After watching the chaotic scenes in the National Assembly yesterday during debate on the 2018 Finance Bill, and amendments therein, I am increasingly convinced that any person seeking an appointed or elective public position in Kenya must demonstrate that he or she has actually read and internalised our 2010 constitution.
My understanding of the constitution is simple. It was intended to, through a proper system of checks and balances based on Kenya’s history, counter the Executive incompetence or impunity through a diverse legislature of thinkers and a clever, honest and impartial Judiciary. We are clearly struggling on the first two fronts at national and county levels, and the jury is still out on the third.
I have a second understanding of the constitution. It was supposed to transform the colonial administrative state we inherited (orders from above) into a modern policy state (views from below).
That the work of the national government would be restricted to policy, inter-governmental facilitation, and “last resort”, not mainstream, development and service delivery. That the work of county governments would be to domesticate and execute national policy through growth-directed plans and budgets that attracted private sector investment while offering efficient service delivery at the grassroots.
We are in fiscal crisis because of a “big brother” national government that is essentially unreformed from the pre-2010 constitution days. Read, state capture of national policy. Think, grand corruption that consumes our fiscus and feeds our borrowing spree. Consider why few measures in the President’s memorandum to amend the Finance Bill hurt the Executive the least.
We are in economic crisis because we are unable to envision counties as our new centres of growth, whether on their own, or as viable regional economic zones. Six years into devolution, the shape of our overall GDP hasn’t changed much. Surely, devolution was as much about the economy as it was about politics. This will not happen with an unreformed national government. The ease with which Parliament was able to cut County allocations is telling.
I am a great advocate of painless revenue collection, but let’s not talk about the “stealth taxes” that will replace the reduced VAT on fuel. Let’s instead hang our heads in shame at watching quietly over a Jubilee administration that has taken us on an unsustainable borrowing spree, and is now killing us with taxes on the back of the “tyranny of numbers”.
In perspective, this is probably the earliest ever time that the National Treasury has ever presented Supplementary Budget Estimates for parliamentary approval. Three months into the financial year? That’s a crying shame.
“No pain, no gain?” Please! Let’s see the returns from the mega-borrowing. Please! Let’s find a political leadership that implements the constitution, not “development”. “Big Four” is fine, but it is no innovation. It simply responds to the demands of Article 43 of the Constitution.
And, please, I do not buy the lazy lament that our constitution is expensive.
In normal countries facing challenging econo-fiscal times, this is a “Strategy 101” moment based on five questions. Where are we now/How did we get here? That’s the context question. Then, where are we going/where do we want to go? That’s the visioning question.
In between these two, the core strategy question, how do we get there/where we want to go? Following this, how do we organize to get there; and finally, how will we know when we’re there/how far we are? This final one we call the monitoring and evaluation question.
The IMF doesn’t need to tell us what to do. In this Strategy 101 moment, shouldn’t we begin with a five-year public spending, revenue and performance review, including audit results, leading to an economic review that provides us with a 2017/18 baseline, or context? Then a proper baseline of fiscal norms based on proper activity-based costing that links people to activities and activities to results? That’s how we reformat national and county government.
Then let’s look at 2022 from an econo-fiscal, not political, perspective. And set, effect and monitor realistic targets, supported by a realistic, and flexible, roadmap for spend, revenue, deficit and debt reduction that deliver the promise of our constitution. Strategy 101 in practice.
As former GE boss Jack Welch once said, “Strategy is not a lengthy action plan. It is the evolution of a central idea through continually changing circumstances”. The last time I checked, the constitution, not development, is the basis of our central idea.
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.