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Pakistan overtakes Uganda as top Kenyan goods buyer

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By CONSTANT MUNDA

Pakistan overtook Uganda to become the biggest buyer of Kenyan goods in the first five months of the year after supplies to Kampala were largely slowed by coronavirus-induced delays at the border.

Earnings from exports to Pakistan, predominantly tea, bumped 19.37 percent to Ksh24.13 billion ($225 million), pushing the world’s fifth most populous country back to the summit of top importers of Kenyan products for the first time since 2017, official data shows.

The data collated by the Kenya National Bureau of Statistics (KNBS) shows supplies to the land-locked Uganda, Kenya’s largest overall trading partner, dropped 5.65 percent to Ksh20.22 billion ($189 million), largely hurt by delays in April and May due to a requirement for truckers to have Covid-free certificates.

That slowed delivery of goods – including vegetable oils, fuel, iron and steel as well as paper and paperboard– to Kampala, pushing the country down to third biggest buyer of Kenya’s after being leapfrogged by the United Kingdom (UK).

Revenue from exports to the UK, the former Kenya’s colonial master, grew at the fastest pace of 30.06 percent to Ksh21.49 billion ($200 million) on increased demand for fresh farm produce such as fruits, cut flowers and vegetables.

Kenya Flower Council, the lobby for large-scale flower farms, said demand for Kenyan fresh produce in Europe and other key destinations has been rising since April at about 30 percent of targeted sales to current levels of nearly 75 percent.

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Delivery has, however, been hurt by erratic freight services with most airlines prioritising medical supplies in the fight against contagious Covid-19, KFC chief executive Clement Tulezi said on phone.

“The biggest challenge we have at the moment is freight. It is only the UK which has remained open for the longest even when we were in the heat of Covid shocks two months ago,” said Mr Tulezi.

“Our hope is that as Europe and other markets start to open, and increased demand and less supplies comes in, we should be able to attract more freighters into Nairobi.”

Overall, Kenya’s exports rose 6.73 percent (or Ksh16.98 billion, $158 million) in the January-May 2020 period to Ksh269.13 billion ($2.5 billion) spurred by increased sale of tea and horticultural products.

Tea earnings jumped 18.90 percent to Ksh58.62 billion ($548 million), cut flowers by 4.23 percent to Ksh51.14 billion ($478 million), while income from sale of fruits surged 78.91 percent to Ksh11.09 billion ($104 million).

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Corona travel ban costs civil servants Sh30bn in perks

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Corona travel ban costs civil servants Sh30bn in perks

The National Treasury building in Nairobi
The National Treasury building in Nairobi. FILE PHOTO | NMG 

World Bank report says Kenya will save up to Sh2.5 billion monthly from reduced local and foreign trips by employees of national government, counties and parastatals

Civil servants are missing out on Sh2.5 billion in travel benefits and subsistence allowances monthly after restrictions imposed to curb the spread of coronavirus suspended meetings and out of town assignments.

The World Bank in its latest review of Kenya’s expenditure says the country will save up to Sh30 billion in the year to June 2021 or Sh2.5 billion monthly from civil servants reduced local and foreign trips — which often involve lavish travel allowances.

The pause in meetings has denied employees of the national government, the county governments, and parastatals opportunities to boost their wages through perks such as mileage, sitting and subsistence allowances earned from local and foreign travels.

The untaxed allowances have the effect of more than doubling an employee’s pay, making the civil service the preferred employer for many Kenyans.

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“With continued limitation of daily subsistence allowance (DSA) and travel-related costs, the government could save up to Sh30 billion in the second half of FY2019 and first half of FY2020 as a result of restrictions imposed to contain the spread of Covid-19 on domestic and foreign travel, training and workshops,” said Felipe Jaramillo, the country director for Kenya, in the report.

The civil service looks set to save additional billions of shillings following the work-from-home directive given that hospitality and training cost taxpayers Sh15.1 billion in the year to last June or an average of Sh1.25 billion monthly.

Employers have pushed their staff to work from home in the wake of the Covid-19 pandemic, which has drastically changed the way business is conducted.

Kenya suspended international passenger travel, closed schools indefinitely, closed bars and golf clubs, imposed a daily dusk-to-dawn curfew and banned public gatherings to curb the spread of the virus that has infected 10,294 people and killed 197 locally.

President Uhuru Kenyatta last Monday announced a phased reopening of the country from the Covid-19 lockdown, lifting restrictions on travel in and out of the Nairobi Metropolitan Area, Mombasa and Mandera and allowing air travel to resume.

