Good Morning. The Supreme Court unanimously upheld William Ruto’s presidential election. Tomorrow, President-elect William Ruto will be sworn in as Kenya’s 5th President.
Looming fuel shortage
Parts of the country like Nairobi and Western Kenya might face fresh fuel crisis following delayed payment of subsidy funds by the government. This has incapacitated oil companies from paying for new oil imports.
Oil marketing companies have not been taking their products, specifically diesel, out of the Kenya Pipeline Corporation (KPC) system. This has clogged up KPC’s pipelines and depots, such that it cannot move any products from the Kenyan coast to Nairobi and Western Kenya.
Oil marketing companies recently complained that the government owes them in excess of Ksh 65 billion in subsidy arrears.
They also warned of a possible fuel shortage should the payments be delayed further.
COMMUNICATIONS
Communications Authority of Kenya to tighten regulatory oversight on online media content providers
The Communications Authority of Kenya (CA) set out plans to tighten regulatory oversight on online media content providers. Recently, online media content providers have been under the spotlight of the government on tax and copyright issues.
The Authority is seeking a consultant to check the adoption, impact and penetration of these providers in the Kenyan market.
“The consultant will be expected to make appropriate recommendations on the basis of the study findings, on the best regulatory approaches that may be employed for the online providers” - Communications Authority of Kenya
CAPITAL MARKETS
Nairobi County government to float a green bond
The Nairobi County government is considering floating a green bond to help finance the estimated Ksh 150 billion cost of modernising the city’s infrastructure.
Newly elected Nairobi governor Johnson Sakaja said that a bond is the best way to finance the costly projects which include water and sewerage.
“The water and sewerage alone need over Ksh 20 billion to replace old pipes, install pipes in areas previously unserved and to develop new water sources,” - Nairobi Governor said on Thursday when he received a delegation from Nairobi Securities Exchange (NSE).
Green bonds are specifically to raise money for climate and environmental projects, and are typically asset-linked and backed by the issuing entity's balance sheet.
NSE chairman said that the NSE was ready to guide the county government to develop the bond, which would look to tap into the growing green finance segment.
PETROLEUM
The Kenya Pipeline Company (KPC) to build a new pipeline
The Kenya Pipeline Company (KPC) has announced plans to build another petroleum products pipeline between Mombasa and Nairobi, barely four years after the commissioning of the line that currently moves fuel between the two cities.
The company says growing demand for petroleum products in Kenya and the region is causing a strain on the pipeline that started operations in 2018, necessitating more investments including the construction of another line and increasing capacity at its inland depots.
KPC said other than growing demand, there is also an increase in petroleum product flow rate from ships importing fuel to Kenya following the commissioning of the second Kipevu Oil Terminal (KOT) in August.
TAX
Illegal Diesel Taxes
The Ministry of Energy risks a Ksh11 billion refund claim from motorists after the Kenya Revenue Authority continued to collect higher levies on diesel, eleven months after a law raising the fees was quashed.
Background: Kenya Revenue Authority (KRA) has been collecting the Petroleum Development Levy (PDL) at a rate of Sh5.40 per litre of diesel consumed, despite Parliament directing the Energy ministry to revoke the increase in fuel prices in October 2021.
The revocation means that KRA should have reverted to the previous rate of Ksh 0.40 per litre.
statistics on this
A litre of diesel should be retailing at Ksh136 instead of Ksh140.
KRA collected approximately Ksh 11.05 billion from motorists as Levy from diesel between October last year and June. The amount could have been ksh 818.67 million if the rate was based at Sh0.40 for every litre.
This estimated collections are based on consumption figures showing that motorists bought 2,046,690,720 litres of diesel between October last year and June 2022.
WHAT YOU MUST HAVE MISSED
Tanzania issues new rules for exporting maize from the country.
Tanzania froze the issuance of new maize export permits for Kenyan traders in what could worsen the shortage of maize in the country. Several millers and animal feed manufacturers in Kenya reported that Tanzania stopped issuing permits last week.
Days later, Tanzania announced that Kenyan grain traders seeking to import maize from Tanzania would be required to register their companies in Dar es Salaam as the country imposes stricter rules to protect its commodities and jobs from shifting abroad.
The Asset Recovery Agency(ARA) dropped a money laundering case against three Nigerian companies
The Asset Recovery Agency had filed a lawsuit in July accusing three Nigerian companies of smuggling more than Ksh 25 billion into the country from foreign jurisdictions between October and November 2021.
ARA claimed that they only discovered the illegal transactions when the accounts had Ksh 5.7 billion balance. The three companies are; Avalon Offshore Logistics Limited, OIT Africa Limited, and RemX Capital Limited.
The case was dropped last week.
Kenya Airways to resume daily flight frequency for the New York route in December
Kenya Airways had cut the flight frequency on the route to three per week from five in February after demand subsided. The higher demand is a positive signal for the tourism sector, for which the US remains the largest overseas source market.
NCBA Group plans to venture into carbon credit banking
In August, NCBA group began offering asset finance for electric vehicles (EVs) as part of its green strategy, injecting an initial Ksh 2 billion into the segment. The green building venture will see the bank offer loans to companies and households to either retrofit or design climate-friendly buildings that emphasise energy and water-saving measures.
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