Kenya Insights

Category: Economy

  • 14M Kenyans Are Now Blacklisted On CRBs

    14M Kenyans Are Now Blacklisted On CRBs

    The number of loan accounts negatively listed with credit reference bureaus (CRBs) has hit 14 million, underscoring the struggles Kenyans are having with repayments.

    The blacklisted accounts jumped by a significant 45 percent in the five months between August and January after the Central Bank of Kenya (CBK) lifted a three-month moratorium.

    Data by Metropol–one of the three licensed CRBs alongside TransUnion and Creditinfo International —shows that the number of loans accounts in arrears for more than 90 days had jumped to 14,035,718 by January this year, up from 9,673,258 in August 2020.

    “Obviously people are struggling with repayment even those who had restructured their loans. This is a temporary situation and I believe as the economy starts to pick up and cash flow improves people will begin to pay,” Metropol managing director Sam Omukoko told the Business Daily.

    The banking regulator had given a six-month suspension of CRB listings in April as part of the measures to cushion borrowers hit by the coronavirus pandemic.

    The moratorium lapsed in October, allowing financial institutions to start sending names of defaulters to the bureaus. Lenders, however, offered defaulters 90 days from October 1 to start repaying their loans or get listed with CRBs.

    The huge rise in negative listings was driven by mobile loans following a proliferation of digital lenders targeting the banked and the unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.

    Last year the CBK revoked the approval of digital lenders to share data and exempted those who had borrowed less than Sh1,000, which was expected to bring the number of negatively listed borrowers down.

    The move barred 337 unregulated digital mobile lenders from forwarding the names of loan defaulters to CRBs. An internal memo showed that only 39 banks, 14 microfinance banks, 1,353 unregulated saccos, 164 regulated saccos were allowed to continue using the mechanism from the end of August.

    The sharp rise in new listings underlies the crisis in the banking sector which are struggling with mounting unpaid loans whose share has grown to the highest level since August 2007 as a result of economic difficulties during the coronavirus pandemic.

    Many workers who had tapped unsecured loans on the strength of their salaries to purchase goods such as furniture and cars and meet expenses like school fees have struggled to keep up with repayments in the wake of retrenchments and pay cuts.

    About 1.72 million workers lost jobs in three months to June when Kenya imposed a lockdown to curb the spread of the coronavirus. Recovery has been slow, with salary cuts persisting in many sectors.

    Companies that had borrowed based on the forecast of cash flows have also been struggling to repay their bank loans, even as they defer capital projects such as launching new products or extending supply in new areas.

    Borrowers defaulted on Sh73.05 billion bank loans in 10 months to December alone, highlighting the gravity of the Covid-19 induced economic hardship.

    New CBK data shows that the value of loans defaulted hit Sh423 billion or 14.1 per cent of the total Sh3 trillion loan book — a sharp rise from Sh351.73 billion that was in default by the end of March 2020.

    The Sh71.26 billion spike in defaults between end of February and December is a stark contrast to an additional Sh5.4 billion that fell into default status in a similar period in 2019 and Sh31.1billion in 2018.

    The jump in gross non-performing loans (NPLs) – credit for which principal or interest has not been paid for 90 days or more – is despite borrowers having applied to defer payments on more than half of current loan book.

    Customers extended repayment periods on loans worth Sh1.63 trillion by end of December, an equivalent of 54.2 percent of total loan book.

    CBK governor Patrick Njoroge, however, said the current levels of defaults are still manageable and that he expects the ratio to rise to 16 percent or 17 percent if economic recovery delays.

    “Credit risk remains elevated and that is expected given where the economy is. We have done some analyses and assuming that the economy remains flat and the benefits of reopening the economy do not come through, NPLs will rise to 16 or 17 percent of gross loans,” said Dr Njoroge.

    “Those numbers are still manageable because banks have been doing what they needed to. They needed to be conservative and make provisions for their loans.”

    The huge jumps in provisioning by end of September saw banks’ earnings fall sharply, with Standard Chartered Bank Kenya, Absa Kenya, Cooperative Bank of Kenya, DTB, I&M Holdings and NCBA all issuing profit warnings.

    External Link.

  • Kagame Unamused With UK’s Travel Ban To Rwanda And Has Responded To Boris

    Kagame Unamused With UK’s Travel Ban To Rwanda And Has Responded To Boris

    The Government of Rwanda has challenged the government of the United Kingdom (UK) to explain its decision of banning travelers from Rwanda to prevent the spread of new Covid-19 variants that are emerging.

    On Thursday, January 28, Grant Shapps, UK’s Secretary of State for Transport announced that his country had added Rwanda, Burundi and the United Arab Emirates (UAE) to its travel ban red list with effect from Friday, January 29.

    The move, according to the UK was in response to new evidence showing “the likely spread of a coronavirus variant first identified in South Africa.”

    “This means people who have been in or transited through these countries (Rwanda, Burundi and UAE) will be denied entry, except British, Irish and third-country nationals with residence rights who must self-isolate for ten days at home,” he posted on his Twitter account.

    The decision also meant that direct flights between Rwanda and the UK were banned.

    A statement from the UK government added that any exemptions usually in place will not apply, including for business travel.

    “Today’s action follows new measures announced by the government to minimise travel across international borders and reduce the risk of Covid-19 transmission, including managed isolation in hotels and the need to declare a reason for travel.”

    The British High Commission in Rwanda commented on the development on the same day, saying the decision was taken due to the risk of new variants rather than “any reflection on Rwanda ‘s strong handling to tackle the Covid-19 pandemic.”

    On Saturday, January 30, the government of Rwanda has come out to question the UK’s decision, saying that the sparse information communicated in regard to the travel ban does not stand up to scientific scrutiny.

    In a statement posted on its official website, the government of Rwanda pointed to the country’s response towards the virus, which has been characterized by transparency and consistency,

    “Rwanda’s overall response to Covid-19 including testing, surveillance, contact tracing, containment, treatment and reporting has been consistent, transparent and corroborated by third party entities,” it read in part.

    “Rwanda is one of the few countries that require a PCR Covid-19 test for all departing passengers and all those in transit,” it added.

    In addition, the government argued that “Rwanda did not join in the widespread bans on travelers from UK in December 2020 over the variant discovered in parts of the UK.”

    The statement concluded with a request to the UK to give clarifications on the motivations behind the “arbitrary decision” by their government to impose the travel ban on Rwanda.

  • CS Balala Defends Model Naomi’s Appointment

    CS Balala Defends Model Naomi’s Appointment

    Ministry of Tourism and Wildlife Cabinet Secretary Najib Balala has defended the appointment of English supermodel Naomi Campbell to become Magical Kenya International Ambassador, saying that the industry needs her for an  international outlook in the fashion space.

    Balala said that the country is targeting international markets as a post Covid recovery strategy, adding that Naomi is a known and “expensive” brand who will do good for the tourism sector in the country as a brand Ambassador, being the advocate for tourism and travel internationally for the Magical Kenya brand.

    Balala noted that despite her busy schedule, she has accepted to fly the Kenyan flag as the country seeks to revitalize tourism in post-COVID 19 which has wrecked countries economically.

    “I know many have asked why we did not appoint Lupita Nyong’o the Brand Ambassador. We have tried reaching out to her in the last five years but her managers could not let us reach her,” revealed Balala.

    Speaking today during his visit to the Global Tourism Resilience and Crisis Management Centre-Eastern Africa (GTRMC), Kenyatta University, Balala stated that just as they have appointed Eliud Kipchoge to target sports markets, Naomi Campbell will promote the fashion industry.

