With Bluechip companies like Safaricom, BAT Kenya, Standard Chartered, Bamburi Cement and others are soon entering their dividends season and they are expected to issue payouts to shareholders.

These Bluechip firms have a significant foreign shareholding and thus the dividend repatriation will mop out even more dollars out of the economy.

Safaricom is Kenya’s top dividend payer due to its large volume of issued shares and high profitability.

 

The telco announced an interim dividend of Sh0.58 per share on February 28, to be paid out on March 31.

 

Safaricom will distribute Sh23.24 billion to shareholders, including Sh9.3 billion ($72 million) to be wired to South African telco Vodacom and its parent Vodafone of the UK, which together owns a 40 percent stake in the Kenyan entity.

 

The high demand for dollars as firms rush to the Foreign exchange market to buy the dollar for onward payment of dividends to offshore investors will weaken the shilling further

Already hit by a sharp rise in global commodity prices, increased shipments of raw materials and equipment and Russia’s invasion of Ukraine, Kenya’s external accounts are also under pressure as dollar inflows from traditional sources such as agricultural exports and tourism fail to keep up with demand.

The pressure in the forex market is so dire that most banks have placed a cap on the amount that can be exchanged, most have imposed a daily cap on dollar purchases of as little as $5,000 as firms struggle to obtain adequate forex to meet their supply needs.

This shortage has made industrialists who depend on the dollar to make raw materials purchases from the international market hoard their dollars and some are even demanding payments to be made in dollars even as the shilling’s value is on a downward spiral.

The shilling was on Friday exchanged at an average of Sh128.88 units to the dollar, having depreciated from Sh104.44 at the end of March 2020.