The Mwango Capital Podcast

In this episode recorded on 09.07.2024, we host the Nairobi Securities Exchange (NSE) CEO, Frank Mwiti, for an in-depth conversation on the state of the exchange.

We cover the current state of the securities exchange, market performance in 2024, access to data, listings from the government, the corporate debt market, and his vision for NSE’s future.

Subscribe to get notified when we make a new post.

Key Quotes

“Currently, the participation, for example, by retail investors in Kenya is less than 10%. So, you can see that a huge chunk of our market is reliant on institutional capital. And by the way, more than 60 percent of that institutional capital is foreign.” 

“Given that we are in a high-interest environment, and my view, I think that is going to persist for quite a while, especially given the activities of the last few weeks in our country. The government is going to, in my view, continue borrowing at fairly elevated levels, the upper teens, which means that banks in all likelihood will continue to lend to the private sector in the mid-twenties. And that's a secure debt now, which means there is opportunity potentially to come to the public market and raise funds at potentially more competitive terms including potentially even raising a hard currency denominated funding through our market.”

“The green bonds, let me call it the larger sustainability ESG agenda, there's more capital looking for opportunities than there are opportunities but the single biggest issue is origination and structuring.”

Show Notes

00:00:00 Introduction

00:05:05 Overview of the NSE

00:09:12 Kenyan Capital Markets

00:12:15 2024 Market Performance

00:20:52 Strategies to Attract Investors 

00:35:54 Access to NSE Data and the Earnings Calendar

00:45:43 Listing from the Govt, Tech Companies, and the Impact of AI

00:52:58 The Corporate Bond Market

00:59:56 Cost Of Investing in the NSE

01:05:56 Future Outlook

In this episode recorded on 11.07.2024, we host the AAR Insurance CEO, Justine Kosgei, for an in-depth conversation on the firm.

We cover the firm’s product offering, insurance penetration in Kenya, affordable health insurance, Social Health Insurance Fund (SHIF), and IFRS 17’s implementation and impact.

Subscribe to get notified when we make a new post.

Key Quotes

On insurance penetration:

“Many people don't know how the penetration is calculated. Usually, it's a percentage of total insurance premiums that we have in the industry compared to the GDP. So right now it's below 3%. That is very low compared to other countries such as South Africa. For example, whereas our penetration is 3% as a contribution to the GDP for developed countries and in Africa, places like South Africa, they're talking about 17%. So it means we are very far off. It means that the number of people also that have insurance if you take the number of people who have health insurance in Kenya, or private insurance, is about 2 million. Yet we have 55 million Kenyans in total. Meaning we have  over 50 million Kenyans who have no insurance.”

On cultural aspects:

“We have very strong bonds and very strong support systems that sometimes do not encourage people to take insurance.”

On Insurance cost:

“When you have a smaller pool, you, as actuaries or as statisticians, realize that for you to have adequate premiums together for expenses, you have to charge more. But if we have more penetration, then it will be easier to price and create solutions that are more affordable.”

Show Notes

00:00:33 CEO’s Career Journey

00:09:48 Company History

00:15:47 Insurance Penetration

00:26:20 Product Offering

00:31:37 Affordable Health Insurance

00:35:23 Social Health Insurance Fund (SHIF)

00:38:04 Dos and Donts of Insurance Policies

00:40:27 Responsibilities as a CEO

00:43:57 IFRS17

00:48:49 Closing Thoughts

In this episode recorded on 27.06.2024, our host, Ramah Nyang, is joined by Churchill Ogutu - Economist at IC Group, Stellar Swakei - Senior Research Associate at SIB, Oyoo Wycklife - Council Member at Law Society of Kenya, Nikhil Hira - Partner at Koddy Africa LLP to discuss the legal and economic implications of the Finance Bill 2024's rejection.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:03:55 Impact on Ability to Raise Cash

00:05:47 Legal Perspective on the Withdrawn Finance Bill

00:15:43 The Appropriation Bill and the President’s Proposal to Cut Spending

00:23:17 LSK’s Update on Persons Arrested During Protests

00:27:46 How Can Kenya Fix the Debt Problem?

