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MUCAI: Competitiveness a more valuable growth parameter

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Global competitiveness is crucial to
Global competitiveness is crucial to industrialization and sustained productivity. FILE PHOTO | NMG 

When we speak of a country’s competitiveness, we are looking at its ability to sustainably produce goods and services for which there is a market at a price and quality that their market is willing to pay for. Competitiveness may be local or regional and is now increasingly global as the Internet and global infrastructure allow for the almost seamless exchange of goods and services across continents.

Kenya has come a long way in terms of creating a conducive business environment that will nurture local industries and attract Foreign Direct Investment (FDI).

Perhaps a conspicuous signifier of this is our recent ranking in the Global Ease of Doing Business at position 61, which is 12 places up from the previous year and 31 places from 2016.

However, Ease of Doing Business is a ‘necessary but not sufficient’ condition to improve growth and prosperity. This reminds me of a conversation on an East African country where you are able to register a business in hours ‘I can set up in hours, but then what do I sell? How do I make money?’ – this is a competitiveness question.

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Global competitiveness is therefore crucial to industrialization and sustained productivity that will ensure a country’s capacity to provide productive jobs, decent wages and consequently a dependable social support system for its population. Competitiveness may be due to natural factors e.g. climatic conditions, physical location or geographic conditions.

In some cases, competitiveness is built on the sheer will and determination of a nation without any such benefits, Japan and Singapore being examples of such power-houses that emerged despite, and some may argue because of, not having any physical or geographic advantage.

I would argue that the most potent form of global competitiveness is where natural factors are combined with will and determination to create powerhouses that are unbeatable. A classic example in our country is the floriculture industry where we have combined our location, weather and altitude with investment, both local and international, to create a world-beating industry, especially in cut roses.

Theoretically, in a liberalized economy, competitiveness is found and nurtured by the free market. Economic actors find and discover what the markets want and then compete to provide goods and services at a quality and price that is competitive.

However, the State is today a major player in affecting competitiveness positively or negatively.

In a positive sense, the State can build infrastructure that eases movement of goods and people, educate the populace, provide healthcare, etc that affect the macroeconomic factors.

So as we look at the Manufacturing Pillar of the Big 4 Agenda and our ambitions to grow manufacturing beyond 15 percent of GDP, our key question must be as simple as it is foundational – what can we make in Kenya today at a quality and price that is globally competitive.

Mucai Kunyiha, Vice Chairman of Kenya Association of Manufacturers.

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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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