Kenya private sector activity slows in June, slowest level in a year
The Stanbic Bank Kenya Purchasing Managers' Index fell to 48.6 from 49.6 in May. Readings above the 50.0 mark indicate expansion in business activity while those below show contraction. The contraction was the sharpest in 11 months, the survey showed.
"Weaker conditions were primarily driven by a solid contraction in business activity. Survey respondents attributed this decline to lower customer spending, challenging economic conditions and operational disruptions from protests," Stanbic Bank said in comments accompanying the survey.
In the last week of June, thousands of Kenyans participated in protests, initially called to mark the anniversary of anti-government protests last year, but then amplified by public anger over the death during the month of a blogger in police custody.
Interior Minister Kipchumba Murkomen said at least 10 people had been killed during one day's unrest when youth-led demonstrations were followed by looting and arson in Nairobi and other cities.
The rights group Amnesty Kenya said at least 16 people were killed, all by gunshot, which it said was suspected to have been fired by police.
"The dip in activity was due to output and new orders contracting because of weaker consumer spending, challenging economic conditions, and social protests reappearing in June," Christopher Legilisho, Economist at Stanbic Bank.
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BBC News
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- BBC News
Wetin hapun as India Prime Minister Narendra Modi make historic visit to Ghana
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The Independent
2 hours ago
- The Independent
Somalia has relied on aid for decades – can it survive without it?
Of all the countries in the world that will be affected by cuts to overseas aid announced this year, the impacts felt in Somalia will be among the most profound. The war-torn country has long been highly reliant on aid to function. Over 67 per cent funded by foreign donors, while the country's health system continues to be predominantly run by a mixture of international donors, agencies and NGOs. Cuts are already taking their toll: a World Food Programme (WFP) country spokesperson told The Independent that they have reduced food aid provision from 1.2m people per month to 820,000 per month despite the country's critical food needs, while USAID files analysed by The Independent show projects worth more than $400m have been terminated in Somalia by that agency alone. But while Somalia's example shows us why aid remains vitally important for some countries, it also helps illustrate why some politicians have become disillusioned by the way aid has been operating. Tens of billions of dollars have poured into the country since the country's civil war broke out in 1991, but the country's life expectancy remains below 50, GDP per capita remains below $500, and corruption levels were judged the second worst in Africa by Transparency International in 2024. 'There is a lot of donor fatigue when it comes to Somalia,' says Ahmed Soliman, Horn of Africa Programme researcher at Chatham House. 'The way that the US instigated its cuts in such a brutal and painful way, it is very difficult to predict how much everyone will suffer now,' adds a Mogadishu-based UN official, who did not wish to be named. 'But at the same time, aid dependency has been a problem for a long time in Somalia. This could be an opportunity for the country to stand on its own two feet a bit more.' There are some reasons to be hopeful that now could be a good moment for the country to begin to being weaned off aid dependency. Nation-building efforts, carried out in earnest since a new federal constitution was adopted in 2012, are beginning to pay dividends. Recent years have seen the government introduce legislation on everything from data protection to child welfare, while management of the country's national humanitarian 'safety net' has largely been transferred from NGOs to government authorities, says Somalia WFP spokesperson Sara Cuevas Gallardo. At a time when many African nations are crippled by unmanageable debt repayments, wide-ranging reforms instigated by Somalia's finance ministry have enabled the country's external debt to fall from 64 per cent of GDP in 2018 to less than 6 per cent of GDP by the end of 2023. Meanwhile, President Hassan Sheikh Mohamud has pledged to hold the country's first nation-wide federal election since 1969 next year. Efforts are also under way to tackle corruption in the country. The diversion of aid to local officials, clan leaders, or elders – labelled ' widespread and systemic ' by the UN in 2023 – has long been a concern for humanitarian operators in the country, but new initiatives around coordinating systems and boosting aid efficiency are increasingly being adopted, said the Mogadishu-based UN official. 'As time goes by, and as our country has struggled with the failures of institutional decay and turbulence in different formats, we are slowly but surely building back our institutions,' said Abdihakim Ainte, advisor to the Prime Minister of Somalia, at the recent climate resilience summit held by think tank IIED in London at the end of June. This shift is taking place at both a national and local level. In Southwest State – the country's most populous, and one long-impacted by cycles of drought, famine, and insecurity – a new piece of legislation, signed into law in February, aims at strengthening efforts to ensure that aid is used for its intended purposes by cutting out middle-men and criminalising unauthorised transportation or commercial usage, among other measures. 