    “Campbell will help promote the marketing of Kenya as an ideal tourism and travel destination to the world as well,” said Balala.

    On matters research, Balala lauded the Kenyatta University fraternity, especially the policy makers and researchers who did a research on the Impact of COVID 19 on the tourism sector, which gave the government a three action plan to put the tourism industry back on track.

     The research titled “COVID-19 and Tourism in Kenya, Impacts, Measures taken and Recovery Pathways” revealed that domestic tourism is the driving force of the travel and tourism sector in major economies globally accounting for 73 per cent in 2017 and 72.1 per cent in 2018.

    Balala acknowledged the place of research in reviving the tourism sector in Kenya and said that they will support such related research, thanking GTRCMC Director Esther Munyiri for a job well done.

    Balala further said currently, hotels only have a bed occupancy of just about 10 to 15 per cent because most countries such as the UK are still on a lockdown due to the pandemic and it would take up to 2023 for the sector to fully recover.

    “The government has pumped approximately Sh. 1 billion from the Sh. 3billion allocated to hotels to help them in their recovery process,” said the CS.

    “We are pursuing the Centre to roll out innovations and tool kits for best practices in the mitigation and recovery strategy,” he noted.

     Principal Secretary Safina Kwekwe Isungu said that the ministry is already implementing the three pathways highlighted in the proposal as a mitigating measure and strategy towards the sector’s recovery.

    Present was Tourism Chief Administrative Secretary and Chairman of National Tourism Crisis Steering Committee Joseph Boinett who said that the Centre is critical because it acts as a catalyst for jumpstarting the sector.

    Others were Kenyatta University Vice Chancellor Prof. Paul Wainaina who noted the pandemic hit the whole world bringing about loss of livelihoods and unemployment and as such they are an interested party and will create a tourist resilient content to help in the recovery process.

    “We will create an actionable framework to aid tourism stakeholders to mitigate the tourism crisis,” he said

  • Why Farmers Are Shunning Doing Business With NCPB Despite Price Increase

    Why Farmers Are Shunning Doing Business With NCPB Despite Price Increase

    Maize farmers in Uasin Gishu County have remained reluctant to release their produce to the National Cereals and Produce Board (NCPB), despite an upward review of prices from Sh. 2,500 to Sh. 2,700 per 90kg bag.

    According to the chairperson, parliamentary committee on agriculture and Moiben MP Silas Tiren most farmers have lost interest in doing business with the government following corruption scandals that hit NCPB three years ago.

    Many farmers fear a repeat of the 2019 maize scandal where genuine farmers saw a delay of payment due to the challenges that faced NCPB.

    Some of the farmers were subjected to investigations by the Directorate of Criminal Investigations (DCI) and Ethics and Anti-Corruption Commission for the produce they supplied towards the government Strategic Food Reserve (SFR) program and are yet to be paid, said Tiren during a press briefing at the NCPB depot in Eldoret Wednesday.

    The Moiben MP wondered why the Ministry of Agriculture has not paid farmers who were not found with any inappropriate deeds despite the money being released by the National Treasury.

     “We urge the ministry to hasten the payment to the farmers who have suffered for the last three years. We are also calling on the Judiciary to fast track the hearing of court cases touching on the farmers so that those found not to have committed any illegalities are paid their dues,” said Tiren who was accompanied by several farmers including large scale maize growers Kimutai Kolum, Yusuf Keitany and James Cheruiyot and KFA director Kipkorir Menjo.

    A day after the maize price was increased by Sh. 200 per 90 kg bag and the board assuaring payment within 24 hours of supply of maize, farmers are yet to be convinced.

     There is little activity at the NCPB depot in Eldoret with most farmers keeping off the premise preferring to sell their produce to private millers who offer higher prices and pay promptly.

    Tiren said the slight increase in price has not impressed the farmer to supply their maize to NCPD.

    “NCPB has received less than 3000 bags of maize from the farmers up to now,” he noted.

    The farmers however appreciated the slight increase of the price by the government but hoped that it should go up to last year’s price of Sh. 3200 per 90kg bag.

    They also appreciated the government’s decision not to allow the importation of maize this year saying the decision has ensured maize prices remained relatively stable.

  • Why Lamu Island Is At the Verge Of Losing Its World Heritage Status

    There are mounting fears that Lamu Island could lose its status as a world heritage site due to the high proliferation of bodabodas operating within the Archipelago resulting in the Island losing its Old Swahili cultural allure.

    Lamu is arguably the most unique and beautiful Swahili town in Kenya, but the increase in bodabodas is fast eroding the efforts to preserve the cultural richness of its historical town.

    During a visit of Lamu’s museums and heritage sites today, Sports and Culture Cabinet Secretary Amb. Amina Mohammed expressed concerns over the likelihood of Lamu Island losing its status as a world heritage site due to lack of effective regulations to man the bodaboda sector that has recently exploded as a key employer for youths in the county.

    She revealed that Kenya plans to ensure that Lamu retains its status as a world heritage site following the issue being raised by UNESCO that Lamu was flouting rules put in place to ensure that the Island maintains its profile as a cultural hotpot.

    The touristic gem could be scrapped from the United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage List because of pollution being caused by a growing number of bodabodas.

    Flanked by National Museums of Kenya MD Mzalendo Kibunja, the CS stated that Lamu Island status as a world heritage site was up for review following recommendations by UNESCO over concerns that the county was not keeping up with measures aimed at maintaining Amu Island as heritage site.

    “Of concern is the high influx of bodaboda operators within the Lamu seafront that is now affecting movement not only among tourists but also locals who are concerned that the seafront is considerably occupied by bodabodas,” she said.

    The CS added that there is need for all stakeholders within the county and national government to come up with a working formula around which bodaboda operators could be allowed to operate while also ensuring the Island maintains its status as a world heritage site.

     Some stakeholders have in the past expressed concern that addressing the high influx of bodabodas and  facilitating youths accessing the bodabodas as a source of employment.

    “An alternative job sector is needed to keep youths away from the bodabodas within Lamu Island,” she stated.

    There are at least 300 bodaboda operators in Lamu Island today with more youths expected to join the burgeoning sector this year given the lack of alternative jobs.

    Kibunja also said that there is need for a capacity building forum to bring in all stakeholders to agree on a working formula around which bodabodas could work within the Island without being a menace.

    “Although it is not in the county government’s list of priorities in terms of regulating the sector, there is need for everyone to be brought on board to show how the sector could lead to tourism decline that has already been impacted by COVID-19,” Kibunja said.

    Lamu Museum’s curator Mohammed Mwenje further echoed that serious interventions and policies were needed to ensure that the bodaboda sector does not lead to the county’s decline as a premier tourism destination.

    “There is need for a middle ground being reached to allow the old to coexist with the new way of life such as the bodaboda by creating certain spots that the bodabodas can operate in while ensuring that the Lamu Old town is not compromised,” Mwenje said.

  • Brexit Explained And How Big Shocks Awaits Britons Lives

    LONDON (AP) — So far, the large majority of British and EU citizens have not felt the realities of Brexit. Though the U.K. left the European Union on Jan. 31, it follows the bloc’s rules until the end of this year as part of a transition period to the new economic relationship.

    That’s all set to change.

    On Jan. 1, Britain embarks on its new, more distant relationship with the EU after nearly five decades of closer economic, cultural and social integration.

