Business News Highlights

Overvalued Kenyan shilling wreaks havoc on locally-manufactured exports

The Kenyan shilling is nearly 20 per cent overvalued against the dollar in real terms, rendering the manufacturing sector uncompetitive in regional export markets, economists at investment services group, Renaissance Capital have said. The analysts estimate the fair value of the shilling based on the real effective exchange rate (Reer) should be 119 units to the dollar. Reer takes into account the currency’s value relative to that of its trading partners as well as inflation levels.

In nominal terms, the shilling is exchanging at 101.35 against the US dollar. The higher implied value means that in terms of trade, Kenyan goods are practically expensive for other countries to buy. This is in comparison with those sourced from countries such as South Africa whose currencies are seen to be undervalued.

James Gichuru Road expansion goes over-budget by Sh8 billion

An audit report submitted to the National Environment Management Authority (Nema) has confirmed that conversion of the James Gichuru Road-Rironi section of the Nairobi-Nakuru road into a six lane highway will cost Sh8.3 billion more than was announced in July. The report says that expansion of the road will cost Sh24.7 billion or Sh8.3 billion higher than the Sh16.4 billion earlier reported, raising questions as to what may have caused the steep price inflation within weeks.

In July, the Kenya National Highways Authority (KeNHA) announced that it had signed a contract with China Wu Yi to expand the road at a contract sum of Sh16.4 billion. Expansion of the 25.1km stretch is aimed at easing traffic congestion on the busy highway, especially during rush hours when a large number of cars are getting out or entering Nairobi and is also part of a larger project to expand the Northern Corridor from the Jomo Kenyatta International Airport (JKIA) junction to Rironi.

Puma takes Kenafric to court for infringing on company trademark

Kenyan manufacturer Kenafric Industries is entangled in a dispute with German clothing and footwear firm Puma over alleged trademark infringement. Anti-Counterfeit Agency (ACA) inspectors seized several shoes and exercise books from Kenafric’s factory bearing the name ‘Fuma’, which Germany’s Puma holds are manufactured to confuse consumers of its global brand.

The trademark disute has seen Kenafric officials charged at a chief magistrate’s court. Kenafric has on the other hand sued the ACA seeking release of footwear and exercise books seized from its Baba Dogo factory in August last year following the complaint by Puma. Kenafric says its Fuma brand is registered with the Kenya Industrial Properties Institute, and that the ACA wrongly seized its products. The firm adds that its Fuma trade name has never been challenged by anyone. The firm says the rubber shoes target the low-end market.

UN supports Kenya, rejects Namibia and Zimbabwe’s bid to export ivory

Kenya’s  bid to put an end to ivory trade has received renewed support from the United Nations (UN) as  Zimbabwe and Namibia failed convince the UN Convention on International Trade in Endangered Species (CITES)  that they should be allowed to export elephant ivory. Meanwhile, Swaziland lost a bid to sell rhino horn – moves they all argued would protect the animals rather than endanger them.

Kenya, among other African nations, is strongly opposed to any reopening of the ivory or horn trade on the grounds that it will stimulate demand and threaten their animals. In the secret ballots, Namibia’s proposal was defeated by 73 to 27, Zimbabwe’s by 80 to 21, both far short of the two-thirds required to pass. Swaziland’s was defeated by 100 to 26. Member states of the UN Convention voted overwhelmingly at a conference to reject the proposals to sell tusks and horns, whether they are seized from poachers or taken from animals that die naturally or have been put down by the state.

Hilton Worldwide to open Sh11 billion hotel in Nairobi’s Upper Hill area

Hilton Worldwide, an American multinational hospitality company, has signed a management agreement with Kenya-based developer Jabavu Village Ltd to open a $110 million (Sh11 billion) 255 guest-room and suite hotel in Nairobi. The hotel is set to open in 2020 and joins 50 Hilton Hotels & Resorts properties trading or under development in 17 countries across Africa. Kenya is one of Africa’s fastest growing economies with strong growth in agricultural, tourism, construction and telecommunication sectors. The country’s diversifying economy means it is a popular destination, busy with leisure and business travelers.

Co-developed by Jabavu Village and White Lotus Projects, Hilton Nairobi Upper Hill will comprise an Executive Lounge and five food and beverage outlets, including a relaxing poolside bar, speciality smokehouse and grill restaurant, lobby dining area with landscaped deck and a boutique rooftop bar with unbeatable vista views of the Nairobi skyline on the 43rd level.

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