'The law is really very comprehensive, and we are training law enforcement and the court system to be able to enforce it,' says Abdinasir Abdi Arush, minister of humanitarian and disaster management in Southwest State. 'We have shared what we have done with other states as well as the federal government, to encourage them to carry out their own reforms.' In the private sector, meanwhile, the billions of dollars in remittances sent by the Somali diaspora shows there are revenue streams beyond humanitarian aid that the country can capitalise on, while certain business success stories offer hope that profits are possible even in the most challenging of economic environments. The $2.4bn in remittances that the IMF tracked Somalia receiving in 2024 is more than double the $1bn the UN tracked the country receiving in aid. The World Bank describes the diaspora as a ' vital economic force ' in the country, while the strength of remittances last year led the IMF to upgrade 2025 GDP growth last year to a buoyant 4 per cent. Abdullahi Nur Osman, CEO of Hormuud Salaam Foundation, a non-profit that makes charitable donations, argues that Somali businesses will be the key driving force from aid dependency. The Hormuud Salaam Foundation is funded via profits from Somalia's largest bank and largest telecoms provider, Salaam Somali Bank and Hormuud Telecom. 'Our staff in the country are part of the local community, and have local knowledge and trust,' Osman says. 'The private sector has not only managed to survive through civil war, but has thrived.' Hormuud Telecom provides Somalis with some of the cheapest mobile data globally, at an average cost of $0.50 per gigabyte, while Salaam Somali Bank's widely used mobile money platform has contributed to Somalia becoming a 'largely cashless society', says Osman, with over 70 per cent of adults now using mobile money transfers. Such digital infrastructure developed out of necessity, allowing Somalia to continue doing business regardless of security concerns – and it is also now widely used by NGOs to send funds and early warning messages for crises like drought or flooding. 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There are concerns, too, that when foreign investment does come, it is not necessarily being well-regulated. A wide-ranging hydrocarbons agreement signed between Turkey and Somalia in April drew significant criticism for giving Turkey access to 90 per cent of Somalia's oil and gas revenues, according to documents published by Turkey's Parliament. For his part, President Hassan Sheikh Mohamud defended the deal as one with 'shared benefits', arguing that Turkey was the only country willing to invest. The story of Somalia's oil and gas also speaks to a broader problem facing the country that will need to be more effectively addressed if the country is to stand on its own: the issue of weak governance. President Mohamud, first in power between 2012 and 2017 and now again since 2022, is a man accused by some of economic mismanagement and power-grab. Even more concerningly, Somalia continues to be impacted by Civil War, with Al Qaeda terrorist group Al Shabaab controlling some 40 per cent of the country, the provinces of Jubbaland and Puntland attempting to break away, and clans regularly fighting over resources on a local level. Ahmed Soliman, from Chatham House, believes that the federal government has had a tendency to look outwards for legitimacy from foreign donors or resources like oil and gas, when the reality is that its hold on power is actually weakening, with constitutional reforms under President Mohamud's administration leading to fighting between Jubbaland and the federal government in recent months. 'There is a sense that the federal project is stalling a bit, and the security picture is failing to evolve in a positive way,' says Soliman. 'The aid dependency continues because the core dilemma of the relationship between the centre and the regions has yet to be resolved.' The lack of clear government control means that everyone from large companies to informal sellers is forced to pay taxes or security provision multiple times to groups including the local government, the federal government, local militia, and police forces, and Al Shabaab, says Soliman. Recent months have seen Al Shabaab boost its territory, with far fewer resources than the federal government, to the point of threatening Mogadishu in recent months. What is now required is careful, consensus-driven negotiation between different parties to build a more sustainable, popular governance model for the country – something 'nobody thinks for one second is going to be easy, but requires politicians acting in the national interest ahead of self interest', says Soliman. climate and security concerns escalating, and aid cuts biting, Somalia continues to face a difficult situation. It remains to be seen whether the country's political class will be able to navigate the country through.