    The change for Britain’s economy and people is the most dramatic since World War II, certainly more so than when the country joined what was then the European Economic Community in 1973.

    “It’s a far bigger shock to our economic system and it’s going to happen instantaneously,” said Anand Menon, director of The U.K. in a Changing Europe think tank and a professor of European politics and foreign affairs at King’s College London.

    “All of a sudden you wake up in a new world at the start of January.”

    Here are some of the changes to movement that people will start to feel almost overnight.

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    WHAT’S CHANGING?

    Even though the coronavirus pandemic has led to a collapse in the numbers of people traveling between Britain and the EU, the end of freedom of movement from Jan. 1 will represent the most tangible Brexit consequence so far.

    Under the divorce deal agreed by the two sides on Dec. 24, the roughly 1 million British citizens who are legal residents in the EU will have broadly the same rights as they have now. The same applies for more than 3 million EU citizens who are in the U.K.

    But British citizens will no longer have the automatic right to live and work in the EU, and vice versa. People who want to cross the border to work and live will have to follow immigration rules and face other red tape such as ensuring their qualifications are recognized.

    The exception is people moving between the U.K. and Ireland, which have a separate common travel area.

    For many in the EU, the freedom to be able to travel, study and live anywhere in the 27-nation bloc is among the most appealing aspects of European integration.

    Yet some in Britain and other parts of Western Europe became more skeptical about the freedom of movement after a number of former communist nations in Eastern Europe joined the EU in 2004 and many of their citizens moved to the U.K. and other wealthier countries to work. Concerns over immigration were a major factor in Britain’s 2016 Brexit vote. On Jan. 1, the consequences of that decision will become apparent for British and European citizens alike.

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    WHAT ARE THE NEW TRAVEL RULES?

    Although travelling for holidays will remain visa-free, British people will only be allowed to spend 90 days out of every 180 in the EU, while the U.K. will allow European citizens to stay for up to six consecutive months.

    For retired British citizens who have been used to spending more than three months at their second homes on Spain’s sun-soaked Costa del Sol, the change may come as a shock. British travellers in Europe will also have to have at least six months left on their passports and buy their own travel insurance. Britons will no longer be issued the European Health Insurance Card, which guarantees access to medical care across the bloc, but the U.K. says it is setting up a replacement system so that U.K. visitors to the bloc and EU citizens visiting Britain still have medical coverage.

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    WHAT ABOUT PETS?

    For British citizens accustomed to taking their dog, cat or ferret on vacation in Europe each summer, the situation will get more complicated as Britain will no longer be part of the EU’s pet passport scheme — although the agreement avoids the onerous months-long procedures that some had feared. U.K. pet owners will have to have their animal microchipped and vaccinated against rabies at least 21 days before travel, and will need to get an Animal Health Certificate from a veterinarian no more than 10 days before departure.

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    WILL DRIVING BE A HASSLE?

    The deal means British drivers won’t need an international driving permit once they cross the Channel. British motorists can travel in the EU on their U.K. licenses and insurance, as long as they carry proof that they are insured in the form of a “green card.”

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    WHAT ABOUT WORKING?

    The end of freedom of movement will have a major impact on hiring at all ends of the labor market.

    A newly graduated British citizen on holiday in the Greek islands, for example, won’t be able to walk up to a beach bar and seek part-time work without having the necessary visa. The same applies for European citizens arriving in the U.K. They won’t be able to turn up at a sandwich shop like Pret a Manger and look for work without the necessary documentation.

    Larger businesses will also find it far more difficult and costly to hire people from the other side. The deal does include provisions to allow contractors and business travelers to make short-term work trips without visas.

  • COG Instructs Governors To Fire Striking Doctors

    COG Instructs Governors To Fire Striking Doctors

    The Council of Governors has dispatched letters to governors across all the 47 counties directing them to, among other things, immediately terminate salaries for health care workers participating in the ongoing strike.

    According to COG, the medical practitioners who have downed their tools are acting in total disregard of several court orders suspending the industrial action. The Council’s Chairperson Wycliffe Oparanya insists that strike being spearheaded by the various trade unions is unlawful.

    “The unions have failed to adhere to the orders by failing to call off the ongoing strikes.” Oparanya charged in the letter.

    In the letter also addressed to Health Cabinet Secretary Mutahi Kagwe, the county chiefs’ boss lamented how the industrial action has negatively impacted service delivery in the county health facilities.

    Oparanya further wants governors to initiate disciplinary processes where the employees have failed to report on duty without any valid reason.

    The strength of the COG and National Government’s case according to Oparanya, is a determination by Justice Njoki wa Makau of the Employment and Labour Relations Court on Wednesday last week.

    In the ruling, Justice Makau issued a temporary relief suspending the strike for 14 days “to allow negotiations before mentioning virtually the case on 30th December 2020.”

    This according to Justice Makau was to allow time to see if the parties are able to agree.

    If the governors push through with the threat, then medical officers engaged in post graduate training at the National Referrals Hospitals will also be affected as governors are expected to withdraw payment of their tuition fees on top of stoppage of payment of their salaries.

  • Low Income Earners Will Continue To Enjoy 100pc Tax Exemption

    Low Income Earners Will Continue To Enjoy 100pc Tax Exemption

    Low-income earners will continue to enjoy 100% tax exemption indefinitely as National Treasury Cabinet Secretary Ukur Yatani reverts Value Added Tax and Income tax to earlier rates before the outbreak of the COVID-19 pandemic.

    Individuals earning below Kshs. 24,000 monthly will continue to enjoy full exemption from Pay-as-You-Earn (PAYE) tax in what CS Yatani says is aimed at cushioning low-income earners from the severe impact of the coronavirus economic fallout.

    “This indeed increased tax relief for individuals from Kshs. 16,896 to Kshs. 28,000” said Yatani in a statement released Thursday.

    The tax relief measures which had been extended to consumers and businesses under Value Added Tax and Income Tax in April will cease, as the treasury announces the return of normal rates.

    Beginning  1st  January 2021, the Corporate Tax rate will revert to 30% from the current 25%, same as Individual Income tax which will also shoot to 30% from 25%.

    In the face of revenue pressures and maturing loans, CS Yatani has projected that the 7 month Economic Stimulus Programme will dent implementation of priority programmes under Big 4 Agenda and recovery of the economy in general.

    “Indeed, the government will have, as at 31stDecember 2020, forgone tax revenues totaling Kshs. 65 billion over the course of the preceding seven months.”

    Consumers who have enjoyed reduced cost of essential vatable goods will notice a slight increment as VAT also returns to the normal rate of 16% from 14% announced in April.

    In his defence, Yatani added, “It’s important to note that even at the earlier rate Kenya’s VAT is considered the lowest in the region.”

    Tanzania, Rwanda, Burundi, and Uganda all apply the VAT at the rate of 18%.

    The return of the normal VAT rate comes at a time Kenya’s inflation rate in November rose to a six-month high of 5.5%, from 4.9% registered in October.

    Analysts at Mentoria Economics are of the view that low-income earners will still have to deal with the high cost of living even with the exemption in place.

    “We expect to see a rise in the cost of goods and services due to these measures. Furthermore, the weakening of the shilling against the dollar will also introduce imported inflation in areas such as electricity bills which have a foreign exchange component. The net effect is that this will reduce the volumes of business and weigh heavily on the economy,” said Ken Gichinga, Chief Economist at Mentoria Economics.