00:43:41 Possible Implications of the President’s Recommendations

00:49:32 Spending Cuts

00:56:48 Laying the Foundations for Future Growth

01:03:47 Fiscal Targets in Relation to the IMF Program

01:13:46 Closing Thoughts

In this episode recorded on 12.06.2024, our guest host and communications expert, Terryanne Chebet, is joined by the Competition Authority of Kenya’s Senior Investigations Officer, Prisca Mwanyale, in a conversation on the various strategies and sanctions CAK employs to unmask cartels.

We also cover CAK’s role, what cartels are, how CAK chooses the industries to investigate, the cost of collusion, penalties, challenges in ensuring compliance in the digital space, and checks that keep CAK from abusing its power.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:02:03 CAK’s Role

00:07:52 Cartel and Uncovering Them

00:13:52 Choose Industries to Investigate

00:19:01 The Investigation to Enforcement Process

00:22:41 Collusion and Penalties

00:32:11 Compliance in the Digital Space 

00:34:20 Anti-Competitive Behavior

00:36:18 Cartel Enforcement in Other Countries

00:40:54 Lessons from Forensic Activities

In this episode recorded on 10.06.2024, our guest host, Julians Amboko from Nation Media Group, is joined by Stephanie Kimani - Economist, Nicholas Kahiro - Tax Manager, Ruth Mwiti - Tax Consultant, and Stellar Swakei - Economic Analyst for a 2024 pre-budget analysis and a discussion about the Finance Bill.

We cover the performance of the Finance Act 2023, the government's ambitious revenue targets in a depressed economy, the voluntary tax disclosure program, the national tax policy, and expenditure estimates for FY 2024/2025.

Subscribe to get notified when we make a new post.

Key Quotes

“From the analysis and observation of where we are currently, I don't believe that the Finance Bill 2024 will be able to raise more than KES 600B and still I do not believe that we will be able to achieve the current fiscal year's revenue target and also the next fiscal year's revenue target.” - Stellar Swakei

“Let's have consistency. Let's have predictability. And with the National Tax Policy out, I will urge the government to make sure going forward, let us anchor our changes or amendments in the tax legislation with the national tax policy.” - Nicholas Kahiro

“The budget reading, in my opinion, will be a non-event. There is not much that will change in terms of the numbers that we've already seen. However, what I would love to come out of the budget reading is the government's commitment. That political goodwill and the political commitment that they will be walking the talk and just assuring Kenyans that we are with you because what I have been feeling in the past couple of months, even through this whole public participation for the finance bill, is that there's a bit of a disconnect from what the government expects or thinks is happening on the ground vis-a-vis the reality.” - Stephanie Kimani

“There are laws currently that have been made or developed to collect taxes, the income tax, the excise duty act, the VAT act, and in terms of administration, the Tax Procedures Act. My view is that we don't need to keep on changing the law to increase revenue. I am of the view that if these laws, the way they are, are implemented, the government can achieve the tax that it is looking for.” - Ruth Mwiti

Show Notes

00:00:00 Introduction

00:02:58 State Of The Economy and Finance Act 2023 Performance

00:07:01 Supplementary Budget II

00:19:58 Direct vs Indirect Taxes

00:28:00 Govt’s Ambitious Revenue Targets

00:34:58 FY 24/25 Expenditure Estimates and Fiscal Consolidation

00:42:27 The National Tax Policy

00:55:01 Deficits in the FY 24/25 Budget

01:00:40 The Voluntary Tax Disclosure Program and Tax Amnesty

01:05:46 Closing Remarks

In this episode recorded on 23.05.2024, our guest host, Ramah Nyang from Bloomberg Africa is joined by Stellar Swakei - Senior Research Associate at SIB, Kigen Kiplimo - Head of Policy Research at KNCCI, Zach Munyi - Head of Public Policy at EABL, and Job Wanjohi - Head of Policy Research at KAM to unpack the Finance Bill 2024.

