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NEWS INDEPTH: Tough task ahead in Kenya’s drive to improve its roads

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Kenya has a total road network of 230,000 kilometres but only about half of it is in good or fair condition, a new audit showed, an indication of the huge task ahead in infrastructure upgrade.

As at January 2016 the country had a gazetted total road network of 161,456.4km comprising of 39,995.1 km categorised as national trunk roads and 121,456.4km of county roads. The data was based on the road inventory and condition survey carried out between 2007 and 2009 and covered roads with way-leaves greater than nine meters.

The Kenya Roads Board (KRB) in partnership with the World Bank in August 2016 undertook a fresh audit that covered all roads including narrow ones which are less than nine meters wide. A large component of the country’s road network consists of narrow roads and tracks with reserves of between six to nine metres and had previously not been mapped.

The new audit revealed that 57 per cent of the country’s total road network is currently in either good or fair shape, albeit an improvement from 44 per cent in 2009 due to larger funds disbursements through the Roads Maintenance Fuel Levy (RMFL).

An estimated 33 per cent of paved roads across the country were certified as in good condition in 2018, while 48 per cent were found to be in fair condition.

About 30 per cent of gravelled roads were in good condition in 2018 while 41 per cent were in fair condition.


“A bigger percentage of the unpaved county network is either poor or very poor, indicating the need for more resource allocation to upgrade the roads,” the KRB said.

Industry estimates showed that about Sh70 billion is required for the maintenance of the entire road network annually, exclusive of the backlog for maintenance. Allocations towards road maintenance are made through RMLF collections.

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The KRB said fuel levy collections increased by about 30 per cent following the rise of the fuel levy rate from Sh12 to Sh18 per litre in June 2016.

The projected annual collection for the financial year 2018/2019 is Sh68.996 billion.

“This collection is however still inadequate for road maintenance given that backlog in maintenance has not been addressed fully, and that a total of Sh11.18 billion will be allocated to the Road Annuity Fund,” KRB said.


Faced with fund deficits for road maintenance, the government through KRB is considering alternative road maintenance financing mechanisms such as incorporating long-term infrastructure bonds, public private partnerships, introducing levies on motor vehicle insurance and annual licences, and levies on outdoor advertisements.

It is estimated that these sources would yield Sh60 billion in additional funds annually.

“Further, KRB is currently undertaking a detailed review of road construction materials with the view of recommending cost-effective materials for road development and maintenance.

“Other potential savings are expected to be realised from revised road construction specifications and contract documents,” KRB said.

Roads constitute the most important mode of transport in the country, accounting for the transportation of more than 95 per cent of all freight and passenger traffic.


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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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