    The local currency has continued with the free fall, breaching the 111 mark to trade at a mean of 111.06 as quoted by the Central Bank of Kenya on Thursday.

    However, the treasury says the government will continue to roll out interventions under the Kshs. 58.1 billion Economic Stimulus Programme to cushion vulnerable groups and enhance liquidity in businesses.

  • Blue Economy Key To The Attainment Of Kenya’s Vision 2030, President Kenyatta Says

    Blue Economy Key To The Attainment Of Kenya’s Vision 2030, President Kenyatta Says

    President Uhuru Kenyatta has said Kenya has prioritized the sustainable utilization of its ocean and blue economy resources as an enabler of the Vision 2030 economic blueprint.

    “It is clear that the ocean economy is a smart investment that can deliver social, economic, and environmental benefits to our people.

    “As such, Kenya is keen to fully realize the potential of its 142,400 square kilometre Exclusive Economic Zone. However, as we do so, we will steadfastly protect our marine resources even as we pursue its enhanced development and productivity,” the President said.

    The Head of State spoke Thursday at State House, Nairobi when he presided over the national launch of the New Ocean Action Agenda which is an offshoot of a similar global plan by the fourteen-nation High-Level Panel for Sustainable Ocean Economy.

    President Kenyatta is a member of the panel whose objective is to promote sustainable utilization of ocean resources by striking a balance between their economic exploitation and conservation requirements.

    Besides national government efforts to reposition the blue economy as a key economic driver, the President said County Governments had also realised the importance of the sector to regional economies.

    “In addition, our coastal economic bloc, Jumuiya ya Kaunti za Pwani, comprising six counties along the coastal region – Mombasa, Kwale, Kilifi, Tana River, Lamu and Taita Taveta has identified the ocean and blue economy as one of three value chains to prioritize in their county development plans.

    “The Lake Region Economic Bloc, which represents the socio-economic aspirations of fourteen counties within the Lake Victoria Basin that constitutes 30% of Kenya’s population, has similarly prioritized the blue economy as a key economic pillar,” he said.

    The Head of State listed the ongoing reconstruction of the Liwatoni Fisheries Complex at a cost of Kshs 318 million, training of 1,000 fishermen, set up of Bandari Maritime Academy as well as the launch of the Kenya Coast Guard Service as some of the efforts being made to promote sustainable utilization of Kenya’s ocean resources.

    Further, the President said Kenya is proactively implementing policies aimed at tackling the challenge of ocean pollution especially from plastic waste.

    “In 2017, Kenya banned the use of polythene carrier bags. In addition, we have now implemented a ban on single use plastics in all protected areas including beaches, national parks, conservation parks, and forests,” the President said, adding that the Government is working with local communities to conserve coastal ecosystems.

    “For example, through the support of the Kenya Marine and Fisheries Research Institute (KMFRI), the Mikoko Pamoja Project has recently been able to restore 10 hectares of mangrove forests.”

    President Kenyatta voiced the country’s commitment to its international agreements on sustainable utilization of ocean resources saying Kenya will continue leveraging on global institutions based in the country such as UNESCO’s Intergovernmental Oceanographic Sub-Commission for Africa and Adjacent Island States, and the Global Sea Level Observation System (GLOSS) to sharpen Kenya’s ocean conservation efforts.

    “As a member of the High-Level Panel for a Sustainable Ocean Economy, I commit myself and my Government to achieving 100% sustainable ocean management of areas within our national jurisdiction, guided by Sustainable Ocean Plans, by 2025,” he said.

    Retired Chief of the Defence Forces General Samson Mwathethe who chairs the National Blue Economy Committee said Kenya is making steady progress towards reaping the immense economic benefits presented by the sector.

    General Mwathethe regretted that the country had in the past failed to take advantage of its blue economy resources and called on the private sector to partner with the Government in reviving the sector.

    On his part, Agriculture CS Peter Munya said his ministry was working on ensuring Kenya’s blue economy contributes more to the economic progress of the country by providing appropriate incentives and policy frameworks for the sector to thrive.

  • Tenders To Chinese Blacklisted Firm Stecol Paves Road Of Discord Between AfDB And Kenya

    Tenders To Chinese Blacklisted Firm Stecol Paves Road Of Discord Between AfDB And Kenya

    According to Kenya Insights sources, The Nairobi office of the African Development Bank (AfDB) has concerns over the overwhelming presence of China’s Stecol in Kenyan construction. The $52m contract won by the manufacturer in July to build the Bus Rapid Transit system’s lanes and stations on the Thika Highway sparked a reaction from the financing company.

    Kenya’s tight hold of Stecol has caused a discomfort and paved road of discord between AfDB and Nairobi.

    Though barred by the African Development Bank on charges of fraud when still called Sinohydro, China’s Stecol is still winning road contracts in Kenya. Meanwhile, Nairobi is not answering the bank’s calls.

    On June 15, 2017, the African Development Bank Group (AfDB) announced the conclusion of a settlement agreement with Sinohydro Corporation.

    An investigation conducted by the AfDB’s Office of Integrity and Anti-Corruption established that Sinohydro Corporation engaged in a fraudulent practice in bidding for works contracts in the context of the AfDB-financed Road Sector Support Project in Uganda.

    As part of the settlement, the AfDB imposed a conditional non-debarment subject to the company enhancing its global corporate compliance programme within that period to the institution’s full satisfaction.

    In 2013, Sinohydro Corporation is said to have participated in a tender for works contracts under the Bank-financed Road Sector Support Project in Uganda.

    The investigation by the Office of Integrity and Anti-Corruption found that Sinohydro Corporation misrepresented its prior project experience by using not yet successfully and substantially completed contracts as references.

    The Office of Integrity and Anti-Corruption of the African Development Bank Group is responsible for preventing, deterring and investigating allegations of corruption, fraud and other sanctionable practices in Bank Group-financed operations.

    The investigation by the Office of Integrity and Anti-Corruption of the African Development Bank was conducted by Mohamed Konneh and Esther Lynn Mhone. African Development Bank staff and the general public can use the Office of Integrity and Anti-Corruption secured hotlines to report sanctionable practices within the Bank or operations financed by the Bank Group.

    Since 2006, investment from China has rapidly increased in Africa. According to a World Bank report in 2008, most of the Chinese investment goes to the infrastructure sector, mostly hydropower, railroad, and telecommunications.

    The hydro-power projects are widely blamed for negative impacts on local community and natural environment. Sinohydro was also fired as Botswana’s primary contractor on Gaborone’s Sir Seretse Khama International Airport (SSKIA) Expansion Project Phase 2.

    At the time of termination of the contract, Sinohydro had completed approximately 90 percent of the project and had been paid about P527 million.

    The Chinese company, now Stecol, is still working on Uganda’s giant 600-MW Karuma dam. But is also picking up new projects in Nairobi. It is estimated it has won a total $160m in contracts in Kenya. The AfDB has repeatedly asked the Nairobi government for details on how Stecolwon this flurry of contracts but has yet to have a reply.

    The US $ 142m development project included converting the current one into a six-lane highway with interchanges and over-passes. Construction of 10 Eastern missing links were also carried out during the project.

    This includes two footbridges and associated infrastructure for the highway. The link from North Airport Road, where Taj Mall stood, has also been completed to help motorists joining the highway from the airport.

    The project is fully funded by African Development Bank and the European Union in partnership with the Kenyan government and is being undertaken by a Stecol Corporation.

    The firm was also awarded most of the contracts in the so-called regeneration of 38 roads in Nairobi Eastlands.