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But the Treasury says that restrictions on meetings, travel and trainings for civil servants will remain in the coming months, denying public servants fat perks.

The World Bank reckons that public servants use the travel perks to enlarge their salaries.

“While daily subsistence allowances (DSA) paid in connection with domestic and international travel fall under ‘other goods and services’ rather than the wage bill, DSA appears, at times and in part, to be used to supplement formal remuneration,” Mr Jaramillo said.

The highest-ranking public servant is entitled to Sh22,000 for a day’s stay in Naivasha, Mombasa, Kisumu, Nairobi, Kilifi, Lamu and Kwale — explaining why these towns have become popular with government retreats.

The lowest-cadre worker travelling to these towns is entitled to a Sh4,200 allowance per day.

Senior civil servants earn Sh18,000 per day for retreats held in Nyeri, Eldoret, Kericho, Kakamega, Kilifi, Embu, Nanyuki, Nakuru, Lodwar and Garissa. The lowest-ranking officials earn Sh3,500.

The deal gets rosier for civil servants travelling abroad who receive an average of Sh50,000 per day in allowances.

The allowances structure shows that the payouts are higher for visits to the more frequented places like Arusha in neighbouring Tanzania and Addis, the African Union headquarters (ranging between Sh60,930 and Sh21,150), while rarely visited places like war-ravaged Afghanistan attract the lowest stipends of between Sh51,750 and Sh16,110 per day.

The Treasury singled out overseas trips — which often involve hefty travel allowances and huge entourages — and hospitality or entertainment spend by government departments — as examples of wasteful spending.

Spending on foreign and local trips setback taxpayers Sh12.5 billion in the year to June 2019, up from Sh3 billion five year, reflecting a rise of 18.7 percent.

Central government hospitality spending has tripled from Sh3.9 billion in the year to June 2014 to Sh9.8 billion last year. Counties spend undisclosed billions on entertainment like to conferences and training.

Parliament suspended all foreign travel effective March 13 and directed that all conferences, retreats and workshops be held within precincts of Parliament in Nairobi in the wake of the virus outbreak.

Committee meetings have also been curbed, save for those that touch on budget and health that a critical in allocating cash and shaping policy decisions in the fight against coronavirus.

This has stopped the allowances gravy train given the perks have the effect of doubling the MPs basic salary, which stands at Sh580, 000 monthly.

The total take-home for Kenyan MPs rose to Sh1.1 million per month when perks from mileage, sitting and responsibility allowances are factored in.

Foreign and local trips cost taxpayers Sh33.4 billion in the year to June 2019, up from Sh20.3 billion five years ago.

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UK offers work permit to non-graduate Kenyans

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UK offers work permit to non-graduate Kenyans

UK Prime Minister Boris Johnson
UK Prime Minister Boris Johnson. FILE PHOTO | AFP 

Highly skilled Kenyans without degree-level qualifications will from next year be allowed to apply for work permits in Britain under post-Brexit immigration rules, enabling them to compete with job-seekers from the European Union and other regions.

Britain’s new points-based immigration system, set to be implemented from January 2021, has lowered the requirement for job applicants to minimum skill level of A-level or equivalent from degree-level under the 27-member EU bloc system.

Britain’s Home Office says the new system will “provide greater flexibility and ensure UK business has access to a wide pool of skilled workers”.

The relaxed visa rules will enable Kenyan professionals in fields such as IT, accountancy, plumbing and electrical works to compete with other migrants.

Britain projects a huge climb in job vacancies after the new post-Brexit immigration system ended free movement of labour between it and the EU following the departure from the bloc earlier this year.

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“An applicant’s job must be at the minimum skill level of A-level or equivalent, rather than degree level under the current system,” said the British home office.

There is no planned formal route for lower-skilled workers to enter Britain, although seasonal and sector-specific schemes may be created.

Britain has lowered the minimum general salary threshold for skilled migrants by 26.67 percent to £22,000 (Sh2.97 million) per year, or £1,833 (Sh247, 628) a month, from £30,000 per year currently.

This follows a January 2020 proposal by Migration Advisory Committee (MAC), an independent entity that advises the British government, which had recommended £25,600 (Sh3.46 million) minimum annual pay for migrant skilled labourers.

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“Under the new system, those wishing to live and work in the UK must gain 70 points – and points are awarded for criteria such as having a job offer, holding a PhD relevant to the job, speaking English and earning more than £22,000 per year,” says an advisory by Britain’s Home Office.

“There are also additional points for those with job offers in ‘shortage occupations’.”

