– CEO – Kenya Comercial Bank
Justifiably, 2017 was a year that can be summarised in three words: uncertain, changing and challenging. Looking at the East African region in the last year, economic conditions deteriorated largely in Kenya and South Sudan, with the rest of the countries closing the year with a not so favourable story to tell.
Geopolitical instability remained a major threat to the region’s near-term economic growth. A prolonged electioneering period in Kenya brought a slowdown in expansion across the East African region. We however see some recovery coming through during the first half of 2018. The full effect of the law capping interest rate in Kenya marked by a slow business environment on account of the general election negatively hit businesses and the economy at large.
The rate cap subdued private investment owing to the drop in lending rates. As such, overall credit growth to the private sector reached its lowest levels in mid-2017. In South Sudan, hyper-inflation impacted on business but we remain optimistic that the political situation will take a turn for the better, creating a conducive operating environment. It is worth noting that the Rwanda elections passed uneventfully, which was a positive indicator for business and investment in the region. Unsurprisingly then, most business executives would report that conditions for the financial services industry have worsened over the past 12 months, a fact that is clearly borne out in the industry’s financial performance this year.
First Published by Capital Radio