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KISERO: Audit big infrastructure contracts

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Chinese and Israeli contractors
It is time the anti-corruption crusade started putting its finger on where corruption is hurting us most- namely the shady deals involving Chinese and Israeli contractors. FILE PHOTO | NMG 

Transparency International (TI), the global anti-corruption watchdog, says in a new report that Chinese and Israeli companies are among international contractors who regularly bribe Kenyan officials to win lucrative multi-billion shilling public infrastructure contracts.

The report says that bribery of Kenyan officials has continued unabated over the years partly because China and Israel are not enforcing the existing anti-bribery laws. As we all know, China has criminalised the bribery of foreign public officials, in line with obligations under the UN Convention Against Corruption.

But TI says that there has been no known enforcement against foreign corrupt practices by its companies, citizens and or residents.

The report says that despite the fact that its companies and individuals have been the subject of publicly reported investigations and charges in numerous countries, including Bangladesh, Ethiopia, Kenya, Sri Lanka, the United States and Zambia – Bejing has not made arrests on reported corruption.

While singling out China as the “world’s leading exporter of corruption,” the TI insists that only stringent punishment of Chinese officials implicated in graft will change the trend. “China should acknowledge the influence of its companies in terms of how they conduct business in foreign markets,” the TI report says.

Coming at a time when the administration of President Uhuru Kenyatta is in the middle of implementing high profile prosecutions, the findings of the TI report provide a good juncture for commenting on the high- profile prosecutions.

We used to say that the fight against corruption in this country always targeted the small fish.

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But in the current wave, it is clear that anti-corruption authorities have targeted both big and small fish. Several permanent secretaries, governors, and top public officials are in court facing corruption charges. The top management of State- controlled monopoly power distributor, Kenya Power, including managing director Ken Tarus, have been arraigned in court to face corruption charges. But perhaps most sensational is the case where the chief executive of Kenya Bureau of Standards, Mr Charles Ongwae, the whole of his executive committee and local officials of an international Moroccan fertiliser supplier- have been arraigned to face charges of murder.

Even the most ardent critic of the administration admits that the ongoing prosecutions exhibit elements of seriousness on the part of the government. But looked against the report by TI, it would appear that the current-anti graft crusade is yet to touch corruption where it hurts the most-namely, the shenanigans by Chinese and Israeli companies.= Contractors from these two countries have been winning massive deals with parastatals under circumstances where contracts are gifted merely on the basis of secret MoUs signed by ministers. I recently came across a case where a Chinese group had signed an MoU for a massive $156 million with one of the government ministries. Such projects come with loans negotiated on the government’s behalf by the Chinese contractors. Invariably, they come with a massive advance payment released months before the contractor has lifted a spade. Loans contracted through MoUs are the biggest factor when it comes to explaining the recent and rapid accumulation of commercial foreign loans in our external debt register.

It is time the anti-corruption crusade started putting its finger on where corruption is hurting us most- namely the shady deals involving Chinese and Israeli contractors. Investigators should look at all projects contracted through MoU’s and shady commercial contracts and especially cases where huge advance payments have been made to Chinese and Israeli firms before any work is done. The starting point should be a thorough scrutiny of our external register to determine the circumstances under which those loans were recorded in our books in the first place.

Since China is poised to continue doing big projects here, we should ask ourselves the following questions: First, what must we do to ensure that our take up of Chinese projects does not lead to an unsustainable build-up of our external debt. Secondly, where is the transparency in an arrangement where a foreign contractor conducts for you the feasibility study on terms of reference he has himself drawn, does engineering designs on its own, and then proceeds to organise and facilitate a loan for you from a Chinese bank?

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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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