Finance

Kenya: Employment recovery sparks optimism for banks, but caution remains

Tuesday, 12 October 2021 19:42
Kenya: Employment recovery sparks optimism for banks, but caution remains

(Ecofin Agency) - Rising payroll taxes in Kenya and the details of the Producer Price Index for businesses reflect an employment recovery in the country. Although this is good news for banking activity, some businessmen are cautious about the future.

Various indicators suggest that jobs will continue to grow in Kenya through Q3 2021. According to the Kenya Revenue Authority, payroll taxes or PAYE (Pay As You Earn) for the first fiscal quarter from July to September reached KSh107.7 billion, or about $97 million. This is KSh4.4 billion more than expected.

The Purchasing Managers' Index published by Stanbic bank, the local subsidiary of South Africa's Standard Bank Group, showed that the index of jobs that are burdensome to companies saw its biggest increase in five months in September. Sectors included in the analysis, such as agriculture, manufacturing, construction, wholesale and retail trade, services, and mining, all recorded increases in hiring.

This is positive news for the banking sector, which is doubly exposed to the worker situation. First, banks lend directly to individuals. According to data from the Central Bank of Kenya, the decline in outstanding bad loans from households accelerated to -24% at the end of June this year from -17% in the three months to March 2021. The report also notes a strong decline in outstanding loans in consumer sectors such as real estate and trade, which are indirect banking loans to individuals.

These employment dynamics have been reinforced by the authorities' decision to pursue pump fuel subsidies.  Authorities hope to reduce price increases and restore purchasing power to workers. These good employment prospects are not, however, in a stable outlook for all sectors.

The Central Bank’s business confidence index reported that agricultural and industrial companies that employ between 100 and 500 people or more are quite pessimistic about the outlook. Some fear climate risks while others fear the socio-political instability that could come with the 2022 elections.



 
Telecom


 
Public Management


Ecofin Agency covers the news from 9 business sectors in Africa: Public management, Finance, ICT, Agribusiness, Electricity, Mining, Oil and Gas, Comms and Laws. Ecofin Agency is also creating and management specialized medias, in paper and on the web/social networks, for institutions or African publishers.

AGENCE ECOFIN

Mediamania Sarl
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11

REDACTION
redaction@agenceecofin.com

Public management
Aaron AKINOCHO
Borgia KOBRI
Moutiou ADJIBI

Finance
Idriss LINGE
Walid KEFI
Chamberline MOKO

Agribusiness
Espoir OLODO

Electricity
Gwladys JOHNSON

Oil and Gas
Olivier DE SOUZA

Mining
Louis-Nino KANSOUN

ITC 
Muriel EDJO

Comms
Servan AHOUGNON

Cameroon
Brice R. MBODIAM
Sylvain ANDZONGO
Monique MAY
Julienne Rose SENDE

Togo
Fiacre E. KAKPO
Waliyullah TAJUDEEN
Séna AKODA

Niger
Sandrine GAINGNE

Gabon
Stephane BILLE
Pierre-Celestin ATANGANA

Desk
Stéphane ALIDJINOU
Souha TOURE
Vahid CODJIA
Diane ZODEHOUGAN
Hikmatu BILALI

Translation
Schadrac AKINOCHO
Mouka MEZONLIN
Firmine AÏZAN



Digital
Omar SOKHNA
Mamadou DIOP
Bacary MANE
Abdel Razak MOULIOM

Digital Marketing
Jérémie FLAUX
Geraud ACHI
Jean Christian BERNARD
Franck FOUTE

Web publishing
Bakoly RAHARISOA
Rina RAMANANDRAISOA
Hasina RAJEMISON

Development
Dominique FLAUX

 


 
REGIE COMMERCIALE
AGENCE ECOFIN
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11
Fax: +41 22 301 96 10

Benjamin FLAUX
bf@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72

Voir page 
Nos services
 

 










 



Ecofin Agency is a news agency for economic and sectorial information. It was created in 2010 and it website was launched in June 2011.

Please publish modules in offcanvas position.