Auditor General Edward Ouko has raised the red flag on Sh2.54 billion worth of property investments by the National Social Security Fund (NSSF) that have either stalled or are giving inadequate returns to the pension scheme.
The single-largest idle investment, Hazina Trade Centre, is only 38 per cent complete yet it is two years behind schedule. The completed section is valued at Sh1.5 billion, although about Sh1.9 billion has already been spent in the construction.
The building, located in Nairobi’s city centre, was tendered for a contract sum of Sh6.7 billion, but has only reached the 15th floor. It was to be undertaken for a period of 155 weeks ending July 2016, but stalled more than a year ago after questions were raised on its stability.
“As at March 2018, the building was still incomplete and builders work had stalled after reaching 15th floor or 38 per cent and its Sh1,887,744,544 spent on the project out of the total contract cost of Sh6,715,218,188. All efforts should be made to ensure completion of the building to safeguard members’ contributions,” said Mr Ouko.
The NSSF bought Hazina Plaza in Mombasa in 1994, but has lost cash due to rent arrears amounting to Sh239.5 million since only Sh66.5 million had been paid by September 2016 yet Sh323.6 million had been expected.
“So far the fund has not realised any value for money from the investment of Sh450 million in Hazina Plaza Mombasa since 1994. The unrealised benefit from the investments in Hazina Plaza casts doubt on prudent financial management of the lease for the interest of contributors,” said Mr Ouko.
Land worth Sh126 million was disposed of in Mavoko, Machakos County, in 2011 but only Sh12.6 million was paid and the rest, amounting to Sh113.4 million remains outstanding despite having become due in the same year, 2011.
The then Municipal Council of Kisumu swapped property in Milimani Estate valued Sh178 million for a debt it owed the NSSF in 2012, but the houses located in it bring in only Sh66,000 annual rent from NSSF staff who occupy them, yet the amount should have been reviewed upwards to benefit the Fund’s contributors.
“Value for money has not been received from the investment over the last five years up to June 2017,” says Mr Ouko.
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.