The government could lose about Sh20 billion in Foreign Direct Investments (FDI) following the controversial cancellation of the Health Care Information Technology (HCIT) solutions project by the Ministry of Health.
The Sh4.9 billion project was on October 2, 2017, awarded to SevenSeas Technology Limited, which was required to roll it out in five years under the Managed Equipment Services (MES), a critical component of the Universal Health Coverage (UHC), one of components of President Uhuru Kenyatta’s Big 4 Agenda.
Generally, the project entails use of ICT to connect 98 county, sub-county and referral health facilities — including 47 level four, five and six hospitals, and the four national referral facilities — to a central data hub. SevenSeas had already implemented phase one of the project, which entailed construction of the data and network operation centre, radiology hub and training room, and reporting room.
However, a terse letter from Health Permanent Secretary Susan Mochache dated November 18, 2019, to Seven Seas Technologies Limited chief executive Michael Macharia, put paid to the project.
Ms Mochache did not disclose whether the ministry would advertise for the multibillion shilling project afresh.
The move has already seen the Senate ad hoc committee on MES summon Health Cabinet Secretary Sicily Kariuki to shed light on the circumstances surrounding the project’s termination.
Documents submitted in Parliament show that the FDI was to be injected through equity investments as several foreign firms had shown interest in partnering with SevenSeas on the project.
Among, the documents is a letter from the Competition Authority of Kenya (CAK) dated June 26, 2019, approving Africa Healthcare Master Fund PTE Limited, a Japanese firm to invest Sh250 million in SevenSeas for the project.
Another Sh2.5 billion was to come from a Japanese fund, which is over and above the investment by Toyota of Sh310 million, Abraaj, a Dutch company and other Kenyan individual investors.
There was also a commitment from another Japanese company for Sh240 million, with discussions for other investments underway.
However, the final condition to unlock these investments was that the Government of Kenya, through the National Treasury, issues a Support Letter to SevenSeas.
The purpose of the letter was to ring-fence the government’s budgetary allocation for the project, in essence acting as a government guarantee over its commitment to the realisation of the project.
The support letter is among the requirements the government was required to comply with, according to the tender document it signed through the Ministry of Health and SevenSeas.
But Ms Mochache, in the termination letter, states that the requirement does not feature anywhere in the tender documents.
“The requirement for an original copy of the GoK Support Letter to be given to your firm does not feature anywhere in the tender documents. It is overtly clear to the ministry that your firm lacks the requisite financial capacity to execute the HCIT contract and has been unable to mobilise any funding without a GoK Support Letter,” Ms Mochache stated.
It is important to note that the government promptly issued the original copy of the Support Letter to multinational firms General Electric (GE) East Africa Services Limited and Philips Medical Systems that were contracted for other segments of the MES project.
“The Ministry of Health has on several occasions undertaken to ensure the Support Letter is issued to us as provided for in the tender documents. How then does the PS turn around and say that it is not a requirement in the tender document?” Mr Macharia posed.
He said his company will challenge the cancellation in court, a move that could see the country lose billions in compensation should the government fail to reverse its decision within 14 days from November 25, when the company responded to Ms Mochache’s letter.
“How does this government intend to achieve UHC when it is frustrating us? It was our undertaking to implement the project so that it serves the people of Kenya,” Mr Macharia says.
The CS, who declined to respond to our inquiries, is required by the Senate committee to “provide the reasons for the hurried termination of the contract, a day after SevenSeas provided its evidence, and the cost to the taxpayer,” a brief from the committee chaired by Isiolo Senator Fatuma Dullo, reads.
It is believed that wheeler-dealers in government want a foreign firm, preferably Chinese, to get the tender.
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.