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Counties fail to account for Sh81bn

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Economy

Edward Ouko
Auditor-General Edward Ouko. FILE PHOTO | NMG 

Twelve counties were unable to account for Sh81 billion they received from the National Treasury during the electioneering year, a latest report by Auditor-General Edward Ouko has revealed.

Mr Ouko did not give an opinion on the financial activities of the 12 counties for the financial year 2016/17, meaning there was little or no documents backing the devolved function’s expenditure. This is technically known as disclaimer opinion.

According to the report, more than half the counties were in a bad financial state in the year that ended June 30, which was just a month to the August General Election where most incumbent governors lost their seats.

The report exposes huge variances between the financial statements and the Integrated Financial Management System (Ifmis) reports resulting in the auditor expressing adverse and disclaimer opinion.

The disclaimer opinion issued on financial statements of the 12 counties could be a signal of either the book-keeping nightmare that the devolved governments find themselves in or misappropriation of taxpayers’ money.

The auditor is usually unable to offer an opinion when he encounters numerous errors and where information is not made available to him, making it difficult for him to finish the audit.

Mr Ouko was therefore unable to render any opinion on Nairobi, Nandi, Tana River, Vihiga, West Pokot, Bomet and Homa Bay. Others are Kericho, Kitui, Lamu, Machakos and Migori.

At the same time, 12 other counties were issued with an adverse opinion indicating massive inaccuracies in the Sh73 billion they received in the same fiscal year.

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Mr Ouko issues an adverse opinion, which is the worst report an institution can get, when he finds so many anomalies that he lacks confidence in the financial health of an institution.

Some of the counties that were issued with an adverse opinion include Nyamira, Samburu, Kirinyaga, Murang’a, Tharaka Nithi, Kwale and Kisumu.

Others are Siaya, Turkana, Garissa, Isiolo and Embu counties.

Nairobi County was found to have irregularly spent Sh8 billion out of the Sh10 billion it collected as revenue after the county executive failed to bank it as required by law.

The report also revealed that out of the over one million cars parked, only 402,401 were compliant, resulting in the loss of Sh270 million in revenue. The county was put on the spot for releasing clamped vehicles without payment of the penalties

The county also failed to disburse Sh281 million to various hospitals including Pumwani and Mbagathi hospitals as reimbursement for free maternity care, therefore adversely affecting the delivery of services at the public facilities. Embu County was for instance operating 19 main bank accounts contrary to the Public Finance and Management Act. The accounts had a total of Sh521 million. The county was also found to be using multiple revenue collection systems despite acquiring a digital platform at a cost of Sh18 million resulting in its underutilisation.

In Murang’a, Mr Ouko dismissed the budget figures reflecting in the statements as misleading and erroneous faulting the county executive for failing to post the original document.

The devolved unit also recorded a decline in revenue after it dropped to Sh535 million from Sh641 million collected in the 2015-2016 financial year.

In Kiambu, the auditor found that 19 employees were not taxed while 262 employees were undertaxed, resulting in non-remittance of PAYE of Sh434, 431 and Sh5 million respectively.

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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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