EPRA plans to reinstate caps on wholesale fuel prices
24 April 2023
EPRA to reinstate caps on wholesale fuel prices as from next month
Kenya’s energy sector regulator, the Energy and Petroleum Regulatory Authority (Epra), announced that it would reinstate caps on wholesale fuel prices from next month.
According to Mr. Daniel Kiptoo, the director general of Epra, the caps will coincide with the complete withdrawal of the subsidy on diesel. The regulator is mandated by law to cap wholesale fuel prices but withdrew the ceilings in 2021.
Epra had initially announced plans to reinstate the cap in October 2022, but the plan was held up by the continued cross-subsidization of diesel with super petrol.
Capping wholesale prices allows small dealers to sell fuel at gazetted retail prices and still enjoy margins, allowing them to remain afloat.
This move is expected to provide much-needed relief to small fuel dealers who have been struggling to make ends meet due to low margins.
CAPITAL MARKETS
The Central Bank of Kenya (CBK) canceled the issuance of a reopened 15-year bond
The Central Bank of Kenya (CBK) canceled the issuance of a reopened 15-year bond, whose sale closed on Tuesday, due to poor performance. This comes as the government continues to face challenges in raising debt financing from the local market.
details of the bond sale
The bond sale, which sought a total of KES 30 billion, comprised the reopening of a 15-year bond first sold in 2019 and a three-year paper first sold last year.
However, the three-year bond raised just KES 1.76 billion, and the cancellation of the 15-year bond was blamed on aggressive rate demands from investors amid a liquidity squeeze in the money market.
This poor performance could put more pressure on the Kenya Revenue Authority (KRA) to beat collection targets or force the government to rely on external financing to close the budget funding gap.
Note that:
Earlier this month, the Treasury had auctioned the first tranche of this month's bond issuance, a 10-year reopened paper targeting KES 20 billion. It raised just KES 3.6 billion.
The government also failed to hit its target with a tap sale on an infrastructure bond it had first floated in March, raising only KES 5.1 billion out of a target of KES 10 billion.
There were no additional details from the Central Bank of Kenya concerning the canceled 15-year tranche.
TAKEOVERS
Treasury seeks to raise takeover threshold for NSE-listed firms
The Treasury plans to amend regulations that govern takeovers in a move that will raise the threshold for seeking approval for share purchases from 25% to 30%
Current regulations : The Capital Markets (Take-overs and Mergers) regulations provide that investors who own more than a quarter of a listed company's shares are required to disclose to the Capital Markets Authority when buying shares equivalent to at least 5% of the total stock. The disclosure includes stating whether they plan to take full control of the company.
The proposed regulations raise the 25% or a quarter ownership threshold to 30%.
The proposed changes will provide investors with more flexibility when purchasing shares in Nairobi Securities Exchange-listed companies.
COMPANIES
1. Minet Kenya and Fidelity Insurance Launch Bizna Sure Cover to Protect MSMEs from Various Risks
Minet Kenya and Fidelity Insurance announced the launch of a new insurance product designed specifically to protect micro, small and medium-sized enterprises (MSMEs) in Kenya. The product, called Bizna Sure, aims to provide comprehensive coverage for businesses against a wide range of risks that could potentially cause financial, legal and reputational damage.
Unlike traditional insurance policies that do not take into account the complex dynamics of MSMEs, Bizna Sure is tailored to offer protection against a wide range of risks that businesses in this sector are vulnerable to. The premiums for this insurance policy will range from KES 5,000 to KES 1 million, depending on the value of the assets being insured.
Fidelity Insurance CEO Richard Marisin said that the product offers a unique and differentiated solution that can be customized to cover all the perils, including theft, property damage, business interruptions, and other risks that may affect the owner, employees and even third parties.
The insurance coverage options under Bizna Sure include machinery breakdown, employee dishonesty, cyber liability, political violence, property, money, and staff compensation.
2. CPF Financial Services received regulatory approval by the Retirement Benefits Authority to manage tier II contributions from employers who opt out of NSSF.
