Kenya ready to privatise 35 state companies, President Ruto says

Kenya’s President William Ruto said Thursday that his government was ready to privatise 35 state companies “trapped in government bureaucracy” in a bid to boost productivity following a change to laws.

Last month, Ruto’s government signed a revised privatisation bill into law that makes it easier to sell state enterprises to private companies.

The revised law aims to push up the private sector’s participation in the economy, the presidency said at the time of the signing.

“We have identified the first 35 companies that we are going to offer to the private sector,” Ruto told a gathering of African stock market officials in Nairobi.

He added that the government was also exploring options regarding some 100 state-owned firms, saying that many “would-be lucrative companies… are trapped in government bureaucracy, when the services they are offering can be better offered by the private sector.”

“We will make this opportunity available.”

East Africa’s economic powerhouse is facing a host of challenges, including depleted government coffers, skyrocketing inflation and a plunging currency that has led to soaring debt repayment costs.

The International Monetary Fund (IMF) said this month that it had agreed to a $938-million loan for Kenya, which also has a $2-billion-eurobond repayment due next year.

The IMF also urged Ruto’s government to reform public sector firms, particularly the national electricity supplier — Kenya Power and the national carrier Kenya Airways — which suffered record losses in 2022.

The World Bank said on Monday that it expects to provide the country of 53 million people with $12 billion in support over the next three years.

Kenya had accumulated more than $66 billion (Ksh10.1 trillion) in debt by the end of June — according to Treasury figures — equivalent to around two-thirds of gross domestic product.

Kenya’s President William Ruto said Thursday that his government was ready to privatise 35 state companies “trapped in government bureaucracy” in a bid to boost productivity following a change to […]

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Outrage as Kenya tax officials accused of harassing tourists at airport

Lawmakers have joined Kenyans in protesting a directive by the Kenya Revenue Authority (KRA) seeking to tax personal or household items worth $500 (Ksh75,000) and above, whether new or used by tourists visiting the country.

The National Assembly Committee on Defence and Foreign Relations said some KRA officials have been taking advantage of the directive to harass tourists, hence giving the country bad publicity. The committee chairman Nelson Koech said Kenya instead be working on how to grow the number of tourists visiting the country.

“We are entering the peak tourism season and His Majesty’s visit to Kenya is poised to give our tourism a very big boost. The KRA’s passenger Terminal Guidelines could not have come at a worse time. This is not the time to be threatening those coming to Kenya,” Mr Koech said.

“We agree, the laws around the world impose limitations on the amount of goods but that should not be an excuse to threaten passengers, harass travellers or infringe on the privacy of tourists. KRA should make it easy for passengers and travellers coming to Kenya to declare their luggage and where necessary pay duty before landing,” he added.

The Belgut MP pointed out that there is a need to clarify which goods are affected and ensure personal effects and electronics are left out.

“There appears to be mischievous characters at Times Tower who are bent on sustaining negative publicity on taxes. We appreciate that the only way we are going to achieve sustainable development as a country is by paying taxes and becoming dependent on our own resources as a country,” Mr Koech said.

“But even then, there is a need for all agencies of government to go easy on Kenyans and as far as possible avoid coming across as insensitive in making their public announcements,” he said.

“Why would KRA choose when we are preparing for the Royal Visit to remind Kenyans of these new Passenger Rules? Where have they been all along?”

Tourism Cabinet Secretary Alfred Mutua termed the KRA move as one of the reasons the number of tourists visiting the country has been declining.

“You go to Rwanda, they don’t harass you. Does Rwanda not collect taxes? You go to South Africa, and they don’t harass you. In Dubai, they don’t harass you. So, why do our visitors face such challenges in Kenya? And we wonder why people are not coming to Kenya,” Mutua asked.

Senate majority leader Aaron Cheruiyot said on his X account that “the National Assembly finance committee holds the key to alleviating national shame that is the KRA searches at JKIA. By providing the necessary clarity needed to distinguish goods for a commercial venture and personal items”.

Lawmakers have joined Kenyans in protesting a directive by the Kenya Revenue Authority (KRA) seeking to tax personal or household items worth $500 (Ksh75,000) and above, whether new or used […]

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Kenyan court dismisses challenge over GM crops

A Kenyan court on Thursday dismissed a lawsuit challenging a government decision to allow the importation and cultivation of genetically modified crops to help combat its food crisis.

In October last year, the government lifted a decade-old ban on GM crops in response to dwindling food security following the worst drought to ravage the Horn of Africa region in 40 years.

The Kenya Law Society swiftly launched a court challenge, arguing the decision was unconstitutional as there were concerns over the safety of the crops. 

But environment court Judge Oscar Angote ruled on Thursday that there was no evidence to show any harm to nature or human health.

“As a country, we need to trust the institutions that we have in place and call them to order when they breach the law,” Angote said, making reference to government bodies that regulate GM foods.

A Kenyan court on Thursday dismissed a lawsuit challenging a government decision to allow the importation and cultivation of genetically modified crops to help combat its food crisis. In October […]

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Boost for terror fight as US, Kenya sign pact

Kenya’s fight against the terrorist group Al Shabaab received a major boost on Monday with the signing of a cooperation agreement with the United States that will see Kenya Defence Forces (KDF) soldiers trained and provided with financial and technical assistance over the next five years.

“The agreement will also see the two countries collaborate on peace and security efforts within the country and in the region, including the planned deployment of Kenyan police officers to Haiti,” US Secretary of Defence Lloyd James Austin III said at a press briefing in Nairobi yesterday.

“The US government deeply values our partnership with Kenya in countering Al Shabaab and is grateful to Kenya for its leadership in addressing security challenges in the region and around the world. I also want to thank the minister today for Kenya’s willingness to consider leading a multinational security assistance mission in Haiti,” he said.

Austin, who was welcomed in the country by Defence Cabinet Secretary Aden Duale and Chief of Defence Forces General Francis Ogolla, announced that the US is prepared to provide up to Ksh14.8 billion ($100.3 million) in addition to technical assistance to the mission in Haiti once it is approved by the UN Security Council.

Following parliamentary approval, Kenyan police officers from specialised units of the Administrative Police will leave for the Caribbean country in the next few months to tackle armed gangs that control areas in the capital and provincial towns.

Duale noted that the Al Shabaab is currently the largest terrorist group in East Africa.

“They are recruiting and radicalising young people for their own terrorist operations and within this framework we are working on the whole area of counterterrorism, our maritime security, peace and security in the Horn of Africa and the Great Lakes region and how we can benefit from US defence technology and innovation,” he said.

He also noted that the cooperation will see Kenya’s contribution to peacekeeping missions globally supported by the US, aside from receiving training, technology and innovation to enhance KDF’s capabilities.

“The framework places special emphasis on interoperability between our two militaries in an increasingly complex and interconnected world. Our ability to work together seamlessly is paramount and this cooperation will enable us to respond effectively to the ever-evolving security challenges in our region and beyond,” Duale said.

“Together, we are charting a course for a more secure and prosperous future for our nations and the world,” he added.

This is Austin’s first trip to Africa since taking up his post in January 2021. Before coming to Kenya, he visited Djibouti. He is expected to meet with President William Ruto before visiting the US Manda Bay camp in Lamu before departing for Angola.

Austin noted that Somalia has made remarkable progress in the past year in the fight against Al Shabaab by recapturing more territory from the group.

“But we know that progress is not always a straight line, and we can see significant improvement one day and challenges the next. Our approach across the continent has always been a combination of defence capabilities, development and diplomacy, and I think that is the right combination to ensure that you make a lasting impact,” he said.

While in Djibouti, Austin met with Somali President Hassan Mohamud who explained why he had called for a 90-day halt to the second phase of the drawdown of the African Union Transitional Mission in Somalia (Atmis) troops.

Kenya’s fight against the terrorist group Al Shabaab received a major boost on Monday with the signing of a cooperation agreement with the United States that will see Kenya Defence […]

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Disappointments, high living cost cloud Ruto’s 1 year in office

Kenya’s President William Ruto flew to the US Wednesday to attend the 78th United Nations General Assembly session in New York, in week he marked his administration’s first anniversary.

His delegation has also used the trip to court American companies to invest in the East African country, with trade and investment roadshows between Thursday and Friday in Chicago and San Fransisco, including a tour of the Silicon Valley, the world’s technology and innovation centre.

US ambassador to Kenya Meg Whitman, a familiar face in the Silicon Valley from her days as chief executive of eBay and Hewlett Packard (HP), in a video posted on her X, formerly Twitter, handle, described the Chicago leg of the road shows as “a big success”.

“It has been great. We had hundreds of people; investors, American companies, Kenyan companies, all of whom got a chance to hear why they should do more business in Africa and more specifically why they should do business in Kenya… We had very good conversations on what we can do together,” Ms Whitman said.

But back home any positive vibes his spin doctors had hoped the US visit would arouse have faded away after the energy regulator on Thursday night announced record-high fuel prices in its latest monthly review.

The new fuel prices are expected to trigger increases in the cost of basic goods and services — from food to public transport — souring the public mood further, a day after the Treasury published its latest medium-term revenue strategy showing more taxes are on the way starting next year.

High cost of living and punitive taxes were among the grievances that fuelled the disruptive opposition-led anti-government protests that intermittently shutdown the economy in Nairobi and some major towns in the country between March and July.

Amnesty International Kenya said police killed at least 30 people during the protests.

The Energy and Petroleum Regulatory Authority attributed the massive increases in the prices of petrol and diesel mainly to rallying global crude prices, which saw the landed cost of diesel, for example, rise nearly 20 percent.

But for all his rhetorical skills, President Ruto could still struggle to explain the oil market dynamics to a distrusting public that is used to him making many promises that are never delivered.

He won the August 9, 2022 election after campaigning on a populist platform to reduce the cost of living within the first 100 days in office and frequently criticised the previous administration of Uhuru Kenyatta, in which he served as a renegade Deputy President, for raising fuel prices and burdening Kenyans with taxes.

His scorecard after the first year in office hasn’t looked any better though, with the latest survey by pollster Infotrak showing that a majority of Kenyans believe the country is going in the wrong direction on his watch.

A report by Independent Medico Legal Unit (IMLU), a non-profit organisation that documents cases of police brutality, torture, violence and discrimination, shows that Kenya’s human rights record has got worse in the past year.

The report released on Thursday shows that the country recorded 482 cases of torture and related violations between October 2022 and August 2023, more than double the 232 cases during a similar period previously.

Of the 482 cases, 351 were torture and inhuman or degrading treatment, 128 were extrajudicial executions and three were enforced disappearances.

On Friday, the Federation of Kenya Employers (FKE) said the disruption in policies and taxes mean that employers are no longer able to plan their costs and inputs. The National Treasury through the Finance Act, 2023 introduced a myriad of tax changes including doubling value added tax (VAT) on fuel to 16 percent and introducing a 1.5 percent housing levy deducted from the gross pay of workers and matched by their employers.

“Tax increases brought about by the Finance Act, 2023 coupled with the already high electricity tariffs and tight monetary policy have slowed consumption which is the main driver of domestic demand in Kenya,” said FKE national president Habil Olaka.

FKE said Kenya had lost over Ksh50.69 billion ($345 million) in foreign direct investment (FDI) and other investment inflows in three months as economic growth plummeted over high taxation and an unpredictable business environment. “Employers are appealing to the government to provide a stable and less costly business operating environment. The government needs to commit to a long-term development plan and give enough lead time for businesses to adjust their budgets before making far reaching policy changes,” said Mr Olaka.

At the same time, Matatu Owners Association (MOA) announced public service vehicle (PSV) operators will increase fare prices by 20 percent immediately along all the routes following the increase in fuel prices.

Kenya’s President William Ruto flew to the US Wednesday to attend the 78th United Nations General Assembly session in New York, in week he marked his administration’s first anniversary. His […]

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Ruto signs $59m deal with US aid agency to acquire electric buses

Kenya’s President William Ruto has signed a Ksh8.7 billion ($59.2 million) deal with US foreign aid agency Millenium Challenge Corporation (MCC) for the acquisition of electric buses to ease traffic congestion in Nairobi Metro Area.

The buses will operate on Line 2 of the Bus Rapid Transit (BRT).

“The Blended Finance for BRT Project aims to catalyse private financing to support the acquisition of electric (or other low emission) buses to operate one or more lines of the BRT system, currently being prepared for the Nairobi metropolitan area,” MCC said on its website.

“The project aims to facilitate the timely operation of BRT lines and contribute to Kenya’s goals of reducing greenhouse gas emissions related to urban transportation.”

Kenya’s President William Ruto has signed a Ksh8.7 billion ($59.2 million) deal with US foreign aid agency Millenium Challenge Corporation (MCC) for the acquisition of electric buses to ease traffic congestion […]

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How new technologies are driving financial inclusion in Kenya

Inclusivity in the financial system is desired by all nations. It enhances economic efficiency, stabilizes the financial system, and protects vulnerable citizens. In Kenya, a developing economy, the government is exploring various measures to ensure everyone participates in its financial system.

New technologies like USSD, SRL, and cryptocurrency can potentially include all Kenyans in the financial system.

Mobile payment offers accessibility for all

In developing countries, mobile payments such as Bangladesh’s bKash, Cambodia’s Wing, and Tanzania’s M-PESA are important in financial inclusion. These services use Unstructured Supplementary Service Data (USSD) to connect with customers.

USSD is vital in financial inclusion. It has become a vital tool for offering mobile financial services to low-income individuals. By dialing numbers starting with * and ending with #, users already engage with USSD.

According to 2016 data, 96 percent of households in Kenya used mobile money M-PESA. The growth in mobile phone penetration contributes to Kenyans’ use of mobile-based payment methods. This method is considered more straightforward than others.ADVERTISEMENT

Despite that, the adoption of mobile payment still meets some challenges. Certain groups — usually impoverished, have lower educational attainment and are predominantly female — have limited access to mobile phones and data.

Past research also revealed that phone owners with higher education may not use their privilege to exercise the so-called savvy money management methods, such as savings. They have the means to do it, but for some reason, they don’t.

These findings challenge the commonly optimistic view of mobile money as a key avenue for financial inclusion. It aligns with qualitative research suggesting that Kenyans have diverse needs and prefer to have their money circulate actively.

Furthermore, potential issues arise when mobile network operators (MNOs) control financial services and essential communication infrastructure like USSD. This can hinder competition and impact benefits like lower costs and improved services for customers.

Entertainment sector boosts inclusion

Entertainment avenues like Simulated Reality League (SRL) are also transforming how people use their money by engaging in virtual sports simulations and digital entertainment. They are designed to mimic real-world sports such as cricket.

SRL today  still follows the same basic formats: Test, One-day Internationals (ODI), and Twenty20 (T20). Unlike real matches that can extend for hours due to various factors, games last for two hours without interruptions.

In a computer-generated Twenty20 match, there are 20 overs, each with six balls, and betting options for every over and special bet for the beginning and end of the game, making it more streamlined without delays caused by penalties or injuries.

SRL cricket offers similar betting markets as official matches, including options like match winners, coin toss winners, ties, and predictions for top batters and bowlers.

Authorities remain cautious about crypto

As digital currencies gain traction, traditional banks remain cautious due to perceived risks that outweigh potential benefits. In 2015, the Central Bank of Kenya (CBK) warned about the risks of cryptocurrencies due to their unstable nature and lack of rules. While they suggested people avoid trading, they didn’t ban it.

Kenyans can legally buy and sell cryptocurrencies. In fact, Kenya holds over $1.5 billion in Bitcoin, about 2.3 percent of the country’s total value. This doesn’t even count other tokens, like Ethereum or Dogecoin. This shows that Kenyans still embrace cryptocurrencies despite the CBK’s advice.

While concerns about digital currencies often revolve around risk and complexity, they can benefit banks and customers. Cryptocurrencies are alternatives to conventional banking. They operate without intermediaries and beyond the control of single entities. Instead, crypto transactions rely on the blockchain’s code and a decentralized structure.

However, the central bank’s control of crypto could lessen the asset’s appeal and challenge banks’ entry into the field. The decentralized nature of cryptocurrencies raises questions about the central bank’s control if digital assets gain widespread adoption.

Inclusivity in the financial system is desired by all nations. It enhances economic efficiency, stabilizes the financial system, and protects vulnerable citizens. In Kenya, a developing economy, the government is […]

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Kenya President Ruto decries ‘unfair’ debt policies

Kenya’s President William Ruto has decried what he termed as an “unfair” framework in the administration of the global financial system, saying the global West continues to disenfranchise Africans by imposing unjust debt repayment policies that are almost unmanageable.

Speaking at the Kenyatta International Convention Centre (KICC) in Nairobi on Tuesday in a speech to delegates at the ongoing Africa Climate Summit, Ruto waded into the often-murky terrain of foreign debt to African nations, saying that a conversation on the punitive policies of the West and its institutions towards Africa “is not an unfair” debate.

His remarks were received with applause from the thousands, including African heads of states, who were gathered at the Tsavo amphitheatre on the second day of the Africa Climate Summit. Also in attendance were leaders from the global North, among them the United Nations Secretary-General Antonio Guterres and the US Special Presidential Envoy for Climate John Kerr

Ruto appeared pained in his remarks, cutting his written speech for a few minutes to embark on a short anecdote about how Africa has been hurt by the unfair debt programmes of the West, and how climate change is exacerbating an already bad situation.

While Africa’s debt debate has become a touchy issue in recent years, it is becoming even louder in the wake of the debilitating effects of climate change.

Spend fortunes

African governments are routinely being forced to spend fortunes of small budgets to fund adaptation projects, and Ruto said the government had been forced to add an additional three million pupils to the national feeding programme, up from one million last year. The holes they burn in their treasuries are often plugged using expensive domestic and foreign borrowing, and African leaders have in recent years decried what they deem as exploitative policies by Western financiers.

“This is the continent with the highest investment potential,” said President Ruto, who went ahead to note that the high potential is hampered by “high interest rates for development capital.

“As a result, nine countries in Africa are already in debt distress, 13 are at high risk and 17 are at medium risk, and African continent is bearing the brunt of the global climate crisis because an unjust financial architecture views African nations as risky borrowers,” he added.

“How do we get Africa to pay five times more (than the rest)?” he wondered. “We are not asking to be favoured or treated differently; we just need a conversation.”

Kenya’s President William Ruto has decried what he termed as an “unfair” framework in the administration of the global financial system, saying the global West continues to disenfranchise Africans by […]

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President Ruto urges global financial institutions to be fair to Africa

Africa is calling for a fair financial system that treats all nations equally, according to Kenya’s President William Ruto, who also chairs the Heads of State Committee on Climate Change.

