Controversial ICT practitioners Bill
13 June 2022
Good morning.
South Sudan stated that it is willing to receive its citizens back into the country ahead of the expiry of Kenya's deadline of closing down the Kakuma Refugee camp by June 2022.
ICT Practitioner’s Bill
Last week, Parliament passed a controversial ICT bill requiring IT practitioners to be registered by the Professional Body Institution of ICT Practitioners.
The Bill was first discussed in 2016, but the ICT Cabinet Secretary kicked it out because it was allegedly duplicating regulations that were already in existence.
Some requirements in the bill
IT practitioners will be required to have a degree from a reputable university.
IT practitioners will have to pay to renew their license yearly.
The bill seeks to have all professionals in the sector register with a national body.
In a statement shared on Saturday, June 11, the ICT Cabinet Secretary made it clear that the Ministry of ICT had opposed the bill at every stage since it was first presented in Parliament in 2016.
Way forward
The bill has been forwarded to the President and awaits him to sign it into law or return it to Parliament with a memorandum on his reservations.
CAPITAL MARKETS
Treasury cancels Ksh 115 Billion Eurobond and turns to bank loans
Kenya canceled the issuance of a Ksh 115 Billion ($1 billion) Eurobond & will instead borrow from a syndicate of banks. This is because it has become more expensive to borrow internationally given the rising yields.
Kenya now joins Nigeria which also canceled a planned issue of $950 million owing to unfavorable market conditions during the timeframe approved for the fundraising.
additional information
Kenya’s commercial debt is mainly in Eurobonds with an outstanding portfolio of 6 worth a total of $7.1 billion (Sh829.9 billion), which are traded on the Irish and London stock exchanges.
The Eurobonds have risen sharply in the past few weeks, to trade above 10% in the secondary market. This is an indication of the pricing Kenya will get if it goes to the international market.
FUEL SUBSIDY
Kenya has been spending Ksh 7.65 billion monthly on fuel subsidy
Kenya has spent an average of Ksh7.65 billion ($66 million) every month to subsidize diesel, super, and kerosene. - The World Bank
The World Bank stated that the fuel stabilization program has an adverse impact on the country’s revenues and that it should be scrapped.
what next
In a proposed amendment to the Appropriation Bill 2022, the Budget and Appropriations committee proposed a Ksh 15.36 billion increase in the allocation to the fuel subsidy program.
The allocation for fuel subsidy now stands at approximately Ksh 20 Billion.
TAX
High Court rules that churches do not require tax exemption certificates
Last week, The High Court stopped Kenya Revenue Authority from demanding tax on tithes, donations, and offerings from Churches. Justice David Majanja upheld a ruling of the Tax Appeals Tribunal, which barred the taxman from demanding tax from Thika Road Baptist Church.
Background
The Kenya Revenue Authority wanted the church to pay Ksh 5.5 million, arguing that it failed to produce a tax exemption certificate.
While churches are exempted from paying taxes on tithes, KRA insisted they must get the exemption certificate, which is subject to certain conditions.
The Law on exemption certificates
Paragraph 10 of the First Schedule of the Income Tax Act exempts from paying tax, institutions, a body of persons, or irrevocable trust of a ‘public character’.
These include trusts, churches, and charities or bodies established for the purposes of fighting poverty or distress of the public or for the advancement of religion or education.
EXPORTS
Kenya to resume exports of miraa (khat) to Somalia in two weeks
President Uhuru Kenyatta brokered a deal with Somalia’s new President Hassan Sheikh Mohamud on Thursday that will see the lifting of a two-year ban on miraa exports to Somalia.
Background
In 2020, Somalia closed access to its market after a political fallout between the two countries under former President Mohamed Abdullahi “Farmaajo”.
The ban led to a daily loss of more than 50 tonnes of Kenyan khat valued at more than Ksh20 million ($171,000).
In 2021, Kenya exported goods worth Ksh 13.45 billion to Somalia, an 18% increase from Ksh11.39 billion in 2020.
COMPANIES
SWVL to shut its commuter services
SWVL announced plans to shut its intra-city rides in the country citing tough economic times.
The company which has operated since July 2019 also plans to suspend the city-to-city services and will only operate the Business service which caters to corporations, organizations, and private entities.
The company operates in the country with 3 different solutions: Swvl Daily, tailored for intra-city rides in Nairobi, Swvl Travel tailored for city-to-city rides, and Swvl Business tailored for business-to-business rides.
In 2020, the company had rolled out a service allowing commuters to use the platform for long-distance travel in Kenya.
WHAT YOU MUST HAVE MISSED
The World Bank predicts that the Kenyan economy will slow down by 5%
The World Bank projects the Kenyan economy will slow down to 5.5% this year amid concerns over increased commodity prices including fuel and the effects of drought.
The Bank stated that the country will receive below-average rains that will negatively affect agricultural performance leaving nearly 3.1 million Kenyans in need of food aid.
Insurance group Britam made additional provisions of Sh2 billion to absorb losses in its asset management business
The amounts are meant to protect investors in its subsidiary Wealth Management Fund LLP whose outflows are expected to be higher than can be met from the firm’s existing assets.
Access Bank acquires 83.4% of Sidian Bank.
Sidian Bank and Access bank Kenya are set to be merged. This will create the largest Tier 3 Bank in Kenya with a combined Ksh 57 billion in assets and Ksh 26.6 billion loan book.
Airtel sells mobile cash unit stake for Ksh 64.2 billion
Airtel Africa Plc sold a 25.77% stake in its local mobile money business. Similar changes in ownership of the mobile money businesses were also witnessed in markets such as Rwanda, Tanzania, and Zambia.