Kenyan traders cry foul after Somalia bars khat

Kenyan traders cry foul after Somalia bars khat

Miraa traders in Kenya are up in arms after Somalia turned back an aircraft that was delivering 13.6 tonnes of khat to Hargeisa, the capital of the breakaway Somaliland region.

Nyambene Miraa Traders Association (Nyamita) chairman Kimathi Munjuri said the cargo plane was turned back on Saturday despite having received clearance to leave Nairobi and deliver the highly prized commodity to Hargeisa.

Hargeisa, a major consumer of Ethiopian khat, is experiencing a shortage of the stimulant due to ethnic unrest that has hit Ethiopia’s expansive Oromia region for the last five days.

Flight 5YMSA, which had overflight and landing clearance from Somaliland Civil Aviation and Airports Authority, turned back and landed at Wajir International Airport.

According to Somalia based news sites, the cargo plane was denied entry due to the country’s air Somalia banned miraa imports three months ago to prevent the spread of the coronavirus.

Despite Somaliland declaring unilateral independence in 1991, the issue of air traffic control is yet to be agreed on between Mogadishu and Hargeisa.

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The semi-autonomous state is in talks with Somalia, spearheaded by Djibouti, to resolve longstanding differences.

Airspace control is one of the issues Somaliland wants to be solved in the talks that resumed late last month in Djibouti.

The move by Somalia was reportedly received with protests in Hargeisa by expectant miraa chewers who are hit by the shortage.

Mr Munjuri said traders’ losses would run into Sh8 million if the khat is not delivered on time.

“The miraa is valued at about Sh3 million, Sh2.5 million goes to transport. There are other logistics costs, which cannot be refunded. We had approvals from Somaliland Civil Aviation Authority to deliver the miraa. Everything was in order until the aircraft entered the Somalia airspace. The pilot was told that he was carrying illegal cargo,” he said.

Mr Munjuri decried the slow pace of the Foreign Affairs ministry to address the trade stalemate with Somaliland.

“We have even been trying to have the Somalia border reopened to facilitate trade but nothing seems to be moving.

“The Ministry of Trade and Agriculture have been engaging Foreign affairs on various issues. All miraa trade issues seem to be stuck at Foreign Affairs,” he said.

Somaliland withdrew all Covid-19 restrictions including public gatherings and international flights on June 23.

The incident came a day after Kenyan investors and State officials held talks with Somaliland President Muse Bihi in Hargeisa.

Kenyans Should Condemn Saboteurs, Profiteers Negating On Gains Made In COVID-19 War

Kenyans Should Condemn Saboteurs, Profiteers Negating On Gains Made In COVID-19 War

The COVID-19 pandemic has emerged as the defining global health crisis of our time. As it spreads exponentially, the disease has had an unprecedented impact on almost all economic sectors. The strain on governments is extreme and the impact on the people continues to grow. To arrest the spread of the coronavirus, Kenya introduced stern containment measures.

The pandemic also has the potential to create devastating social, economic and political crisis with far-reaching consequences. But as cases increase, there is solace in the fact that the government has stepped up response efforts. However, it is in disaster response and relief efforts that the values of open government can come under intense pressure, though it can also meaningfully contribute to better outcomes.

But as the government, partnering with other local and global players, steps up efforts to combat the pandemic, it is worrying that these are being negated by saboteurs and profiteers. The public enemies slowing down the fight against COVID-19 are not only those breaking the curfew but economic saboteurs who do not implement government directives.

Besides arresting curfew breachers and mask defaulters, let the authorities also go for economic saboteurs who refuse to effect the executive directive on tax relief. Almost four weeks after President Uhuru Kenyatta announced two per cent VAT reduction on essential commodities, the prices at many retail outlets are unchanged.

The prices of milk, bread and sugar, for instance, are either the old ones or have been increased. Why is milk still retailing at Sh50-plus yet the authorities do not go after the retailers with as much zeal as they do drunkards who are locked up in bars?

