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Delay in passing new coffee rules hampering sector

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A farmer picks coffee berries in Nyeri
A farmer picks coffee berries in Nyeri. FILE PHOTO | NMG 

Delay in effecting the proposed coffee regulations could throw farmers into the same predicament that they have faced over the years, with the new coffee year beginning in October.

If the regulations are not gazetted in the next one month, it means growers will use the same marketing structures that have for decades been controlled by cartels.

When he visited Kirinyaga and Nyeri counties recently, Industrialisation, Trade and Co-operatives Cabinet Secretary Peter Munya promised radical changes in the industry.

He said plans are underway to list coffee at the commodity exchange to enable overseas buyers to access it online.

This is meant to eliminate brokers and other cartels, the CS said.

But this would only happen if the Coffee (General) Regulations 2018 (draft) is gazetted.

Under the new regulations that were developed two years ago by a national task force before being revised again this year, the entire marketing system is supposed to be restructured to favour the grower.

The rules prohibit traders involved in coffee business from holding multiple licenses, which most multinationals have been taking advantage of to exploit poor farmers.

As it has turned out, most companies involved in the coffee business are part of the same entity but registered in different names. For instance, a coffee milling firm owns a marketing agent’s license and also a dealer’s permit to buy beans at the Nairobi Coffee Exchange for export.

So when the firms meet at the auction, they can manipulate prices.

The 2018/2019 coffee year begins in October, which is just a week away. This is when the main picking season starts. It is supposed to begin after the long rains, which come in the second week of October.

The coffee that farmers will harvest this season will be sold from January next year.

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President Uhuru Kenyatta had appointed the national task force in March 2016 before constituting a Coffee Sector Implementation Committee (CSIR) to oversee implementation of the draft, which will radically change the way coffee is marketed and steer the sub-sector to recovery.

The regulations had been gazetted last year but the High Court declared them unlawful after a group of farmers and the Council of Governors moved to court.

The leaders argued that the team did not carry out public participation when developing the proposals. The court, however, ordered the Agriculture CS to ensure that the regulations are promulgated within 30 days of the first sitting of the present parliament.

But attempts by the government to involve stakeholders in resolving the impasse has failed as a group of officials of co-operative societies resolved to block the gazettement of the rules.

The officials are from the main coffee growing areas of Nyeri, Embu, Kirinyaga and Murang’a.

They want CSIR to first adjust some contentious clauses. One of them recommends paying growers directly into their individual bank accounts after their coffee is sold.

According to the officials, the new rules are meant to create monopoly by the government in handling farmers’ proceeds.

Paying farmers directly, they also contend, will kill co-operative societies.

They have the backing of millers and marketing agents, who are currently the main financiers of societies as they advance loans to farmers as opposed to borrowing from commercial banks.

“If we sort out the co-operatives, we shall have sorted out the coffee sector,” Mr Joseph Kieyah, the chairman of CSIR, told the Sunday Nation.

Mr Kieyah’s team accuses co-operatives officials of blocking the reforms. This perhaps explains why a decision to carry out a forensic audit of all coffee co-operatives in the country was reached.

After the audit, several officials of these co-operatives may find themselves jobless if they are found guilty of embezzling members’ funds.

And as Mr Munya said, small societies will be merged to improve economies of scale and farmers’ earnings.

The CS promised farmers improved payment for their deliveries. Therefore, it would be interesting to see if the new rules will in force by the time the new season’s harvest is taken to the market.

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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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