Building on its Mobile Money success which is a product of the largest telecom company in Kenya by subscribers, the government now plans to sell a mobile only government bond. The bond according to the a press release by the East African nation’s Treasury office says citizens will soon be able to buy these bonds directly on their mobile devices making it the world’s first mobile-only government bond.
Called the M-Akiba (“akiba” means savings in Swahili) Infrastructure Bond, “Kenyans can buy bonds from a minimum amount as low as Kshs.3, 000 (about $30/14,000 Nigerian Naira) up to a maximum of Kshs.140, 000 per day. Investors can continue to invest additional amounts in subsequent periods up to the date of closure of the bond issue or when the overall targeted amount of the issue has been achieved” according to the Cabinet Secretary.
“The upside potential of a product like M-Akiba and the impact it is likely to have on increasing the number of investors in the market is significant. We are excited that this product will give ordinary Kenyans the opportunity to participate in the capital markets in an easy and affordable manner, in addition to giving them the ability to earn good returns on their savings,” Mrs. Rose Mambo, the Chief Executive Officer of the Central Depository and Settlement Corporation added.
To invest in the upcoming Kshs.5 billion “Save Money, Make Money, Build Kenya” bond, Mr. Rotich said, potential customers will only need to have a valid identity card, dial *889# and follow the prompts. Upon the maturity of the bond, the principal amount and coupons (interest from the bond) will be paid through M-PESA.
“The M-Akiba bond is an infrastructure bond which means that the proceeds from the bond will be utilized to finance ongoing and new infrastructure projects in areas such as roads, energy, water and telecommunications. I therefore wish to urge all Kenyans to participate in saving through this product as they will not only be saving but also participating in building the nation through financing development projects that will improve their standard of living”, said Mr. Rotich.
Now the aim of this is to allow ordinary Kenyans who already have an idea of mobile money operations especially because of the Mpesa success to buy government bonds which the nation of Kenya actually needs to finance its national budget. Kenya was called upon by the IMF to try and deal with its budget deficit that’s now about 9.6 percent of GDP in 2016 which represents a 2.4 percent increase from the year before. But Kenya now plans to borrow some $1.5b externally this year to finance projects and in addition wants to raise money domestically to bridge some of the budget deficit problem.
By bringing such an initiative to a popular platform such a Mpesa, the government hopes that Kenyans of all class will be able to invest in their own and the country’s future.
Kenya is one of the best performing tech nations in Africa. The population of Kenya in 2012 was about 43 million and it was reported that they had a about 19.9 million connected users at the time but fast forward to 2016, with a population of 47 million, there were about 31.1 million connected users which means a vast majority of the population is connected to the internet. Little wonder why the Facebook CEO made Kenya one of his stops on his African tour last year as other names like Google and IBM have vested interests in the country.