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AG absence in case on plastic bags ban risks Sh2bn loss

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Justice Onesmus Makau.
Justice Onesmus Makau. FILE PHOTO | NMG 

Taxpayers face a Sh2 billion loss after the State failed to defend a suit where a Nairobi-based manufacturer is seeking compensation following the ban on the use of plastic bags.

Trial judge Onesmus Makau said the suit will be concluded within a month or October 25 without hearing opposition for the compensation suit from the Attorney-General’s (AG) office.

This looks set to tilt the case in favour of Hi-Plast Limited, which further seeks an order to quash a Gazette notice by the Ministry of Environment, banning the use of plastic bags.

Justice Makau raised concern over the AG’s failure to file a defence for the suit and serve Hi-Plast with court papers detailing its opposition.

A representative from the AG’s office told the judge that the State was under the assumption that after the Kenya Association of Manufacturers (KAM) case against the plastic ban was thrown out the matter had rested and assumed “the new case compensation would equally fall.”

“The defendants have defaulted in entering appearance and further failed to file any appropriate defence,” Hi-Plast lawyer Eddy Orinda told the court.

The director of the company, Mahesh Dodhia says the ban has caused him losses, having invested heavily in machinery and raw materials as well as defaulted on loan repayments.

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In a sworn statement, he says that the ministry should have at least engaged stakeholders before imposing the ban, which would have helped mitigate the losses.

“The petitioner’s loans were to be repaid solely based on sales projections that were hinged on month on month output and sales of its products, which are now deemed illegal,” Mr Orinda said.

The firm also claims that the declaration of the ban and its implementation came after manufacturers were granted inadequate and unreasonable notice.

Hi-Plast accused the ministry of disregarding a parliamentary committee’s call for the shelving of the gazette notice leading to the ban.

Last February, a gazette notice announced an end to the use, manufacture and importation of plastic bags for household and commercial packaging in Kenya from August 28.

Those in breach risk an imprisonment of up to four years or fines of up to Sh4 million with the manufacturers lobby saying the ban would cost 60,000 jobs and force 176 manufacturers to close down their businesses.

Mr Dodhia further accused the ministry of abetting other manufacturers, whom he claimed continue to produce plastic bags.

He added that the ban seems to have been effected to prop up the businesses of friendly manufacturers, a move he terms discriminatory and malicious.

He stated that at time the Gazette Notice was published in March 2017, the company was in the process of shipping raw materials.

In law, justice Makau said, not serving amounts to not filing a defence.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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