The East African dream of achieving a seamless Northern Corridor transport network is back on course after Uganda agreed to start construction of the Standard Gauge Railway (SGR) from Malaba to Kampala after years of uncertainties.
Kenya was considering terminating its section of the SGR line at Kisumu should Uganda, which had indicated that it would build its line to connect to Tanzania, stuck to its guns.
SGR is part of the Northern Corridor transport network, which connects the Port of Mombasa to the neighbouring landlocked countries of Uganda, Rwanda, Burundi and South Sudan.
President Yoweri Museveni’s move comes as a boost to Kenya, whose financing prospects for the second phase had apparently been pegged on Uganda agreeing to put up a line from Malaba to Kampala.
Kenya is now certain of extending the facility to the Ugandan border following the commitment by President Museveni that his country will construct a line to Kampala.
“We have had great progress on these discussions. It will be a game-changer, especially for movement of cargo from Mombasa to Kampala,” said President Museveni.
The Ugandan president made the remarks last week during his three-day state visit in Kenya where he toured various infrastructure projects in Mombasa and rode the SGR train from the port city to Nairobi.
The Ugandan announcement concided with the visit by a Kenyan delegation to Beijing to negotiate funding for the second phase of the SGR.
The high-powered delegation, comprising officials from the Treasury, Kenya Railways Corporation, Ministry of Transport and State Law Office, left for the Chinese capital last Friday.
The Kenya Railways Corporation (KRC) owes the Exim Bank of China Sh227 billion that was used in the construction of the SGR between Mombasa and Nairobi.
There have been fears recently that the Chinese might auction the Port of Mombasa if the government defaults on repayment.
A report by Auditor-General Edward Ouko states that the payment agreement substantively means the revenue of the Kenya Ports Authority would be used to clear the debt.
Kampala had last year announced the suspension of SGR and turned its attention to revamping the old metre-gauge railway network until unresolved issues with Kenya and China had been concluded, Ugandan Finance minister Matia Kasaija had said then.
“It is apparent the SGR is going to take us a lot of time to complete. First, we have to wait for Kenya to reach the Malaba [border] point then we can start,” Mr Kasaija told the Daily Monitor last year October.
Uganda’s first phase of SGR, the eastern line running from Malaba to Kampala, about 273km (338km rail length), is expected to cost $2.3 billion. The entire SGR, to cover the whole country, is expected to a cost $12.8 billion.
The Uganda government has been in constant back and forth engagements with Beijing to release the first tranche of funding for the eastern line, particularly with prospects of paying back when oil revenues start flowing in 2020.
When Uganda and Rwanda had announced that they would construct their SGR heading to Tanzania, Transport cabinet Secretary James Macharia told Shipping then that Kenya would have an option of ending the line at Kisumu, then use the state of the art port that is being constructed on Lake Victoria to supply cargo to the Great Lakes countries.
Kisumu Port is estimated to cost about Sh14 billion, and the Treasury will need to secure about Sh350 billion for the Naivasha-Kisumu section.
Rwanda and other countries along the corridor had an agreement in 2013 to link up the port of Mombasa using the SGR and each country is required to construct their own section.
Only Kenya has so far made significant progress in the construction of its line, with Mombasa-Nairobi section completed, while Uganda and Rwanda are still discussing the financial deals.
Kenya secured a Sh150 billion loan from China to extend the railway line from Nairobi to Naivasha after last year’s completion of the Mombasa-Nairobi section.
It is estimated that more than 50 per cent of the cargo handled at the Port of Mombasa is destined for markets such as Uganda, with 11.2 million tonnes of cargo moved between the two nations annually.
SGR has seen a significant share of the road cargo from Mombasa to Nairobi shift to the train as the government has made it mandatory for transporters to use the rail.
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.