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MORDUE: We want trading blocs to work; that is why we leave EPA decision to them

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NJIRAINI MUCHIRA

By NJIRAINI MUCHIRA
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The European Union envoy to Kenya spoke with The Eastafrican’s Special Correspondent Njiraini Muchira on relations with the country.

The EAC has failed to reach consensus on the Economic Partnership Agreement. Is the preferential market access the best option for Kenya?

Kenya’s trade statistics show that 18 per cent of trade is with African partners. That is very low compared with 50 per cent in Asia and about 80 per cent with the EU. There is unutilised potential to enhance trade between Kenya and its partners. The EU wants to encourage regional trading blocs to work. This is why we offered the EPA and why we still say the EPAs should ideally be concluded with the bloc. Only the bloc can decide what it wishes to do.

As a trading bloc, the EAC should come to the EU and tell us, ‘We would wish one or other partner to move ahead in a variable geometry.’ If the partners ask that, we will look into it and allow that to happen. The EU wants an arrangement that will continue to allow Kenyan goods to be traded in the EU with no duties as foreseen in the EPA agreement.

The EU is keen on democracy and governance. What is your take on the recently launched Building Bridges Initiative report and current Kenyan politics in general?

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The BBI is primarily a national issue for Kenya. However, I think it is an important reflection seeking to address issues like how Kenya can make the five-year election cycle less divisive, avoid repetition of tensions witnessed in 2017 and 2007, ensure a more inclusive political culture, strengthen devolution, empower citizens to hold leaders accountable, get better value for money for public expenditure and reduce corruption. The issues raised in the BBI report are important in thinking of ways Kenya can improve governance.

Why are Kenyan agricultural products subjected to stringent EU regulations?

I would not describe them thus. Our regulations are relatively simple and designed to ensure the health and safety of consumers. One challenge for Kenya is that its own standards on these products are not fully aligned with the EU’s and there are some active ingredients sold in Kenya that are banned in the EU because they are considered harmful to the consumer. The health and safety of the Kenyan and EU consumers are important and toxins should not be allowed in products. The EU will continue to ensure its consumers are not exposed to risks.

How important are Kenya’s relations with the EU?

The EU is Kenya’s biggest trading partner accounting for over 21 per cent exports and probably the largest source of foreign investments at 32 per cent of all foreign direct investments. There are over 1,000 EU companies in Kenya. In agriculture, products like coffee, tea, peas, beans and cut flowers account for close to 80 per cent of the exports to the EU. Over half a million Kenyan jobs depend directly or indirectly on exports to the EU. This makes EU relations with Kenya very important.

Is the Kenyan government doing enough to fight corruption?

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We have seen determination in recent months to record progress. There have been some high profile cases with arrests. One of the challenges is to see a number of those indictments also result in convictions. The rate of convictions is too low. The EU offers support to the Director of Public Prosecutions, Directorate of Criminal Investigations and the Judiciary. We support in following money trails and with forensic experts to dig up evidence so that prosecutors can obtain convictions. There is progress but the real litmus test will ultimately be the number of convictions secured and assets seized from those found guilty.

How attractive is Kenya as a destination for EU investments?

My message to investors is that Kenya has huge potential with a market of 47 million people, is strategically located and is a gateway to East Africa and Africa in general. Kenyans are well-educated, has a skilled workforce and has improved on the World Bank Doing Business Survey. These factors make it attractive. Some areas, however, need improvement. There are concerns over the time it takes for goods to clear at Mombasa port and issues on VAT reimbursement. Foreign companies want an environment where things move relatively swiftly. There is confidence in Kenya but we need to do more to create the environment that makes Kenya the ideal destination.

How can the EU compete with China’s dominance in Kenya?

There is no inherent contradiction in having China as a strong partner for Kenya as we collaborate on areas like tackling wildlife poaching. I think there is space for all to collaborate. Ultimately, it is for Kenya to decide how it wishes to work with its partners, define its national priorities and for us as partners to do our best to extend support.

Do you think the Africa Mission in Somalia (Amisom) is doing enough to bring peace in that country?

I pay tribute to Kenya as a provider of troops to Amisom, which has done a lot of work to bring stability in Somalia, which the EU has backed with considerable funding ($1.4 billion). Going forward, good relations between Kenya and Somalia will be essential for resolving some of the challenges that exist there today. The AU runs Amisom, so we would follow their lead.

For the long term, however, everybody’s objective is to see a stable, prosperous Somalia without needing foreign troops because terrorist threats will have disappeared.

What should Kenya expect from you during your tour of duty?

I have been in Kenya for a few months and what strikes me about the country is the ideas, innovation, dynamism and a lot of potential waiting to be unleashed. Kenya should expect an ambassador who is proud to be here. I see my role being a bridge between Kenya and the European Union. The EU is Kenya’s strategic partner and our relation matters a lot. I see my job as helping EU companies to invest in Kenya and ensure aid makes an impact that is more decisive on the Kenyan economy, help to deliver the Big Four Agenda, create more jobs and help to support the rise of the value chain of Kenyan production.

BIO

Nationality: Irish

Academic qualifications:

1989–83: BSc. Dual Honours at University of Aston including 1 year of study at Ruhr-Universität, Bochum.

Professional experience in the European Institutions:

Since Sept. 2019: Hors Classe Adviser seconded to the European External Action Service and serving as EU ambassador to Kenya

2012-19: Deputy Director-General for Migration – DG Migration and Asylum (HOME)

2014–16: Director for Strategy and Turkey. DG Neighbourhood and Enlargement Negotiations.

2010–14: Head of Cabinet of Commissioner Füle.

2009–10: Head of Unit – DG Mobility and Transport (DG MOVE) Management of the unit responsible for maritime safety.

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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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