Domestic flight fares rose the highest ahead of Christmas compared to international plane charges and local bus rates on increased demand for flying on routes like Kisumu and Mombasa, official data show
The Kenya National Bureau of Statics (KNBS) says domestic air fares rose 18.43 per cent to an average of Sh21,230 in December for return compared to similar month in 2017.
This was higher compared to country bus fares that rose 17.5 per cent to Sh1,245 for 350-kilometre journey, which is the equivalent to moving from Nairobi to Kisumu, in the period under review.
Return international fares rose 8.92 per cent to Sh120, 546 in December while bus fares for shorter route of 250 kilometers increased 7.03 per cent to an average Sh436.
“The demand for air service was high in December 2018 because there were more passengers seeking to travel by air especially during the festive season compared to 2017,“ said Silverstone Air sales manager Patrick Oketch.
Introduction of new carriers like Jambojet (2014), Silverstone and Fly Sax has brought down air fares low enough to attract bus travellers into flying for the first time.
This, backed by the growing appetite for local flights by the middle class, especially on routes like Nairobi and Kisumu, has seen a rise in air travel with the promise of a 50-minute flight on an eight-hour bus ride on a highway beset by tail-backs.
The KNBS data show that domestic passenger travel rose from 2.6 million passengers in 2013 to 4.1 million in 2017, reflecting a growth of 57.6 per cent.
While the KNBS data capture fares throughout December, flight charges rose sharply in the days to Christmas on increased demand.
This saw cost of flights to Kisumu ahead of Christmas overtake that on the Mombasa route for the first time.
Those travelling to Kisumu from Nairobi on Jambojet paid Sh14,500 on December 21, the highest on the weekend to Christmas day.
The highest price on Jambojet to Mombasa from Nairobi over the period was Sh11,500 and fell to a low of Sh4,500 on December 24.
Rival Fly540 flight to Kisumu from Nairobi on December 21 was sold out and the fares on the Mombasa route were Sh11,270.
Passengers travelling to the lake side city, ordinarily would pay Sh4,500 and Sh6,500 for a one-way, signalling a pent up demand.
The carriers’ main challenge has been convincing Kenyans to book early, which is vital for the low-cost model.
Bus fares to Kisumu from Nairobi rose 17.5 per cent, which was a slower pace compared to the cost of diesel that rose 21 per cent in the year to December to Sh111.89 a litre.
World Bank pushes G-20 to extend debt relief to 2021
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.
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.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
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.
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.
Scope Markets Kenya customers to have instant access to global financial markets
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.
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.