In Kenya’s budget-making history, it is a rare occurrence for a President to reject a Finance Bill. In itself, it’s such a unique bill. Simply put, it is a legislative proposal by the National Treasury that sets out the revenue raising measures for the national government together with a policy statement expounding on the same.
But it is one of the many threads of the complex modern national budget-making process, as set out in the gritty Public Finance Management (PFM) Act, 2012.
The process kicks off in February of each year and runs through to September—culminating in the promulgation of the Finance Act.
For the first time in a while, a finance bill was rejected by the President. Subsequently, the President, through a Memorandum to Parliament issued 10 recommendations on the bill.
The fifth recommendation, curiously, touches on the Betting, Lotteries and Gaming Act, which is captured in miscellaneous amendments section (of the Finance Bill).
As has been custom, the finance bill was also used to execute amendments to other financial sector related statutes.
The section has previously originated some very grabby amendment proposals. Famously, it was in the Finance Bill 2015 that the Treasury CS first outlined an ambitious proposal to increase the minimum core capital requirement for banks and mortgage finance companies from the current Sh1 billion to Sh5 billion with December 31, 2018 set as the compliance deadline. In the Finance Bill 2018, the National Treasury Cabinet secretary had proposed over 90 miscellaneous amendments to 10 principal statutes.
But with the President declining to assent to the bill—with a miscellany at the heart of it, isn’t it time all the miscellanies were done away from the finance bill? For instance, in the Finance Bill 2018, there were over 30 amendments proposed under the Betting, Lotteries and Gaming Act (which was the highest). There were slightly over 20 amendments proposed under the Central Bank of Kenya Act and about 12 proposed under the Retirement Benefits Act, 1997.
The touchiest of the amendments, visibly, was the proposal by the Cabinet secretary to repeal Section 33B of the Banking Act. But the touchiness notwithstanding, it’s probably time all the miscellanies were restricted to their principal Acts to, among other things, forestall future unnecessary standoffs between the Presidency and National Assembly.
For instance, if there is an amendment concerning the Banking Act, it should be restricted to the Act in itself (as opposed to stacking them up in the finance bill and incubating a hostage situation).
Incomparably, there were only three principal Acts that were up for amendments namely, the Sacco Societies Act via the Sacco Societies (Amendment) Bill, 2018, the Capital Markets Act through the Capital Markets (Amendment) Bill, 2018 and the Insurance Act via the Insurance (Amendment) Bill, 2018 (stay tuned for my upcoming review of the amendments to the Insurance Act).
Besides expunging miscellanies from the Finance Bill, Parliament also needs to provide timelines within which a bill, once passed, is remitted to the President for assent.
Currently, the law gives the President 14 calendar days to sign or reject a bill, but conspicuously fails to state how long it should take for a bill to be evacuated to the President for the same.
While this has played out for some time, it has turned out to be loophole during the just-ended tiki-taka between the National Assembly and the Presidency over the Finance Bill-and consequently calls for a rethink.
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.