Today is September 14, the day on which the International Monetary Fund (IMF) taps run out on Kenya. Coincidentally, it’s also the deadline for public comments on draft Public Investment Management (PIM) guidelines the Treasury issued as a proposal to manage and control Kenya’s project investment appetite. Yes, these guidelines are a global lender’s conditionality issued by our apparent IMF acolytes sitting in the Treasury.
My first instinct on viewing these guidelines was to do a comparative search for other countries.
Tanzania’s are far more elaborate, speaking to the clear differentiation between programmes and projects, but read like a pupil’s manual. South Africa’s capital planning guidance is far more sophisticated, speaking to both initial investment and ongoing maintenance of big-ticket investments, and is fully integrated into their medium-term expenditure framework (MTEF) planning and budgeting process.
The UK’s Green Book is from another planet, running through the full gamut of policy options, programming, project long and short-lists and official social discount rates.
Each of these documents is a heavy tome of reason and thinking about the best use of public money for ‘big things’. And I did not even need to go to Chile’s world-leading standards on project management, built over three generations.
Basically, IMF staffers are probably laughing their heads off at our 35-page attempt at guiding public investment. If you read the document on its own, after navigating grammar that is so bad that the Treasury urgently needs Nation wordsmith Philip Ochieng to offer a “Better English” translation, it would be simplistic to conclude that Kenya has ticked the ‘IMF box’ on project management.
Here are some of its opening words: “An efficient public investment management framework is a panacea for efficient project cycle management.”
Panacea? Please, project management is not a disease! Then: “Currently, the country does not have a public investment management framework.” Huh? So how did we invest in the standard gauge railway, Galana-Kulalu and the like?
Let us continue reading: “Without any methodological guidance on efficient public investments, the basis for consistent and comprehensive project appraisal is missing.” Whoa! Then: “…this not only leads to projects entering the budget without verification of their quality and their cost-effectiveness but also a greater likelihood of ad-hoc decisions on project funding.” Wow, is our National Treasury, the guys who keep saying “yes” when they mean “no”, finally throwing the Presidency under the bus?
We are still on Page One, which continues “the result is a bloated project portfolio, unpredictable funding, stalled projects, and inflated costs contributing to the under-execution of budgets and delayed translation of the investment in projected economic growth”. Somebody is under the bus.
The only commentary I have seen on these guidelines celebrates the creation of, you guessed it, more institutions as buildings and staff, not rules of the game. It is notable that the guidelines prefer no mention of legislative institutions — Parliament and “county assemblies, yet it is no secret that’s where our ‘pot-belly’, as opposed to ‘pork-barrel’ politics, works during the budget preparation process.
Most amusing is the acceptance of a category of projects known as “mega-projects” (Sh1 billion or more). These, plus “medium and large projects” (Sh100 million to Sh1 billion) must undergo a stringent feasibility study. Anything less than Sh100 million goes straight to tender, even in counties. Laugh, then cry. As usual with Kenyans, it is a “what to do” not “how to do it” document.
Then think about our successful counties, where policy equals the people, programmes respond to the people, and projects deliver programmes to the people. Makueni is a shining example, as is Kakamega. Watch out for Kisumu and Kitui in the near future.
There is a common thread in these counties. Their leaders listen to the people and respond. They do not self-design projects for the people.
What Kenya needs is a proper public participation process that provides inputs for policy people to respond to. That the Treasury is able to infest Kenya with half-baked guidelines confirms their pre-2010 constitution mindset.
And if we are to go really technical on this, let’s find a guideline that begins with a needs assessment that translates into policy opportunities to be implemented through law or programmes.
When the IMF staffers have stopped sniggering, let us have a real discourse with them and our other development partners.
In 2003, the Economic Recovery Strategy was premised on, among other things, aid as technical assistance, not aid as money. I think these poor guidelines tell me exactly what we need right now — the Treasury doesn’t need more money, it needs new ideas, period.
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.