Optimism is rife that the setting up of a one-stop building plans approval facility in 2019 could eradicate graft blamed for the Sh36.3 billion loss of opportunities reported this year.
In separate statements to the national government, Nairobi Governor Mike Sonko and the Architectural Association of Kenya (AAK) say the tedious and complicated approval process makes construction expensive while hurting employment prospects for skilled and unskilled artisans.
Building experts, the county and national governments as well as construction material dealers and banks are also counting losses as the impediments have caused foreign-based investors to divert cash to more favourable markets.
In a terse letter to Housing and Urban Development CS James Macharia, AAK said the journey through multiple regulatory agencies by investors seeking approval hurts Nairobi’s quest of becoming an African Foreign Direct Investment powerhouse.
“Issuance of construction permits is dotted with long winding paths, unreasonably lengthy delays, high costs and numerous regulations to comply with and rampant corruption. AAK is willing to assist in establishment of a digitised one-stop shop facility.
“This will enhance accountability, better enforcement of construction laws making Kenya gain higher rating in the Ease of Doing Business,” AAK says in a memorandum signed by its president Emma Miloyo.
Governor Sonko avers that while the county had a digital platform to fast-track approvals, multiple agencies housed in separate government offices had made it impossible for local and foreign companies to launch operations within months after filing their applications.
The Kenya National Bureau of Statistics latest report on Leading Economic Indicators says Nairobi experienced a 17.7 per cent slump in the construction sector with a total of Sh169.3 billion real estate and commercial developments approved between January and October compared to Sh205.5 billion projects approved during a similar period last year.
The bad tidings have also hit listed construction and allied firms that saw them shed their values with ARM Cement, now under suspension, reporting a 57.31 per cent loss, Bamburi (26.67 per cent), E.A Cables (57.8 per cent) and E.A Portland settling for 40.74 per cent.
The KNBS report shows the commercial buildings space reported a 19.11 per cent drop valued at Sh15.1 billion compared to the real estate development’s 16.74 per cent drop worth Sh21.2 billion.
Cement consumption also dropped by six per cent to stand at 4.6 million metric tonnes in 2018’s first 10 months compared to 4.9 million metric tonnes during a similar period last year.
The slump could also have been affected by the now suspended demolitions blamed on wayward State officials who approved construction of buildings on riparian and road reserves as well as on public property hurting public confidence on land ownership papers.
Architectural firm, Boogertman and Associates managing director Andrew Kusewa adds the building laws and codes need to be urgently reviewed to establish a common building environment policy that embraces new technologies while creating safeguards to deter unplanned developments.
“Kenya can easily increase the scale of private real estate projects…..well-planned residential and commercial developments but our cost of borrowing is prohibitive. This has led to everyone going solo where we buy very small portions of land to put up houses or commercial facilities,” he says.
Mr Kusewa said this has denied Kenyans benefits attributed to shared services and utilities usually found in planned real estate developments that reserved space for all essential social amenities.
“It is easier to provide schools, sewerage systems, water and commercial centres as well as security on planned areas. But our individual units hurt the development plans making Kenyan urban areas look like slums,” he says.
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.