Daily Mail
3 hours ago
- Daily Mail
Ethiopia says mega-dam on River Nile is complete
Ethiopia says its mega-dam on the River Nile is now complete, following years of tensions with Egypt and Sudan over its construction that many feared would lead to war in Africa. The contentious £3billion project is set to be officially inaugurated in September, Ethiopia's prime minister Abiy Ahmed told the country's parliament on Thursday. The Grand Ethiopian Renaissance Dam, Africa's largest hydroelectric plant, rises more than 500ft out of the grasslands of eastern Ethiopia and spans 6,000ft across the Blue Nile river. Construction on the mega-project began in 2011, with the aim of generating electricity for Ethiopia and selling excess energy to its neighbours. It was built on the Blue Nile, one of the two tributaries to the River Nile, which also flows through Sudan. The Blue Nile provides 85% of the Nile's waters. Almost immediately after construction began, Egypt and Sudan warned the dam would massively hamper their own economies that are heavily reliant on the Nile for their own water supplies. Several years of negotiations failed, and tensions between Ethiopia and Egypt & Sudan threatened to boil over to all-out war, as both sides signed military deals with rival nations in the region to bolster their own security. During his announcement of the dam's completion, Ahmed said: 'To our neighbours downstream - Egypt and Sudan - our message is clear: the Renaissance Dam is not a threat, but a shared opportunity. 'The energy and development it will generate stand to uplift not just Ethiopia,' Abiy said. But neither Egypt nor Sudan see it this way. In 2024, Egypt signed a military cooperation deal with Somalia, a rival of Ethiopia, sending arms, military hardware and special forces to the nation. It also reportedly planned to send 10,000 soldiers to Somalia as part of a peacekeeping mission. That deal came after Ethiopia signed a military deal with Somaliland, a breakaway region of Somalia, in which is agreed to give the independent province 12 miles of its own coastline, opening the possibility of allowing a naval base on its land. Pictured: An image taken in 2013 shows workmen preparing to start construction on one side of the dam, which now extends from the hillside and across the river. That same year, Ahmed warned that anyone planning to invade Ethiopia ought to 'think ten times' before doing so. He said that 'those who are afar and nearby' should know that 'we usually embarrass and repel those who dare try to invade us'. 'Anyone intending to invade Ethiopia should think not just once but 10 times because one great thing we Ethiopians know is [how] to defend ourselves,' the Ethiopian leader added. Ethiopia first began generating electricity at the project, located in the northwest of the country around 30 km from the border with Sudan, in February 2022. At full capacity the huge dam can hold as much as 74 billion cubic metres of water and could generate more than 5,000 megawatts of power. Satellite images taken in 2020 showed water pooling behind the dam, with Ethiopia's water minister Seleshi Bekele admitting that year that the water level in the reservoir had increased from 1,720 feet (525 metres) to 1,837 feet (560 metres). The row, which is now threatening to boil over once again, began simmering in 2011, with Egypt in turmoil amid the Arab Spring protests which forced Hosni Mubarak from power and created a leadership vacuum at the top of society. With Cairo effectively blinded, Ethiopia's then-Prime Minister Meles Zenawi launched a five-year Growth and Transformation plan, with the dam at its heart. His country, once among Africa's poorest, was emerging from the end of a decade of unprecedented growth - poverty had fallen, illiteracy rates were down, life expectancy had increased by a decade. But the nation was still being held back, most notably by a lack of electricity - with 65 per cent of the country not connected to the grid. The dam would change all of that, providing enough power not just for the citizens of Ethiopia, but a surplus which could be exported to its neighbours, generating profit and providing opportunities for the whole region. Laying the first brick himself, Zenawi vowed the project would be finished 'whatever the cost'. He died the following year. The actual cost of the project is thought to be £3billion, but its financing is murky. Unusually, Ethiopia chose not to apply for international loans to bankroll it, instead turning to its own citizens and private loans. The central bank, major businesses and everyday citizens were pressured - some say forced - into buying bonds that funded the project, with Ethiopian citizens living overseas saying they also faced pressure to buy in. While China is not officially invested in the project, Ethiopia is a major recipient of Chinese loans - receiving the second-highest total of any African country at £2.6billion, according to the China-Africa Research Initiative. Almost all of the loans were paid after construction on the dam had started. Chinese firms have also been heavily involved in construction, with multi-million pound contracts awarded to companies specialising in hydroelectric dams.
