Increase in fuel prices
20 June 2022
Good morning. The value of foreign currency deposits in local banks rose to Ksh 834.5 billion in April.
The latest review of fuel prices in Kenya
On Tuesday, The Energy and Petroleum Regulatory Authority (Epra) increased pump prices by Ksh 9 per litre pushing the cost of super and diesel to Ksh159.12 and Ksh140, respectively in Nairobi — the highest in Kenya’s history-
The new prices will set the stage for a further increase in the cost of living since manufacturers of goods, transporters, and service providers will pass the increased cost of fuel to the consumers.
As of today, Several routes in Nairobi will see an increase in fares by Ksh 20 to Ksh50.
The Matatu Owners Association (MOA) asked its members countrywide to increase transportation charges since the fuel increase made the current fares unsustainable.
CAPITAL MARKETS
1. The Nairobi Securities Exchange (NSE) has lost Ksh 627.5 billion of investor wealth since January
The value of all stocks at the NSE stood at Ksh1.965 trillion compared to Ksh 2.636 trillion at the start of 2022. The NSE main index has dropped to a 19-year low as foreign investors withdraw their capital from the exchange.
Foreign investors, who account for about 55% of traded turnover at the NSE, withdrew a net of Ksh4.2 billion from the market last month.
The flight of investors to the US market — where inflation is at a 40-year high of 8.6% — has led to price falls of blue-chip firms like Safaricom, Equity Group and East Africa Breweries Limited (EABL) which are favorites for foreign investors.
2. Parliament has allowed Laikipia County to borrow Ksh1 billion via an infrastructure bond.
Parliament approved a request by Laikipia County to borrow Ksh 1.16 billion through a domestic infrastructure bond at the stock market.
The objective of the bond is to finance the implementation of projects, including the provision of water for agricultural production and the improvement of the business environment by upgrading markets and town infrastructure.
According to Laikipia County Governor, the proceeds from the seven-year bond will be invested in water systems, sewerage systems, paving roads, walkways, cyclist paths and enhancing street lighting.
PUBLIC SPENDING
Top public officials doubled their spending on foreign travel
Data from the Controller of Budget revealed that top public officials spent Ksh 3.95 Billion on foreign travel in the 9 months to May 2022 - a 160% jump from Ksh 1.51 Billion in a similar period last year.
data in the picture above Kenya to reduce its marketing budget in Italy, Switzerland, and Japan
Kenya plans to cut its tourism marketing budget in three traditional tourism source markets so as to free the advertising budget in favor of five new markets China, the United Arab Emirates (UAE), Saudi, and South Korea.
Tourism promotion and marketing activities have been allocated Ksh1.06 billion in the financial year beginning June.
Kenya carries out promotion initiatives like roadshows, sponsoring invited tour agents and advertisements in foreign media to attract visitors.
Other investments include implementing policies to open air routes and increase visa openness.
A focus on the local tourism market: The tourism ministry also plans to target the domestic market which buoyed the industry during the pandemic with high visits to coastal hotels, parks and sports events.
IMPORTS
Trouble at the Kenya-Tanzania border for Kenyan millers
Tanzania imposed a new requirement that mandates grain traders to get an export permit before shipping maize out of the country. The policy shift locked already bought stocks of grain by Kenyan millers at the Kenya - Tanzania border.
Approximately 400 trucks with stocks of grain for Kenyan millers are stuck because of the new policy.
This has cut the supply of grain to Kenya given that Tanzania is the only source of maize where processors are getting grain from at the moment.
The price of flour in supermarkets hit a high of Ksh186 ($1.58) from Ksh150 ($1.28) last week occasioned by the high cost of maize with a 90-kilogram bag now selling at Ksh5,500 ($46.55) from Ksh5,000 ($42.59)
WHAT YOU MUST HAVE MISSED
Payment dispute in Mombasa port leads to Cargo delays
Importers using the Mombasa port are experiencing delays in cargo delivery and collection after a payment dispute arose between Kenya Ports Authority (KPA) and Kenya Railways Corporation (KRC-SGR) against shipping lines.
KPA, which is owed substantial amounts of money by KRC and shipping lines, suspended the release of cargo until the debts are cleared.
Kenya Revenue Authority shut down Keroche Breweries in a renewed tax dispute
In March this year, Keroche and KRA signed a payment plan that would see Keroche Breweries settle an undisputed tax amount of KSh957 million over a period of 24 months starting January 2022.
Last week, the taxman shut down the company claiming that Keroche Breweries had defaulted on their earlier agreement on the settlement of tax arrears.
The company CEO stated that beer worth at least KSh350 million could go to waste if the brewer is not reopened in time to recover the losses, with over 400 workers losing their jobs.
The Tax Appeals Tribunal gets 10 new members
The Judicial Service Commission picked a 10-member team for the Tax Appeals Tribunal. This is 2 months after the Treasury Cabinet Secretary lost the powers to make appointments to the commission.
The Tax Appeals Tribunal (Amendment) Act gives the Judicial Service Commission powers to appoint members to the Tax Appeals tribunal.
The government will be forced to float a roads bond in the coming months
According to a report by parliament, the government will be forced to float a bond to pay off bills to road contractors and suppliers.
The National Assembly’s Committee on Transport, Public Works and Housing suggested that the arrears for Infrastructure Department have reached levels that cannot be offset through the annual budgetary allocation.