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Kenya committed to AU trade pact even with US deal, says Uhuru : The Standard

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Kenya remains committed to the African Continental Free Trade Agreement (AfCFTA) despite forging a new trade deal with the US.

This was President Uhuru Kenyatta’s (pictured) message for the African Union as he sought to reassure regional partners that the deal with the US could serve as a model for other African states.  

“We are keenly looking forward to concluding the trade arrangement between our countries and I believe these trade agreements would not only serve Kenya and the US but would probably set the base for a new engagement between the US and other African countries,” said Uhuru during his visit to Washington.

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Uhuru was speaking after meeting US President Donald Trump at the White House where the two leaders agreed to begin talks that will lead to a trade pact between Kenya and the US.

President Kenyatta then met with 350 business leaders attending a US-Kenya Trade Forum in the US capital stating that the agreement with the US would compliment regional efforts by African countries to kick-start AfCFTA.

“At this juncture, I want to put away a few doubts because there has been a feeling that by Kenya engaging with the US to have a trade arrangement, we are running away from our commitment to the African Continental Free Trade arrangement,” he said. “I want to assure you that there can be nothing further from the truth as that is definitely not the case.”

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This comes even as the African Union is pushing to have a continent-wide trade pact with the US, instead of individual bilateral deals once the Africa Growth Opportunities Act (AGOA) lapses in 2025.

Ambassador Albert Muchanga, AU’s Commissioner for Trade, last year said the AU would opt for a continent-wide trade deal with the US, with the much-anticipated AfCTA billed as the best bet.

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“Fragmentation in Africa brings with it small economies, small markets, uncompetitiveness and a host of other weaknesses which make African economies fail to grow at rates high enough to reduce poverty and overcome the underdevelopment trap that they find themselves in,” said Ambassador Muchanga at the Africa Business Summit in Chicago Last year.

“With this structural weakness, our countries are also vulnerable to manipulation, politically and commercially,” he said.

According to Kenya Association of Manufacturers (KAM), the trade deal with the US has an opportunity to increase trade volumes to the US and breathe new life into the stagnant manufacturing sector.

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“Any free trade agreement provides a raft of opportunities for any country, including large markets, larger supply base and lower business costs,” said KAM chief executive Phillis Wakiaga. “AGOA has benefited a lot of local industries, especially textiles and apparel industries and with the deal coming to an end in 2025, the free trade agreement between Kenya and the US will push Kenya to consider its competitiveness in such negotiations.” 

However, Wakiaga said Kenya needs to improve efficiency in local value chains for the manufacturing sector or lose out.

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“For example in the case of AGOA we have traditionally used about 10 per cent of the product lines available to us and we need to ensure Kenya is prepared once a deal is in place,” she said. 



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KenyaAfrican Continental Free Trade AgreementPresident Uhuru KenyattaAfrican Union

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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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