We cover policy changes that stand out, the impact of the tax proposals on financial services, motor vehicle circulation tax, infrastructure bonds, and engagement by National Treasury with industry players.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:01:45 Standout Policy Changes

00:05:47 Impact on Financial Services

00:21:00 Concerns from KNCCI

00:25:19 Motor vehicle circulation tax

00:38:28 Tax on Infrastructure Bonds

00:43:30 Policy Proposals by KNCCI

00:45:49 Proposals by KAM

00:51:36 EABL Proposals

01:01:59 Engagement with National Treasury

In this episode recorded on 15.05.2024, we are joined by our guest tax experts Ruth Mwiti, Ernest Muriu, and Karambu Muthaura to unpack the Finance Bill 2024.

We cover the proposed changes to the Income Tax Act, taxation of infrastructure bonds, motor vehicle circulation tax, VAT, pension and retirement benefits, excise duty, and changes to the Tax Procedures Act.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:00:48 Overview of the Finance Bill 2024

00:05:51 Proposed Changes in the Income Tax Act

00:15:39 Motor Vehicle Tax

00:24:03 VAT

00:32:21 Pension, Retirement Benefits, and Excise Duty

00:47:55 Changes to the Tax Procedures Act

00:58:54 Amendments to the Employment Income

01:03:14 Is KRA Exempted From The Data Protection Act?

01:04:54 Infrastructure Bonds and Eco-Taxes

01:09:59 Closing Thoughts

In this episode recorded on 30.05.2024, we host Kuza Asset Management’s CEO, James Mose, CFA, on the firm’s journey to achieving KES 1B in assets under management.

We also cover the firm’s key products, financial literacy training, asset classes they are invested in, regulation, fundraising, and long-term view.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:01:57 Role of Chief Investment Officer

00:03:13 Kuza’s Journey and Key Products

00:17:01 Journey Into Asset Management

00;23:35 Value Proposition

00:28:12 Regulation by CMA and RBA

00:32:46 Financial Literacy Training

00:34:09 Asset Classes

00:36:36 Working Capital, Management Fees, and Fundraising

00:40:12 Longterm View

In this episode recorded on 14.05.2024, we host Nahashon Mungai - Executive Director, Global Markets at Standard Investment Bank to better understand SIB and its product, Mansa-X.

We also cover its regulation, the Kenya shilling and USD funds, risk management, management fees, and taxation.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:01:43 SIB’s Business Model

00:06:41 Mansa-X

00:10:45 Regulation

00:11:51 KES and USD Fund

00:13:17 Custodian, Trustees, Diversification, and Liquidity

00:21:10 Financial Instruments and Tools

00:28:11 Management Fees and Risk Management 

00:32:11 Lock-In Period and the Compounding Effect

00:38:53 Risk of Losing Initial Capital

00:45:13 Competition, Huddle Rates, and Taxation

In this episode recorded on 09.05.2024, we are joined by the Competition Authority of Kenya’s Cecilia Kyenze - Senior Analyst, Policy and Research and Ninette Mwarania - Manager, Policy and Research to discuss the institution's role in enhancing consumer experience with online food delivery platforms.

We also cover regulating online food and grocery delivery marketplaces, the duration of market inquiries, handling consumer complaints, enhancing consumer experience, and addressing consumer data concerns.

Subscribe to get notified when we make a new post.

Show Notes

00:00:00 Introduction

00:01:29 CAK’s Mandate

00:05:59 Market Inquiries

00:10:26 Prioritization and Duration of Market Inquiries

00:12:22 Inquiry Into Online Food And Grocery Delivery Platforms

00:22:43 After a Market Inquiry

00:26:05 Handling Complaints and Enhancing Consumer Experience 

00:30:13 Addressing Consumer Data Concerns

00:32:03 Regulating Online Food and Grocery Delivery Marketplaces

00:33:01 Conclusions, Recommendations, and Takeaways

00:39:13 Closing Remarks