In 1967, having graduated from university with a degree in economics, I earned the right to place BSc Econ after my name. Had I gained the equivalent qualification as an architect here in Kenya I would now call myself Arch. Mike Eldon; if I would have become an accountant I would now boast of being CPA Mike Eldon; and as an engineer I would swagger in the glory of being identified as Eng. Mike Eldon. Not to mention our “learned friends” in the legal profession. Yet as a ‘mere’ economist I must humbly introduce myself as simply Mr. Mike Eldon.
Why is this? The question has fleetingly passed through my mind from time to time. But it was only when I heard from Dr. Julius Muia, the Principal Secretary in the State Department for Planning (at least, having earned a PhD, he is able to place “Dr.” before his name), that one of his goals is to uplift the status of economists in this country that I began to think about the issue more seriously.
I reliably learned that the national government has over 400 economists who functionally report to the Principal Secretary, Planning – but that no fresh ones have been recruited since 2011.
Dr. Muia informed me that the State Department for Planning recently asked the Commission for University Education to establish how many students are studying economics and related programmes in our universities, and he was amazed to be told that it was over 25,000.
So now he wants to create closer links between them and their professors, and the economists in his ministry; and he also is looking into how to form an Economists and Statisticians Association of Kenya, ‘ESAC’. (Yes, another neglected discipline, the statistical one.)
Back to my education in economics. Sure, economists are often mocked, and maybe, just maybe, for good reason. First we are told that they can never agree on how to deal with the issues in their field – hence the line that ‘if you were to lay out all the economists in the world end-to-end you would come to no conclusion’.
And then, right back from when I was a student over half a century ago, it was said that economists could never get even their diagnoses about the economy right, never mind any prescriptions, as they were “always applying yesterday’s theory” – that was by now already out of date and discredited. (Shades of the IMF’s Structural Adjustment Programme?)
Leaving the all-too-easy mockery aside I am so grateful that, lacking enthusiasm for my science A-Level subjects in high school, I went along with my father’s suggestion that I should consider studying economics at university – as he had done in the 1920s at the London School of Economics, travelling from his native Romania to do so.
My years in the mid-sixties at University College London opened up my powers of critical analysis and connected me to the big economic issues of the day, assets that I have carried with me ever since.
Little wonder therefore that I am still in touch with Vicky Chick, one of my lecturers from my time at UCL, and that a few months ago I was happy to respond to an invitation to pay tribute to Prof. Spraos, the then head of the economics department, on the occasion of his 90th birthday.
A belated benefit of my BSc Econ is that in my work with the World Bank in recent years I have been forced to resuscitate my dormant economics grounding, allowing me to speak in the language of industrial-strength experts in the domain.
In conclusion let me applaud Dr. Muia for his determination to raise the profile and status of economists and also statisticians, so that together they can develop a more influential voice in our society as they lay out the options we face, and help us reach rational sustainable solutions.
We are all potential beneficiaries of such a noble initiative, and so I am all for it.
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.