Speaking on the second day of the Africa Climate Summit, President Ruto said it was not too much to ask as many African nations were facing debt distress due to climate change.

“This is the continent with the highest investment potential. We are only limited by two things: high interest rates for development capital,” President Ruto said, adding that nine countries in Africa are already in debt distress, 13 are at high risk and 17 are at medium risk.

He argued that the suffering was global but the African continent was bearing the brunt and that the financial architecture is such that African nations are seen as risky borrowers.

“How do we get Africa to pay five times more?” The president wondered. “We are not asking to be favoured [or] treated differently… We need a conversation.”

“Climate change was destroying the economies of African nations and forcing affected countries to divert their budgets and resources meant for economic growth to dealing with the effects of climate change,” Dr Ruto said.

“Africa had lost 2.5 million head of livestock, among other things, due to climate change,” he said.

He said the summit was both Africa’s climate summit and a global pre-COp28 meeting where Africa would speak, and the world would listen.

“The ACS is an orientation to familiarise us with our journey into the future, driven by African solutions,” he explained. “We have gathered here to consult, deliberate, collaborate and share the future of climate action globally and for Africa. This summit is about turning ideas into action and forging transformative partnerships to bring our planet back from the brink of climate change.”

Acknowledging that there was still a long way to go to achieve Africa’s aspirations, he urged all stakeholders to keep their promises, even in difficult times.

Nevertheless, he said, there was a need to move fast because climate change was an emergency that required a commitment to climate action and green growth.

“This African moment is a global moment, we are there in word and deed. I urge everyone at this summit to show bold leadership in support of African aspirations. We have a long way to go and no time to lose. We have the permission of our ancestors to innovate a way, not only to go fast, but to go together,” said Dr Ruto.

Even in the face of adversity, the summit host said, there is opportunity. Climate change and the crisis it brings is Africa’s opportunity to unlock the vast resources we have for a green energy transition, he said.

President Ruto said Africa has an unprecedented opportunity to turn away from the well-trodden unsustainable path.

Speaking at the Youth Summit on Sunday, President Ruto said the world had witnessed the immense potential that African youth could unleash.

He added that this underscored the importance of the Youth Commission. Potential and opportunity are all futuristic.

African countries face unique, disproportionate and structural disadvantages that can help them achieve prosperity. And the tragedy of climate change is “relentlessly eating away at this progress”, President Ruto lamented, while declaring that the continent will use its capacity to limit its own emissions as a clear pathway to net zero by 2050.

“Furthermore, to achieve green growth, Africa has committed to move quickly to develop the necessary instruments and institutions, with Kenya, as an outcome of the summit, offering to host the Global Centre for Adaptation (GCA),” President Ruto said.

“We have been negatively profiled, the continent of disease, war and poverty, but we are stepping out to say that Africa is home to 60 percent of the world’s renewable energy assets,” he said.

Standing in for US President Joe Biden, US special climate envoy John Kerry said, “My sense is that after this speech, we have no choice but to act.”

“Africa has the greatest opportunity in the world to win this (climate change) dialogue,” he added.

“I feel that Africa at this moment offers an enormous opportunity. This problem that we face is man-made. Humanity is being threatened by humanity. We need the Loss and Damage Fund in one year, this year, in Dubai. We can win this battle, but we can only win it if we make fundamental choices,” he further said.

Africa is calling for a fair financial system that treats all nations equally, according to Kenya’s President William Ruto, who also chairs the Heads of State Committee on Climate Change. […]

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US vetoes compensation of embassy blast victims

Victims of the August 7, 1998, terrorist attack in Nairobi are unlikely to get any compensation after the US government insisted it already paid them and put in place measures to combat terrorism in Kenya.

This comes amid a renewed push by the Senate to have Kenyan victims of the attack compensated. This year marks the 25th anniversary of the attack in which over 200 people were killed and close to 5,000 others injured.

The attack resulted in 12 American deaths while the embassy building was badly damaged.

“The terrorist attacks against our embassies in Nairobi, Kenya and Dar es Salaam, Tanzania claimed 224 innocent victims and injured more than 4,500 others,” said the US Embassy-Nairobi Spokesperson in an interview with Nation.

 “In the years immediately following the blast, the United States government provided support and assistance to help Kenyans affected by the bombing to recover from the attacks and resume their lives.

“This support included: medical care, counselling, school fees, rehabilitation therapy, vocational training, and recovery assistance to businesses.”

In 2020, former US President Donald Trump told Sudan that it would only come off a list of state sponsors of terror if it pays $335m (Ksh46.9 billion) in compensation. Sudanese Prime Minister Abdalla Hamdok responded by saying the funds had been transferred, a decision that the US confirmed a year later.

“Sudan has paid $335m to compensate victims of past attacks against the United States as part of an agreement that removed the struggling country from Washington’s list of state sponsors of terrorism — also known as its ‘terror blacklist’,” US Secretary of State Antony Blinken said in April 2021.

Khartoum’s then transitional, civilian-backed government provided the funds for survivors and victims’ families from attacks including the 1998 bombings of the US embassies in Kenya and Tanzania by Al Qaeda, which was backed by Sudan’s then-leader, Omar al-Bashir.

Sudan had been listed since 1993 when Al Qaeda leader Osama Bin Laden lived there as a guest of the government. However, it is not clear whether the money has been released to survivors and victims’ families from the twin 1998 attacks on US embassies in Kenya and Tanzania.

Instead, the US government reiterated its commitment to seeking justice as it intensifies the war against terrorism.

“In the aftermath of this attack, the Kenyan and Tanzanian governments, along with countless other international partners, helped us move forward in the face of these heinous acts,” said the spokesperson.

“Today, the United States and our African partners remain committed to pursuing justice, and together we remain steadfast in our efforts to root out violent extremism.”

However, the Kenyan Senate was not happy with the US move, which only saw it compensate its nationals and part of her Kenyan staff. This week, the Senate formed a nine-member ad-hoc committee to follow up on the matter with the US. The committee will be chaired by Machakos Senator Agnes Kavindu.

The Senate wants the committee to engage Kenya’s Foreign Affairs ministry to engage with the US government to pursue and secure the compensation of the Kenyan victims and their families. The US has not made it clear whether or not there will be any payments in future.

“Since 2015, the United States has invested nearly $85 million (Ksh12 billion) in assistance to work in partnership with Kenya to combat terrorism and help ensure the Kenyan people remain safe,” said the spokesperson.

“For example, the United States is working with Kenya’s Border Police Unit to counter violent extremism by delivering vital medical services to susceptible and disenfranchised communities along the border region.”

“The United States has also partnered with the Kenyan Coast Guard since its inception in 2018 and together we are beginning a multi-year project to increase their maritime security in the western Indian Ocean, an area known for illicit trafficking and transnational organized crime activity,” said the US Embassy-Nairobi spokesperson.

“The United States and Kenya are working in partnership to strengthen Kenyan military and law enforcement capabilities to address domestic and regional challenges, including countering terrorism, improving maritime security, and securing Kenya’s borders,” said the US-Embassy-Nairobi spokesperson.

“We will continue to conduct joint exercises and training with the Kenyan Defence Forces and the National Police Service to increase our coordination and capacity to deal with threats to regional peace and security.”

Victims of the August 7, 1998, terrorist attack in Nairobi are unlikely to get any compensation after the US government insisted it already paid them and put in place measures […]

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Maritime dispute: Somalia rejects mediation ‘offer’

Somalia says it will not accept mediation over a maritime dispute with Kenya, which the International Court of Justice (ICJ) decided in October 2021.

Somalia’s State Minister for Foreign Affairs Ali Mohamed Omar told a committee of MPs that Somalia was not in any talks with Kenya to resolve the dispute.

The issue had been raised on Saturday by a member of the parliamentary committee who sought clarification from State the Federal Government following reports that Kenya’s President William Ruto had asked the Djiboutian counterpart Omar Ismael Guelleh to help broker the deal.

The minister, instead, says Somalia will abide by the Court’s ruling which mostly re-demarcated the sea border between the two countries.

“Regarding the remarks made by Ruto, the maritime dispute was settled by the ICJ and there is no turning point on that. The court verdict favoured Somalia’s sovereignty,” Omar stated.

“Perhaps the (discussion on the) implementation on the court ruling is possible, but the ownership (of the sea) isn’t anything on the table.”

The minister further dismissed that such mediation is to be performed by Djibouti and there was nothing to talk about.

“It came as a surprise to us, and I don’t think there is any dispute between Kenya and Somalia that Djibouti is involved in resolving. I believe the court ruling is final,” the state minister further stated.

According to Somalia, Djibouti has not approached Somalia on this issue yet, but that Mogadishu will decline any such overtures in future.

Neither Kenya nor Djibouti have publicly commented on the claims.

Somalia had sued Kenya at the ICJ back in 2014 seeking to reclaim a part of Kenya’s waters in the Indian Ocean.

In October 2021, the Court agreed with most of the claims and dropped others.

The ICJ decisions are binding to the parties and have no option for appeal. However, the two countries will need to actually re-demarcate the boundaries as decided by the Court.

ICJ Ruling in Summary

-The case concerned 100,000 sq km triangle in the Indian Ocean that is thought to be rich in oil and gas. Further studies to some of the identified blocks however showed the oil was not viable

-Kenya argued the maritime border runs in a line due east from where the two countries meet at the coast.

-Somalia, however, argued in court that tit should follow on in the same direction as their land border.

-Judges rejected Somalia’s demand for reparations after accusing Kenya of violating its territorial integrity

-The 14 Judges sitting at the Hague redrew the boundary, establishing a new demarcation line between the disputed territory. They rejected Kenya’s claim that Somalia had previously agreed to a demarcation.

Somalia says it will not accept mediation over a maritime dispute with Kenya, which the International Court of Justice (ICJ) decided in October 2021. Somalia’s State Minister for Foreign Affairs […]

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Kenya Azimio demonstrations: Schools shut as police battle protesters

Kenya has closed schools in the country’s two main cities as a three-day opposition protest kicks off with demonstrators confronting police.

Tear gas has been fired in the capital, Nairobi, and the coastal city of Mombasa at those protesting over the high cost of living.

Many businesses have remained shut over fears of looting, with people scared of getting caught in violent clashes.

Last week, at least 14 people died in protests – 10 were shot dead by police.

Human rights organisations have strongly criticised the police for what they call their excessive use of force last Wednesday. More than 50 children were admitted to hospital after tear gas was fired into their classroom in Nairobi.

The opposition called for a series of protests after tax hikes were introduced last month by the government of President William Ruto

The police chief has said the protests are a threat to national security and has deployed riot officers across the country.

In some towns, including Nairobi and Nakuru in the Rift Valley, protesters have barricaded roads and been hurling stones at police.

There are reports of several people being injured in such confrontations in Migori, a county in the west of the country.

Christine Wema, the director of Migori’s Oruba nursing home, told the BBC that two men had been brought into the facility with leg injuries, probably caused by rubber bullets used by the police

Another person had been admitted with breathing problems after a tear-gas canister was lobbed in his house, she said.

Rights groups and diplomats have expressed deep concerns about the situation in Kenya, urging the government and opposition to resolve their differences peacefully.

The two sides had agreed to hold talks earlier in the year, but the opposition said Mr Ruto’s team was not committed to resolving their complaints.

These include the soaring cost of living as well as the conduct of the elections last year, narrowly won by President Ruto, who promised to champion the interests of the poor.

However, since taking office, he has done little to tackle inflation and his government has raised taxes – doubling the VAT on fuel.

Tensions are likely to be fuelled further by reports in the local media that the security details for opposition leaders Raila Odinga and Kalonzo Musyoka were removed ahead of this week’s protests.

Security officers assigned to Ngina Kenyatta, widow of Kenya’s first president, have also been reportedly withdrawn. She is also the mother of ex-President Uhuru Kenyatta, who is an ally of Mr Odinga and who has been accused by th government of funding the protests.

Kenya has closed schools in the country’s two main cities as a three-day opposition protest kicks off with demonstrators confronting police. Tear gas has been fired in the capital, Nairobi, […]

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‘Maandamano’: Chaos, rebellion as Kenyans protest over high cost of living

Chaos. Anarchy. Disarray. Unruliness. Mutiny. Rebellion. Six words that define the scenes witnessed across the country on Wednesday as thousands protested against the high cost of living and the Finance Act 2023. But six words that, in the context of the civil unrest, are scant definitions or descriptions of the wave of violence that engulfed the country on a day that President William Ruto was hosting Iranian President Ebrahim Raisi, and on the day that Azimio leader Raila Odinga vowed to lead the nation in a protest movement against the ruling Kenya Kwanza’s policies.

In the end, Mr Odinga did not need to physically lead the demonstrations. He did not even need to make his signature appearance at Kamukunji Grounds in the city atop his car. For in the six-or-so-hours between sunrise and the time he called a press briefing to announce the cancellation of the Kamukunji rally, parts of the country had already ground to a halt. Mobs of rioters had disobeyed a police directive not to venture out and protest, and they had been met with brute police force. There were reports of seven deaths as scores were injured.

In the wee hours of Wednesday morning, the boom-boom of gun salutes had echoed from the lawns of State House in Nairobi as President Ruto welcomed Mr Raisi. Barely a kilometre away on Ngong Road, a bunch of young men had sneaked out of Kibra and were heading towards the city for a face-off with the police. In Kisii, rioters were already on the streets, as they were in Mombasa, Kisumu, Nyeri, Murang’a and Nakuru.

These contrasting images were a remarkable commentary of the two worlds in Kenya; one where the rule of law and order carried the day, and the other where civil disobedience brought economies, livelihoods, and even lives, to a violent end. One where the President was unperturbed by the disorder outside the gate to his office and was in fact on a diplomatic foray, and one where thousands poured to the streets, burning tyres, ejecting passengers from matatus, chanting anti-government slogans and engaging police officers in day-long running battles.

If Kisii was the poster child of a region engulfed in total chaos and pandemonium, the small settlement of Mlolongo on the outskirts of the city was the epicentre of riots that disrupted transport, vandalised the Nairobi Expressway, and generally caused mayhem. So bad was the violence in Mlolongo that the ‘Nation’ team there reported the deployment of what appeared to be Recce Squad officers, the special, highly trained police unit from Ruiru that has in recent days only been deployed on VIP protection assignments and anti-terror operations.

Video footage from the scene showed the burnt shells of a pick-up truck and what appeared to be a small truck upturned in the middle of the road. In the far distance, the dividing wall of the expressway had been vandalised, the iron fence looted and the thousands of flowers lining it crashed onto the scorched tarmac.

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Chaos. Anarchy. Disarray. Unruliness. Mutiny. Rebellion. Six words that define the scenes witnessed across the country on Wednesday as thousands protested against the high cost of living and the Finance Act 2023. […]

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Tear gas, arrests at Kenya protest over tax hike plans

Kenyan police fired tear gas on opposition leader Raila Odinga’s convoy on Friday as people joined anti-government protests in several cities over a harsh cost-of-living crisis and a raft of controversial tax hikes.

“Tear gas was fired on Odinga’s motorcade after he addressed a mass rally in the capital Nairobi,” AFP correspondents said, and police took similar action to break up protests in the Indian Ocean port city of Mombasa as well as Kisumu, an opposition stronghold in the Lake Basin region.

Police were out in force for the protests, the latest called by Odinga this year over the policies made by President William Ruto’s government.

At a rally conducted on Friday, Odinga — who lost the close-fought August 2022 election to Ruto — announced plans to collect 10 million signatures in a bid to remove his arch-rival from office.

“Kenyans elected leaders to parliament and they have betrayed them,” he said to cheers.

“Ruto himself who took over power illegally has betrayed Kenyans,” he added.

Odinga’s Azimio La Umoja alliance had called for the protests over the impact of the new taxes on Kenyans already suffering economic hardship and soaring prices for basic necessities.

Last week, Ruto signed into law a finance bill which is expected to generate more than $2.1 billion (Ksh295.89 billion) for the government’s depleted coffers and help repair the heavily indebted economy. 

The Finance Act 2023 provides for new taxes or increases on a range of basic goods such as fuel and food and mobile money transfers, as well as a controversial levy on all taxpaying Kenyans to fund a housing scheme.

Court challenge

Critics accuse Ruto of rowing back on promises made during his election campaign, when he declared himself the champion of impoverished Kenyans and pledged to improve their economic fortunes.

However, he has defended the taxes, saying they will help create jobs and reduce public borrowing.

The high court in Nairobi last Friday suspended implementation of the legislation after a senator filed a case challenging its constitutional legality. 

Despite the ruling, Kenya’s energy regulator Energy and Petroleum Regulatory Authority (Epra) later that day announced a hike in pump prices to take account of the doubling of VAT to 16 percent as stipulated in the law.

In Nairobi’s central business district, where main government buildings are located, police were patrolling on foot, in vehicles and on horseback, while several roads in the capital were closed.

“I hope this demo will make a difference,” Alex Dwisa, a 24-year-old manual worker, told AFP.

“The cost of living is too high, I don’t have Ksh10,000 ($70) to send my two kids to school.”

In Odinga’s bastion of Kisumu, a man in a vehicle mounted with a loudspeaker was mobilising residents to turn out.

“We must listen to Baba (as Raila is locally known). He said we have to demonstrate today. Come out and join us to liberate our country,” he said.

The protests have been dubbed “Saba Saba” (Seven Seven) as they are taking place on the seventh day of the seventh month, symbolising the day in 1990 that the opposition rose up to demand the return of multiparty democracy.

Kenyan police fired tear gas on opposition leader Raila Odinga’s convoy on Friday as people joined anti-government protests in several cities over a harsh cost-of-living crisis and a raft of […]

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Kenya households, investors at crossroads over Treasury, CBK policy

Investors and households in Kenya are caught up in a divergence of policies between the National Treasury and the central bank as the new administration grapple with a wave of inflationary pressures, high debt servicing costs and a slowdown in economic growth.

But economists warn that the tightening of both fiscal and monetary policies concurrently by the National Treasury and CBK is a recipe for economic downturn, casting doubt on the government’s efforts to tame inflation, support local businesses and attract foreign direct investment.

Yvonne Mhango, Group Chief Economist and Director of Research at Equity Group Holdings, said that a tighter policy environment both on the fiscal and the monetary policy side implies downside risk to GDP growth.

“The Finance Bill proposes measures that reflect fiscal restraint, which will slow growth going forward. For businesses, it implies a slowdown in retained earnings available for re-investment, which undermines growth prospects,” she said.

The government, apparently dancing to the tune of the Bretton Woods institutions in economic management in efforts to seek debt relief and cheaper credit, is bracing to implement the controversial Finance Act 2023, which spells punitive taxation measures, including doubling of value added tax on fuel to 16 percent and a mandatory housing levy on salaried workers.

