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Fees For Govt Services Hiked Up to 100 Times - Money Weekly News Roundup
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Fees For Govt Services Hiked Up to 100 Times - Money Weekly News Roundup

Interior CS Kithure Kindiki arriving at Parliament Buildings for a Joint Sitting with National Assembly and Senate Committees on National Security, Defence and Foreign Relations on the request for approval by Parliament of deployment of NPS officers to Haiti. PHOTO | KITHURE KINDIKI | X
Interior CS Kithure Kindiki arriving at Parliament Buildings for a Joint Sitting with National Assembly and Senate Committees on National Security, Defence and Foreign Relations on the request for approval by Parliament of deployment of NPS officers to Haiti. PHOTO | KITHURE KINDIKI | X

It is that time of the week again when we take a comprehensive look at the news headlines over the last seven days and dissect those that can affect your money. 

Welcome to yet another edition of Money Weekly. 

This week Treasury CS, Davis Chirchir, warned that if the Israel-Hamas conflict persists the price of fuel at the pump in Kenya might hit Ksh300 from the current Ksh217.36 per litre of Super Petrol. His sentiments come at a time when the fuel prices in neighbouring Tanzania are dropping.

The High Court has given temporary relief to Kenyans seeking government services after suspending a shocking tenfold increase in the cost of services such as ID Card processing and renewal, passports, birth and death certificate application as well as marriage certificates, work permits for foreigners and the registration of children born to Kenyans outside the country. 

Also in the works is a plan by the government to increase fees associated with land ownership such as search, transfer and issuance of title deeds by up to 100 times. 

Layoffs are also on the rise, reaching levels similar to those recorded during the height of the Covid-19 pandemic. Posta Kenya, for instance, plans to retrench over 500 employees early next year and Base Titanium plans to close down operations at the end of 2024.

The Treasury CS is also warning that Kenya is facing a serious cash flow problem due to the Kenyan shilling losing its value. This is as the CBK governor calls for more climate-conscious investments in order to build a climate-resistant economy.

Let’s dive in.

Fuel Prices Could Hit Sh300, Energy CS Davis Chirchir Warns

Fuel prices could hit a high of Ksh300 if the Israel-Hamas conflict continues, Energy and Petroleum Cabinet Secretary Davis Chirchir has said. 

This warning comes after the October-November fuel prices were adjusted upwards to see Kenyans pay the most they have ever paid at the pump.

Currently, in Nairobi, petrol is retailing at Ksh217.36, diesel at Ksh205.47 and kerosene at Ksh205.06. It is expected that the Energy and Petroleum Regulatory Authority (Epra) will announce the new fuel prices next week for the November-December cycle.

Mr. Davis Chirchir, shared this worrying news while speaking to the National Dialogue Committee hearings intimating that the government was doing its best to mitigate the rise in fuel prices but it cannot do much because of international supply challenges.

"We can't do much on international pricing of petroleum. I read an article recently in the Financial Times that international (crude) prices could go to $150 (per barrel) because of the Israel-Hamas war, which would literally mean our products going to a high of Ksh300 per litre at the pump. We hope it doesn't get there," said the CS.

Analysts speculate that the US could tighten its sanctions on oil-producing nations seen to support Hamas which could affect the supply of crude oil. This is similar to what happened at the onset of the Russia-Ukraine conflict not only affecting fuel prices but also in grain supply in the world.

In the meantime, fuel prices have seen a drop in the neighbouring country of Tanzania. The Energy and Water Utilities Regulatory Authority (EWURA) of the Republic of Tanzania announced the reduction in prices citing the decrease in the world oil price by an average of 5.68%

In Dar es Salaam, a litre of petrol goes for Ksh198.42, diesel goes for Ksh204.48 and kerosene goes for Ksh207.45.

Read On: Cost of Fuel Might Rise to Ksh300 Per Litre - Energy CS

High Court Suspends Tenfold Hike in Cost of Govt Services

The High Court in Nakuru has halted a recent government decision to raise fees for essential services, such as national IDs and passports, in response to a petition challenging the move. 

Dr. Magare Gikenyi, the petitioner, argues that the increased costs lack transparency and were implemented without a clear formula or public involvement. The court's suspension of the fee hike is seen as a temporary relief for citizens who would have been adversely affected by the arbitrary increases.

Dr. Gikenyi emphasises that the fee adjustments are likely to disproportionately impact young Kenyans, potentially hindering their ability to obtain crucial documents like Identity cards, which could, in turn, limit their access to job opportunities.

The changes were contained in a special gazette notice dated November 7, 2023, signed by Interior Cabinet Secretary (CS) Prof. Kithure Kindiki. 

