njuguna ndung ’ u : the african economic picture and the kenyan economy after the crisis notes by prof njuguna ndung ’ u, governor of the central bank of kenya, at an address to the emerging market traders ’ association, nairobi, 20 november 2009. * * * general africa ’ s macroeconomic overview after a decade of strong performance in africa ’ s economies, the global economic crisis has dented its growth path • economic growth in ssa has fallen from an average of 6. 5 % in the 2005 – 2007 period to 1. 1 % in 2009 ( from a projected growth of 6. 2 % ) • exports have fallen from an average of 37. 7 % of gdp in 2005 – 2007 period to 31 % in 2009 with reduced demand • the economic crisis has dampened the expectations on commodity futures markets thereby inducing falling prices and demand for most commodities • falling export demand / declining commodity prices spread the impact of the crisis to far more ssa countries ; suppressing economic activity and causing fiscal and external balances to deteriorate significantly • africa ’ s oil exporters and middle income countries have been hard hit when compared to their low - income counterparts while the fall in copper and diamond prices has resulted in a significant drop of export receipts for zambia and botswana, respectively • most of these countries had extensively built some fiscal space before the crisis – this has suffered severely • current account balance has worsened with a significant drop in exports as compared to imports economic effects of the crisis on sub - saharan africa ( ssa ) • what emerged about 16 months ago as a global financial crisis turned into the sharpest global economic contraction in modern times. its negative effects on subsaharan africa are still unfolding • the crisis initially hit african countries with stronger financial linkages to international capital markets ; significant trade relations with the western world and rich natural resource countries • the initial phase of the crisis manifested itself through weakening of local currencies, declining foreign reserves and bubble busts in capital markets • declining foreign reserves – decline in demand leading to significant drop in commodity prices and worsening terms of trade in general – non - resident outflows from equity and bond markets ( “ flight to safety ” ) – the market - determined or flexible exchange rate acted as an automatic stabilizer during this crisis in most african economies and accumulated reserves were drawn down to cushion the economies • weakening of stock markets as a result of – outflow of non - residents ’ funds – dumped stocks – un

njuguna ndung ’ u : initiatives, developments and achievements of the kenya government securities market remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the launch of the ftse - nse kenya government bonds index, nairobi, 3 october 2012. * * * the chairman of the nairobi securities exchange ( nse ) ; chief executive, nse, mr peter mwangi ; officials of the ftse group ; capital and financial market executives ; members of the media ; ladies and gentlemen : at the outset let me thank the nairobi securities exchange chief executive for inviting me to participate in this auspicious moment of the launch of the ftse - nse kenya government bonds index. this achievement is indeed critical for the development of a robust domestic financial market in kenya. today ’ s event comes at a time when we as market players take pride in the success of our efforts in spearheading market development. this collaboration among market players has been instrumental in developing one of the fastest growing bond markets in africa as the kenyan bond market is ranked among the top in africa. ladies and gentlemen : let me take a few minutes to make some remarks on the initiatives and developments that have underlined the achievements of kenya government securities market. over the last one decade, the central bank of kenya in liaison with stakeholders in the financial sector has contributed significantly to the following successes : 1. longer maturity profile of domestic debt instruments : average maturity profile of government securities rose from 8 months or ratio of 76 : 24 in treasury bills to bonds in june 2001 to 5 years 5 months or ratio 20 : 80 currently. with a well - functioning secondary bond market in place, the government no longer faces rollover risks associated with short term debt instruments. 2. benchmark bonds implementation : successful implementation of treasury bonds benchmarks and reopening to increase their liquidity since april 2009 was a critical step towards addressing the bond market fragmentation problem and in the development of a reliable yield curve in our market. about 16 benchmark bonds have so far been reopened bringing into the market more than ksh. 138 billion and providing critical financing for the national recurrent and development budget as per government ’ s fiscal policy. 3. project - specific ( infrastructure ) bonds – the government of kenya took a bold step in february 2009 to issue the first project / sector specific bond with an aim to fund key infrastructure projects and set pace for public, private as well as supranational agencies