The proposed fiscal measures are aimed at boosting revenue collections and reducing budget deficit estimated at Ksh718 billion ($5.12 billion) in the 2023/24 financial year but lay the foundation for increased inflationary pressures triggered by high cost of production and transport.

This week, the Central Bank in a surprise move raised its benchmark rate by 100 basis points to 10.5 percent, arguing the policy shift is to anchor inflation expectations as a result of the tightened fiscal policies.

This was the first key policy action under the newly appointed governor Kamau Thugge, who assumed the office on June 19, replacing Patrick Njoroge after eight years in the role.

IMF Working Paper

This ushers in a high interest rate regime, where households and businesses will find it difficult to access bank loans for expansion and new investments.

According to Reginald Kadzutu, chief executive at the asset management firm Amana Capital Ltd, inflation caused by rising prices of goods and services cannot be controlled by increasing interest rates.

“Taxes affect both owners of capital and labour, but the rate hike will benefit only the owners, creating an even more unequal society,” he said.

The high interest rate will also increase the cost of government borrowing in the domestic market through treasury bills and bonds, making the cost of servicing government debt expensive.

“In terms of the implications of the policy trajectory we are seeing in the economy, it implies that the tightening on the fiscal side, added to the tightening on the monetary policy, we will see some softening of growth going forward,” Ms Mhango said.

According to her, a higher tax burden means that households have less disposable income and hence a slowdown in spending and consumption in the economy, which has implications on GDP growth.

Kenya is under immense pressure from the International Monetary Fund (IMF) to raise taxes and remove subsidies, particularly on fuel, to deal with persistent budget deficit and to maintain a tight monetary policy regime.

Yet, the IMF Working Paper dated 1998 on ‘Coordination of Monetary and Fiscal Policies’ said a balanced monetary and fiscal policy mix is conducive to maintain an economy on its equilibrium path by controlling inflation and promoting financial conditions for sustainable growth.

In effect, setting a restrictive monetary policy to offset a lax fiscal policy may crowd out private investment and significantly increase the borrowing costs for the government.

“The establishment and development of domestic capital markets require an even greater degree of monetary and fiscal policy coordination,” said the IMF.

In 2016, a dispute erupted between the National Treasury and the Central Bank over who was to blame for the rising cost of living after inflation spilled out of the government upper limit of 7.5 per cent. While the Treasury argued that CBK should be vigilant over all aspects of inflation that caused the cost of living to rise by 8.01 per cent in December 2015, the regulator said it could only police risks arising from excess money supply in the market.

The overall inflation for May 2023 rose to eight percent from 7.9 percent in April as a result of high food and energy prices.

Ken Gichinga, chief economist at Mentoria Consulting, says lack of coordination between monetary and fiscal policies and the resultant double tightening on both ends will see a slowdown in business performance.

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Investors and households in Kenya are caught up in a divergence of policies between the National Treasury and the central bank as the new administration grapple with a wave of […]

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Kenyans brace for tough July as President Ruto signs tax bill into law

Kenyan President William Ruto on Monday signed into law a Bill that raises taxes on a wide range of items, the presidency said, defying criticism that it will pile more economic hardship on citizens.

The new tax package was approved by parliament last week and will double tax on fuel to 16 percent and introduce a new housing levy, a move expected to have a ripple effect in a country hamstrung by high inflation.

“President Ruto has assented to the Finance Bill. Signed at State House,” the presidency said in a message to journalists, accompanied by pictures of him signing the document. Dr Ruto, who took office in September after a bitterly fought election, is seeking to fill the government’s depleted coffers and repair a heavily-indebted economy inherited from his predecessor Uhuru Kenyatta, who splurged on major infrastructure projects.

Kenya is now sitting on a public debt mountain of almost $70 billion or about 67 percent of gross domestic product (GDP), and repayment costs have jumped as the shilling sinks to record lows of around 140 to the dollar.

The new law — expected to generate more than $2.1 billion — will hike taxes on basic goods and services including food and mobile money transfers. People who earn Ksh500,000 ($3,600) a month will now pay 32.5 percent in income taxes while those making Ksh800,000 ($5,700) will pay 35 percent, up from the current 30 percent. Sales tax for small businesses has also been tripled to three percent.

One of the most contentious provisions is a 1.5 percent levy on the salaries of all tax-paying Kenyans that will be matched by employers to fund an affordable housing programme.

A new five percent withholding tax for digital content creators has also been introduced.

‘Mistake and an experiment’ 

The opposition led by Ruto’s rival Raila Odinga has threatened fresh demonstrations over the tax package, saying it will strain already squeezed incomes. “Our position remains that the Bill is a mistake and an experiment Kenyans can ill afford,” Odinga’s spokesman Dennis Onyango told AFP on Monday.

“We had hoped that Ruto could call for its review before signing it,” he said, adding that Odinga’s Azimio alliance will announce its next step at a rally on Tuesday.

Earlier this year, the opposition staged several anti-government protests over the cost of living crisis which degenerated sometimes into deadly street clashes between police and demonstrators.

At least a dozen protesters were also arrested this month during a march against the tax proposals.

Critics accuse Ruto of rowing back on promises made during the August 2022 election campaign, when he declared himself the champion of poor Kenyans and pledged to improve their economic fortunes.

But the 56-year-old rags-to-riches businessman has defended the taxes, saying the housing fund will construct homes for the poor and create employment. Kenyans are already feeling the pinch from soaring prices for basic necessities, along with a sharp drop in the value of the local currency.

Economic growth slowed last year to 4.8 percent from 7.6 percent in 2021, reflecting the global fallout from Russia’s invasion of Ukraine and the worst drought in four decades buffeting the vital agriculture sector.

The Law Society of Kenya has vowed to challenge the finance law in court this week.

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Kenyan President William Ruto on Monday signed into law a Bill that raises taxes on a wide range of items, the presidency said, defying criticism that it will pile more […]

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Hard times lie ahead for EA citizens as states raise budgets to spur growth

East African governments this week presented their most expensive budgets yet, seeking to reinvigorate their economies, finance expanded government operations and repay ballooning debts.

Economists are warning the region’s citizens to brace for harder times as the fiscal measures proposed in the 2023/24 budgets are wont to further raise the cost of living, cause investor flight in some countries, and result in job losses.

Kenya, the region’s biggest economy, has proposed a $26.3 billion spending plan, while Tanzania has a $19.2 billion budget. The Democratic Repulic of Congo is planning to spend $16 billion, Uganda $13.9 billion, Rwanda $4.7 billion, Burundi $1.5 billion and South Sudan $1.4 billion.

The region’s taxpayers are facing more levies, with Kenya introducing measures to raid payslips of the working class to finance election promises President William Ruto made to his “hustlers,” to shore up forex reserves and spur growth.

In Uganda, the Museveni administration is seeking to borrow to finance some 18 big-ticket infrastructure projects while promising more on household incomes through the Ush1 trillion ($271.9 million) Parish Development Model, a programme the government launched in February 2022 to bring 39 percent of poor Ugandan households into the money economy.

Tanzania’s Samia Suluhu ’s regime has sought more cash to finance an economy shaking out of slumber, with Finance Minister Mwigulu Ncheba proposing to boost domestic revenue collection through a raft of measures while reducing domestic and external borrowing.

Reduced incomes

In Burundi, Finance Minister Audace Niyonzima presented a $1.4 billion budget against a struggling economy where spending will rise 65 percent and the budget deficit is expected to rise to BF728.9 billion ($258.3 million), from BF197.4 billion ($69.9 million) in the ending financial year.

South Sudan and DRC are yet to read their budgets but the estimates have already been made public.

In Kenya, Prof Njuguna Ndung’u, the Treasury Cabinet Secretary, on Thursday presented a Ksh3.68 trillion ($26.3 billion) budget whose implementation will involve raiding the wallets of salaried workers, increasing fuel costs and heavy borrowing.

Salaried employees will part with more to finance the National Health Insurance Fund (2.7 percent) and pay a 1.5 percent of gross salary to support the affordable housing programme in addition to a 35 percent income tax.

Prof Ndung’u proposed an amendment to the Income Tax Act to adjust Pay as Your Earn by introducing two additional tax bands: 32.5 percent for individuals earning monthly incomes between Ksh500,000-Ksh800,000 (($3,570- $5,712), and 35 percent for those earning more than Ksh800,000.

He said the two new bands will affect 26,676 employees, who constitute 0.8 percent of the employed workers.

“It remains to be seen how much additional tax revenue will be generated from the two new tax bands and whether the government will achieve its objective in making the tax system more progressive,” said Dr Benson Okundi, a partner at audit firm PwC.

Prof Ndung’u proposed to allocate Ksh35.3 billion ($252.3 million) to Dr Ruto’s pet project, the housing programme, to reduce mushrooming of slums and create more jobs for the youth.

He proposed to amend the Employment Act, 2007 to introduce a housing levy payable by employers and employees at 1.5 percent of an employee’s gross monthly.

Yet the minister hinted at a possible retrenchment of lower-cadre staff in state corporations. He said the State Corporations Advisory Committee will start “rationalising staff establishment to keep them lean.”

Kenya proposes an increase in VAT of petroleum products from eight percent to 16 percent; zero rating of liquified petroleum gas from VAT and increase of turnover tax from one percent to three percent, with the upper threshold lowered to 25 percent.

The doubling of VAT on fuel will see the cost-of-living skyrocket as fuel has a ripple effect on transport, infrastructure, energy, agriculture and food and housing.

PwC, in its budget review, observed that an increase on VAT on fuel will impact inflation.

“The inflation rate in Kenya rose to eight percent in May 2023, from a ten-month low of 7.9 percent in the prior month. Increase in VAT of petroleum products is likely to have far-reaching consequences,” PwC said.

Prof Ndung’u indicated that the National Assembly will formulate a county revenue bill to provide governance around revenue generation for counties.

The government is seeking to raise Ksh2.57 trillion ($18.4 billion) – the highest amount in its history – from ordinary revenue, amid opposition by lobbies and the opposition in parliament.

Investor concerns

Foreign businesses, through lobbies, have expressed their concerns. In a letter to the National Assembly, Maxwell Okello, CEO of the American Chamber of Commerce, asked legislators to remove several proposals deemed detrimental to business.

Foreign businesses have also taken issue with the digital content monetisation tax – which has now been reduced to five percent from the proposed 15 percent – saying it will put undue burden on digital service firms, which are mostly foreign multinationals.

“The additional administrative requirements and possible additional tax costs may discourage the use of content creators for advertisement and other digital campaigns and kill this budding industry in Kenya,” Okello said.

The proposal to raise income tax for those earning above Ksh500,000 ($3,575) may also discourage foreign investors and expatriates from working in Kenya due to the high taxes.

“We will lose business to other countries that position themselves as global business and lifestyle destinations. The founders of businesses and expatriates have the option of setting up in other markets such as Rwanda, Tanzania and South Africa, and those currently in Kenya may relocate to these destinations,” he said.

A top executive in a regional petroleum company who asked not to be named told The EastAfrican the rise in VAT on petroleum products will depress demand, impacting the entire economy.

“In the end it’s a zero-sum game,” he said.

“If demand reduces, the private sector will have to take measures to reduce their overhead costs, including by reducing their workforce. On the other hand, if revenue is not met, government will take austerity measures, and if the state doesn’t spend as it should, it will depress the entire economy.”

However, Prof Ndung’u said the move is meant to enable oil companies “recover the VAT credits that they have been carrying forward over the years.”

On the flip side, foreign businesses in Kenya will now pay a lower corporate income tax of 30 percent – like local firms – down from 37.5 percent, to eliminate ‘discrimination’ of non-resident businesses.

Uganda austerity measures

Uganda’s Ush52.7 trillion ($13.9 billion) is dedicated to poor Ugandans but does not address the high cost of living. Instead, Uganda will borrow more to finance infrastructure.

Finance Minister Matia Kasaija proposed austerity measures, including a freeze on new administrative units, domestic borrowing and rationalisation of agencies to save the government Ush1 trillion ($271.9million) annually.

The decision to look for more credit to fund 18 new infrastructure projects is raising fears of disrupting the country’s debt management, amid risks of aggressive behaviour by local lenders and the consequences of shor-term loans.

The 18 projects are valued at $3.344 billion and are scattered across transport, energy, agricultural, education and ICT sectors.

Uganda borrowed $1.26 billion in the 2021/22 financial year to finance nine projects in those sectors, according to the latest government report.

Some of the new projects are industrial parks, which require a $173.8 million loan, expected from the China Exim Bank; and an Industrial Transformation and Employment Project that bears a $150 million loan from the World Bank.

The Greater Kampala Metropolitan Area Project requires a $518 million loan expected from the World Bank, while the Climate Smart Agriculture Project also bears a $325 million World Bank loan request. In addition, upgrade of Kitgum-Kidepo road carries a loan financing burden of $117.7 million expected from Standard Chartered Bank.

Uganda’s overall public debt portfolio increased from Ush73.5 trillion ($19.6 billion) in June 2022 to Ush86 trillion ($22.8 billion) by end of March 2023, government data shows.

Its annual debt servicing bill is projected to expand from $500 million in 2022/23 to around $1 billion by close of 2024/25, with a debt servicing costs to revenue ratio increase from 25 percent in 2022/23 to 30 percent in 2024/25, according to Bank of Uganda (BoU) data. The debt servicing costs to GDP ratio is forecast to rise from 17 percent to 22 percent in the period.

“We are still examining the viability of all the selected projects together with different lenders but we are confident that all of them will receive funding in the next financial year,” said Patrick Ocailap, deputy secretary to the Treasury at Uganda’s Finance Ministry.

“We also expect debt servicing to GDP ratio to remain at less than 50 percent after absorption of the new projects in government’s infrastructure portfolio in line with strong economic growth patterns.”

Uganda’s top borrowing priority lies with concessional loans for certain projects in the education and health sectors, while commercial loans will be used for a few high-yielding projects, the Ministry of Finance said.

Massive government borrowing is blamed for aggressive investor behaviour in local debt markets and lukewarm short-term credit ratings.

“The government’s latest move appears very risky in the financial markets. Dollar borrowing is very costly today,” argued Allan Lwetabe, director for investment operations at the Deposit Protection Fund of Uganda.

A commercial dollar-denominated loan would cost eight percent per annum over a five-year period. It cost two percent per annum three years ago.

“Borrowing so much in US dollars would also require matching loan repayments with dollar supply flows anchored on export earnings from coffee, gold, tea and fish among others,” Lwetabe told The EastAfrican.

Uganda will need to manage the two issues, as it may require more dollars than the local market has.

Dar plans

Tanzania’s Tsh44.39 trillion ($19.13 billion) budget tabled by Finance Minister Mwigulu Nchemba is meant to boost domestic revenue collection through a raft of measures while reducing domestic and external borrowing.

Projected domestic revenue has been pegged at Tsh31.38 trillion ($13.52 billion), an increase of 12 percent from the 2022/2023 target of Tsh28.02 trillion ($12.07 billion). It will make up 70.7 percent of the total budget and includes Tsh26.73 trillion ($11.52 billion) from tax collection as new levies, which appeared to target middle-income earners , take effect.

Just Tsh7.57 trillion ($3.26 billion) is expected from external sources, including grants and concessional loans (Tsh5.47 trillion, $2.36 billion) and non-concessional loans (Tsh2.1 trillion, $905.17 million), according to Nchemba.

Concessional borrowing will provide Tsh2.22 trillion ($956.9 million) for key projects compared with Tsh1.65 trillion ($711.2 million) in 2022/2023, while external commercial loans will drop by 30.8 percent from Tsh3 trillion ($1.29 billion) to Tsh2.1 trillion ($905.17 million).

The government expects to borrow Tsh5.44 trillion ($2.34 billion) from the domestic market. Maturing government paper is projected to yield Tsh3.54 trillion ($1.52 billion) while the remaining Tsh1.9 trillion ($818.56 million) will be canvassed from locals to help finance development projects.

Tanzania’s private sector is set to be fully incorporated into this fund-raising drive under a new public-private partnership law passed by parliament on June 13.

Some Tsh6.3 trillion ($2.71 billion) will be spent on servicing national debt which, by April 2023, stood at Tsh79.1 trillion ($34.09 billion), up 13.9 percent from Tsh69.44 trillion ($29.93 billion) in April 2022.

External debt stood at Tsh51.16 trillion ($22.05 billion) against a domestic debt of Tsh27.94 trillion ($12.04 billion), with concessional loans standing at Tsh37.69 trillion ($16.24 billion).

At least Tsh4.13 trillion ($1.78 billion) will go to external debt repayments including principal payments and interest. Nchemba said the concessional loans component in the new budget has been increased by 22.8 percent and non-concessional loans cut down by 14.4 percent.

The government’s spending plan also includes Tsh1.14 trillion ($491.37 million) to cover government subsidies in education (free primary/secondary school education and higher education student loans), Tsh1.5 trillion ($646.55 million) to complete the Julius Nyerere Hydro Power Project and Tsh1.11 trillion ($478.45 million) to the standard gauge railway project.

Other priority areas will include Air Tanzania revival, developing a special economic zone at the coastal town of Bagamoyo, and developing a Rare Skills programme aimed at increasing youth’s capacity for self- employment.

In Rwanda, Finance Minister Uzziel Ndagijimana proposed increased spending by six percent to Rwf5.03 trillion ($4.4 billion), from Rwf4.7 trillion ($4.1 billion) in 2022/23.

The government plans to finance 63 percent of its budget with domestic revenues while external loans would constitute 24 percent and external grants 13 percent.

“The budget reflects the government’s economic resilience efforts in the face of global shocks.

The government will continue to prioritise fiscal consolidation, ease inflation and invest in agriculture, scale up social protection coverage; improve the quality of education, create employment opportunities and support micro, small, medium and large enterprises affected by Covid-19 through the enhanced Economic Recovery Fund and Manufacture and Build to Recover Programme,” Dr Ndagijimana said.

Rwanda announced a 10 percent increase in customs duty on imported construction materials, including metal tubes, doors, windows, and their frames. Wheelbarrows, plastic bags, and cloth bags will also face a 35 percent import duty.

Import duty for second-hand clothes will remain at $2.5 per kilogramme, while second-hand shoes will be taxed at $5 per kilo. Under the EAC Customs act, import duty on second-hand clothes and shoes is $0.4 per kilogramme.

The government will allocate Rwf2.8 trillion ($24.7 billion — 55.9 per cent of the budget) to the Economic Transformation Pillar.

These resources will scale up agricultural productivity, create jobs, support private sector development and strengthen climate change adaptation and mitigation measures.

It will also increase access to electricity and clean water, support urbanisation and settlement, improve the national road network, scale up the adoption of ICT, and implement agriculture de-risking and financing facilities.