    Stecol Corporation also won the Sh306M Malaba water supply and sanitation project.

    Joining the concerns of local and foreign construction companies operating in Kenya: Twalib Mbarak, the director of the Ethics and Anti-Corruption Commission has already received several complaints from from construction companies, they allege that the company is bribing their way to win tenders.

    Sinohydro Tianjin Engineering is a typical Chinese firm with Kenya’s notebook, the firm was erroneously awarded Sh36B Thwake Dam tender which was not only reversed by the Public Procurement Oversight Authority having been bloated but was also given a no approval by AfDB who was the financier.

    The African Development Bank (AfDB) opposed the awarding of a controversial Sh62.3 billion Thwake dam tender; Irrigation Principal Secretary Patrick Nduati Mwangi defied his boss Eugene Wamalwa and awarded the contract to the second lowest evaluated bidder.

    Mr Gabriel Negatu, the AfDB regional department director wrote to the PS rejecting requests to the bank to give a no-objection to the award of the contract to STECOL Corporation (Sino Hydro Tianjin Engineering Co Ltd) instead of the lowest bidder—China Gezhouba Construction Group Corporation (CGGC).

    “Based on the information provided, the Bank regrets to inform you that no objection to award the tender to the second lowest bidder CAN NOT be given since there is no justifiable reasons to reject the least evaluated bidder,” Mr Negatu wrote to Mr Mwangi in a letter dated.

    Mr Mwangi disregarded AfDB, the Attorney General, the Ethics and Anti-Corruption Commission (EACC) and Mr Wamalwa’s advice to award the contract to China Gezhouba.

    China Gezhouba won the Tender Processing Evaluation Committee (TPC) stage with a Sh36.9 billion bid for the first phase of the multibillion shilling dam, but the Ministerial Tender Committee (MTC) appointed by Mr Mwangi awarded the contract to (Sino Hydro) at a cost of Sh39.5 billion.

    Mr Mwangi awarded the contract to Sino Hydro subject to lowering the bid price to Sh36.9 billion.

    Mr Negatu said AfDB’s procurement rules and procedures prohibit modification of bids including negotiation of price for works.

    Key cartels were begging Mr. Mwangi’s push for the award to Stecol, kickbacks had allegedly been taken and nothing was to stop the steps. If this was to take course, the taxpayer would’ve had to pay extra Sh3B.

    Wamalwa, the AfDB and Githu (AG) had strongly advised that the tender be awarded to the lowest bidder, at Sh36 billion but insisted on Sh39 billion bid — Sh3 billion higher.

    The paper trail showed procurement irregularities, insubordination, and total disregard of Attorney General Githu Muigai’s legal opinion on a key government project financed by the African Development Bank (AfDB).

    Stecol Corporation has been involved in upgrading of Outering Road. It has also been mentioned in the construction of a bridge at AllSops that will join Outering Road and Thika Superhighway (of which it was fully involved in).

    Concern for AfDB a key financier of major infrastructural projects in Kenya is the embrace of fraudulent Chinese company in their constructions.

  • Over One Million Youths To Benefit From Fish Farming Project Sponsored By World Bank

    Over one million youths from the lake region are set to benefit from a fish value chain development project to cushion them against the negative effects of Covid-19 pandemic.

    The project rolled out in Busia, Siaya, Kisumu and Kakamega counties targets to engage the youth, majority of whom lost their jobs and sources of livelihood in aquaculture and other areas along the fish value chain.

    Dubbed ‘jobless lives matter,’ the project also seeks to boost on-farm fish production in the area to control overfishing in Lake Victoria.

    Through support from the World Bank (WB), the respective county governments will harness resources to promote fish farming, establish fish markets and develop fish value chain to create job opportunities for the youth.

    According to the project’s secretariat coordinator Timothy Odende, fish farming has the potential of turning around the lives of the youths to save them from depression and engaging in drugs.

    “This project is going to help our youth who are jobless to earn a living at the same time improve the economy of this region,” he said.

    The project which runs for two years, he added shall be coordinated by first ladies from the four counties who have been tasked with the responsibility of identifying the youths to be enrolled in the program.

    Speaking during the launch of the project in Kisumu on Thursday, Odende disclosed that the recruitment shall be done at grassroots with each ward in the four counties producing 4, 000 youths.

    The first ladies, he added will use their networks to identify the kind of projects to be funded along the fish value chain.

    Siaya County Governor Cornel Rasanga said the county governments will allocate resources and seek partnerships with development partners to make the project a success.

    Besides being empowered to venture into fish farming, he said, the youth shall be engaged in construction of fish ponds, fish cages, fish markets and other infrastructure required to roll out the project.

    The first ladies, Judy Ojaamong (Busia), Dorothy Nyong’o (Kisumu), Priscilla Oparanya (Kakamega) and Rosella Rasanga (Siaya) pledged their support to make the project a success.

    Judy Ojaamong who spearheads the first ladies caucus for the project said the initiative was a long-term solution to addressing unemployment among the youth.

    “The potential of this initiative cannot be underestimated. With a proposal of Sh. 2 million a few months ago we now have projects worth Sh. 60 million in Busia which are transforming the lives of our youth,” she said.

    Through the initiative, she added, a modern fish market has been constructed in Busia where hundreds of youths earn a living.

    Pricilla Oparanya said the project will engage the youth to bar them from being misused by politicians as the clamor for 2022 general election heightens.

    She added that the project will play a leading role in post-Covid-19 economy recovery in the area by ensuring that the youths have money in their pockets.

    Rosella Rasanga said on farm fish production and cage farming will boost food security in the area at the same time improve on nutrition of the locals.

    The project comes amidst concerns over dwindling fish stocks in Lake Victoria which is the largest producer of fish in the country.

  • Diesel And Kerosene Prices Reduced As Petrol Increased

    Diesel And Kerosene Prices Reduced As Petrol Increased

    Super Petrol increases by Kshs.1.48, Diesel and Kerosene decreases by Kshs.0.12 and Kshs.0.50 per litre respectively.

    The prices are inclusive of 8 percent Value Added Tax (VAT) in line with the provisions of the Finance Act 2018 and the Tax Laws (Amendment) Act 2020.

    The changes in this month´s prices are as a consequences of the average landed cost of imported Super petrol increasing by 2.65% from Ksh 34668.38 (US$ 319.23) per cubic metre in July 2020 to Ksh 35587.13 (US$ 327.69) per cubic metre in August 2020.

    The average landed cost of imported Diesel decreased by 1.02% from Ksh 36193.12 (US$ 333.27) per cubic metre to Ksh 35824.97 (US$ 329.88) per cubic metre while for Kerosene decreased by 2.06% from Ksh 31277.89 (US$ 288.01) per cubic metre to Ksh 30634.97 (US$ 282.09) per cubic metre.

    The Authority has also calculated the maximum wholesale prices of petroleum products in accordance with the Petroleum Act 2019.

  • World Bank Approves A Sh81B Loan To Improve Infrastructures In North Eastern

    World Bank Approves A Sh81B Loan To Improve Infrastructures In North Eastern

    The World Bank Board of Directors today approved $750 million in International Development Association (IDA)* financing to improve the movement of people and goods, digital connectivity and access to social services for over 3.2 million people living in the North Eastern region where the Isiolo-Mandera Regional Road Corridor traverses.

