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Ngara Estate Loses its Shine

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Ngara Estate in Nairobi. PHOTO | SALATON NJAU | NMG 

In the 80s, Ngara was a middle-class estate. It was clean, there was ample playgrounds and parking spaces and the sewerage system was working.

Ngara is now less appealing even to investors, as hundreds of hawkers crowd the streets, and kiosks and makeshift garages mushroom on access roads.

The estate has deteriorated as others located near the central business district such as Upper Hill, Parklands and Westlands sprout with skyscrapers. Property prices also have stagnated and a number of buildings are vacant.

Charles Ng’ang’a, a marketing executive at Hass Consult says the presence of street families and property owners from the 70s clinging onto their old buildings without developing them has eroded the value of most the properties.

“There is no residents or owners association in place to restrict the informal businesses, extension of the downtown spreads into Ngara, street urchins are thriving there and a low-income estate mentality is crippling Ngara. The association, if it was in place, can dictate the way housing is done in the area, restoring the 70s feel that gave Ngara the middle-class status, which impressed investors,’’ says Mr Ng’ang’a.

He adds that investors also shy away because there is no restrictions on hawking and more routes are being encouraged, besides the Ngara bus terminus, as the county aims to decongest the city centre.

Rajesh Patel, a property owner and resident in Ngara blames the reluctance by the county government, saying that if security is restored, the estate may regain its status.

“Something must be done urgently because in terms of class and age, Ngara should be ranked together with Parklands and Westlands. Actually, Ngara should do better since it’s the nearest to town from this side. But it’s terrible, even Nairobi West from the other side of town is doing far better than us,” he says

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Rents have remained low, attracting low-income earners and university students living in old buildings sitting on large tracks of land. For instance, a one bedroom apartment ranges from Sh15,000 to Sh19,000 on average, whereas in Parklands and Westlands the same house would fetch higher rents. Commercial buildings and newly constructed houses also lie vacant for months.

Even as moneyed Asians snap up buildings in Parklands and turn them into high-rise buildings they have shunned neighbouring Ngara where a three-bedroom house costs as low as Sh15 million.

But as low house prices cut owners’ profits, some have converted their homes into one-room shared hostels, attracting students who go to University of Nairobi, Technical University of Kenya, among other satellite colleges located in the CBD.

A shared room of four costs Sh7,000 a month while bed-sitters range from Sh10,000.

“We don’t fear the ‘chokoras’ {street urchins} We co-exists nicely. Ngara has cheap accommodation and it takes about 10 minutes to walk to school. But after school, we will graduate to the other end of the city,” said Mark Okello, an engineering student at the University of Nairobi who stays in a hostel.

In the good old days, residents used to walk to Ngara from town but now even the students doing evening class are at risk as thugs roam from the Globe Cinema Roundabout, to adjacent Kipande Road, towards Ngara.

“We take solace that as students we are just visiting here, after graduation and getting a decent salary then the first thing is to relocate,” says John Makori, a student at a tertiary college in town who stays at Ngara men’s hostel.

Mr Thiong’o says that Ngara can be optimised by building high-rise apartments.

Proper planning of a designated market, stalls and doing away with informal hawking on the roadside, decongesting the bus terminus and building wider roads to reduce traffic would woo real estate investors to Ngara.

@ke.nationmedia.com



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KRA must ease tax filing to boost revenues

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Nikhil Hira Independent tax consultant and Director Bowmans Coulson Harney (law firm). [Courtesy]

Anyone who has been following Kenya’s budgets over the last few years will recall headlines each year saying that the country has set its largest-ever budget. 

The upcoming 2021/22 fiscal year is no exception, with Treasury Cabinet Secretary Ukur Yatani announcing a budget of Sh3.6 trillion – yes, the biggest ever! A little over Sh2 trillion will come from government revenues, with approximately Sh1.8 trillion of this from tax revenues. 

The balance will be borrowed – another common feature of the last few years. 

This year’s budget comes amidst an economic crisis brought on by the Covid-19 pandemic, with the inherent assumption that the pandemic will come to an end before the start of the next financial year. 

Given surges in infections that are being seen globally, and indeed in Kenya, this assumption may well be the deal-breaker. 

The Ministry of Health has already said that Kenya may see another wave of infections in July, fuelled by the Indian variant. This could result in more lockdowns with the associated impact on the economy and indeed revenue collections. The lack of vaccines is an issue that the government must address as a matter of great urgency if the country is to get through the pandemic without further economic woes. 

While deficits in government budgets are not uncommon, Kenya seems to be annually widening the gap between expenditure and revenues. 

If one applies this model to their household budget, the upshot will almost certainly be bankruptcy. 

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What is actually required is curtailing recurring government expenditures, which is something that the government has acknowledged in the past with proposed austerity measures. 

The reality is that Kenya has not succeeded in doing this, and the pressure on revenue collection is exacerbated. 

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When you add to the high level of wastage and corruption we are witnessing, the deficit will almost certainly continue to widen. 

The responsibility for tax collection and enforcement lies with the Kenya Revenue Authority better (KRA). 

There is no doubt that the authority has improved significantly in this task since it was set up in 1995. 

The taxman estimates that 4.4 million tax returns were filed by June 30 last year, up from 3.6 million in the previous year.  While this is a significant improvement, when compared to the country’s population, this number of returns seems unusually low. 

The increase in the number of tax returns, is to a large extent, due to the online reporting system, iTax, and a major push by KRA through taxpayer education.

There is no doubt that the online system has made filing tax returns significantly easier and gone are the large queues of people witnessed at Times Tower on deadline day. 

That said, there is still much to be done to make filing returns a seamless and painless exercise. 

System downtime during filing periods is something that all of us will have experienced, although, in typical Kenyan fashion, we inevitably wait until the last day to file our returns as we do with most things! 

The spreadsheet that one uses to file a return is by no means the simplest to use.  One key issue seems to be that taxpayers are not alerted to changes in the model until they try to upload a return. 

The spreadsheet does not allow one to make it more relevant to their sources of income – in essence, it is too rigid and inflexible. KRA should be able to rectify this without too much effort.

Last year was unusual in that different rates of tax were applicable in the first quarter as compared to the rest of the year.  This followed the Covid-19 relief measures that were introduced in April 2020. 

There was much debate about whether the changes were meant to apply for the whole year or whether some form of apportionment was needed. 

In the end, the decision was made for apportionment. One can argue about what the correct treatment should be, but the issue was how long it took for the decision to be made and, indeed, to amend the iTax system. 

The age-old notion has always been that the more complex and difficult it is to file a tax return, the more likely it will be that taxpayers simply won’t file their returns. While the issue with the system has been resolved, there is an inherent administrative issue here that must be addressed. 

KRA has to be significantly more proactive in dealing with changes in rates and law to ensure the least inconvenience to taxpayers. 

The writer, Nikhil Hira, is the Director of Bowmans Kenya.

The views expressed in this article are the author’s and not necessarily those of Bowmans Kenya  

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Business

The age of gentrification is truly upon our country

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Never mind the businessmen outside Nairobi could be richer. Rural folks aspire to one day moved to a new county (city).

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Business

The rise and fall of Trade Bank: A tale of the sleazy 90s

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It is where titans such as Equity Group boss James Mwangi, who now oversees an over Sh1 trillion asset-rich bank, cut their teeth.

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