What interventions are Kepsa, FKE and Cofek, among other stakeholders, doing to point out these gaps? While I appreciate that Kepsa has been visible in this area, prescribing measures to mitigate the impact of the pandemic, it is my humble opinion that some of these once-vibrant bodies have failed in their cardinal duty.

It is encouraging to hear that the Kepsa COVID-19 Business Response Committee seeks to gather disaggregated information from all sectors on the impact of COVID-19 on them and the effects of the interventions by the public and private sectors to safeguard businesses and jobs during and after the pandemic.

These are progressive policies. When you cushion employers from the hardships of COVID-19, families and communities will, in turn, not feel the heat. Apparently, though sad indeed, the coronavirus crisis has revealed the ‘true’ public servants.

This is beyond the President’s commendable call for government entities to clear pending bills. It seems few are paying for goods or services procured in the past two months. I know of customers who, taking advantage of the virus, have written to service and goods providers, claiming that they cannot pay for them or are closing shop and hence scaling down on consumption.

Consumer regulatory agencies have failed Kenyans during the pandemic. Since the announcement of the first confirmed case of COVID-19 in Kenya, uncertainty descended upon consumers, sparking panic buying of commodities ranging from essential foodstuffs to protective gear, such as face masks, gloves, hand sanitisers and toiletries.

Traders should realise that the pandemic has worsened the economic situation of many households, with many breadwinners having to contend with pay cuts, unpaid leave or even loss of gainful employment. Kenyans should condemn such heartless businesses dancing on the graves of helpless consumers.

DEBT: CBK boss reveals how Rotich ‘cooked figures’ in his last budget

DEBT: CBK boss reveals how Rotich ‘cooked figures’ in his last budget

Central Bank of Kenya (CBK) Governor Patrick Njoroge has accused suspended Treasury Cabinet Secretary Henry Rotich of distorting revenue figures.

Dr Njoroge yesterday said the misrepresentation of numbers by the embattled official had driven the government on a borrowing spree.

In a rare bare-knuckle attack on Rotich’s tenure, Njoroge described Treasury’s budget-making process as “abracadabra”, where revenue numbers were randomly included in the budget books “from thin air.”

The governor described the revenue shortfalls by Treasury that resulted in a borrowing spree as “parte after parte” in street parlance.

 “There was a lot of abracadabra,” said Njoroge of the budget-making process that was overseen by Rotich and his Principal Secretary Kamau Thugge.

READ ALSO: The man who messed up a whole country

Njoroge spoke at a press briefing in his office a day after the Monetary Policy Committee slashed the benchmark lending rate from nine per cent to 8.5 per cent.

Rotich and Thugge face multiple criminal charges, including abuse of office, conspiracy to commit economic crimes, single-sourcing for projects, and approving payments contrary to the law.

In five years, Rotich had borrowed upwards of Sh3 trillion, an amount higher than what his 14 predecessors, combined, borrowed. And as of last year, repaying this ever-increasing debt was gobbling up about 57 per cent of tax revenue.

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Suspended Treasury CS Henry Rotich Photo/COurtesy

The country has low sources of revenue and high spending on non-development projects, a recipe for financial disaster. Njoroge said for the first time in his four-year stint as governor and chairperson of the MPC – the CBK’s organ responsible for monetary policy – they were in agreement with austerity measures being undertaken by Treasury.

He lauded the current crop of leaders at Treasury for “being realistic” in their revenue projections.

“It is not the first time we have had a conversation with the National Treasury. I have been here four and a half years now. But I think for the first time… we believe in the fiscal consolidation taking place,” said Njoroge.

“It is one thing to have words that you are going to consolidate, it is another to actually mean what you say and actually go ahead and do it.”

Njoroge was referring to the many austerity efforts by Rotich, which always failed to materialise, with the country falling deeper into debt. The country’s stock of debt currently stands at Sh5.9 trillion. Njoroge said there was no clarity in terms of revenue estimates that Treasury presented to the MPC in the past.

“Revenues in the past were over-stated, completely over-stated,” he said. Treasury has since revised downwards revenue estimates to Sh2 trillion from Sh2.1 trillion.

 “If that is the way you do budgeting, then you deserve what you get, which is nothing. And indeed, you deserve the crisis that follows after that,” said Njoroge.

