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WATENE: Why Kenya needs to take a different development path

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Kenya needs to identify development plans of its trading partners and work towards supporting them. FILE PHOTO | NMG 

Michael Porter would argue that every nation has a comparative advantage — its capabilities and resources position it to deliver certain goods or services to an advantage over others.

Kenya has a great wealth of resources to tap from — rich flora and fauna, arable land, minerals and an educated and highly adaptable workforce on which manufacturing and services thrive.

The plethora of resources creates endless possibilities for Kenya and probably explains why we have a diversified economy. It also means there are numerous options from an international trade perspective.

Vision 2030 sets out the aspiration for the country — a newly industrialising, middle-income country providing high quality of life to its citizens.

To achieve this vision, Kenya needs to take a different development path. Historically, Kenya is known for tea, coffee, flowers and runners. Singapore, on their part, appreciated their limited natural resources and opted for services — shipping, tourism and financial services to mention a few. They did not have the expertise so they created an attractive environment under Lee Kuan Yew.

In essence, they built a vibrant economy through imported skilled workers. Today, Singapore is an industrialised society with over 3,000 multinational corporations accounting for more than 75 per cent of its manufacturing output and direct export sales. The Port of Singapore is the world’s second busiest after Shanghai.

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Singapore is now the 15th largest trading partner of the US and receives over 10 million tourists a year. Kenya and Singapore were apparently at par at independence. When asked what they loved about Kenya, many tourists responded, “warm and welcoming people”. Herein lies the answer to the untapped potential of the country and the resource that gives us an edge over others — our people.

Kenya has one of the most robust, advanced and vibrant financial sectors in the region. Why not build on this to provide the world with some of the best finance professionals? Our medical professionals are also known to hold their own on the global stage.

Lastly, we are recognised the world over for our innovation in the telecommunications and technology space. Imagine creating large pools of professionals in each of these areas and signing agreements with our trading partners to give them the talent they need.

Ethiopia is focusing on strengthening their enabling and supportive sectors hence we can supply them with health, education, financial and technology professionals.

Kenya needs to define its trading strategy with its large trading partners —Uganda, Tanzania, China, the US, UK, the Germany, etc.

By simply determining their current imports and targeting to substitute them with those from Kenya will create a beginning. How about packaging cultural and history-related tourism targeting Americans?

Or uplifting its medical facilities and services to be the medical hub of Africa and drive medical tourism?

Why not be a leading manufacturer of technology related products targeting Africa through Comesa?

Regionally, Kenya needs to identify development plans of its trading partners and work towards supporting them.

If her East African counterparts are putting up industrial parks for textiles, for instance, who will supply related equipment? The possibilities are endless.

At the end of the day one thing stands out — a different approach is required in terms of our international trade and it all begins with investment in our people.

Sam Watene, senior advisor, Altima Africa Ltd.

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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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