The relaxed visa rules will also benefit Kenyan students who will now be allowed more time after completing studies in the UK universities.

Under what Britain’s Home Office calls “Graduate route”, which opens in the Summer 2021, Kenyan students, just like other international ones, will be allowed more time to stay in the UK to look for jobs than the four months under the EU rules.

International students completing undergraduate or master’s degrees will be able to stay in Britain for two years and those completing a PhD three years.

Britain says the new “Graduate route” system will “make it easier for some of the best, international graduates to secure skilled jobs in the UK and contribute to the UK’s economic growth”.

“Leaving the European Union means the UK will be open to the brightest and best from around the world – and Kenya is very much a part of that,” British High Commissioner to Kenya Jane Marriott said in a statement on Monday.

“I’m particularly pleased that the new Graduate Route will be opening in summer 2021, allowing Kenya and the UK’s fantastic and talented minds to work even more closely together.”

After nearly four years of politicking, haggling and delays that cost the political careers of two Prime ministers – Theresa Mary (2019) and David Cameron (2016) – the UK formally left the EU on January 31.

There is, however, a transitional period that ends in December 2020.

UK Home Secretary Priti Patel said Brexit has allowed “British people take back control of our borders and introduce a new points-based immigration system”.

“Now we have left the EU, we are free to unleash this country’s full potential and implement the changes we need to restore trust in the immigration system and deliver a new fairer, firmer, skills-led system from 1 January 2021,” Ms Patel said in the statement.

“Britain is open for business and ready to welcome the best and brightest global talent.”

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KRA official risks losing Sh597m over port bribes

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KRA official risks losing Sh597m over port bribes

Times Tower, Kenya Revenue Authority (KRA) head office
Times Tower, Kenya Revenue Authority (KRA) head office. FILE PHOTO | NMG 

The anti-graft agency has launched a fresh bid to seize properties worth Sh597 million from a Kenya Revenue Authority (KRA) official, maintaining they are linked to bribes paid at Mombasa port.

The Ethics and Anti-Corruption Commission (EACC), in its appeal, says that the properties owned by Joseph Chege Gikonyo and his wife Lucy Kangai are proceeds of crime and should be forfeited to the government.

High Court Judge Hedwig Ong’udi in November 2018 lifted an order freezing the properties because another judge had ruled in a separate case that one of the properties the EACC was targeting was acquired legally.

The EACC argued that it was wrong for Justice Ong’udi to base her decision on another ruling and discharge Mr Gikonyo’s properties.

The anti-graft agency argues that Mr Gikonyo’s property empire in Mombasa, Kilifi, Nairobi and Murang’a is incongruent with his known income — a modest monthly salary of Sh100, 000.

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His day job involved valuations and document processing for goods imported through the Mombasa port.

Importers usually hire clearing and forwarding firms to pay and obtain document clearance from the KRA.

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EACC says that its detectives tracked down 20 clearing and forwarding agents who said that paying the KRA official to release their cargo had become a normal occurrence.

The clearing and forwarding agents allegedly admitted to having paid Mr Gikonyo Sh258.4 million to have their goods released.

Mr Gikonyo allegedly received Sh43.9 million through mobile money transfer and Sh214.4 million in cash.

Mr Gikonyo and his company Giche Ltd are said to have purchased and developed properties in high-end areas of Nairobi and Mombasa worth Sh355.8 million.

The properties include two plots in Nyali, Mombasa County, valued at Sh125 million, two parcels of land in Shanzu, also in Mombasa, valued at Sh26 million and a posh farm house in Kilifi town valued at Sh27 million.

Others are a Sh40 million house in Mombasa town, a parcel of land in Kwale valued at Sh2.5 million and another in Mtwapa valued at Sh2 million.

The list of Mr Gikonyo’s property in Nairobi includes 13 plots in Sosian estate valued at Sh75 million, several flats in Umoja Estate valued at Sh33.5 million, a house at Greenspan Estate valued at Sh12 million and a Sh9 million house in Vescon Estate.

Mr Gikonyo has also invested in Equity Bank, Safaricom, Kenya Reinsurance Corporation, KenGen and Madison Insurance.

The EACC in 2018 filed a recovery suit against Mr Gikonyo, Ms Stephen and Giche Ltd following two years of investigations.

But Mr Gikonyo and Giche Ltd filed an objection arguing that it had been proved in a different case, that one of his property was acquired lawfully.

Mr Gikonyo sold the property, which had three blocks of flats, to Mr Francis Irungu Thuita in 2018.

He said that he was in active farming before moving to real estate. He demonstrated cash deposits from farming activities and real estate.

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