Under the Social Transformation Pillar, the government will allocate Rwf1.5 trillion ($1.3 billion — 30.4 per cent of the budget).

“Is government borrowing to invest or consume? And what is the actual return on investments on those projects?” pondered Paul Corti Lakuma, a senior research fellow at the Economic Policy Research Centre based at Makerere University.

On stays of application of import duty rates per the East African Communty Common External Tariff. Prof Ndung’u said it will apply for one year on rice (35 percent), imported iron and steel products (35 percent), vegetable products (35 percent), baby diapers (35 percent), leather and footwear products (35 percent), paper and paper products (35 percent).

It will also apply to timber (plywood and particleboard $120/MT – $200/MT), furniture (45 percent), plastic and rubber (35 percent), smartphones (25 percent), and billets (10 percent).

“Interestingly, one of the reasons for the introduction of a four-band EAC CET (version 2022) was to minimise the request for stays by partner states, but it seems this trend persists,” PwC observed.

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East African governments this week presented their most expensive budgets yet, seeking to reinvigorate their economies, finance expanded government operations and repay ballooning debts. Economists are warning the region’s citizens […]

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Salaried Kenyans, youth hit hard in Ruto’s tax plan

Salaried Kenyans, mainly youth digital content creators and the middle class at large will have it harder under President William Ruto’s taxation plan following a raft of proposals that will hit their earnings.

In the Finance Bill, 2023, which carries tax proposals for the 2023/24 financial year, the National Treasury plans several actions that will leave Kenya’s middle class, who the government has always gone after in seeking more revenues, with more deductions.

The Bill proposes a 3 per cent deduction from workers’ basic salaries towards the National Housing Development Fund, to which the employer will make an equal contribution.

“An employer shall pay to the National Housing Development Fund in respect of each employee, the employer’s contribution at 3 per cent of the employee’s monthly basic salary and the employees contribute,” the Bill states.

Both the employer and the employee’s contributions are, however, capped at Sh5,000 per month.

Kenyans earning at least Sh500,000 monthly also face deeper tax chops as the Bill proposes to raise their income tax from 30 per cent to 35 per cent This will see a worker earning Sh500,000, pay over Sh200,000 in tax. The proposal comes at a time when President Ruto has been hard on the wealthy, even hinting at introducing a wealth tax.

Read: Content creators feel the pinch of YouTube charges

But the pain will not befall only the salaried as Treasury also proposes to raid Kenya’s digital content creators, an industry that has attracted the youth, offering an alternative to a population category hard hit by unemployment.

The Bill proposes a 15 per cent tax on payments relating to digital content monetisation, as a withholding tax. The tax will have huge implications on thousands of youth who currently earn a living from the digital space and comes when the government has been aggressively driving investment in internet connectivity and technology to attract the jobless.

“In respect of payments relating to digital content monetisation, 15 per cent (withholding tax),” the Bill proposes in relation to the sector.

Treasury has also proposed to raise turnover tax for businesses with revenues from as low as Sh500,000, from 1 per cent to 3 per cent, a move that will hit more businesses classified under small and medium-sized enterprises (SMEs), which may not be stable.

National Treasury and Economic Planning Cabinet Secretary Njuguna Ndung’u. Treasury has proposed to raise turnover tax for businesses with revenues from as low as Sh500,000, from 1 per cent to 3 per cent, a move that will hit more businesses classified under small and medium-sized enterprises (SMEs), which may not be stable. | Dennis Onsongo | Nation Media Group

“Section 12C of the Income Tax Act is amended in subsection (1), by deleting the words “Sh1 million but does not exceed or is not expected to exceed Sh50 million” and substituting therefore “Sh500,000 but does not exceed or is not expected to exceed Sh15 million,” the Bill proposes, on businesses to be slapped with the 3 per cent turnover tax.

Tax on every business

The tax is charged on every business, notwithstanding whether it has made a profit or a loss.

Read: Digital tax will hurt firms

Consumers of various products will also pay more if the Bill’s proposals are adopted and enacted into law. Among new products proposed to attract Excise Duty in the new financial year include imported fish (Sh100,000 per metric tonne or 20 per cent of the value) and powdered juice (Sh25 per kilo).

Those who consume beauty products such as wigs, false beards, eyebrows and eyelashes, and artificial nails will be hit with a 5 per cent excise tax, as the government goes harder on the industry that has over the past decade grown significantly.

Cement importers will pay a 10 per cent excise tax per kg of the product, or Sh1.50 per kg, whichever is higher.

Other areas Treasury has proposed to slap taxes on include digital assets, targeting owners of platforms that facilitate the exchange or transfer of digital assets. The assets include cryptocurrencies, token codes and numbers held in digital form and generated through cryptographic means.

“The owner of a platform or the person who facilitates the exchange or transfer of a digital asset shall deduct the digital asset tax and remit it to the Commissioner. A person who is required to deduct the digital asset tax shall, within twenty-four hours after making the deduction, remit the amount so deducted to the Commissioner together with a return of the amount of the payment, the amount of tax deducted, and such other information as the Commissioner may require,” the Bill states.

It also adds that any person who receives rental income on behalf of the owner of the premises shall deduct tax and within 24 hours remit the amount to the taxman. This cuts the period the rental income tax is paid from the 20th day of the month, as has been the case.

Read: Tech giants face tripled digital tax in fresh plan

Companies with tax disputes with Kenya Revenue Authority and who wish to pursue the dispute at the tax tribunal will be required to deposit an equivalent of 20 per cent of the disputed taxes with the tribunal, a move that could affect many companies’ cash flows and deter many from pursuing such disputes legally.

The Bill also proposes some reliefs, mainly to consumers and businesses, who have been slapped with annual inflation adjustment that has often raised the cost of consumer goods.

Employees of startups who receive shares from the companies they work for will also not be taxed on the value of the shares immediately, as the Bill proposes to defer the payment.

State targets per diems, allowances

Employees face tighter times as the State plans to tax any travel allowances exceeding the standard rates approved by the Automobile Association of Kenya (AA).

The Finance Bill 2023 proposes that the AA rates will be assumed to be the amount used, ending a common line of wastage of public funds through excessive claims.

“Notwithstanding the provisions of the sub-paragraph(ii), where an amount is received by an employee as payment of travelling allowance to perform official duties, the standard mileage rate approved by the Automobile Association of Kenya shall be deemed to be reimbursement of the amount so expended and shall be excluded in the calculation of the employee’s gains and profit,” the Finance Bill states.

The Finance Bill also targets club membership allowances.

“By inserting the following new paragraph immediately after paragraph(f) (fa) club entrance and subscription fees disallowed against employer’s income,” it says.

“Any amount paid or granted to a public officer to reimburse an expenditure incurred for the purpose of performing official duties, notwithstanding the ownership or control of any assets purchased,” it adds.

This comes amid proposals by the Salaries and Remuneration Commission (SRC) to eliminate four allowances for civil servants, translating to billions of shillings.

The commission has recommended the abolishment of perks including retreat allowance, sitting allowance for institutional internal committee members and task force allowance.

Presently, there are over 247 remunerative and facilitative allowances payable within the public service, up from 31 in 1999, straining the national bill through double payments. Besides trimming allowances, the SRC targets to cap allowances at a maximum of 40 per cent of a public worker’s gross pay.

Retreat allowance is currently paid to public officers participating in special assignments meant to review, develop and produce policy documents away from their work station.

The SRC also targets to scrap sitting allowance for members of internal committees which are constituted to assist the execution of the mandate of institutions.

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Salaried Kenyans, mainly youth digital content creators and the middle class at large will have it harder under President William Ruto’s taxation plan following a raft of proposals that will […]

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Kenyan opposition stages new anti-government demonstrations

Kenyan anti-riot police were out on the streets on Tuesday as the opposition defied a police ban and staged new demonstrations over the cost of living crisis and last year’s election results.

Previous protests called by veteran opposition leader Raila Odinga have turned violent, with at least three people killed as police fired tear gas and gangs went on the rampage, attacking people and property.

The capital Nairobi was largely peaceful on Tuesday, although a bus was torched on one of the city’s main roads, while youths blocked roads in several slum areas, witnesses said.

Protesters also set fires and used rocks to block roads in and out of Odinga’s lakeside stronghold of Kisumu in western Kenya, they said.

Nairobi Regional Police Commander Adamson Bungei had announced Sunday that Odinga’s Azimio la Umoja coalition had been denied permission to hold the demonstrations, saying the previous protests in March were “marred with violence”.

But the coalition insisted the action would go ahead. 

Protected by constitution

“Police cannot decide in advance that there shall be violence and then proceed to ban political activities that are protected by the constitution. That is the making of dictatorship,” it said in a statement Monday.

Odinga’s side had in April announced a halt to the demonstrations to allow bipartisan talks to take place, but the process appears to have stalled.

Azimio said it would deliver a petition to President William Ruto’s office on Tuesday over the “unacceptably high” cost of food, fuel and electricity.

It also planned to submit a petition to the Independent Electoral and Boundaries Commission showing that the results of the August election were “doctored”.

Odinga narrowly lost to Ruto — his fifth presidential election defeat — and continues to insist that the poll was fraudulent and that victory was “stolen”.

Campaign promises

Ruto, who critics say has broken several campaign promises since taking office in September, has branded the opposition action as “nonsense”.

“No property will be destroyed again. The government will stand firm to ensure and protect the life, property and business of every Kenyan,” he said at the weekend.

His government has voiced concerns about the impact of the demonstrations on the economy, which is slowly recovering after the Covid-19 pandemic, but is facing high inflation and a huge debt mountain as well as a plunging currency.

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Kenyan anti-riot police were out on the streets on Tuesday as the opposition defied a police ban and staged new demonstrations over the cost of living crisis and last year’s […]

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Kenya’s mass protests have a rich history, but have been hijacked by elites

Kenyan opposition leader Raila Odinga and his coalition party, Azimio la Umoja One Kenya, recently called for mass protests across the country. Odinga and his team have questioned the legitimacy of President William Ruto’s win in the country’s August 2022 election, and taken issue with the rising cost of living. The Conversation Africa’s Kagure Gacheche spoke with Westen K Shilaho, a senior researcher on African politics, who explores the evolution of political protests in Kenya.

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What does the law say about political protest?

The right to protest is enshrined in the constitution of Kenya under Article 37. It states that:

Every person has the right, peaceably and unarmed, to assemble, to demonstrate, to picket, and to present petitions to public authorities.

The right to protest is also affirmed by international instruments to which Kenya is a signatory. These include the African Charter on Human and People’s Rights and the International Covenant on Civil and Political Rights.

However, successive Kenyan governments have repeatedly criminalised the right to protest. As a result, the police consistently react with brute force against protesters.

Protestors stand amid tear gas on March 30, 2023 as they engaged police in running battles in Nairobi’s Mathare Area 10 during anti-government demonstrations called by the opposition. PHOTO | SILA KIPLAGAT | NMG

What led to the latest wave of protests in Kenya?

Kenya held general elections on 9 August 2022, and William Ruto was declared president. The opposition contested the election results and filed a petition before the Supreme Court, which unanimously dismissed the petition for lack of evidence.

ReadNo handshake with Raila, Ruto says

Raila Odinga, the losing presidential contestant, rejected this ruling and has refused to recognise Ruto’s win. He has taken the dispute to the court of public opinion – the streets. He has made three main demands:

  • that the electoral agency’s servers be opened to prove that he won the 2022 election
  • that Ruto halts reconstitution of Kenya’s electoral body
  • that the government lowers the cost of living.

Protests began on August 15, 2022 when the presidential election results were declared. Hoodlums assaulted the electoral agency’s chairperson and other officials. They are yet to be held to account for these attacks.

After a six-month lull, these protests recently spilled over into the streets. The opposition called for demonstrations twice a week from 20 March until the government accedes to its demands.

ReadKenya protests: Police attack journalists

Ruto and his supporters have been scornful of the opposition’s demands, saying they have no basis in law, morality or logic. Ruto dismissed the protests as acts of economic terrorism.

An anti-riot police officer speaks to residents of Mathare in Nairobi on March 30, 2023 during anti-government protests. PHOTO | FRANCIS NDERITU | NMG

Ruto’s olive branch

After two weeks of violence – where at least three people died, several others injured and property vandalised – Ruto extended an olive branch to the opposition and asked them to call off the protests. He suggested that the issue of the reconstitution of the electoral body could be revisited.

In response, the opposition suspended the protests.

ReadRaila and Malema: Two of a kind in Africa

Ruto has previously said he would not be blackmailed into a power-sharing arrangement with the opposition. If not checked, power-sharing arrangements – or “handshake” in Kenya’s political parlance – could become the country’s default arrangement after elections. This would be to the detriment of democratic tenets.

What is the history of political protests in Kenya?

Kenya’s political history is marked by mass protests that date back to the colonial period and continued into independence.

Amid police crackdowns, Kenyans protested against political assassinations and autocracy during the tenures of the country’s first president, Jomo Kenyatta, and his successor, Daniel Moi.

Through a constitutional amendment, Moi turned Kenya into a one-party state in 1982, which heightened political tensions. Later that year, Kenyans protested in Nairobi in support of an attempted coup against Moi as opposition politicians and civil society sought a return to political pluralism.

Residents of Mathare in Nairobi confront anti-riot police officers on March 30, 2023 pleading for peace and an end to running battles during the Azimio anti-government protests. PHOTO | FRANCIS NDERITU | NMG

Multiparty politics

Countrywide protests were held in 1990. This agitation, coupled with pressure from civil society, religious groups and western donors, forced Moi to accede to multiparty politics in 1991.

In 1992, mothers of political prisoners held an 11-month hunger strike in Nairobi to demand the release of their sons.

Protests against presidential results in 2007 led to a horrific crackdown. More than 1,100 people were killed, several of them extrajudicially by the police. Odinga had disputed Mwai Kibaki’s win. Protests and summary executions also followed the 2013 and 2017 announcements of presidential election results.

ReadHow politicians planned Kenyatta farm attack

Protests are important. They can influence a government or a body of authority to respond to popular interests and injustice. Through protests, a government can be forced to address service delivery concerns, corruption, labour disputes, extrajudicial and summary executions and education matters, and to abandon dictatorial tendencies. In some countries, such as Tunisia, Egypt and Libya, protests collapsed regimes.

Kenya’s opposition leader Raila Odinga addressing his supporters in Nairobi’s Pipeline Estate on March 30, 2023 as he led mass demonstrations. PHOTO | DENNIS ONSONGO | NMG

Personality driven

As I discuss in my book, Political Power and Tribalism in Kenya, political protests in the country have become insular, sectarian, tribal, unashamedly personality driven and elitist.

My research found that the political elite have used protests for self-preservation and to pursue their interests.

ReadPoverty unites Raila, Malema in the streets

Protests have become about getting opposing political personalities to come to an agreement so that election losers don’t lose all the benefits of being in power – but such agreements stifle healthy debate.

Elections must produce winners and losers among the contestants. The citizenry should be the only constant winners. Their concerns must be met regardless of who ascends to power.

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Kenyan opposition leader Raila Odinga and his coalition party, Azimio la Umoja One Kenya, recently called for mass protests across the country. Odinga and his team have questioned the legitimacy […]

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Outrage as Kenyan police attack journalists during protests

A barrage of tear gas canisters and a deluge from an armoured water cannon directed at journalists in Kenyan opposition leader Raila Odinga’s convoy highlighted the brutality of security forces on the third day of anti-government protests.

Anti-riot officers battered the journalists as their vehicle was trapped between a barricade erected by police and Mr Odinga’s convoy — which wasn’t spared either — with the Kenyan opposition leader of the Azimio la Umoja One Kenya Coalition alleging his car was shot at seven times.

Faced with the vicious attacks, the journalists, who were perched on the carrier of the black Toyota Land Cruiser, scampered for safety and, in the process, four were seriously injured.

A woman helps police officers with water
A woman offers police officers water to rinse their faces during opposition protests in Nairobi’s Mathare estate on March 30 ,2023. PHOTO | SILA KIPLAGAT | NMG

Six journalists injured

In total, six journalists were injured during Thursday’s protests in different parts of the country, victims of brutality by police and violent protesters. It brought to 22 the total number of journalists injured since the start of the demonstrations on Monday, March 20.

ReadKenya protests: Envoys urge urgent solution

And even after the journalists and the driver of the vehicle had fled, a plainclothes policeman smashed the car’s windscreen, shoved a rifle through the cracks and fired inside several times.

In the aftermath, bloodied faces of victims of the attack, including local broadcaster NTV’s cameraman Eric Isinta told of the horror. Others injured at the scene in Nairobi were Mr Timon Abuna of Standard Media Group, Mr Mauritius Oduor of Royal Media Services and Mr George Oduor, an independent photojournalist. The journalists were rushed by colleagues to a nearby hospital for treatment.

Protesters run away from police officers as demonstrators block a highway in Nairobi on March 30, 2023 during a protest called by the opposition coalition Azimio la Umoja against the government and high food prices. PHOTO | YASUYOSHI CHIBA | AFP

Tear gas canisters

Mr Isinta said police lobbed three tear gas canisters directly at him with one getting into his clothes and another hitting his face.

“There were many tear gas canisters that were thrown as we were getting near the junction. I could not see where I was going. One tear gas canister hit me on the head and another one on my chest and into my clothes. I got it out before it could burn me but a third one hit my face and I was injured,” Mr Isinta said.

He sustained a serious injury on the right side of the face.

ReadHow politicians planned Kenyatta farm attack

In Kisumu, a Citizen TV cameraman was critically injured while fleeing from rowdy protesters. Mr Dismas Nabiswa, who was covering the riot from a footbridge on the Kisumu-Nairobi highway, was injured after he missed a step and fell, breaking some of his ribs. He was rescued by boda boda (motorcycle taxi) operators who rushed him to the Jaramogi Oginga Odinga Teaching and Referral Hospital where he was treated before being transferred to Avenue Hospital.

Kenya’s opposition leader Raila Odinga addressing his supporters at Nairobi’s Pipeline Estate on March 30, 2023. PHOTO | DENNIS ONSONGO | NMG

Hostile hooligans, police

His phone, camera and a live video transmission gadget were damaged during the melee. Azimio leaders condemned the attack on the press.

ReadAU calls for calm, restraint in Kenya

“It is very unfortunate that in the whole of these skirmishes, the media is being targeted for attack. The other day and today, several journalists have been injured,” Mr Odinga said shortly after the incident.

In a similar incident on Monday, journalists covering the protests were attacked by hooligans and the police in different areas. Reporters covering the protests said they faced hostility from both the protesters and the police.