    Through the new operation – the Horn of Africa Gateway Development Project (HoAGDP) – the World Bank will finance the upgrading of 365 kilometers of the 740-kilometers Isiolo-Mandera Regional Road Corridor and 30km of spur roads, while the upgrading of the remaining sections will be financed by other development partners. The HoAGDP will also finance the laying of a fiber optic cable along the entire 740-kilometer corridor with spurs to local communities; trade facilitation measures, such as border management systems and construction of border posts; the provision of basic socio-economic infrastructure for communities living along the corridor; institutional strengthening; as well as emergency response measures in case of a disaster or catastrophe during the life of the project.

    “The potential of Northeastern Kenya as a transit and regional trade facilitation zone is presently not fully exploited,” says Josphat Sasia, Lead Transport Specialist and Task Team Leader. “This transformative project will integrate the region and enhance security, inclusion, and a sense of equity, which the communities living in this underserved region of Kenya have desired for a long time. Successful implementation of the project will require the support of the leadership and communities of the region.” 

    The upgraded road, the fiber optic connections, and the provision of basic social services will attract investments, facilitate regional and domestic trade, create jobs, and improve information sharing and access to internet-based opportunities.

    “Promoting equal opportunities across the country and linkages in the subregion will strengthen Kenya’s transformation from a low middle income to a middle-income country by 2030,” notes Keith Hansen, World Bank Country Director for Kenya. “We believe that this investment, envisioned as a backbone project under the North and North Eastern Development Initiative, will contribute significantly to the Government’s efforts to ensure shared prosperity.” 

    The Kenya-HoAGDP is expected to take 6 years of implementation. The project is the first in a series of projects aimed at supporting the development of regional transport corridors and modal linkages under the Horn of Africa Initiative.

    “Regional integration is fundamental for the countries in the Horn of Africa to create jobs and reduce poverty in an inclusive and sustainable way. The World Bank is a founding partner of the new Horn of Africa Initiative, launched in 2019 by the participating countries to deepen their cooperation and deliver development results for their populations”, says Deborah Wetzel, World Bank Director of Regional Integration for Sub-Saharan Africa, the Middle East, and Northern Africa. “This new project launches the implementation of this Initiative and will fill a major gap in the connectivity of the region in terms of infrastructure and trade, and also by strengthening regional institutions to promote knowledge sharing and build human capital”. 

    * The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.

  • South Africa’s Store Shoprite Is Exiting Kenyan Market Only Two Years After Entering It

    South Africa’s Store Shoprite Is Exiting Kenyan Market Only Two Years After Entering It

    (Reuters) – South Africa’s Shoprite Holdings plans to sell or close its remaining two stores in Kenya by the end of December, leaving the East African country two years after entering it.

    The supermarket group has been reviewing its long-term options in Africa as currency devaluations, supply problems and weak consumer spending in Angola, Nigeria and Zambia have weighed on earnings.

    “Kenya has continued to underperform relative to our return requirements,” the company said on Tuesday as it posted a 16.6% rise in annual group earnings, adding its decision to leave had been cemented by the economic impact of the COVID-19 pandemic.

    Shoprite shares jumped more than 11% to a five-month high as investors cheered the group earnings, post-lockdown outlook and dividend.

    The decision to leave Kenya comes a month after Shoprite said it was considering selling its stake in its Nigerian subsidiary.

    As part of the ongoing Africa review, the firm has renegotiated 48 rental agreements by either reducing rent payments or converting them to local currency, Chief Executive Pieter Engelbrecht told analysts.

    The firm has also restricted capital allocations to its supermarkets outside South Africa.

    Shoprite, with more than 2,300 stores across Africa, reported record sales of 156.9 billion rand, up 6.4% for the year ended June 28, with like-for-like sales up 4.4% as customers spent more at its discount Usave and mid-to-upper market Checkers stores.

    Sales at its loss-making rest of Africa operations declined 1.4% as “complexity in managing COVID-19 regulations across multiple territories negatively impacted the second half,” it said.

    Diluted headline earnings per share (HEPS) from continuing operations climbed to 765.8 cents against a restated 746.9 cents a year earlier, while adjusted diluted HEPS rose 16.6%.

    Shoprite declared a final dividend of 227 cents per share and said it had traded ahead of expectations since the beginning of July.

    ($1 = 16.8841 rand)

  • Coffee And Tea Farmers Clear Their Farms Over Poor Returns, Opt For Lucrative Macadamia

    Coffee And Tea Farmers Clear Their Farms Over Poor Returns, Opt For Lucrative Macadamia

    Farmers in Kiambu County frustrated by poor returns of coffee and tea are shifting from growing the two cash crops to the more lucrative macadamia trees to make good earnings.

    Coffee and tea produce disillusioned them, when the sectors stagnated paying them as little as Sh10-Sh15 per kilo despite the huge investments they have made in the sectors.

    They said to increase their returns from farming, they will diversify their farming by intercropping macadamia with coffee and tea, and eventually ditch the two cash crops if the sectors continue to frustrate them.

    Speaking at Kanyoni village during a farmers’ education day on Saturday, the farmers said the macadamia market is lucrative and was worth investing in.

    They described the coffee and tea sectors as thankless outlays that despite heavy investment, the returns are very low and sometimes lead them to incur losses.

    “We feel like we have wasted all the years we have invested in coffee and tea following their little returns. How does someone pay you Sh15 per kilo which you wait for a whole year? We have waited for the improvement that the government had promised, but nothing is forthcoming. Slowly, we shall shift to the better-paying macadamia sector,” said Leah Njiru, one of the farmers.

    James Waweru, another farmer from Githobokini village, Gatundu North Sub County said intercropping was the only way to make the most from their diminishing land for farming, to be able to get good returns.

    “One macadamia tree can produce over 30 kilos of nuts per harvest and with each going for Sh200, we are assured of good returns. Also, their payment is instant after they receive from the farm. Again, the cost of investment in macadamia is low, compared to coffee and tea where you spend money on pruning, chemicals, harvesting and labour on farming,” said Waweru.

    The farmers received 1,000 macadamia seedlings variety that matures after a year from Thika MP Patrick Wainaina who is also the CEO and founder of Thika-based Macadamia processing company, the Jungle Nuts Ltd.

    Wainaina said the company intends to increase macadamia plantation from 200,000 annually to one million trees and added that he hoped the initiative would contribute to 10 million macadamia seedlings by 2022, in an effort to increase the country’s macadamia production.

    He added that the initiative would not only help in increasing the country’s tree cover but will also empower farmers to get better returns.

    The MP also assured the farmers of a ready market at good prices, and advised them to beware of brokers whose intention is to exploit them by buying their produce at low prices.

  • Oil Companies Want US To Pressure Kenya To Loosen Strict Stance On Plastics

    Oil Companies Want US To Pressure Kenya To Loosen Strict Stance On Plastics

    NAIROBI, Kenya (AP) — The oil industry has asked the United States to pressure Kenya to change its world-leading stance against the plastic waste that litters Africa, according to environmentalists who fear the continent will be used as a dumping ground.

    The request from the American Chemistry Council, whose members include major oil companies, to the Office of the United States Trade Representative came as the U.S and Kenya negotiate what would be the first U.S. bilateral trade deal with a country in sub-Saharan Africa.

    That deal is expected to be a model for others in Africa, and its importance helped lead to Kenyan President Uhuru Kenyatta’s White House visit with President Donald Trump this year — a rarity for an African leader during this administration.