CPF Financial Services obtained the approval of the Retirement Benefits Authority (RBA) to manage tier II contributions from employers who opt out of the National Social Security Fund (NSSF).
The firm has been cleared to be a custodian of the tier II contributions – by workers earning above KES 18,000 -- through its Taifa (Umbrella) Pension Fund, which is designed for private and public sector employers and staff.
CPF is the largest registered pension administrator in Kenya, providing pension services to over 200 employers with an estimated 500,000 members and 8000 pensioners.
The fund is now seeking to onboard employers who opt out of the tier II statutory contributions by dangling enhanced benefits, including post-retirement medical savings and medical cover in retirement.
“By joining Taifa, an employer enjoys the benefit of opting out of NSSF Tier II statutory contributions to instead provide pension through a scheme with superior benefits,” CPF said in a statement.
TAX
Online Betting firms required to fully onboard their systems with those of the KRA
As a prerequisite to the go-live date of May 12, 2023, betting firms are required to develop an M-Pesa pay tax application programming interface and a data transmission service to initiate real-time tax remittances.
Integration testing for the M-Pesa pay service is set to take place between April 25 and May 5. After this, the Kenya Revenue Authority, betting companies, and Safaricom are expected to sign non-disclosure agreements.
Safaricom is expected to support bulk payments by bookmakers via the recently launched Daraja service, a programming interface that creates a bridge for payment integration to web and mobile applications.
KRA stated that the choice of Safaricom’s M-Pesa was informed by the telco’s readiness for the integration during the pilot program, which aims to allow for daily tax remittances and real-time data transmission.
“Safaricom was readily available to work with us on the pilot. However, it’s not just Safaricom as this is open to other providers” - KRA Acting Commissioner General Risper Simiyu.
WHAT YOU MUST HAVE MISSED
Naivas Supermarket issues Data theft Notification
Naivas supermarket issued a data theft notification on Sunday. This was in compliance with section 43 of the Data Protection Act.
section 43 of the Data protection Act:
where personal data has been accessed or acquired by an unauthorized person, and there is a real risk of harm to the data subject whose personal data has been subjected to the unauthorized access, a data controller shall
(a) notify the Data Commissioner without delay, within seventy-two hours of becoming aware of such breach; and
(b) communicate to the data subject in writing within a reasonably practical period, unless the identity of the data subject cannot be established.
All imports and exports for ministries and other State agencies are to exclusively be cleared by the State-run Kenya National Shipping Line
Cabinet Secretary Mining, Blue Economy, and Maritime Salim Mvurya said on Friday that he had issued circular directing all government agencies to clear cargo through Kenya National Shipping Line.
Early this month, Mvurya directed KNSL to take over the moribund Government Clearing Agency (GCA) and ensure it handles government exports and imports.
The Employment Court dismissed an application by Facebook's parent company Meta, seeking to strike out a petition filed by 260 content moderators who have sued the firm for unfair sacking
Meta Platforms Inc and Meta Platforms Ireland Ltd argued that the Kenyan courts lacked jurisdiction to determine the matter because they are foreign firms that do not trade in the country.
Justice Mathews Nduma rejected the application by Meta saying the dispute revolved around the employer-employee relationship and it is immaterial whether the alleged violations occur in a physical or virtual space, within Kenya
Microsoft ADC and JKUAT signed a deal to start a revised curriculum that makes graduate skills more relevant to industry demands
The new curriculum will impact 128 units within the computer science offered courses. It is expected to start with the September 2023 students intake.
According to the managing director of Microsoft ADC, the curriculum review process was part of ADC’s goal of catalyzing digital transformation by providing opportunities for knowledge acquisition to equip Kenyans to be competitive in the global digital landscape.
Cabinet Secretary for trade, Moses Kuria, gazetted two new Export Processing Zones:
Eldoret/Municipality Block 15/1757 in Uasin Gishu County (135 hectares) and Bukhayo/Nasewa/1500 in Busia County (341.2 hectares)