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A barrage of tear gas canisters and a deluge from an armoured water cannon directed at journalists in Kenyan opposition leader Raila Odinga’s convoy highlighted the brutality of security forces […]

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South Sudan releases journalists held over viral Kiir video

South Sudanese President Salva Kiir. Two journalists detained over a video reportedly showing him urinating on himself have been freed. PHOTO | PETER LOUIS | AFP

Two South Sudanese journalists detained over a video reportedly showing President Salva Kiir urinating on himself have been freed, a media lobby group said Wednesday as it demanded the release of two other colleagues.

Two of the seven journalists arrested in January remain in police custody over the video that went viral on social media in December, the Union of Journalists of South Sudan (UJOSS) said.

The journalists — staff at the state-run South Sudan Broadcasting Corporation — were arrested by agents from the National Security Service as part of an investigation into the source of the clip.

In the footage, Kiir, dressed in his trademark black hat and a grey outfit at what is described as a road commissioning ceremony, is seen with a damp patch on his left trouser leg.

“We are still calling on the government to release the two (journalists) who are still behind bars,” UJOSS president Patrick Oyet told AFP.

Probe dragged

Oyet urged the government to present the duo in court if they have broken any law, adding that the probe had dragged on for months. 

“The law says you should carry out investigations and produce somebody in the court within 24 hours.”

“If there is no case they should be released,” he said.

In January, the New York-based Committee to Protect Journalists called for the unconditional release of the journalists and for state authorities to “ensure that they can work without further intimidation or threat of arrest.” 

Arbitrary detention

The arrests match “a pattern of security personnel resorting to arbitrary detention whenever officials deem coverage unfavourable”, said CPJ’s sub-Saharan Africa representative, Muthoki Mumo.

Kiir, 71, oversaw the birth of South Sudan as an independent nation after it broke free from Sudan in July 2011.

But the world’s youngest country has lurched from crisis to crisis since then, enduring brutal conflict, political turmoil, natural disasters and hunger.

South Sudan ranks 128th out of 180 countries on the Reporters Without Borders (RSF) press freedom index.

According to the media watchdog, freedom of the press is “extremely precarious” in the landlocked nation, “where journalists work under constant threat and intimidation, and where censorship is ever-present.”

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South Sudanese President Salva Kiir. Two journalists detained over a video reportedly showing him urinating on himself have been freed. PHOTO | PETER LOUIS | AFP Two South Sudanese journalists […]

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CIVIC SPACE IN NUMBERS

The CIVICUS Monitor measures enabling conditions for civil society or civic space. We provide ratings for civic space in 197 countries and territories (all UN member states and Hong Kong, Kosovo, Palestine, and Taiwan). At CIVICUS, we see civic space as the respect in policy and practice for the freedoms of assembly, association and expression which are underpinned by the state’s duty to protect civil society.

We view civic space as a set of universally-accepted rules, which allow people to organise, participate and communicate with each other freely and without hindrance, and in doing so, influence the political, economic and social structures around them.

CIVIC SPACE IN 2022

Today, only 3.1% of the world’s population lives in countries with Open civic space. 

For better accuracy and comparison over time, this year we added a decimal point to the percentages.

GLOBAL CIVIC SPACE RESTRICTIONS 

Over the past year, civil society across the world has faced a variety legal and extra-legal restrictions. Below we document the top ten violations captured in the CIVICUS Monitor.

Top 10 Violations to Civic Freedoms

COUNTRY RATINGS

The CIVICUS Monitor currently rates 39 countries and territories as Open, 41 rated as Narrowed, 42 rated as Obstructed, 50 rated as Repressed and 25 rated as Closed.

REGIONAL BREAKDOWNS

 OpenNarrowedObstructedRepressedClosed
Africa2413246
Americas 109952
Asia and Pacific8710114
Europe and Central Asia1921644
Middle East and North Africa00469
This page was last updated on 22 June 2022

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The CIVICUS Monitor measures enabling conditions for civil society or civic space. We provide ratings for civic space in 197 countries and territories (all UN member states and Hong Kong, Kosovo, Palestine, and Taiwan). […]

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DR Congo EALA representatives boycott Kampala meeting

The Democratic Republic of Congo representatives at the East African Legislative Assembly (EALA) have boycotted a retreat of the members of the regional body that is being held in Kampala, Uganda.

Mr Stephen Odongo, a Ugandan representative in the EALA, said their DRC counterparts were concerned about their security while in Kampala. They are said to have avoided entering Rwanda for the committee sessions of EALA on the same grounds.

Members of the regional body were Monday evening hosted to a dinner by the Speaker of the Ugandan Parliament Anita Among at her residence in Kampala where she committed to have the Speakers of the respective parliaments in the region develop standards to be observed by EALA members.

“Let us have a meeting as Speakers and agree on what should be done by our members who are in the community,” Ms Among said.

Caution

Speaking about the boycott, Ms Among cautioned members against involvement in matters that do not concern them.

“Don’t enter into wars that do not concern you,” she said.

Ms Among’s remark was prompted by Mr Odongo when he raised concern about the boycott and called upon her to give assurance to the legislators about the state of security in Uganda.

“As the number three in the country, we would wish that you make a very strong statement of the state of our security to inspire confidence in our colleagues who are not here with us that this country is safe and we are here for regional integration,” Odongo had appealed.

EALA Speaker Joseph Ntakirutimana said he was shocked when he received the communication from the DRC representatives that they would not attend the committee sessions both in Kigali and Kampala.

M23 rebels

DRC last year severed relations with Rwanda as the former accused Kigali of providing material support to the M23 rebels who have captured swathes of territory around North Kivu province.

Both the United Nations and the United States accuse Rwanda of supporting the rebels but Rwanda has vehemently denied the allegations.

However, the relations between Kampala and Kinshasa appear to have been warm, signified by the signed Status of Forces Agreement which has allowed the Uganda Peoples’ Defence Forces (UPDF) to hunt down the Allied Democratic Forces (ADF) rebel group in the jungles of eastern DRC.

The same cannot be said for Rwanda whose deployment of the country’s army as part of the East African Joint Regional Forces has been objected to by DRC.

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The Democratic Republic of Congo representatives at the East African Legislative Assembly (EALA) have boycotted a retreat of the members of the regional body that is being held in Kampala, […]

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Kenyans tell how allure of jobs landed them in hands of Myanmar junta

For every Kenyan who has been a victim of human trafficking to Myanmar, their story is that of hope for a rags-to-riches experience that instead dives them into the murky world of the Myanmar junta.

And as the government tries to save many from the jaws of militants, many Kenyans, particularly young women below the age of 30, are continuously getting duped into accepting fake job offers in Thailand, from where they are then trafficked to Myanmar to work as scammers targeting men from particular countries.

To help others from falling into the same trap, three women recently rescued from Myanmar shared the stories about how they left Kenya in search of job opportunities that never came, lost a fellow Kenyan but found a way back home after discovering that they had crossed over to a foreign land and were controlled by an armed group.

Their hope is to protect others from falling into a similar predicament and shed light on the desperation that makes young people easily trust whatever opportunity is thrown at them without thinking through the dangers that might lurk ahead.

Read: Family’s hope of receiving kin’s body from Saudi diminishes as agent vanishes

For 29-year-old Damaris Akumu, from Migori County, the allure of a better life for herself and her child pushed her to use her savings to pay for what she thought was an opportunity of a lifetime.

“I had searched for jobs but none was forthcoming, so I paid the lady that was to arrange my travel Sh150,000 and borrowed another Sh100,000 for emergencies and personal effects and left Kenya on August 4,” she recalls.

Ms Akumu travelled on the same day with 26-year-old Marleen Nduta Gitau, who learnt about the job offers through a relative that she had met at her grandparents’ burial earlier this year.

“I am the second-born in a family of three. My elder sibling has Down syndrome, our last-born is a college student and my parents are casual labourers. This, therefore, means the responsibility of the firstborn falls squarely on me,” Ms Gitau explains.

The relative told her about opportunities in Thailand and she quickly started thinking about working in another country.

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For every Kenyan who has been a victim of human trafficking to Myanmar, their story is that of hope for a rags-to-riches experience that instead dives them into the murky […]

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Regional forces mull next step after M23 decline ceasefire

Regional forces assembling in the Democratic Republic of Congo have underlined the priority of guarding civilians suing for peace, by providing a buffer against M23 rebels, The EastAfrican can reveal.

The decision came in response to a defied ultimatum given to the M23 last week by leaders who had gathered in Luanda, Angola.

And as community and armed groups representatives from the Democratic Republic of Congo gathered in Nairobi this week, seeking long-term peace, military experts were holed up in Goma mulling the next step after M23 rebels defied a ceasefire call.

The three-day dialogue forum, the third in a series of the Nairobi Process, is backed by the East African Community.

Yet to ease hostilities

In Goma, military experts from EAC member states contributing troops to the regional force (EACRF), as well as the UN stabilisation mission (Monusco) were activated after participants of the Nairobi process reported that the group was yet to ease its hostilities in spite of publicly vowing to do so last week.

As the first step, sources told The EastAfrican the Kenya Defence Forces troops which have been on standby in Goma will be tasked with creating a ring around civilians to reduce casualties among local communities.

The idea is to ensure M23 attacks are thwarted by the Congolese forces, FARDC, the regional EACRF and Monusco, if the regional heads of state under the East African Community approve it.

The decision was first mooted in Angola last week, where a mini summit of the EAC and the International Conference on the Great Lakes Region (ICGLR), under the chairmanship of Angolan President Joao Lorenco, called for ceasefire by all armed groups or they be forced out of occupied territories.

“Kenya to initially deploy its contingent in Goma, DRC and subsequently in Banagana, Rutshuru and Kiwanja upon the withdrawal of M23 to its initial positions not beyond the line along Sabinyo (DRC side), Bigego, Bugusa, Nyabikona, Mbuzi, Rutsiro and Nkokwe,” the communique stated.

Continued battles

The M23 in a statement had agreed to the ceasefire call by the Heads of State after the Luanda process with a rider that they would not cease to defend themselves if they were violated by FARDC. But this week, locals reported continued battles between the rebels and Congolese forces.

The peace bid is, however, challenged by DRC’s own local politics. Kinshasa had opposed the idea of the buffer zone, fearing it could incite political heat, including ethnic divisions. Such an eventuality could hurt President Felix Tshisekedi as he bids for re-election due on December 20, 2023.

In the DRC, well before the announcement of the election date, candidates had already declared themselves for the elections and political parties had already put themselves in order of battle. Among the candidates is Martin Fayulu, his challenger in the 2018 election, who claims he won. Others are Moïse Katumbi. The former governor of the ex-province of Katanga is currently allied to Tshisekedi but is expected to challenge him.

Party dynamics

Former president Joseph Kabila’s camp has remained uncertain as his party the Common Front for Congo has yet to reveal its intentions. The other is Dr Denis Mukwege, the famous gynaecologist who co-won the Nobel Peace Prize winner in 2018. 

Some Congolese have asked him to stand, something he hasn’t taken on but which has attracted jibes on him from Tshisekedi.

After the announcement of election dates, the chairman of the Independent National Electoral Commission Denis Kadima mentioned “constraints that may hamper the implementation of the elections.”

Among the challenges is insecurity, with Mr Kadima admitting that parts of DRC in rebel hands “have an impact on the smooth running of the elections.”

“No electoral operation can be organised properly without security for voters, electoral agents, sites of operations, materials and candidates,” he said last month.

Corneille Nangaa, former chairman of the electoral commission, said DRC’s “number one enemy of the electoral process is mistrust between actors and stakeholders.”

The registration of the estimated 50 million voters has not yet started, he told The EastAfrican.  In 2018, the electoral body needed 15 months to be ready.

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Regional forces assembling in the Democratic Republic of Congo have underlined the priority of guarding civilians suing for peace, by providing a buffer against M23 rebels, The EastAfrican can reveal. The decision […]

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Uprooting of baobabs in Kenya sparks outrage of conservationists

Lisa Libutu was going about her business at the Kenyan coastal county of Kilifi when a truck loaded with an uprooted giant baobab tree drove by on the Mombasa-Malindi Highway.

She was astonished at the sight of what is considered an everlasting tree uprooted.  It had not happened before.

The baobab is known as Africa’s “Tree of Life”, adapting to arid landscapes, living for up to 5,000 years and with many useful properties for local communities.

They are landmarks where they stand for centuries.

Libutu was not the only person shocked by the uprooting of the baobab. Soon, it became the talk of villagers as more of uprooted gigantic trees were seen being ferried to Mombasa.

Villagers approached by buyers

Libutu later learned that villagers had been approached to sell their trees for $3,000, an offer they could not turn down, she told The EastAfrican.

It is not clear whether the uprooting of the iconic baobab trees in Kenya’s coastal county of Kilifi is a case of ignorance on the part of national agencies and the county government or it is bio piracy.

Researchers fear that Kenya risks losing the baobab species to foreign multinationals who will patent its products and the country will pay the price of negligence yet again after it lost crucial species that were patented and cannot now be uses for commercial purposes in the country.

Lost patents

Dr Amos Lewa, a Kenyan biomedical scientist with the Kenya Medical Research Institute (Kemri), notes that Kenya lost the Prunus africana (the African cherry), endemic in the Rift Valley, which was harvested and sent to Europe and later patented.

Formulations from the Prunus africana are used to treat prostate gland inflammation.

Dr Lewa says Kenya also lost frangipani, a flowery tropical tree whose milk is potent for herpes zoster, and is useful in HIV management of dermatological disorders.

“We lost the patent of the Prunus africana and frangipani, and we can no longer use it commercially. Kenya has lost patents of the kiondo basket and now the baobab tree – whose leaves, bark and roots show febrifuge potential and other medicinal uses – is threatened. The fruit pulp is highly potent for nutrition in children as an alternative to breast milk. We shall lose it in patents too,” he said.

Fibrous leafy tree

The baobab, or mbuyu in Kiswahili, is a gigantic fibrous leafy tree, common in the open semi-arid areas of eastern and coastal counties of Kenya.

Local communities use baobab leaves, pulp and seeds as a source of food.

Baobab seed oil is used in cosmetic products and stem fibres are used in rope making, the fruit shells as fuelwood, the leaves as vegetables and livestock fodder and the powder is used in making jam and juice.

Libutu is the founder of Baossence, an organisation that works with local women and youth at the Kenyan coast to care for and trade in baobab-based products.

“I used to get about 100kgs of baobab seeds in a week from women groups in Kilifi but they suddenly stopped supplying. It turned out the trees they harvested from had been “sold” to a foreigner who intended to export them to Georgia, in the United States,” Libutu said.

Go-ahead to uproot trees

It turned out that in October, the Kenya Plant Health Inspectorate Service (Kephis), the National Environment Management Authority (Nema) and the county government of Kilifi had given the go-ahead to Ariba SeaWeed International to uproot the trees in Mtondia and Tezo for botanical purposes for two years. A Kenya Forest Service approval was granted on November 1.

Eight huge baobab trees had by then already been uprooted and stored for shipping to Shekvetili Dendrological Park Ltd in Ureki in Ozurgeti Municipality, Georgia, US.

KFS said it allowed the uprooting of the baobabs because the International Union for Conservation of Nature (IUCN) did not list them as an endangered species.

Libutu has now launched a petition dubbed “Please Save our Baobab Trees from Wanton Destruction”, which has attracted over 3,000 people including government officials who sought explanation from county officials.

Petition details

The petition is an appeal to the Kenya government, the United Nations Environment Programme and the International Union for Conservation of Nature to immediately ban the “carnage” of baobab trees and to place them on the World List of Threatened Trees/Species.

The petition also seeks to have the baobab become a protected tree species in Kenya, included on the appendices of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Cites), a multilateral treaty to protect endangered plants and animals from the threats of international trade.

Researchers, scientists and environmentalists have jumped on the petition and propelled it to the public for discourse. They are calling out the Ariba Seaweed International Ltd, which has been uprooting the trees in Tezo, Kilifi North, and condemning the environment management agency and the Kenya Forest Service for allowing the decimation of the iconic species.

Amisha Patel, the founder of O’bao, a baobab-based natural skincare brand in Kenya, called on the government to protect the trees.

“I would like to strongly condemn any uprooting and export of whole trees or live parts thereof. I strongly urge the Kenyan government to enforce, be vigilant and protect Kenyan resources,” said Patel.

she said uprooting the baobab tree deprives communities of future economic benefits and sets a dangerous precedent for other natural resources.

Nature Kenya coast conservation programme coordinator Francis Kagema alleged that the uprooting of the trees could be biopiracy as there were no consultations and there was no environment impact assessment.

“It is biopiracy because that is our biological resource. Someone is uprooting and taking it to another country. We do not know who allowed that and the process involved because there were no consultations,” he said.

Nagoya protocol

Kenyan President William Ruto says the harvesting of the trees must conform to the existing regulations, including the Convention on Biodiversity and the Nagoya Protocol.

“I have instructed the Ministry of Environment and Forestry to look into the ongoing uprooting of baobab trees in Kilifi County to ensure that it sits within the Convention on Biodiversity and the Nagoya Protocol,” he tweeted.

“There must be adequate authorisation and an equitable benefit-sharing formula for Kenyans. Further, the exercise must be in line with the government’s agenda of planting 15 billion trees in the next 10 years,” he added.

The Nagoya Protocol, formally known as the Convention on Biological Diversity, came into force on October 12, 2014, and has been signed by over 50 countries.

Baobab is native to Africa and is typically found in sub-Saharan African countries. In Kenya, it grows in several counties including Kitui, Kilifi, Kwale, Taita Taveta, Makueni, Tharaka Nithi, and Lamu.

“Research shows that baobab trees, commonly called the iconic trees of life, grow in 32 countries in Africa and live for 5,000 years,” says Libutu.

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Lisa Libutu was going about her business at the Kenyan coastal county of Kilifi when a truck loaded with an uprooted giant baobab tree drove by on the Mombasa-Malindi Highway. […]

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Kenya’s tea ‘chokes’ under unclear policy, clashing roles

Kenya’s lucrative tea sector is running on contradictory policies, with players clashing on roles.

The East African Tea Trade Association (EATTA) wants some of the policies addressed through a law that will clarify roles and relationships between management agencies, growers, and factory boards, to enhance accountability.

EATTA chairperson Arthur Sewe said the clash in roles can be resolved by adopting the Draft National Tea Policy (2018) to guide on procedures.

“The government initiated a draft National Tea Policy in 2013. However, arising from delay approving it, EATTA contracted a consultant to review it, identify any gaps and suggest remedies. It should be implemented immediately,” said Mr Sewe.

“The key issues to be addressed are low productivity, insufficient development and transfer of technology, high cost of inputs, multiple taxation regime and poor governance,” he proposed this week.

