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EDITORIAL: Stop making a mockery of austerity measures

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Treasury secretary Henry Rotich
Treasury secretary Henry Rotich. FILE PHOTO | NMG 

Judging by the behaviour of senior public officials, one cannot get the slightest idea that the country is in an austerity mode.

This is despite the fact that Treasury secretary Henry Rotich has announced a raft of measures he believes will help the government plug the huge budget hole arising from revenue shortfalls and mounting debt servicing burden.

Mr Rotich had said that the proposed cuts to government spending would be across the board , starting with travel, motor vehicle maintenance, training and hospitality.

But a proper scrutiny of the budget shows that key institutions such as the Judiciary and Parliamentary Service Commission—which ought to lead by example—are not about to rein in profligate spending.

The resolution for budget adjustments is noble because of the amendments to tax measures that parliamentarians passed last week amid mounting financing obligations such as debt servicing, which will take more than half the taxes at Sh870 billion. It must understood that spending such a large portion of public resources on debt servicing leaves a big shortfall in the financing of other government obligations, hence the cuts in spending.

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But the judges and MPs actions only suggest a total lack of support for the austerity measures.

Judges are set to receive Sh9 million fuel guzzlers, defying President Uhuru Kenyatta’s order to cut on motoring expenses amid an austerity drive. At Sh9 million each, the Judiciary is looking to buy fuel guzzlers like Land Cruiser V8, BMW, Range Rover Evoque and Mercedes Benz E220, adding further burden to taxpayers in the forms of petrol and spare parts.

The purchase of the high-end cars also goes against an earlier government policy to lease vehicles instead of purchasing them. Parliament has on the other hand defeated a Treasury proposal to cut out the Sh600, 000 that had been allocated to each lawmaker for furnishing their private offices.

The PSC — the MPs’ employer — reckons there is need to buy office furniture, supplies, personal computers, printers and other IT equipment.

This is unacceptable when the lawmakers have made big cuts on projects that uplift the lives of the ordinary Kenyans like the cooking gas subsidy, power transmission projects, and repair of damaged roads. We must emphasise that austerity will only succeed with the support of the leadership which addresses the demand side. Not from taxing ordinary people more to finance lavish purchases.

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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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