensure the company can operate at optimal levels,” Allan Kilavuka, KQ Group CEO told investors on Tuesday during the release of 2023 financial results in Nairobi.

KQ, which has been in the red since 2012, promised investors that they are looking to return to profitability for the first time in more than a decade this year.

Accumulated losses over the years have seen Kenya’s flagship carrier dip into negative equity, making it technically insolvent with the government pumping billions in bailout.

Last year, the company tapped US advisory firm Seabury Consulting to help it restructure the business and develop a revival plan to wean it off state bailouts that have cost Kenyan taxpayers billions.

The carrier is currently in the process of hiring another consultant to help find an equity investor amid a new push to revive the business.

“Our focus is on completing the capital restructuring plan to reduce the Group’s financial leverage and increase liquidity to ensure the company can operate at optimal levels.

The aim is to place Kenya Airways on a stronger footing and provide a stable base for long-term growth,” Group CFO Hellen Mathuka said during the release of the results.

Access Bank will acquire the National Bank of Kenya (NBK) from KCB Group for 1.25x of the bank’s book, the company shared on Wednesday. Given NBK’s book value of $79.77 million in 2023, the deal values NBK at around $100 million.  

However, one financial expert shared that the final acquisition figure could still be markedly different from that estimate. The transaction is expected to take six to nine months to complete, per Paul Russo, the Group CEO of KCB Group. 

In 2020, Access Bank paid $12.8 million to acquire Transnational Bank. In 2022, it agreed to buy 83% of Sidian Bank, a Kenyan commercial bank, for $37 million, implying a price-to-book multiple of 1.1x.

“All parties will be working together in the coming months to fulfill the conditions precedent relating to the proposed acquisition, which includes the regulatory approvals of the Central Bank of Nigeria and the Central Bank of Kenya,” the two lenders said in a joint statement.

Access Bank, which already has 22 branches in Kenya, will increase its footprint in East Africa’s largest economy, given NBK’s nationwide network. However, the Nigerian lender is expected to inject more capital into NBK.

Since KCB Group acquired NBK in 2019, it began to push the ailing bank to profitability and spent $63.5 million to ensure it met minimum capital requirements.

“During the period, we have made progressive investments in the Bank, and we believe that this is in the best interest of the Group and its sustainability. Our growth strategy is premised on both organic and inorganic plans, and we shall continue to seek opportunities that increase our shareholder’s value,” Russo said.