Extreme weather events

Since September, Kenya’s tea production has dropped significantly due to erratic weather, according to records at the Mombasa Tea Auction.

Data from EATTA indicated, a dip in the volume of tea offered by over half a million kilogrammes in October and projected that production is likely to drop further in the coming years.

The lobby blames climate change that had affected small-scale farmers’ livelihoods. According to a Food and Agriculture Organisation report released in May, Kenya’s temperature was expected to rise by 2.5 degrees Celsius between 2000 and 2050.

A new policy, the association argues, would set guidelines on sustainable farming practices to help farmers and small- and mid-sized enterprises in the agricultural sector adapt to the change in weather patterns.

These include selection of the most suitable areas for tea growing, crop diversification in low production areas, efficient management of soil and water resources, catchment protection, soil water conservation and rainwater harvesting.

For years Kenya basked under the optimal climate for tea growing comprising tropical, red volcanic soils, sunny days and stable rainfall.

Other major tea-producers India, Sri Lanka and China also face rising temperatures and extreme weather events that affect production.

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Kenya’s lucrative tea sector is running on contradictory policies, with players clashing on roles. The East African Tea Trade Association (EATTA) wants some of the policies addressed through a law […]

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Kenya anti-tobacco crusaders fault President Ruto’s South Korea deal

A group of advocates of tobacco use control have denounced the deal Kenya’s President William Ruto made with South Korea to enhance tobacco trade, saying it will put more Kenyans at risk of diseases linked to the farming and use of the product.

The Kenya Tobacco Control Alliance (Ketca), an umbrella body of civil society organisations fighting tobacco use in the country, said the trade deal threatens to undo the progress made in reducing tobacco farming in the country.

Ketca said the agreement between Nairobi and Seoul is not only detrimental to the health of Kenyans, but also violates the Tobacco Control Act of 2007 which “commits the government to continually phase out tobacco farming in Kenya”.

“We ask the government to immediately cancel aspects of the Kenya-South Korea agreement that touch on tobacco,” Thomas Lindi, Ketca’s chief executive, said at a press conference in Nairobi on Wednesday.

President Ruto, after his first official visit to Seoul last week, announced that Kenya “commits to work together [with South Korea] in deepening and strengthening bilateral trade – especially in tea, coffee, and tobacco,” a move contradicting the very government’s efforts to phase out tobacco farming in the country.

Major problem

“We have a major problem with this because it means Kenya will try and increase tobacco planting in the country,” Mr Lindi said.

In March 2022, the ministry of agriculture partnered with United Nations agencies – World Health Organisation, the World Food Programme and the Agriculture and Food Organisation – to initiate the ‘Tobacco-free farms’ project to help farmers shift from tobacco-farming.

The programme, piloted in Migori County, western Kenya, sought to provide farmers dependent on tobacco farming with seeds, fertilisers, and ready markets to help them shift to more sustainable crops such as maize and beans.

“The project is a major step towards attaining a healthy nation and the Ministry of Health fully supports such ventures,” said former Health minister Mutahi Kagwe during the launch of the programme.

His Agriculture counterpart at the time, Mr Peter Munya, said the project would go a long way in boosting the nation’s food security, in addition to keeping farmers healthy.

Ketca praised the move and encouraged a speedy expansion to other tobacco-growing regions, saying the government was finally honouring the requirements of the Tobacco Control Act.

Speaking to The EastAfrican in March, Ketca Chairman Joel Gitari said “Tobacco growing farmers must be given the necessary support to switch to alternative crops that have the potential to improve their health and livelihoods as well as reduce the supply of tobacco”.

“Every effort made to reduce tobacco use is good for the environment, the economy, the future and the country in general.”

Now, noting that the project has been very successful in Migori, Mr Gitari says the agreement with Seoul could avert the gains made even in Migori and prevent the extension of the project to other tobacco-growing regions.

“The government should be focusing on such positive moves instead of engaging in retrogressive activities because whatever it is doing is illegal and we’re losing the gains that we’ve made,” he said on Wednesday.

Cause deaths

According to Ketca, tobacco use and farming will directly cause the deaths of more than 9,000 Kenyans by end 2022 and at least 40,000 others will be diagnosed with various forms of cancer.

“Numerous studies done in Kenya show tobacco farming is unprofitable, leaves farmers poor and sick,” Mr Lindi said.

A recent study by the University of Nairobi and the American Cancer Centre found that farmers in Migori, Busia, and Meru counties could earn on average Ksh80,000 ($697.47) more per acre from alternative crops like vegetables, grains and cereals, backing this claim.

According to the study, farmers in the tobacco-growing regions stuck to the crop because of “the structured supply chain of tobacco incentivises production” and due to lack of a ready market for the other crops.

The lobby now wants the government to completely discourage tobacco farming and use in the country by increasing excise duty on tobacco products, banning tobacco advertising and promoting health information and warnings against tobacco use.

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A group of advocates of tobacco use control have denounced the deal Kenya’s President William Ruto made with South Korea to enhance tobacco trade, saying it will put more Kenyans at […]

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Kenya Treasury says country has no room for fresh borrowing

Kenya’s National Treasury has doubled down on its efforts to swap the country’s short-term debt with longer-term issuances. 

This comes barely a week after it commenced a debt swap that will see Sh87.8 billion ($714.6 million) worth of short-term debt converted into long-term debt to ease the pressure it is experiencing from maturities. Last week, the Kenyan government floated its first switch bond since June 2020. 

Treasury Cabinet Secretary Njuguna Ndung’u said that Kenya has little wiggle room left for fresh borrowing, a situation that has been aggravated by the multiplicity of shocks to the economy, including the ongoing drought, effects of the Covid-19 pandemic and the Russia-Ukraine war.

“Right now, we don’t have headroom for accumulating debt, so in a sense, we have to go down into liability management. When you are buffeted by multiple shocks, the reaction is often to use the resources that you have or even borrow to overcome the crisis,” Prof Ndung’u said.

A fortnight ago, President William Ruto directed Treasury not to borrow from the domestic market at rates above 10 per cent. 

Awaiting growth data

Prof Ndung’u further stated that the targeted Sh300 billion ($2.4 billion) worth of budget cuts anticipated in the Ruto government’s debut Supplementary Budget have been calibrated to ensure that it does not derail the economy’s growth momentum.

According to a circular issued by the Treasury on November 7, addressed to all Cabinet secretaries and accounting officers, the Kenyan government is pursuing aggressive rationalisation of the recurrent expenditure for the current financial year. The areas earmarked for slashes include expenditure on foreign travel and training for the remaining three quarters of the current financial year.

Prof Ndung’u said Kenya might be grappling with a recession even as it awaits growth data for the third quarter of 2022 from the Kenya National Bureau of Statistics. The economy grew by 6.8 per cent and 5.2 per cent in the first and second quarters, respectively.

“The budget cuts were necessary to try and shift resources to needy areas. It is austerity measures to try and save lives. We have to look at what is essential and what is not essential. You cannot affect aggregate demand in times of recession and that is why the budget cuts were in areas that are not essential,” the CS said.

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Kenya’s National Treasury has doubled down on its efforts to swap the country’s short-term debt with longer-term issuances.  This comes barely a week after it commenced a debt swap that […]

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Kenya’s High Court puts the brakes on plans to import GMOs

The High Court in Kenya has temporarily suspended the government’s plan to allow importation and distribution of genetically modified organisms (GMOs) pending determination of a lawsuit against the lifting of the ban.

The lawsuit, which is the second one to be lodged against President William Ruto’s administration for allowing the consumption of GMOs in Kenya, was filed by Kenyan Peasants League, a lobby representing small-scale farmers. The group claims that the decision to lift the ban is not procedural and it is unlawful.

The court orders, signed by Justice Mugure Thande, bar the government from gazetting any directives regarding GMOs or acting on the Cabinet dispatch that announced the lifting of the ban on GMOs.

The group alleges that GMO products pose a health risk to Kenyans, particularly the poor and those with low incomes. It also alleges that the government lifted the ban without involving Kenyans through public participation as required by the Constitution.

The group is opposed to the importation, cultivation and consumption of GMOs.

First lawsuit

The first lawsuit was filed last month by Mr Paul Mwangi. He sued the government for lifting regulatory barriers imposed a decade ago on GMOs and withholding public information on the genetically engineered crops.

He accused government of mischief, saying the decision was hurried and if not quashed, it would result in the violation of the rights of small-scale farmers and consumers.

He stated that the import of the 2022 Cabinet decision to allow introduction of GMOs was not to remove a ban on genetically modified foods, but to effect a blanket lifting of all protocols controlling the introduction of GMOs in Kenya. Mr Mwangi claimed that the decision by the Cabinet on October 3 will lead to the disappearance of indigenous seeds and pave way for the commercial practice of protecting the patent rights of the GMO seeds.

“Of particular concern is the imminent introduction into Kenya of crops developed using genetic use restriction technology (GURT), which is a technology involving the insertion of what is known as a “terminator gene” into seeds so that upon germination, the seeds ‘commit suicide’ and are therefore unable to pass any life after their harvest. The said harvest is thus incapable of being re-sown and cannot germinate into new crop,” said Mr Mwangi.

Regulatory protocols

GMOs were banned by former president Mwai Kibaki’s administration in 2012 and remained so under that of his successor Uhuru Kenyatta.

“The last two administrations had, following the ban imposed by the 2012 Cabinet decision, developed regulatory protocols that had seen the structured introduction in the country of at least one food crop and one cash crop developed through genetic modification without prejudicing the rights and freedoms of the people of Kenya and the Bill of Rights,” said Mr Mwangi.

According to him, the decision passed by President Ruto’s Cabinet to address food shortage in the country is bad for the country’s farmers and consumers.

The lawsuit also accuses the government of disparages the rights of peasant farmers and people working in the rural areas.

The government is yet to file its responses to the two lawsuits.

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The High Court in Kenya has temporarily suspended the government’s plan to allow importation and distribution of genetically modified organisms (GMOs) pending determination of a lawsuit against the lifting of […]

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Kenya Airways targets corporate travel in new Ghana-Senegal flights

Kenyan flag carrier Kenya Airways has announced a new service linking the capitals of Ghana and Senegal starting this December 11. This is the first sign that African governments are serious in implementing the Single African Air Transport Market (SAATM).

The twice weekly service that complements the airlines’ existing schedule to the two destinations will increase options between Nairobi and Accra to nine flights a week and four to Dakar.

This comes hot on the heels of a new Nairobi-Mombasa-Dubai service, also to be launched this December, reflecting KQ’s push to get its growth plans off the ground following the two-year Covid-19 pandemic disruption.

The ease with which the Kenyan carrier will be able to pick intermediate traffic between Accra and Dakar without a reciprocal service by a Ghanaian airline to Kenya signals the beginning of a long-awaited era of open skies in Africa.

Pilot scheme

Kenya and Ghana were among the 15 African states that last week in Dakar signed up to pilot a scheme to test operation of air services under SAATM. Under existing restrictions such flights would operate under fifth-freedom rights on terms agreed on in a bilateral air services agreement.

According to Julius Thairu, Kenya Airways chief commercial and customer officer, the new connection “will offer our guests more travel and connectivity options within West Africa. Strategically, the bigger picture is to support the Single African Air Transport Market and the African Continental Free Trade Area, which are key pillars for Africa’s growth, by growing and deepening our network connections within the continent.”

KQ hopes to tap into existing demand from corporate travellers, traders as well as leisure travellers between Ghana and Senegal to support the service, which will be the first direct connection between the two west African capitals.

The proposed flights will be available twice a week. The outbound leg (KQ514) will originate in Nairobi at 21.30 local time on Tuesdays and Sundays, arriving in Accra at 12.10 local time. The leg to Dakar will commence 01.10 arriving at 04.15. The return flight KQ 515 will depart Dakar at 05.15 local time, and make one-hour a stop in Accra.

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Kenyan flag carrier Kenya Airways has announced a new service linking the capitals of Ghana and Senegal starting this December 11. This is the first sign that African governments are […]

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Kenyan court quashes law allowing home buying with pension savings

The Kenyan government’s plan to accelerate its affordable housing agenda has suffered a setback in court after a judge quashed a law that allows members of retirement schemes to use a portion of their savings to purchase residential houses.

The court also stopped the implementation or enforcement of the amendments introduced to the Retirement Benefits Act No. 3 of 1997, which allowed the retirement benefits industry to help fill the housing gap.

Justice Anthony Ndung’u found that the amendment to the law was achieved through an irregular and flawed parliamentary process because MPs failed to allow public participation in the enactment process.

The amendment was introduced through the Tax Laws Amendment Act 2020, which came into effect on April 25, 2020, and the objective was to cure the large housing gap.

Boost home ownership

The Kenyan government’s aim in amending the law was to boost home ownership and lift the sluggish property market by enabling members of retirement schemes to purchase and own homes using their savings.

Changes to pension laws were also meant to make it easier for individuals to buy their first homes given that most Kenyan households are unable to raise the minimum house purchase deposit or afford the typical monthly mortgage payments.

To bring the amended law into force, former Treasury Cabinet Secretary Ukur Yatani published the Retirement Benefits (Mortgage Loans) (Amendment) Regulations, 2020 showing the rules and limits for accessing pension savings for home purchase. The regulations were published on September 14, 2020.

Pensioners were allowed to use up to Sh7 million ($57,000) or a maximum of 40 percent of their retirement savings to buy a home from an institution or real estate investors.

An institution was defined in the regulations to include banks, mortgage or financial institutions, building societies, microfinance institutions, the National Housing Corporation, institutions approved by the Retirement Benefits Authority or any other entity offering a residential house for sale.

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The Kenyan government’s plan to accelerate its affordable housing agenda has suffered a setback in court after a judge quashed a law that allows members of retirement schemes to use […]

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Uganda seeks Kenya partnership in deal to boost tourist numbers

Uganda’s tourism players are reaching out to Kenya in a controversial bid to help bridge market access challenges for Kampala’s hospitality offers.

The players in Kampala see Kenya’s coastal exposure to the world as a starting point where tourists arriving in Kenya can go on to visit Uganda on the same visa while using Uganda Airlines as a connecting carrier.

But that could bring new threats to Kenya’s own local sites, as well as affect market share for Kenya Airways, which has for years dominated the Kenya-Uganda route.

Mutual benefit

But if this plan works, the proponents argue, Kenya and Uganda will mutually benefit, with Uganda profiting from Kenya’s networks to attract visitors. Kenya in the meanwhile will have its tourists visit Ugandan sites at a discounted price, which stakeholders say could break monotony for repeat clients who have explored Kenya.

Alex Tunoi, the regional manager in charge of domestic and Africa tourism at the Kenya Tourism Board (KTB), said they are aware of the proposed deal, but downplayed its potential to eat Kenya’s lunch.

“East Africa market has great tourism potential for Kenya; with a population of over 200 million, a growing middle class, improved infrastructure and relaxation of travel restrictions. KTB is focused on growing arrivals from the region,” he told The EastAfrican.

“Investment in these markets is bearing fruit with both Uganda and Tanzania emerging among top 10 key sources markets for the destination.”

Lucrative packages

According to the Uganda Tourism Board (UTB) Kampala will offer lucrative packages to tourists arriving at Kenya’s coastal sites to explore its natural, adventure, leisure, business and cultural attractions.

Uganda intends to balance trade with Kenya by working with coastal tourism stakeholders to tap into Kenya’s booming beach tourism.

The first package is set to go online later this year after deliberations from a conference between Uganda and Kenyan on November 17.

“The partnership will ensure thousands of tourists visiting either Kenya or Uganda move freely between the two countries. The tourists can have breakfast at the beach and lunch in a safari in Uganda,” said Paul Mukumbya, Uganda’s Consul-General in Mombasa.

“The November conference in Mombasa will explore Uganda, ‘the Pearl of Africa,’ to give overview of the tourism attractions as well as specifying the investment opportunities in the tourism sector in Uganda and Kenya,” he said.

Eased travel requirements

The two countries are banking on eased regional travel requirements for EAC citizens to improve the balance of trade by jointly promoting beaches and parks in the region.

Citizens of the two countries can use their national identity cards to cross borders while international tourists will use the East Africa single visa to tour the two destinations.

Besides, both countries belong to the one-tourism visa programme that also includes Rwanda. Tourists arriving in one country can use the same tourist visa to cross to the other.

The challenge in the past has been the transportation connectivity.

The plan now is to use Uganda Airlines to connect tourists from Mombasa to Entebbe but once Kenya Airways starts direct flights from the coastal city, Kenya Coast Tourist Association chairman Victor Shitakha says people will have more options.

Packages for bus trips

Uganda Airlines flies between Mombasa and Entebbe three times a week. However, officials say other airlines will not be locked out and they will go as far as selling packages for bus trips.

“The move will create networks and synergies and we are not in competition but we complement each other, where we shall come up with packages marketed together [and] sell both safari and beaches as one package. We are working with Kenya Tourism Board to make it happen,” said Mr Shitakha.

Kenya remains Uganda’s biggest source market for tourists in the region, accounting for 29 per cent of total arrivals in 2018, the highest figure reported before the Covid-19 pandemic, according to figures by the Tourism Research Institute.

Rising numbers

At least 95,000 Kenyans visit Uganda every three months, according to the Ugandan Consulate in Mombasa. It expects this figure to rise.

Last year, Kenya received 870,465 tourists compared to 567,848 in 2020, with the US leading as the major tourist source with 136,981 arrivals, followed by Uganda (80,067), Tanzania (74,051), the UK (53,264) and India with 42,159 visitors.

Before the pandemic, Uganda received over 1.5 million tourists in 2019 and registered over 512,000 travellers in 2020. However, the country’s tourism industry is poised for recovery with renewed emphasis on intra-African travel market as a key marketing strategy.

In 2019, the Tourism sector contributed 7.7 per cent of Uganda’s gross domestic product and created over 667,000 jobs.

Tourism data from 2019 shows that its top three Africa source markets include Rwanda (32 per cent), Kenya (24 per cent) and Tanzania at six per cent.

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Uganda’s tourism players are reaching out to Kenya in a controversial bid to help bridge market access challenges for Kampala’s hospitality offers. The players in Kampala see Kenya’s coastal exposure […]

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Kenya joins calls for Russia to pay Ukraine war reparations

Kenya on Monday joined 93 other countries in supporting a UN resolution calling for Russia to compensate Ukraine after invading it in February this year.

The non-binding resolution A/ES-11/L.6: ‘Furtherance of remedy and reparation for aggression against Ukraine’ by the UN General Assembly reflected the enduring indifference to African countries in condemning Russia’s invasion of Ukraine. But it did show significant support for Ukraine in seeking compensation and depicting Moscow as an aggressor in the war.