Below is a summary of the changes announced by the Interior CS;

Passport Fees:

  • Standard 34-page passport application: Ksh.7,500 (from Ksh.4,500)
  • 50-page ordinary passport: Ksh.9,500 (from Ksh.6,000)
  • 66-page ordinary passport: Ksh.12,500 (from Ksh.7,500)
  • 50-page diplomatic passport: Ksh.15,000 (doubled from Ksh.7,500)
  • 32-page service passport: Ksh.3,000 (unchanged)
  • Lost passport replacement: Ksh.20,000 (from Ksh.12,000)
  • Valid mutilated passport replacement: Ksh.20,000 (from Ksh.10,000)
  • Express passport: Ksh.30,000 (new service) 

ID and Related Fees:

  • First-time ID applicants: Ksh.1,000 (from free)
  • Replacement of lost IDs: Ksh.2,000 (twentyfold increase from Ksh.100)
  • Identification reports: Ksh.1,000 (from Ksh.300)
  • Civil servants' cards: Ksh.1,000 (from Ksh.100)
  • Staff badges for civil servants: Ksh.1,000 (from Ksh.350)

Work Permit Fees:

  • Work Permit Investors (Class G): Ksh.250,000 (from Ksh.100,000)
  • Work Permit Investors (Class D): Ksh.500,000 (from Ksh.200,000)
  • Express work permits, special pass processing, dependant pass processing, student internship processing fees: USD 10,000, USD 200, USD 200, USD 100 (all were previously free)
  • Work permit processing fees: Ksh.30,000 (tripled)
  • Internship pass issuance fees: Ksh.20,000 (quadrupled from Ksh.5,000)
  • Dependant pass issuance fees: Remains the same at Ksh.0
  • Dependant pass issuance fees for spouses of Kenyans: Ksh.30,000
  • Reprocessing fees for rejected permits: Ksh.20,000
  • Validation of work permits: USD 100
  • Cancellation of work permits and confirmation of residence documents: Ksh.50,000 each
  • Querying the status of work permits: Ksh.1,000

Birth and Death Certificate Fees:

  • New birth certificate applications: Ksh.200 (from Ksh.50)
  • Death certificate application fees: Ksh.200 (quadrupled)
  • Amendment fees for birth and death certificates: Increased by Ksh.870 to Ksh.1,000

Permanent Residency Fees:

  • Processing of Permanent residences for children of Kenyan citizens born outside Kenya: Ksh.200,000 (doubled)
  • Issuance of permanent residences for the same children: Ksh.1,000,000 (from Ksh.500,000)

For these fees, Foreign and Diaspora Affairs Principal Secretary Roseline Njogu on Wednesday apologised stating that they apply only to the children of foreigners seeking permanent residence. By the time of going to press, a corresponding Gazette Notice correcting this had not been issued. 

Marriage Certificate Fees

The government also has increased the charges for processing marriage certificates for Kenyan spouses at the Attorney General’s (AG’s) office by 10 times to Ksh50,000.

This is up from the Ksh5,000 fee currently.

The matter is up for confirmation of compliance and further directions by the High Court on November 29, 2023.

Govt Plans to Increase Land Fees by up to 100 Times

Prospective home and land buyers are bracing for higher costs as the Ministry of Lands is planning on increasing fees associated with the processing of land transactions by up to 100 times. 

According to a report by the Daily Nation, the Lands Ministry considers the current fees as unreasonably low and unaligned to market rates.

Below is a summary of the expected changes;

  • Application for incorporation of a trust: Increases to Ksh50,000 from Ksh500 (a Ksh49,500 change)
  • Application for replacement of title section: Increases to Ksh5,000 from Ksh500 (a Ksh4,500 change)
  • Application for the preparation of a surrender of lease: Increases to Ksh5,000 from Ksh500 (a Ksh4,500 increase) 
  • Application for preparation of any instrument not herein above described: Increases to Ksh5,000 from Ksh1,000 (a Ksh4,000 increase)
  • Application for issuance of certificate of title: Increases to Ksh2,500 from Ksh500 (a Ksh2,000 increase)
  • Application for registration of documents; Increases to Ksh1,500 from Ksh500 (a Ksh1,000 increase) 
  • Resubmission for registration of rejected documents: Increases to Ksh1,500 from Ksh500 (a Ksh1,000 increase)
  • Application for official search: Increases to Ksh2,000 from Ksh500 (a Ksh1,500 increase)

President Ruto’s Inaugural State of the Nation Address

On Thursday, President William Ruto gave his first ever State of the Nation Address to a country eager to hear the Kenya Kwanza administration’s plans on tackling the cost of living crisis. 

