Banks to reinstate charges on Bank-to-mobile transactions
13 December 2022
Good Morning.
Banks to reinstate mobile money transfer charges
The Central Bank of Kenya announced the reintroduction of charges for transactions between mobile money wallets and bank accounts. The charges were waived on March 16, 2020, as part of the emergency measures to facilitate the use of mobile money in the context of the Covid-19 pandemic.
According to data from the CBK, the waiver led to an increase in the number of Kenyans actively using mobile money by over 6.2 million between March 2020 and October 2022.
During the period, the monthly volume and value of P2P (peer-to-peer) transactions increased from 162 million transactions worth ksh 234 billion to 440 million transactions worth ksh 399 billion,
This is an increase of 71%.
The monthly volume and value of transactions between payment service providers (PSPs) and banks within the two-year period increased from 18 million transactions worth Ksh 157 billion to over 113 million transactions worth Ksh 800 billion.
The CBK announced that the new charges will come into force on January 1, 2023 and that they would be lower than those that applied before.
TAX
Tax refund claims rose to Ksh 109 billion
Last week, the Kenya Revenue Authority (KRA) stated that outstanding tax refunds hit Ksh 109 billion.
Tax refund claims rose by Ksh 3.2 billion as of June, up from Ksh 106.7 billion the previous year, triggering a red flag from Auditor General Nancy Gathungu over the pile-up.
Currently, Kenya is facing the problem of mounting unpaid bills for supplies and delayed payment of tax refunds to companies.
KRA is required to give funds for value-added tax (VAT) when duty is erroneously paid on any supply, bad debt, excess input tax on zero-rated supplies and overpayments or credits resulting from withholding VAT.
The taxman has attributed the delay in settling claims for the remaining businesses to an ongoing audit of the claims in a bid to weed out fictitious cases.
According to KRA, the claims are to be paid within three months of the applications.
Airtel Africa Received a $194 Million Loan from IFC
Airtel Africa received a $194 million loan facility from the International Finance Corporation (IFC) to support its operations and investments across Africa.
Airtel Africa had 134.7 million users across Africa at the end of September 2022 and reported interim revenue growth of 12.9% year-on-year (YoY) to $2.57 billion for the six months.
The loan facility has a tenure of eight years and will be used to support Airtel Africa’s operations and investments in the Democratic Republic of Congo (DRC), Kenya, Madagascar, Niger, Republic of Congo and Zambia, by “providing a more diversified access to local funding.”
LOAN
Kenya eyes another $750 million loan from the World Bank
National Treasury CS Njuguna Ndung'u revealed that Kenya is eying another $750 million from World Bank to stabilize the economy. He said this while speaking at the launch of the World Bank's Country Partnership Framework for 2023-28 in Nairobi.
Status of world Bank loans in Kenya in 2022
In March, Kenya received Ksh 80.9 billion ($750 million) loan from the World Bank to support its budget and help the East African economy recover from the effects of the Covid-19 pandemic.
The $750 million approved by World Bank in March was part of the Development Policy Operation that intended to help strengthen fiscal sustainability through reforms that contribute to greater transparency and the fight against corruption.
The government has been pushing hard to secure low-cost foreign funding at the time interest rates in the domestic debt market are ranging at a high of 14 percent.
CAPITAL MARKETS
Shelter Afrique seeks approval for a local bond
Pan-African affordable housing firm Shelter Afrique is seeking approval from the Capital Markets Authority (CMA) to issue a local bond for its housing projects.
The firm is seeking to tap regional capital markets and pension funds to finance the construction of affordable houses across East Africa.
The local currency medium-term notes are set to be issued in Kenya, Uganda, Tanzania and Rwanda.
Shelter Afrique has been angling to tap up to Ksh.61.4 billion ($500 million) from pension funds to finance housing projects across the continent. Earlier this year in April, the Nairobi headquartered firm raised Ksh 13.5 billion ($110 million) from a local currency bond issuance in Nigeria.
