Page 8 - DMEA Week 31

DMEA finanCe & inVestment DMEA
Kuwait’s final budget shows $11bn deficit for FY2018/2019
middle east
PRELIMINARy budget gures for Kuwait’s s- cal year 2018/2019 (Fy2018/2019) that ended in March showed the budget surplus narrowed by 31% y/y to KWD3.34bn ($11bn) a er expensing a mandatory 10% of revenues to be transferred to the Fund for Future Generations (FFG), the nance ministry said in a statement.
Kuwait’s government has reached the debt ceiling limit stipulated by legislation and nanced the de cit through reserve drawdowns.
e contraction in the budget de cit was pri- marily driven by a spike in oil income growing by 29% y/y to KWD18.4bn with Kuwait selling on average 2.8mn barrels of oil per day at an average price of $68.6 per barrel.
Non-oil income increased by 24% y/y to KWD2.13bn mainly due to a 30% y/y jump in the catch-all other income category to KWD1.45bn. As a result, overall budget reve- nues rose by 28.5% y/y to KWD20.55bn.
On the expenditures side of the balance sheet, Kuwait’s total state spending, before expensing 10% of revenues to fund obligations towards the FFG, increased by 13.5% y/y to KWD21.84bn.
This was partly due to a 4% y/y increase in state employee compensation bill to KWD11.45bn and a 64% y/y leap in subsidies to KWD4.88bn and a 21% y/y increase in the total spending category to KWD2.48bn.
e budget de cit prior to expensing obli- gations towards the FFG was down 60% y/y to KWD1.29bn, while a er deduction of amounts to be transferred to FFG the nal budget de cit narrowed by 31% y/y to KWD3.34bn.
e Fund for Future Generations is a sover- eign wealth fund entrusted with maintaining the Kuwaiti citizen’s high standard of living in a post-oil economy. Kuwait’s scal year runs from April 1 to March 31.™
Kenya becomes an oil exporter
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KENyAN President uhuru Kenyatta revealed last week that the country had become an exporter of crude oil. Kenyatta told members of his cabinet in a meeting on August 1 that Kenya had sold its rst batch of crude. “We are now an oil exporter. Our rst deal was concluded this a ernoon with 200,000 barrels [valued] at a price of$12mn,”hewasquotedassayinginagovern- ment press release.
As of press time, Kenyan officials had not identi ed the buyer of the oil. When contacted by e Nation, presidential spokesperson Kanze Dena declined to comment. “ ose details are not out,” she remarked.
The export shipment consisted of liquid hydrocarbons that Tullow Oil had extracted from the 10bb and 13T elds in the Turkana region and transported to the port of Mombasa by truck. e uK-listed company began moving the crude in early 2019 at the rate of 600 barrels
per day but pushed delivery volumes up to 2,000 bpd in May. It said in a regulatory ling dated July 24 that it had already sent more than 200,000 barrels to Mombasa and expected to sell and li the cargo before the end of September.
Tullow discovered commercially viable deposits of oil at its Kenyan elds in 2012 and intendstobeginregularcommercialproduction there in the second half of 2023. but the company has already achieved rst oil under a programme known as the Early Oil Pilot Scheme (EOPS). It is now testing the market’s response to this new stream of crude, which is low in sulphur.
Kenyatta said last week that he hoped Kenya would reap the rewards of its entry into the oil export business. “I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we elim- inate poverty,” he stated.™
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w w w . N E W S B A S E . c o m Week 31 08•August•2019