Alluding to some of the unpopular measures his government has taken, President Ruto blamed past decisions that he said made the country live beyond its means and that now was the time to change course.

“As I told Kenyans on my first day in office, times were difficult and many people are struggling and necessary and effective sustainable solutions were urgently needed. We must admit that as a country, we had been living large and way beyond our means.

“The time has come, therefore, to retire the false comforts and illusory benefits of wasteful expenditure, and counterproductive subsidies on consumption by which we dug ourselves deeper into the hole of avoidable debt. The new direction may not be easy, but it is ethical, responsible, prudent and, most importantly, necessary. We have had to take hard decisions and make painful choices because we owe it to Kenyans to do the right thing and confront facts as they are without flinching or equivocating,” he said. 

Below is a quick summary of the highlights from the president’s address that have a bearing on your money.

  • The commencement of the rollout of 100,000 kilometres of last mile fibre optic connectivity with 25,000 free WiFi hotspots in market centres. He pledged to have completed the first 2,200 by December 2023. 
  • The government will settle the first instalment of the USD2 billion Eurobond loan that matures next year in June. The instalment totals USD300 million (Ksh45 billion).
  • Forthwith, 80% of all new recruits to the military, police, KWS, KFS and all other security agencies will be drawn from the National Youth Service (NYS). 
  • The construction of 400 markets countrywide is underway
  • The allocation of an additional Ksh3 billion to the Judiciary was effected in the 2023/24 budget
  • Fertiliser prices were reduced from Ksh6,500 to Ksh2,500
  • The price of a 2kg packet of maize flour was reduced from Ksh250 to between Ksh145 and Ksh175 depending on the brand
  • The launch of the Kenya Integrated Agriculture Management Information System (KIAMIS) to facilitate the registration of farmers, provide e-extension, credit management and mechanisation services
  • Growth of NSSF contributions from Ksh1.4 billion monthly in January to Ksh6.5 billion monthly
  • President Ruto said 56,000 teachers have been employed, so far in 2023 - about 80%, however, are on short-term contracts.

Read on: President William Ruto's Full State of the Nation Address (November 2023)

Layoffs Rise to COVID Levels

The unemployment crisis in Kenya continues to deepen as companies are cutting jobs at a rate matching the peak of the Covid-19 pandemic. Some of the reasons attributed to these drops in employment include high taxes and fuel costs.

This news comes as the Postal Corporation of Kenya (PCK) plans to reduce its workforce by 504, to 1,860 employees. These efforts are meant to alleviate costs for the company as it sees declining revenues as a result of digital competition.

On the other hand, an Australian mining firm, Base Titanium, plans to cease operation in Kwale by December 2024 because of depleted titanium resources. The cease of operation will lead to 870 job losses and financial setbacks for the local suppliers and the government.

Kenya Facing a Serious Liquidity Crisis

Maturing debts are causing a serious cash flow challenge for the Kenyan Treasury leading to delayed disbursement of funds for various projects.

The Treasury Cabinet Secretary, Njuguna Nd’ungu, while appearing before the Finance and National Planning Committee said that the country was in this difficult position because of the depreciating Shilling and high interest rates.

“We are facing so many external headwinds as well as negative external shocks. We are facing a liquidity crisis as we manage short-term debt. But I want to assure the country that we are not facing an insolvency crisis.”

The cash flow constraint is also being experienced by businesses leading to limited expansion plans. A survey conducted by S&P Global indicated that operational costs and cash flow constraints hindered companies' plans to increase branches, introduce new products or increase production capacity. 

In addition, the Kenya National Bureau of Statistics (KNBS) has also reported that inflation rose in October to 6.9% from 6.8% in September. Potatoes, tomatoes and oranges saw a price increase while maize and wheat flour saw a price decrease. Electricity, gas and transport costs also added to the inflation increase.

All this comes with a backdrop of a dynamic shift in the Kenyan population. The population of older persons increased from 1,943,725 in 2009 to 2,740,040 in 2019 while the youth population grew from 11,089,518 to 13,177,600 in the same time and is expected to reach 18,966,737 by 2035. This is according to the 2023 State of Kenya Population Report.

The National Treasury and Economic Planning Cabinet Secretary, Prof Njuguna Ndung’u, noted this as a possible cause of anxiety in the country due to the lack of commensurate job opportunities for the youth and high demand for social protection for the bulging older generation.

“The youth bulge presents the country with significant economic and social opportunities but also challenges concerning health, education, skills training, labour market needs, employment, and digital addiction,” notes Prof. Ndung’u.