HEALTHCARE
World Bank is Backing NSSF’s Bid to Increase Monthly Contributions to Ksh 2,068
The World Bank has backed Kenya’s efforts to increase NSSF contributions by workers from the current Ksh 200 per month to 6% of monthly pay.
This is a boost to the Kenya Kwanza administration’s push for enhanced pension savings with employees’ monthly contribution to NSSF expected to rise ten-fold to Ksh 2,068, with employers expected to match this amount.
In its 16th Kenya Economic Update, the World Bank noted that enhanced social protection will have a meaningful role in the country’s inclusive growth if, among other policy changes, the NSSF Act is amended to allow for higher contributions to the scheme by workers.
The court declared the increase unconstitutional
In September this year, the High Court quashed the bid to increase monthly contributions to the National Social Security Fund (NSFF) ten-fold to Ksh 2,068 after it ruled that the law supporting the increments was unconstitutional.
Note: The contributions were last reviewed in 2001 when the rate was increased to KES 200 from KES 160.
TRADE
Kenya in Talks with US, South Korea & UAE For Duty-Free Trade Deal
The government is in negotiations with the US, South Korea and the United Arab Emirates on the Free Trade Area as Kenya seeks to expand access to its products beyond the regional and traditional markets.
The government noted that negotiations with these countries have started to enhance duty-free and quota-free access of Kenyan goods to lucrative markets.
The government also revealed that trade talks between Europe and the US are back on track as the country ramps up market access for its goods with the expected coming to an end of duty-free access of Kenyan products to America under the African Growth and Opportunity Act which is set to expire in 2025.
WHAT YOU MUST HAVE MISSED
Kenya’s in Diaspora Sent Ksh 42 Billion to Kenya in November
According to the latest CBK Weekly Bulletin, the cumulative inflows for the 12 months to November totaled USD 4,021 million compared to USD 3,667 million in November 2021, an increase of 9.7%
The cumulative inflows continue to support the current account and the foreign exchange market. The United States remains the largest source of remittances to Kenya, accounting for 55.8% in November.
Doctors to go on Strike in January
The Kenya Medical Practitioners and Dentists Union (KMPDU) stated that doctors across the country will go on strike from January 6, 2023, if the government fails to fulfil agreements in a Collective Bargaining Agreement (CBA) covering the 2017-2021 period.
KMPDU Secretary-General Dr Davji Bhimji Atellah says the intent of notice expires on December 28, 2022, after which a strike notice will be issued.
Kenyan Edtech raises $1.8 Million in funding
Zeraki, a Kenyan edtech company that developed digital learning and school data analytics platforms, has raised $1.8 million in seed funding led by Acumen Fund for product catalogue expansion and regional expansion.
The edtech co-founder and CEO Isaac Nyangolo mentioned that the company plans to introduce more administrative tools for schools, such as timetabling software, as well as help parents with fee loans.
The International Finance Corporation (IFC) has committed Ksh 39 billion towards the construction of the proposed toll highway from Nairobi to Mau Summit.
The World Bank’s private financing arm, the International Finance Corporation (IFC) has committed KES 39 billion towards the construction of the proposed KES 160 billion toll highway from Nairobi to Mau Summit.Construction is expected to begin in the 2023-2024 financial year.
IFC is set to approve the disbursement of the funds within the 2023/24 financing year, unlocking more financing for the Public-Private Partnership (PPP) initiated project.
Kenya paid Ksh 4.9 billion in subscriptions to International organizations
Kenya paid Ksh 4.9 billion in subscriptions to the African Union and other international organizations, highlighting the burden taxpayers shoulder to maintain the country’s membership in various global bodies.
Kenya is a member of several international and regional international organizations including the Common Market for Eastern and Southern Africa Comesa), the African Union, the Intergovernmental Authority on Development (Igad), and the East African Community (EAC) and pays annual subscriptions.