Ninety-four countries including Kenya, Ghana, Somalia and Djibouti voted to have Russia “bear the legal consequences” of its invasion of Ukraine, including recompensing for lost limbs, deaths or destroyed property.

“We had serious reservations on aspects of the resolution which were reflected in the outcome of the vote in the high number of abstentions and ‘no’ votes,” said Dr Martin Kimani, in a note explaining Kenya vote on Monday.
“Despite this, we voted yes because it is the right thing to do. Ukraine has a sovereign right to make claims for damages and loses incurred by virtue of conflict.”

No legal weight

It was the latest political symbol of opposition against Russia as voted by the UN General Assembly. Usually, such decisions reached by the Assembly do not carry legal weight, but can fuel political pressure on the affected party.

Since Russia invaded Ukraine in February, there have been several UN General Assembly decisions, all reached under the rare Assembly’s emergency special sessions.

Weeks after the war, 141 member states denounced the invasion and when Russia annexed three regions of Ukraine in October under a shady referendum, 143 others voted to reject it.

Distant war

In Africa, however, the war continues to be seen as distant. Gabon, the other non-permanent member of the UN Security Council from Africa (besides Kenya and Ghana) abstained and so did Uganda, Sudan, Rwanda, Burundi.

Fourteen countries including South Africa, Ethiopia, Eritrea, Zimbabwe, Mali and Central African Republic voted no, while others like the Democratic Republic of Congo were not even present during the voting.

“This is the right of Ukraine but also for all the peoples and countries that are seeking reparations for colonial violence and dispossession, slavery, and other acts of aggression by powerful states, including members of the Security Council,” Dr Kimani added.

Since 1950, the UN General Assembly has often taken up matters regarding international peace and security if the UN Security Council, the most powerful organ of the UN, fails to gain a unanimous decision among its five permanent members. They are Russia, China, UK, US and France.

This session is the 11th since 1950 and it came after Moscow vetoed a resolution tabled before the Security Council condemning an assault on Ukraine.

“Seventy-seven years ago, the Soviet Union demanded and received reparations, calling it a moral right of a country that has suffered war and occupation,” Ukrainian Ambassador Sergiy Kyslytsya told the Assembly before voting.

“Today, Russia, who claims to be the successor of the 20th century’s tyranny, is doing everything it can to avoid paying the price for its own war and occupation, trying to escape accountability for the crimes it is committing.”

The Ukrainian diplomat wants the world to follow an example set earlier when it created the UN Compensation Commission (UNCC) in 1991 to force Iraq to pay for illegally invading Kuwait. The Commission had overseen payments of over $52 billion in reparations to victims by the time it closed this year.

Nearly 50 nations co-sponsored the resolution on establishing an international mechanism for compensation for damage, loss and injury, as well as a register to document evidence and claims.

Pay for destruction

Ukraine wants Russia to pay for destruction including buildings, bridges and roads, demolition of power supply lines, displacement of civilians and killings, besides rape and torture.

His Russian counterpart, Vasily Nebenzya, argued that the Assembly had no powers to rule on legal cases and punish parties.

“These countries boast about how committed they are to the rule of law, but at the same time, they are flouting its very semblance,” he said.

“The UN will play no role in this process because the proposed mechanism is suggested to be created outside of the UN, and no one has any plans to account to the General Assembly for its activity.”

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Kenya on Monday joined 93 other countries in supporting a UN resolution calling for Russia to compensate Ukraine after invading it in February this year. The non-binding resolution A/ES-11/L.6: ‘Furtherance of […]

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Clashes in eastern DR Congo as Uhuru pursues ‘dialogue’ initiative

roops and rebels traded heavy fire in the Democratic Republic of Congo on Monday, a military source and local inhabitants said, as former Kenyan president Uhuru Kenyatta, the East African Community’s mediator in efforts to end the war between DRC forces and M23 militants, called for all armed groups to “silence the guns”.

Government forces and the M23 militia were fighting in Kibumba, about 20 kilometres (12 miles) north of the strategic city Goma, the sources said, speaking by phone.

M23 fighters were also seen about 40 kilometres northwest of the city in the Virunga National Park, a wildlife haven famed for its mountain gorillas but which is also a hideout for armed groups, the sources said.

A mostly Congolese Tutsi group, the M23 (the March 23 Movement) leapt to prominence in 2012 when it briefly captured Goma before being driven out. 

M23 grievances

After lying dormant for years, the rebels took up arms again in late 2021, claiming the DRC had failed to honour a pledge to integrate them into the army, among other grievances.

They have since won a string of victories against the military and captured swathes of territory, prompting thousands of people to flee their homes.

The resurgence has ratcheted up diplomatic tensions, with the DRC accusing its smaller neighbour Rwanda of backing the group.

Kinshasa expelled Rwanda’s ambassador at the end of last month as the M23 advanced, and recalled its own envoy from Kigali.

Rwanda denies providing any support for the M23 and accuses the Congolese army of colluding with the Forces for the Liberation of Rwanda (FDLR) — a notorious Hutu rebel movement involved in the 1994 genocide of Tutsis in Rwanda. 

“The Rwandan army and its allies from the M23 don’t stop, every passing day, launching assaults on our different positions in Kibumba,” Lt Col Guillaume Ndjike, the army spokesman for the eastern North Kivu province, told reporters.

Witnesses in the rebel-held town of Kiwanja also spoke last week of school canteens backed by World Food Programme being pillaged on Sunday and Monday. 

“There was corn flour and oil. They took these provisions as food rations,” a resident said.

Another said oil cans, flour sacks and beans had been taken away by truck the previous day.

‘Silence the guns’

Eastern DRC saw two bloody regional wars in the 1990s.

That conflict, along with the Rwandan genocide, bequeathed a legacy of scores of armed groups which remain active across the region but especially in North Kivu.

The heads of the seven-nation East African Community (EAC) on Sunday announced they would hold a “peace dialogue” on the region’s conflicts. 

“All groups that currently bear arms should lay those arms down and choose the path of peace through dialogue,” said EAC’s mediator, former Kenyan president Uhuru Kenyatta, on Monday. 

He arrived in Kinshasa the day before to hold consultations ahead of November 21 peace talks in Nairobi. 

“Silence the guns and join in a political process,” he urged local armed groups. 

To foreign groups, “the DRC is no longer the battleground for problems that are not from this country,” Kenyatta added. 

“There is nothing that can be gained through the barrel of a gun.”  

Angolan President Joao Lourenco is exploring another diplomatic path.

He met on Friday with Rwandan President Paul Kagame and on Saturday with Congolese President Felix Tshisekedi.

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roops and rebels traded heavy fire in the Democratic Republic of Congo on Monday, a military source and local inhabitants said, as former Kenyan president Uhuru Kenyatta, the East African […]

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Kenya’s central bank directs lenders to forego half of $246 million digital loans

At least 4.2 million Kenyans who failed to pay Ksh30 billion ($246 million) they borrowed from banks, microfinance and mortgage finance companies digitally have been handed relief, after the Central Bank of Kenya (CBK) rolled out a framework to slash the burden by half.

The CBK on Monday said the credit repair framework, to be undertaken by commercial and microfinance banks, and mortgage finance companies until the end of May 2023, will see the lenders forego at least Ksh15 billion ($123m) the borrowers owe them as they discount the loans by 50 percent.

“Through the framework, the institutions will provide a discount of at least 50 percent of the non-performing digital loans outstanding as at end of October 2022, and update the borrowers credit standing from non-performing to performing.

“The institution will then enter into a repayment plan with the borrowers for a period of up to May 31, 2023, for the balance of the loan. Upon expiry of the framework, the credit standing of the borrowers with respect to these loans will depend on their repayment performance during the six-month period,” the CBK stated.

The CBK said the objective of the framework is to improve the credit standing of mobile phones digital borrowers who had been reported to Credit Reference Bureaus (CRBs), for failing to service loans they borrowed using mobile phones.

It covers all loans with a repayment period of 30 days and below that were listed as non-performing by end of October 2022.

“It is anticipated that the framework will enable over 4.2 million mobile phone digital borrowers, adversely listed with CRBs, to repair their credit standing. The total value is approximately Ksh30 billion, equivalent to 0.8 percent of the gross banking sector loan portfolio of Ksh3.6 trillion ($29 billion) at end of October 2022,” the financial services sector regulator stated.

The CBK said most of the affected borrowers were individuals and small businesses that were heavily impacted by the Covid-19 pandemic, which increased their inability to pay after they lost jobs and businesses.

“The adverse effects of the pandemic continue to linger for the covered borrowers. Accordingly, the framework is expected to enable this segment of borrowers to access credit and other financial services as they rebuild their lives and livelihoods,” the CBK stated.

The framework will expire on May 31, 2023, and meanwhile, the lenders have been asked to contact the borrowers and provide them with further details of the framework.

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At least 4.2 million Kenyans who failed to pay Ksh30 billion ($246 million) they borrowed from banks, microfinance and mortgage finance companies digitally have been handed relief, after the Central […]

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Uhuru Kenyatta arrives in Kinshasa for DR Congo peace talks

The East African Community (EAC) is engaged in the search for peace in the Democratic Republic of Congo.

A day after the arrival of Kenyan troops in Goma, North Kivu, former President Uhuru Kenyatta arrived in Kinshasa where he is to stay for two days. The EAC facilitator is accompanied by East African Community Secretary General Peter Mathuki.

Advisers to the chairperson of the East African Community heads of state summit and President of the Republic of Burundi, H.E. Évariste Ndayishimiye, have also been invited to the talks.

The Eastern bloc authorities are preparing for the third round of the Nairobi dialogue, which will bring together the Congolese government and Congolese armed groups.

The Kinshasa talks come a week after a high-level meeting in Sharm El Sheikh, Egypt, with President Evariste Ndayishimiye of Burundi and Rwandan President Paul Kagame and Kenyan President William Ruto.

Mr Kenyatta is scheduled to meet President Felix Tshisekedi in Kinshasa.

“The former Kenyan president will also meet the presidents of the two chambers of parliament (National Assembly and Senate), members of the government, diplomats and representatives of local communities, leaders of religious denominations, traditional chiefs and women’s associations of the provinces of Ituri, North and South Kivu who have travelled from Kinshasa to meet and exchange with the team of President Uhuru on Monday,” reads a statement from President Tshisekedi’s office.

Also Read: DRC, Rwanda to maintain ‘political dialogue’

This will be an opportunity for Mr Kenyatta to talk with the communities and understand what they think after so many years of war.

Talks with M23

The meetings are being held against the backdrop of an intense war between the M23 rebels and the Armed Forces of the Democratic Republic of the Congo (FARDC) in North Kivu.

For the East African leaders, the parties involved must favour dialogue to achieve peace.

The DRC authorities say they have a “double strategy”: diplomacy, but also war to impose peace.

Also read: Cost of DRC war on EAC economies

For this reason, Kinshasa simultaneously says it remains open to dialogue while continuing to fight the rebels who paradoxically also say they are open to dialogue.

President Tshisekedi on Saturday welcomed President João Lourenço, the Angolan head of state and mediator of the Luanda negotiations.

João Lourenço was in Kigali on Friday to meet President Paul Kagame, again in the search for peace. For the moment, despite the increasing number of meetings, the resolutions of the Luanda roadmap, in particular the ceasefire in the theatre of war, have remained a dead letter.

In the DRC, many Congolese reject the idea of dialogue with the M23.

Kinshasa has already set its conditions, including the withdrawal of the M23 from their positions.

Martin Fayulu, a very vocal opponent of Félix Tshisekedi, also believes that Congo “should not dialogue with the M23”. He proposes to talk with Rwanda, Uganda and Burundi “so that they withdraw their soldiers from the DRC”.

Fayulu also rejects the deployment of Kenyan troops in the DRC. According to him, “this deployment is a big joke”.

Almost the entire Congolese public opinion does not want to see DR Congo in talks with the M23. With one year to go before the general election, the authorities are sensitive to national opinion.

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The East African Community (EAC) is engaged in the search for peace in the Democratic Republic of Congo. A day after the arrival of Kenyan troops in Goma, North Kivu, […]

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Kenya: This is why we deployed our troops in DR Congo

Kenya has defended deployment of peacekeeping troops to the Democratic Republic of Congo, saying it has strategic investments interests to protect in the mineral-rich country.

While seeking parliamentary approval for the deployment, Nairobi said it has a lot to lose if the ongoing conflict in the eastern DRC is not stopped.

The National Assembly this week endorsed the deployment, completing formalities for the participation of Nairobi in its first ever direct military engagement in the DRC

The troops, which will begin touching down in eastern DRC, and cost at least Ksh4.5 billion ($37 million) in the first six months, are being seen as a means to achieving Kenya’s mark on the DRC map.

Cost of not sending troops

However, Kenyan legislators agreed with a pitch by Defence Cabinet Secretary Aden Duale that the cost of not sending troops would be worse than deploying. Members of Parliament noted that Kenya’s rising business interests in the DR Congo means Nairobi has a personal investment in searching for peace.

“The long-term local and regional benefits in peace and stability, as well as strategic Kenyan investments in the Democratic Republic of Congo outweigh the costs,” Nelson Koech, MP for Belgut and chairman of the National Assembly Committee on Defence and Foreign Relations, told The EastAfrican.

“Through this deployment, Kenya will also secure its vital interests including Kenyan businesses like banks operating in the DRC, numerous Kenyan businesspeople in the country, bilateral trade with the DRC, and utilisation of the Mombasa port by the DRC among others,” he added.

The Committee which had been assessing Kenya’s formal deployment, a legal requirement, agreed that DRC’s entry into the East African Community earlier this year provides Kenyan businesses with an opportunity, if the country gets security.

The troops will be part of the regional force deployed by the EAC to target rebel groups who refuse to disarm. But it won’t be the only means.

“The troops deployment is complementary and very strategic to the ongoing political process in DRC. The Kenyan Contingent (KENCON) has a lot of goodwill from residents of Eastern DRC due to the fact that Kenya does not share a border with DRC,” Mr Koech added.

Provide leadership

“The KDF will therefore provide leadership and tangibly contribute to the maintenance of peace and security being a current non-permanent member of the United Nations Security Council,” he said.

For months, the question has been how the regional force, technically a combat mission, will work with the UN peacekeepers under the Monusco mission in DRC. Kenya had participated in Monusco in the past but the troops to be deployed under the EAC will be Nairobi’s first combat engagement. Other countries sending troops are Uganda, South Sudan and Burundi with Rwanda allowed to deployed on the shared border with DRC.

On Friday, Kenyan President William Ruto hosted Huang Xia, the Special Envoy of the UN Secretary General to the Great Lakes region whom he told to push for further support for DRC’s institution rebuilding.

“We urge the International Community through the United Nations to put more resources into the peace efforts by East and Southern Africa nations in the DRC,” President Ruto said on Friday.

“We will support all initiatives to end conflict and bring stability and prosperity to East Africa and the Great Lakes Region.”

Exit strategy

Besides financing, the deployment had faced questions on exit strategy. And Kenya has argued this mission will be different from when it launched an operation on al-Shabaab 11 years ago, its then first combat dealings of any kind.

“In Somalia’s case the priority was to crush the Al-Shabaab infrastructure to incapacitate their ability to attack Kenya. In DRC, the mandate of the KDF is simple. We move in to facilitate ongoing regional stabilisation efforts to create room for dialogue,” Mr Koech explained.

The mission will, however, rely other factors to succeed. One of them is the relationship between Rwanda and DRC who accuse one another of fomenting rebel movements. This week, the two countries agreed, for the second time in three months, to seek a solution against their military escalation, through political channels. It was a decision out of a meeting in Luanda, Angola, of their respective foreign ministers

In a joint communiqué, Congolese Foreign Minister Christophe Lutundula, his Rwandan counterpart Vincent Biruta and the Angolan Minister for External Relations agreed that the parties must speed up the implementation of the roadmap of July 6 this year. On that date, Congolese President Félix Tshisekedi met his Rwandan President Paul Kagame in a summit mediated by Angolan President João Lourenço, the African Union’s appointed mediator to reconcile Kinshasa and Kigali. The Tripartite summit had ordered a ceasefire between the M23 rebel group and the Congolese army and the withdrawal of the M23 from their positions.

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Kenya has defended deployment of peacekeeping troops to the Democratic Republic of Congo, saying it has strategic investments interests to protect in the mineral-rich country. While seeking parliamentary approval for […]

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KCB floats first Islamic bond worth $4.4 million in Tanzania

KCB Bank Tanzania has floated its first Islamic bond worth Tsh10 billion ($4.4 million) to fund its Sahl banking asset portfolio.

The Sharia-compliant paper was opened on November 9 and closes on December 5.

“KCB Fursa Sukuk provides opportunities for Tanzanian and non-Tanzanian individuals, retailers, corporations and institutions to invest in the capital markets for three years at an expected return of 8.75 per cent per annum, quarterly,” KCB Tanzania managing director Cosmas Kimaro said in a statement.

The minimum initiation investment is set at Tsh500,000 (about $218).

The bank will list the paper on the Dar es Salaam Stock Exchange after the ongoing initial public offer.

KCB joins NMB Bank and the National Bank of Commerce in offering bonds this year.

NMB floated its Tsh25 billion ($10.9 million) Jasiri bond to finance women-led businesses, with NBC’s Twiga bond targeting to raise Tsh300 billion ($131 million) for funding small and medium enterprises.

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KCB Bank Tanzania has floated its first Islamic bond worth Tsh10 billion ($4.4 million) to fund its Sahl banking asset portfolio. The Sharia-compliant paper was opened on November 9 and […]

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Kenyans’ visa-free stay in S. Africa comes with costs if one overstays

Kenyans planning to travel to South Africa will from January next year enjoy a visa-free stay of up to 90 days per calendar year, but those who overstay their welcome, or enter illegally will pay a huge penalty.

On Wednesday, Kenyan President William Ruto and his South African counterpart Cyril Ramaphosa witnessed an agreement that could end decades of complaints from Nairobi on immigration policies by South Africa.

It means that Kenyans will no longer need to apply for e-visas or regular visas before travelling to South Africa for business or tourism. The tradition has been that Kenyans apply for a ‘free’ visa from an agent of the South African High Commission who charges an ‘application fee’ to handle the paperwork. The visa often comes out after four working days.

With the new agreement, all Kenyans will need is an invitation and return ticket, as well as proof of vaccination for yellow fever and Covid-19; and proof of financial ability to stay in South Africa during the intended duration for tourists.

“This has been a challenge that has been with us for many years. Under the new dispensation, we can build a greater relationship,” said President William Ruto at a joint press conference in Nairobi. His South African counterpart said the deal could take business and tourism “to greater heights.”

