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Counties stifle private sector with unpaid bills : The Standard

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Counties have not paid suppliers more than Sh43 billion incurred during the 2016/17 financial year, making the devolved units the worst employers for private sector.

According to an analysis of the Auditor General’s reports by the National Taxpayers Association (NTA), Mombasa County had the most pending bills at Sh4 billion, followed by Machakos at Sh2.8 billion and Kisumu’s Sh2.5 billion.
Nakuru owes Sh2.1 billion while Mandera has not paid Sh1.8 billion. The counties have been dubbed the worst five employers withholding pay for firms that do business with counties.
“Rolled over pending bills negates the reason for public participation, as projects that were not implemented but rolled over ignore the wishes of the citizens,” said NTA National Chairperson Irene Otieno in the report.

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Enterprises that rushed to do business with counties have had it rough processing payment, leaving them broke and unable to service loans they had taken to supply goods and services to the counties.
Central Bank of Kenya Governor Patrick Njoroge has noted that 10 per cent of loan defaults was as a result of failure by the national and county governments to pay for services rendered.
Latest data from the regulator shows that out of the Sh2.567 trillion lent out by banks, Sh308 billion was in default, which puts non-payment caused by Government at Sh30.8 billion.
Homa Bay County is the best to supply goods and services to, having only accumulated Sh5 million pending bills.
The other four counties good at clearing bills are Vihiga at Sh52 million, Nairobi at Sh56 million, Lamu at Sh74 million and Baringo at Sh78 million.

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The rest of the counties audited had more than Sh100 million in pending bills, with the report also focusing on governance issues.
Mombasa, which had more pending bills than revenue collected, had two of every Sh10 questioned since they were not supported by enough documentation. Nyandarua, on the other hand, had unsupported expenditure of Sh1.6 billion.
Nairobi County collected Sh10.9 billion but only Sh2.4 billion was banked at its official account. The remaining Sh8.5 billion was kept outside the county official coffers.
The audit also noted wastage. In Nyamira County, for instance, there was a 377 per cent rise in wages for temporary workers, yet of 177 projects approved for implementation by the County Assembly, 55, with a value of Sh277 million, stalled.
Nyeri County paid Sh38 million to Kenya Power for street lighting, but none was installed. The county paid Sh3.3 million for three milk cooling plants, but only one was supplied.

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Challenges facing counties and their ability to pay suppliers may also be tied to falling revenues, which declined by Sh1.6 billion, excluding Narok County, which had a spike of Sh4.7 billion between 2016 and 2017.
Kiambu, which had Sh920 million in pending bills, had the highest decline in revenue of Sh381 million, while Nakuru, with pending bills worth Sh2.1 billion, had a revenue decline of Sh334 million.
Although Nairobi collected Sh10.9 billion, the highest revenues collected, it saw a decline of Sh304 million from the Sh11.2 billion collected in 2016.
On the other hand, Narok County’s revenue jumped to Sh7.5 billion while it carried Sh1.6 billion pending bills. Other counties that improved on revenue collection were Meru (by Sh269 million), Machakos (Sh137 million, Laikipia (Sh86 million) and Bomet Sh68 million.

NTAUnpaid Bills2016/17 financial year



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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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