    Kenya three years ago imposed what was praised as the world’s strictest ban on the use, manufacturing and import of plastic bags, part of growing efforts around the world to limit a major source of plastic waste. Environmentalists fear Kenya is now under pressure not only to weaken its resolve but to become a key transit point for plastic waste to other African countries.

    The April 28 letter from the American Chemistry Council’s director for international trade, Ed Brzytwa, seen by The Associated Press, urges the U.S. and Kenya to prohibit the imposition of domestic limits on “production or consumption of chemicals and plastic” and on their cross-border trade.

    “We anticipate that Kenya could serve in the future as a hub for supplying U.S.-made chemicals and plastics to other markets in Africa,” the letter says. It was first obtained by Unearthed, an affiliate of the Greenpeace environmental organization. The council repeated its request in a public commenting session in June.

    China’s ban on imports of most plastic waste in 2018 has forced companies to seek new places to send it, but other countries including African ones increasingly are saying they don’t want it, either. Plastic waste meant for recycling has piled up in dumps in Kenyan cities.

    Meanwhile, oil companies are under pressure as more countries, notably Kenya, aim to shift away from fossil fuels for their energy needs.

    The American Chemistry Council in a statement to the AP said “it is well understood that a bilateral trade agreement between the United States and Kenya will not override Kenya’s domestic approach to managing plastic waste or undermine its international commitments under the Basel Convention,” a global agreement which as of January will make it much more difficult to ship plastic waste to poorer countries. Nearly 190 countries have agreed to it, but not the U.S.

    The council added: “In fact, ACC never mentioned Kenya’s approach to single use plastic bags even once in our comments.”

    The Office of the United States Trade Representative did not respond to a request for comment. A U.S. summary of negotiating objectives issued in May included this: “Establish rules that will ensure that Kenya does not waive or derogate from the protections afforded in environmental laws for the purpose of encouraging trade or investment.”

    Kenya’s government via multiple ministries did not comment. But Kenyan trade minister Betty Maina in comments published Tuesday by the local Star newspaper said Kenya will negotiate with the U.S. “guided by Kenyan laws” and talks continue.

    Kenya banned plastic bags in 2017, inspiring similar bans in other African countries whose streets, waterways and even trees have long been choked with the tattered bags.

    The idea that Kenya’s government might weaken or do away with its ban under pressure from the U.S. or oil industry has upset the country’s vibrant environmental community, which rallied support that also led to this year’s ban on other single-use plastics such as bottles in national parks, beaches and other protected areas.

    “They want Kenya to reverse its strict limits on plastics, including 2017 plastic bag ban! It’s a NO!” tweeted James Wakibia, who pushed hard for Kenya’s plastic bag ban. He is now campaigning for all East African countries to ban “all unnecessary single-use plastic.”

    Griffins Ochieng, who leads the Center for Environmental Justice and Development in Kenya, said any attempt to change the laws on plastics would be hazardous. “Africa is looking like a new dumping ground, we are not going to allow that,” he said.

    “If true, it would be outrageous and unconscionable,” Inger Andersen, the executive director of the United Nations Environment Program, based in Kenya, tweeted. “We ⁦‪@UNEP‬⁩ are so proud of our host nation #Kenya’s strong lead on reducing plastic waste and forcing a shift away from single use plastic.”

    Bans on single-use plastics are growing worldwide. A global review by UNEP in mid-2018 said 127 countries had adopted some form of regulation regulating plastic bags.

    More of those countries were in Africa — 37 — than in any other region, the U.N. said, adding that Kenya’s penalties for violations included up to four years in jail and a fine of up to $38,000.

    Kenya put the U.S. trade talks on hold earlier this year because of the coronavirus pandemic, and they were finally launched in July. The American Chemistry Council said it did not know whether the Office of the United States Trade Representative had taken its recommendations into consideration.

  • Why The Government Has Entered Into An Agreement With Safaricom To Suspend Fuliza Loans Deductions

    Why The Government Has Entered Into An Agreement With Safaricom To Suspend Fuliza Loans Deductions

    The government has entered an agreement with mobile service provider, Safaricom to suspend deduction of mobile loan debts popularly known as Fuliza for 48 hours to enable the youth under the Kazi Mtaani programme to receive their pay.

    The Principal Secretary (PS) for the State Department of ICT and Innovations, Jerome Ochieng says the government, on realization that quite a number of the 283,000 youths under the Kazi Mtaani programme were indebted to Safaricom, indulged the company, which agreed to give a 48-hour waiver from the time payment is made to the participants.

    “Before you cry of non-payment, please ensure that you do not have a Fuliza debt as the company will automatically deduct the money after the 48-hour waiver period elapses,” he said.

    The PS at the same time said that the government plans to have all the 369 level four to level six hospitals interconnected by the end of the year 2022.

    This is a Ministry of ICT, Innovations and Youth affairs digitisation initiative to health facilities across the country that will ensure effective and efficient service delivery.

    As part of the programme, Mr. Ochieng said, the ministry has already installed Local Area Network (LAN) in 50 public hospitals across the country.

    He was speaking in Siaya town Tuesday, when he paid a courtesy call on area County Commissioner, Michael ole Tialal before touring ICT installations in the county.

    The PS said it was the government’s objective to mainstream ICT at the grassroots hence investment in infrastructure development to enable the public access government services online.

    “Our strategy is to make Kenya a leader in digital economy,” he said adding that the government is committed to development of digital skills.

    Ochieng challenged the youth to take advantage of the ICT infrastructure to improve themselves, adding that the government had opened more opportunities through various digital platforms.

    Siaya Governor, Cornel Rasanga hailed the close cooperation with the national government on youth and ICT matters.

    Rasanga advised the youth to take advantage of the digitisation to access government procurement opportunities.

  • KRA Probing Firms And Wealthy Individuals That Owe It Sh259B

    KRA Probing Firms And Wealthy Individuals That Owe It Sh259B

    The Kenya Revenue Authority (KRA) is not taking a day off, it’s emerging that the agency’s detectives have identified 1,309 firms and wealthy individuals that owe it Sh259 billion, setting the stage for travel bans, asset freeze and deactivation of Personal Identification Numbers (PINs) as possible punishments in the recovery of the money owed.

    KRA has been considering different approaches to nab tax cheats in a bid to hit the revenue targets more so in the wake of Covid-19 that has dealt a major blow to the economy.

    In a statement seen by Kenya Insights, KRA Commissioner General Githii Mburu without disclosing the names, says,

    “We have profiled 1,309 individuals and companies with tax-loss estimated at approximately Sh259 billion. These entities are earmarked for further investigations and legal action for non-compliance.”

    KRA has also identified the numerous schemes used by such firms and individuals to evade paying taxes including filing faked VAT in the long run denying the agency billions in revenue. Faking invoices by inflating purchase values to cheat on VAT remittances.

    The KRA flagged firms in the construction, importation of hardware and household goods, scrap metal dealers and importers of electronic items including mobile phones for under-declaring VAT dues.

    Others, especially wealthy individuals, have been hiding their sources of income while engaging in luxury spending and accumulation of property including purchase of homes and high-end cars.

    The KRA enforcement unit has been using various databases to pursue suspected tax cheats, among them bank statements, import records, motor vehicle registration details, Kenya Power records, water bills and data from the Kenya Civil Aviation Authority (KCCA), which reveals individuals who own assets such as helicopters.

    Car registration details are also being used to smoke out individuals who are driving high-end vehicles but have little to show in terms of taxes remitted.

    Kenya Power meter registrations are helping the taxman to identify landlords, some of whom have been slapped with huge tax demands.

