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Spend on projects hits record high in February

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Development spend hits monthly highest

Kenya Treasury
The Treasury says Sh184.63 billion was spent on development in eight months through February. FILE PHOTO | NMG 

Spend on development projects hit the highest monthly levels in February, weeks after President Uhuru Kenyatta picked a team to monitor infrastructure expenditure.

The Treasury signed off nearly Sh51.99 billion towards projects being implemented by State ministries, departments and agencies (MDAs) in February, signalling increased disbursement following a slow start to the year.

This is Sh33.04 billion, or 174.35 percent more than the Sh18.95 billion average monthly disbursement in the seven months to January.

Mr Kenyatta on January 22 created a Cabinet committee to supervise and co-ordinate implementation of development projects with reporting structures spread down to the counties.

The National Development Implementation and Communication Cabinet Committee has been tasked to guide Mr Kenyatta on addressing emerging challenges and evaluating follow-up for resources to ensure proper use of funds and meeting of targets.

The team is led by Interior Cabinet Secretary Fred Matiang’i and deputised by his Treasury counterpart Henry Rotich.

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Statistics released last Friday by Mr Rotich show Sh51.99 billion was channelled to capital projects, more than triple Sh15.71 billion spent in January, Sh28.58 billion (December) and November’s Sh16.49 billion.

Some Sh184.63 billion was spent on development projects in eight months through February, the Treasury data shows, Sh37.27 billion, or 25.29 percent, more than the corresponding period the previous financial year. The absorption of development budget was hit at the start of year after Mr Kenyatta froze implementation of new projects in July 2018 to complete ongoing works.

Higher spending on development projects such as roads, water, power plants, real estate and electricity transmission lines stimulates economic activities, helping to create job opportunities for the expanding unemployed graduate youth and grow government revenue, largely taxes.

Absorption of the development funds is likely to get further boost if lawmakers pass Public Finance Management (PFM) Amendment Bill which sailed through the second reading on February 14.

The bill seeks, among others, to empower the Parliamentary Budget Office (PBO) to monitor and evaluate government projects and programmes.

“Executive Order No. 1 of 2019 offers an avenue where government projects are monitored and coordinated by the Executive,” Mr Churchill Ogutu, a research analyst at Genghis Capital wrote in a note this month.

“We believe ex-ante evaluation of projects by PBO will help enhance viability and curb wastage of public funds.”

The spend in the July-February period accounts for 50.83 percent of the Sh363.22 billion budgeted for development projects this year ending June.

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World Bank pushes G-20 to extend debt relief to 2021

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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.

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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.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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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.

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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.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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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.

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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.

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