Costly Inputs Have Choked Agricultural Sector Productivity

According to a report by Tegemeo Institute of Agricultural Policy and Development, Kenyan farmers have been severely impacted by the rising costs of farm inputs, particularly fertilisers. 

These costs have been exaggerated by supply chain issues due to the pandemic and geopolitical conflicts.

“Input costs have risen due to a number of factors. In the case of fertiliser, costs started rising in late 2021 due to supply-side constraints due to the pandemic. This was exacerbated by the Russia-Ukraine War,” notes Dr Timothy Njagi, a research fellow at the institute.

Meanwhile, the government’s subsidised fertiliser which is aimed at mitigating these prices is battling distribution challenges threatening food productivity.

On the other hand, Kenya’s Fresh Produce Exporters Association is protesting what they perceive as double taxation by the national government and county government. The government has a 0.25% charge while county governments apply cess charges to the same products.

This is as the Horticulture Crops Directorate steps up mango export inspection to curb Avocado smuggling. Kenya has imposed a short-term export ban on avocados to prevent immature avocado exports and preserve the integrity and quality of the industry.

CBK Calls for More Green Financing

Kenya faces an annual climate financing gap of $5.13 billion hence the Central Bank of Kenya emphasises the need for more resources committed to climate action and development. In an effort to build a climate-resistant economy, the governor has called upon various sectors to engage in a comprehensive approach.

Meanwhile, Carbon Value Exchange (Cavex) in a bid to expand its digital carbon financing platform has raised $6 million in seed funding from E3 capital and FSD Africa Investments. The platform connects carbon credit buyers with projects, ensuring transparency, project integrity, and pricing visibility. The investment will enable access to carbon markets for portfolio companies in the Global South by leveraging digital technology.

Kenya Banks on Regional Trade Fair to Boost MSMEs Growth

The East African Community Trade Fair will be happening in Bujumbura, Burundi from the 5th to 15th December. Kenya sees this as an opportunity to boost its Micro, Small and Medium-sized Enterprises (MSMEs). The Ministry of Cooperatives will lead the Kenyan businesses to interact with over 1500 MSMEs that will be in attendance. The platform is aimed at offering market insights and expansion opportunities.

Meanwhile, the Central Bank of Kenya has announced that HOPE Advancement Inc., a subsidiary of HOPE International Inc. has acquired a 51% stake in SMEP Microfinance Bank PLC. 

HOPE aims to infuse capital, upgrade technology and reinforce governance structures to boost SMEP’s capabilities.

Still in banking, Gulf African Bank has collaborated with the African Guarantee Fund to offer a Ksh550 million credit guarantee for women-owned SME loans. 

The partnership, backed by the African Development Bank, intends to boost financing for women-owned SMEs while aligning with Shari’ah principles.

Other News in a Snapshot

  • Daniel Mungai Mugetha and driver Anthony Nduiki Waigumo, Wells Fargo Company employees, allegedly stole Ksh94,918,750 that was in transit. The money was stolen after it was collected from Quickmart supermarket, leaving behind the awaiting police escort. The Directorate of Criminal Investigations (DCI) is following up on the case.
  • In a bid to access customer data directly, restaurants in Kenya are shifting away from third-party delivery services and coordinating their deliveries in-house. It has been noted that there has been a decrease in deliveries via third parties and increased revenue from in-house delivery channels.
  • Swiss-Belhotel International is expanding its operations in Kenya by taking over the management of the Nairobi Safari Club and Emory Hotel in Kileleshwa. The Hong Kong-based company aims to rebrand Nairobi Safari Club and enhance its services and facilities.
  • Ksh1 billion has been reallocated from the State Department for Education to NG-CDF to build classrooms for junior secondary schools. The money will be distributed to constituencies depending on the Grade Seven enrollment. Bungoma, Nairobi, Kisii and Kilifi are some of the top beneficiaries while Lamu and Marsabit receive the lowest share.
  • The Angaza Awards' "2024 Top 10 Women to Watch" nominations are open. Launched in 2020, these awards are meant to celebrate outstanding women in Africa's financial services. The nominations are open until January 23, 2024. Its criteria evaluate impactful female professionals across various financial sectors' achievements and impact on organisational performance, fostering shared value within the industry and community. Professionals from banking, insurance, fintech, and more are encouraged to apply.
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Stephen Kimani aka KIMSpeaks is a thought leader, speaker, and writer. He is also the Founder of Living the DREAM. He is passionate about learning and teaching ideas that empower people to improve the quality of their lives. You can connect with Kimani on LinkedIn.

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