Moi family sells Trans National Bank to Nigerian lender

Moi family sells Trans National Bank to Nigerian lender

Trans National Bank Buyout: Nigerian Tier-1 lender, Access Bank says it is ready to acquire the Transnational Bank of Kenya. CEO of Access Bank Herbert Wigwe, says he anticipates that the deal will be concluded before the end of November. The ownership of Transnational Bank is associated with the family of the former president Daniel Arap Moi.

The Competition Authority of Kenya gave Nigeria’s biggest lender the go-ahead to acquire 93.57% of Trans National Bank Ltd, as consolidation in the East African nation’s banking industry gathers pace.

Access Bank Group Head Office, Nigeria

Access Bank Plc’s purchase follows the merger of NIC Group Plc and Commercial Bank of Africa Ltd., and KCB Group Ltd.’s acquisition of National Bank of Kenya Ltd. earlier this year. Access Bank joins other Nigerian lenders Guaranty Trust Bank Ltd. and United Bank of Africa Plc in operating in the Kenyan market.

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The deal bodes well for the Central Bank of Kenya’s push for consolidation in an industry of more than 40 lenders and a population of almost 50 million people. Kenya has more banks per person than South Africa and Nigeria, Africa’s two largest economies.

In the past two years, SBM Holdings Ltd. of Mauritius bought up some of the assets of Chase Bank Kenya Ltd. and the entire capital of Fidelity Commercial Bank Ltd.

Transnational, which swung to a full-year pretax loss of 98.5 million shillings ($951,690) in 2018, lends mainly to the agricultural sector, according to its annual report. Non-performing loans ballooned 58% to 1.85 billion shillings, while loans rose 0.5% to 6.63 billion shillings, it said.

Finally! Loan providers to inform customers before forwarding them to CRB

Finally! Loan providers to inform customers before forwarding them to CRB

Now, loan defaulters will have to get notified before they have their details submitted to the dreaded Credit Reference Bureau. The move will come from a new law by the Central Bank of Kenya that is meant to protect loan defaulters who get enlisted unknowingly.

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The pending law will require loaning institutions to inform the customers appropriately before  reporting them. The law however prohibits Sacco, banks and microfinances. It is not clear if loaning apps will be included.

Mobile lending apps that are not affiliated to any bank are not controlled by the Central Bank of Kenya.

Loan approval for banks is done on basis of credit score

“An institution and a third party credit information provider shall notify the customer within one month before a loan becomes non-performing that the institution shall submit to a bureau the information on the loan immediately it becomes non-performing,” reads the draft law in parts.

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From the law, any customer to a financial institution will be acknowledged and will also have a right to know any information about them submitted to any credit reference bureau.

On several occasions, CBK governor Patrick Njoroge has hinted an attack against banks which use the credit score to harass customers. In the place, Njoroge advocates for banks using good credit scores for customers to improve their loan eligibility.

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Speaking last week during the Monetary Policy Committee (MPC) briefing in Nairobi, CBK Governor Patrick Njoroge said he hoped some of the firms operating mobile phone loan applications would be de registered, “as they are simply fancy shylocks.”

“There has to be a proper regulation, where similar products are regulated in a similar way so long as you are lending to customers or receiving deposits. If you have a banking function, it’s not just about the name; you have to be regulated in the same way or it will lead to arbitrage,” said Dr Njoroge.

However, the leading digital lenders in the country have announced the launch of the Digital Lenders Association of Kenya (DLAK) barely a week after the Banking Charter came into effect with the objective of setting standards in the financial sector.

Bob Collymore ends Safaricom succession politics with new announcement

Bob Collymore ends Safaricom succession politics with new announcement

Safaricom CEO Bob Collymore has brought to a stop the giant Telecommunication Company’s succession debate with his Thursday afternoon announcement.

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Speaking in a Press Conference at a popular Nairobi hotel, Collymore said he will remain Safaricom CEO until 2020.

He added that his term extension was because of his medical leave that lasted about a year.

His tenure was expected to end in August this year.

More to follow.