Deportation costs

But there is a catch: Each country will bear the cost of deporting their nationals caught overstaying. This means that a Kenyan overstaying in South Africa or caught entering illegally will be returned at the cost of Nairobi. In essence, officials said this will mean the travel filters between the two countries will be stringent, sieving out illegal immigrants, criminal suspects and all those with no paperwork taking advantage of the system.

“People who abuse the system…don’t deserve to be in South Africa, and they don’t deserve to be in Kenya,” President Ruto added.

“This agreement will be implemented to ensure the bad elements that try to infiltrate our countries are dealt with firmly and decisively.”

Age-old complaint

South Africa, by easing the visa rules on Kenya, is merely responding to an age-old complaint. And President Ramaphosa’s predecessors often dodged the bullet, accusing Kenya of being a conduit for illegal migrants, mainly from Ethiopia and Somalia. But Ramaphosa’s regime has tried to ease things, including allowing those on student visas to renew their stays while still in south Africa and ending the need to travel back home for the same.

Ramaphosa also allowed Kenyans to transit through South African airports without a transit visa, but as long as they do not leave the airport. In the past, one needed a transit visa regardless of whether he or she would leave the airport or not. Until January next year, however, Kenyans will still need transit visas if heading to neighbouring countries via South Africa by land.

President Ramaphosa described the new ties as based on a “wonderful foundation that exists” between Nairobi and Pretoria.

Implemented fully

“We are committed to ensure that the agreements that we have signed now and in the past will be implemented fully,” he said before describing the visa issues as “thorny”.

“Our officials will speed up the processes to implement it. This dispensation will be available to Kenyans over a 90-day period in a given year, meaning that, yes, you can use the 90 days, ten days, 20 days or whatever. Kenyans will have a full 90 days to be able to visit south Africa and we would be able to review this and get reports from our ministers within a year and see how this is functioning,” he explained.

It means Kenyans must ensure their stay in South Africa does not exceed 90 days per year, cumulatively, to qualify for visa free stay.

“This will also be underpinned by other processes that we have agreed can take place: closer monitoring of the implementation process and also be able to have a return policy of those elements that would be undesirable to be able to be returned to Kenya.

“We are going to be monitoring this much more closely and we are setting in place various mechanisms to make sure that what we have agreed to is adhered to and that no one takes advantage of the agreement.”

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Kenyans planning to travel to South Africa will from January next year enjoy a visa-free stay of up to 90 days per calendar year, but those who overstay their welcome, […]

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Kenya defers $699m loan repayments as debt pressure high

Kenya failed to meet KSh84.6 billion ($695.4 million) debt repayment obligations in the year to June due to a cash crunch and instead carried over the payments to the current fiscal year.

The public debt rose to KSh8.6 trillion ($70.7 billion) adding more burden on service costs, with more than KSh945 billion ($7.8 billion) used to pay domestic and external lenders in the 2021/22 financial year.

In its latest review of the progress on implementing projects under its 38-month credit scheme, the International Monetary Fund (IMF) said Kenya failed to pay 0.7 per cent of the country’s GDP to external creditors.

The IMF did not make public the identity of the creditors.

“A constrained borrowing environment meant that planned external commercial financing did not materialise. Lack of funds contributed to 0.7 per cent of GDP in unpaid obligations that were carried over to the 2022/23 financial year,” IMF stated.

Kenya’s GDP was Sh12.0982 trillion by 2021, according to the Central Bank of Kenya.

Debt pressures high

The IMF said while Kenya grew its tax revenue and cut budget deficits, the country’s debt pressures remained high.

The lender added that a mix of factors, including huge amounts spent on subsidising fuel, high inflation and disruptions in global supply chains drained Kenya’s efforts on growing revenue and cutting the budget deficit.

“Significant unbudgeted spending in the early months of this fiscal year, much of it for fuel subsidies, posed an additional challenge. There has been progress on fiscal adjustment needed to address debt vulnerabilities though pressure remains elevated,” the lender said.

The government cut the budget deficit from 8.2 per cent of the GDP to 6.2 per cent, during the year, while Kenya Revenue Authority (KRA) grew taxes from 12.6 to 13.7 per cent of GDP, crossing the Sh2 trillion mark for the first time.

External financing needs

Announcing a planned release of KSh52.7 billion ($4.3 billion) in lending to Kenya under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) in the coming weeks, the IMF said nearly half of the money would be prioritised to cover external financing needs due to the ongoing drought.

“Upon completion of the Executive Board review, Kenya will have access to SDR 336.54 million (equivalent to about $433 million), bringing the total IMF financial support under these arrangements to about $1,548 million,” a statement by IMF heads of the delegation to Kenya Mary Goodman and Tobias Rasmussen read.

“This latter amount includes proposed augmentation of access of SDR162.84 million to cover external financing needs resulting from drought and challenging global financing conditions.”

The IMF says the new government must continue with measures to grow revenue further while controlling spending in a bid to cut budget deficits.

Structural, governance reforms

“It will also be important to move ahead with structural and governance reforms. This includes completing efforts to publish beneficial ownership information for awarded government contracts, which will be a major step towards greater transparency and accountability,” the statement said.

“Reform of financially-troubled state-owned enterprises – including Kenya Airways and Kenya Power – will also be key.”

President William Ruto’s initial measures to do away with fuel subsidies and reinstate variable cost adjustments in electricity prices led to a rise in fuel and power prices.

Kenya’s treasury in the quarter that ended June tapped KSh40.87 billion ($336 million) from the dollar reserves the CBK received from the IMF in form of special drawing rights in August last year.

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Kenya failed to meet KSh84.6 billion ($695.4 million) debt repayment obligations in the year to June due to a cash crunch and instead carried over the payments to the current […]

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Kenya Airways pilots call off strike after court order

The Kenya Airline Pilots Association has called off their strike notice following an earlier ruling Tuesday by the Employment and Labour Relations Court which ordered the pilots to resume work.

In a statement Tuesday night, Kalpa withdrew their strike notice and urged their members to resume duty on Wednesday, November 9, 2022, at 6 am.

“Members are also urged to report to the Executive Council any incident of victimisation or disciplinary action that may be taken contrary to the court’s orders,” Kalpa said.

The pilots association said they regretted the disruption and inconvenience to KQ guests and urged their members to immediately restore normalcy to operations.

Kalpa launched the strike at Nairobi’s Jomo Kenyatta International Airport on Saturday, defying a court order issued last week against the industrial action.

Return unconditionally

Labour Relations Court judge Anna Mwaure on Tuesday ordered “the Kenya Airways pilots to resume their duties as pilots by 6am on November 9, 2022, unconditionally”.

Kenya Airways later welcomed the court’s decision.

“We thank the court for the expeditious ruling that now allows KQ to resume its normal operations. We commit to complying with the court’s directions,” said a statement by Allan Kilavuka, the Group Managing Director and CEO of Kenya Airways.

Transport Cabinet Secretary Kipchumba Murkomen had also during the day also welcomed the court order.

He urged the airline not to victimise any pilot who took part in the strike.

“The past 4 days have been difficult for Kenya’s aviation industry due to the strike by the Kenya Airline Pilot Association (Kalpa). We convey our sincere apologies to travellers and cargo customers affected by the strike,” he said in a statement to newsrooms.

“I also urge the management of Kenya Airways to obey the court order barring the victimisation of any of the pilots who participated in the strike,” Mr Murkomen said.

He said a prolonged strike would have not only forced the closure of the airline which was losing over Sh300 million a day but also negatively impacted over 18,000 lives that depend on the airline.

“In the past 3 days, this strike has disrupted travel plans for over 12,000 customers across KQ network, forced the cancellation of over 300 flights and affected 3,500 other employees who were not part of it,” Murkomen said adding that the national government is committed to the well-being of the airline.

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The Kenya Airline Pilots Association has called off their strike notice following an earlier ruling Tuesday by the Employment and Labour Relations Court which ordered the pilots to resume work. In […]

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Kenya makes public SGR contract which gives China sweeping powers

The standard gauge railway (SGR) contract signed by Kenya gives sweeping powers to its Chinese lenders, including requiring arbitration of any dispute to be held in Beijing, documents released by the government after years of secrecy have shown.

In the contract, which helped retired President Uhuru Kenyatta build what was Kenya’s most expensive infrastructure project, Kenya was bound to keep the details of the deal under lock and key, the reason why authorities, including the former Head of State, refused to make the contract public even after a court order.

The contract was Sunday made public by Transport and Infrastructure Cabinet Secretary, Kipchumba Murkomen, ending years of speculation on what the country signed.

But while Mr Murkomen shared the contract, which he said will be tabled in Parliament, details of the collateral Kenya put up—reported by the media, led by the Nation, as being the Port of Mombasa and other assets of the Kenya Port Authority—were missing.

In the documents shared by Mr Murkomen, China was to lend Kenya $1.6 billion at 2 percent interest per annum, with a 0.25 percent commitment fee.

Taxpayers paid a management fee of $4 million 30 days after the signing of the contract.

The SGR deal, the contract shows, is a 20-year loan with a seven-year grace period. Kenya was to repay the amount in 156 months (13 years), and was to dedicate 42.06 per cent of the proceeds from the railway to repay the loan.

For the Nairobi -Naivasha route, Kenya inked a $1.2 billion in a 20-year loan facility.

Kenya was required to pay $137.59 million as insurance fees.

The contract also confirms fears that Kenya had been bound to seek resolution—in case of a dispute—only in China, which experts have said gives the Asian nation a big advantage.

“If no settlement is reached through friendly consultation, each party shall have a right to submit a dispute to the China International Economic and Trade Arbitration Committee for arbitration …” the contract states.

In the deal, Kenya was bound to establish an inland container depot in Nairobi “and its mandatory customs clearance” as well as a Railway Development Fund, that China had said should be established “to be applied in priority to make repayment of loans in relation to the project”.

The contract also demanded that Kenya first approaches China to purchase any goods from the proceeds of SGR, before going to any other market.

Also read: Samia’s basket of goodies from China

The deal, which was signed by former Treasury Cabinet Secretary Henry Rotich and Li Ruogu, the President of the Export and Import (Exim) Bank of China, also precludes Kenya from sharing its details.

“The Borrower shall keep all the terms and conditions hereunder in connections with this Agreement strictly confidential. Without the prior written consent of the Lender, the Borrower shall not disclose any information hereunder or in connection with this Agreement to any third party unless required by applicable law,” the deal reads.

During his vetting in Parliament, Mr Murkomen had promised to make the SGR contract public, saying Kenyans had the right to know what the government signed on their behalf.

‘Never seen’

“I have spoken to everybody whom I thought was a person of influence in government and privy to the SGR contract but they have said they have never seen the SGR agreement. I don’t want to name those I spoke to, but once I get into the office, I will look for it,” Mr Murkomen said.

Following exclusive reporting by the Nation on the SGR contract in 2020, especially on the collateral Kenya put up, the Chinese Foreign Ministry Spokesperson Hua Chunying said: “We have checked with the relevant Chinese financial institution and found that the allegation that Kenyan side used the Mombasa Port as a collateral in its payment agreement with the Chinese financial institution for the Mombasa-Nairobi Railway is not true.”

Since President Kenyatta promised on live television to make public the SGR contract in 2019, the government has been playing hide and seek with Kenyans on the matter, with the country left in the dark on just what it signed and what the Chinese were guaranteed in the process.

In January this year, the government, following a court order, cited a non-disclosure agreement with the Chinese lenders for its refusal to make the contract public. It argued that the contract contains non-disclosure clauses and its release would endanger national security and injure relations with China.

Also read: Hard times for Kenya SGR as port operations return to Mombasa

Then Transport Principal Secretary Dr Joseph Njoroge said in January 2022 court documents that agreements entered between Kenya and Chinese contractors over the construction of the SGR have non-disclosure clauses.

In the case, activists Khelef Khalifa and Ms Wanjiru Gikonyo sought to have all contracts, agreements and studies related to the construction and operations of the SGR made public. They argued that keeping the documents confidential violates the law and discourages transparency in governance.

In May, Justice John Mativo ruled that public officers have a constitutional duty to make information available to Kenyans saying that any restriction on access to information from the government must have a genuine purpose and demonstrable effect of protecting a legitimate national security interest.

“It is clear that the respondents’ attempt to hide behind the provisions of sections 3(6) & (7) of the Official Secrets Act flies in the face of Article 35, section 29 of the Access to Information Act and falls to be rejected,” ruled Justice Mativo.

The judge argued that there are no two systems of law regulating access to information held by public bodies.

Most expensive projects

Mr Khelefa and Ms Gikonyo had, in the case, argued that documents related to the SGR project and its financing have never been made public despite being one of the most expensive projects undertaken by the government.

“SGR is the largest capital-intensive infrastructure project ever constructed in the country, but despite this extraordinary expenditure of public funds, the project has been undertaken with controversy and secrecy from its inception,” they argued.

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The standard gauge railway (SGR) contract signed by Kenya gives sweeping powers to its Chinese lenders, including requiring arbitration of any dispute to be held in Beijing, documents released by […]

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Pilots strike clouds Kenya Airways plans to raise flight frequency

Troubled Kenya Airways is facing an operational crisis as pilots down tools protesting poor working conditions. This is amid plans by the airline to raise frequency of flights and return to old routes over the festive season to take advantage of rising traveller numbers.

The Kenya Airline Pilots Association (Kalpa) said effective 6am November 5, there would be no Kenya Airways aircraft flown by its members departing from the Jomo Kenyatta International Airport.

The association is protesting a decision to suspend contributions to the provident fund, which they claim is a contractual agreement between the airline and all employees. The pilots said KQ has unilaterally stopped both the employees’ and the employers’ contribution since 2020 and has failed to resume the retirement benefits scheme.

Pre-Covid numbers

The strike now stands in the way of KQ’s plan to recover by 2023 its pre-Covid numbers of over five million passengers, recorded in 2019, through more flights and new routes.

This week, Kenya Airways increased the number of flights for the London route throughout winter, seeking to recoup numbers lost during the Covid-19 restrictions. It now flies to London 11 times a week up from five times.

“The increased flight frequencies will cater to this route’s increased demand and provide KQ customers with increased flight options in the upcoming winter season,” the airline said.

KQ also introduced direct Mombasa-Dubai flights during the festive season, targeting to reap from the traditional high demand.

“KQ will operate daily flights with two on Wednesday, Thursday, Saturday and Sunday (morning and evening). Flights are open for booking via KQ’s website, travel agents and online travel agents.”

Left with no option

But Kalpa, which represents about 400 pilots, said the Kenya Airways management had left them with no option but to withdraw labour over unresolved grievances.

“We hoped that the management of the airline would soften its hard stance and engage in a negotiation on the issues raised. However … Kenya Airways management has not made any meaningful attempt to engage,” Kalpa’s General Secretary and Chief Executive Captain Murithi Nyaga said in a statement on Friday.

Kalpa had issued a 14-day strike notice on October 19.

Board decision

Now the carrier’s management will need to first handle the strike by its pilots.

KQ management issued a statement on Friday night saying the strike will cost the airline $2.47 million a day, terming the move by the pilots as unfortunate.

KQ Chairman Michael Joseph said the airline has been working with the Ministry of Labour and the Central Organisation of Trade Unions (Cotu) to resolve grievances raised by Kalpa.

“The board has unanimously come to the opinion that none of the grievances advanced by Kalpa merits an industrial strike and firmly holds that all CBAs (collective bargaining agreements) must align with the need to restructure the airline’s operations towards profitability and efficiency,” said Joseph, suggesting KQ’s financial situation comes first when it negotiates with pilots or staff.

‘Action is unnecessary’

“We wish to reiterate that industrial action is unnecessary at this point as it will delay and disrupt the financial and operational recovery and cause reputational damage to Kenya Airways.

“The board underlines its full support and confidence in [CEO] Mr [Allan] Kilavuka and the management in handling the matters at hand and the company.”

On Wednesday, a Kenyan Labour Court had suspended the strike notice issued earlier, even though pilots insisted they would down tools if their grievances were unmet.

The national carrier has been struggling with losses over the years.

Recently it defaulted on its aircraft purchase loans worth $841.6 million from the American Exim Bank.

The Kenyan government had guaranteed $525 million and has since offered to pay the amount. KQ disputed the figure this week, even though the National Treasury had listed it in its report.

Loan default

The airline has been focused on restructuring its fleet, including selling aircrafts and sub-leasing to other airlines in an attempt to return to profitability.

Data from the airline shows that the national carrier’s fleet size reduced in the last nine months to 41 aircrafts from 43 in December 31, 2021.

Hoteliers have lauded the decision to begin flying from the Moi International Airport to Dubai during the tourism high peak period , saying it will boost the sector.

The hoteliers have been calling for an open-skies policy to allow international airlines to land at the Coast region’s largest airport.

“The announcement of KQ’s direct flights from Mombasa to Dubai from 1 December 2022 is a welcome change and brings us a step closer to the open skies policy that all tourism stakeholders are strongly advocating for,” said Kenya Tourism Board director Bobby Kamani.

“The tourism fraternity looks forward to the resumption of flights to Mombasa by Turkish Airlines, Lufthansa and the introduction of FlyDubai, to continue the momentum,” Kamani added saying their would be value from the open-skies policy.

“It is not just for tourism by way of lower air fares but for the economy as a whole with lower freight costs and an increased interest by international investors to invest in Kenya as they see the country being more accessible than ever before.”

Mohammed Hersi, the chairman of the Diani Hospitality Owners Association, lauded Kenya Airways for resuming the Mombasa-Dubai direct flights.

“The Dubai-Mombasa four times a week flight is progressive,” Hersi said.

“We can’t wait for the following – London-Mombasa even three times a week is good enough, Amsterdam-Mombasa, Milan-Mombasa to serve Malindi and Watamu and Paris-Mombasa flights.”

Players want the airline to also begin direct flights between Mombasa and Mumbai in India and Mombasa and Johannesburg.

KQ is yet to launch to the Italian cities of Milan and Rome, previously planned for June this year, due to reduced passenger demand as a result of slower than expected recovery from the pandemic.

Tourist boom

Some airlines that have asked for licences to fly directly to Mombasa include KLM, Qatar, Turkish, Fly Dubai and Emirates. Ethiopian and Uganda Airlines already fly into Mombasa directly

“If these airlines fly to Mombasa, we will have traffic to fill our beds and further create employment,” said Kenya Coast Tourism Association chairman Victor Shitakha.

In 2021, KLM announced direct flights from Amsterdam to Mombasa. But the plans were ‘halted’ after the airline failed to get rights to fly directly to the destination.

source

Troubled Kenya Airways is facing an operational crisis as pilots down tools protesting poor working conditions. This is amid plans by the airline to raise frequency of flights and return […]

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