    The KRA has hired a team of auctioneers to help it track the properties of the individuals and companies who have failed to pay the taxes due.

    Vehicles, land, homes, office blocks and workplace equipment will be on the KRA radar at a time the taxman has stepped up the war against tax cheats.

    CEOs and other top managers of tax-evading companies could be barred from flying out of the country if the restrictions on flights imposed to limit spread of Covid-19 are lifted. Individuals and companies targeted are those that have lost disputes against the KRA in court or at the tax tribunal.

    Should the KRA make good its threat to deregister the PINs, this will mean that the affected individuals and businesses will be cut off from making transactions that require proof of active registration as a taxpayer.

    The list of transactions that requires proof of an active PIN certificate includes registration of land titles, approval of development plans, registration, transfer and licensing of motor vehicles and registration of business names and companies.

    Others are underwriting of insurance policies, customs clearing and forwarding, payment of deposits for power connections, supplying goods and services to the State, as well as opening accounts with financial institutions.

    Employers would also be committing a crime if they wire salaries to the accounts of workers whose PINs have been deactivated.

    The KRA stepped up its fight against tax evasion and sought additional funding to hire 1,000 intelligence and enforcement officers in an effort to beef up the investigations on wealthy individuals and firms.

  • Running on Empty: South Sudan Is Out of Foreign Exchange Reserves

    Running on Empty: South Sudan Is Out of Foreign Exchange Reserves

    South Sudan, battered by years of conflict and corruption, has run out of foreign exchange reserves and cannot stop the pound’s depreciation, a senior central bank official in the oil-producing nation said on Wednesday.

    South Sudan gets almost all of its revenue from crude oil, but current output, at about 180,000 barrels per day (bpd), has plummeted from a peak of 250,000 bpd before the outbreak of conflict in 2013, according to official figures.

    “It is difficult for us at the moment to stop this rapidly increasing exchange rate, because we do not have resources, we do not have reserves,” Daniel Kech Pouch, the bank’s second deputy governor, told a news conference.

    South Sudan has three exchange rates – one from the central bank, from commercial banks, and from the unofficial market. Pouch said the rate for the pound from the central bank is 165 a dollar, from commercial banks about 190, and 400 from the parallel market.

    In addition to lower oil production, corruption is also driving the crisis, said Brian Adeba, the deputy director of policy at United States-based watchdog The Sentry, which has released several reports documenting high-level corruption. The government has denied the findings.

    “For a long time, egregious corruption and the deliberate destruction of institutional mechanisms for checks and balances have resulted in officials using the central bank as their personal ATM, so this [running out of foreign exchange] is not surprising,” Adeba told the Reuters news agency.

    South Sudan ended five years of civil war in 2018 but disagreements between President Salva Kiir and First Vice President Riek Machar, who led the main rebel group, have stalled the conclusion of the peace process.

    The war – marked by ethnic cleansing, extreme sexual violence and pockets of famine – displaced around a third of the population from their homes. The conflict killed an estimated 400,000 people and created Africa’s biggest refugee crisis since the 1994 genocide in Rwanda.

    “The Bank of South Sudan and ministry of finance have created serious economic blunder by taking out the SSP reserve from the treasury and giving it to businessman … This is dangerous for the peace agreement because it will create fear,” said James Okuk, researcher at the Juba-based Center for Strategic and Policy Studies.

  • Approved List of States Exempted from Quarantine in Kenya

    Approved List of States Exempted from Quarantine in Kenya

    Following resumption of international passenger flights in and outside Nairobi, Kenyan government has drawn a list of countries and territories that shall be exempted from the mandatory quarantine that has come with post Covid.

    Many countries are subjecting travellers to a lengthened coronavirus vetting including mandatory quarantine thereby discouraging travels and that’s what Kenya is now avoiding.

    This move is expected to boost tourism and international guests streaming into the country.

    TRAVELLERS FROM THE FOLLOWING APPROVED STATES AND TERRITORIES WILL BE EXEMPT FROM QUARANTINE:

    1. Afghanistan
    2. Albania
    3. Angola
    4. Anguilla
    5. Antigua and Barbuda
    6. Australia
    7. Austria
    8. Azerbaijan
    9. Bahamas
    10.Bahrain 11. Barbados 12. Belgium 13. Belize
    14. Bermuda
    15. Bhutan 16.Bonaire, Saint Eustatius and Saba
    17. Botswana
    18.British Virgin Islands
    19. Brunei Darussalam
    20. Bulgaria
    21. Cambodia
    22. Canada
    23.Cayman Islands 24. China
    25. Commonwealth of the Northern Mariana Islands
    26. Croatia
    27. Cuba
    28. Curaçao
    29. Cyprus
    30. Czechia
    31. Denmark
    32. Djibouti
    33. Dominica
    34. Egypt
    35. Eritrea
    36. Estonia
    37. Ethiopia
    38. Falkland Islands(Malvinas)
    39. Faroe Islands 40. Fiji
    41. Finland
    42. France

    43.French Polynesia

    44. Gambia
    45. Georgia
    46. Germany
    47. Gibraltar
    48. Greece
    49. Greenland
    50. Grenada
    51. Guadeloupe
    52. Guam
    53. Guyana
    54. Holy See
    55. Hungary
    56. India
    57. Ireland 58.Isle of Man 59. Italy
    60. Jamaica
    61. Japan
    62. Jordan
    63. Kazakhstan

    64. Kuwait
    65. Kyrgyzstan

    66.Lao People’s Democratic Republic

    67. Latvia
    68. Lebanon
    69. Lesotho
    70. Libya
    71. Liechtenstein 72. Malaysia
    73. Maldives

    74. Malta
    75. Martinique

    76. Mauritius

    77. Mayotte
    78. Monaco
    79. Mongolia

    80. Montenegro

    81. Montserrat

    82. Morocco

    83. Myanmar

    84. Namibia
    85. Netherlands

    86. New Caledonia
    87. New Zealand
    88. North Macedonia
    89. Norway
    90. Pakistan
    91. Papua New Guinea
    92. Poland
    93. Portugal
    94. Qatar
    95. Réunion
    96. Russian
    Federation
    97. Rwanda
    98. Saint Barthélemy
    99. Saint Kitts and Nevis
    100. Saint Lucia
    101. Saint Martin
    102. Saint Pierre
    and Miquelon
    103. Saint Vincent and the Grenadines

    104. Sao Tome and Principe

    105. Saudi Arabia
    106. Seychelles

    107. Singapore

    108. Slovakia

    109. Slovenia

    110. South Korea

    111. Spain
    112. Sri Lanka
    113. Suriname
    114. Sweden
    115. Switzerland

    116. Tajikistan
    117. Thailand

    118. The United States of America (except for California, Florida and Texas)
    119. Timor-Leste

    120. Trinidad and Tobago
    121. Tunisia

    122. Turkey

    123. Turks and Caicos Islands

    124. Uganda
    125. United Arab Emirates
    126. United Kingdom
    127. Uruguay

    128. Uzbekistan

    129. Viet Nam

    130. Zimbabwe

    Noticeably, Tanzania which has been having wrangles with Kenya has been excluded from the list furthering the existing diplomatic impasse that has rocked the two neighbors. From the list, it’s safe to say that Kenya has basically opened its borders to all the friendly countries that they’ve been working with.

    Despite Kenya’s COVID-19 cases soaring, the state is determined to get things back to normalcy given the big hit that the virus has dealt to the economy and many companies Golding their carpets.