Welcome to this week's Money Weekly roundup, where we are going to delve into the latest developments impacting various aspects of the financial landscape.
In today’s edition, we'll explore how a new funding model is reshaping enrollment patterns in private universities, the significant boost for Small and Medium Enterprises (SMEs) with a Ksh5 Billion grant from KIEP, and the recent move by EPRA to maintain stable fuel prices through the introduction of a stabilization fund.
As we do every Thursday, here's our weekly summary of the top news from the last seven days that are shaping the economic landscape and could impact your money.
The implementation of the new higher education funding model has had a significant impact on private universities, leading to a decline in the number of government-funded students they have received. This decline has reached its lowest point in the past seven years, exacerbating the financial challenges already faced by these institutions.
According to data provided by the Kenya Universities and Colleges Central Placement Service (KUCCPS), the number of students placed in private universities has decreased by 67%, totaling 9,622 students in the latest placement cycle. Private universities enrolled 29,463 students in 2022
This figure is notably lower than the 10,984 students placed in 2016 when the program was initiated.29,661 candidates were placed in 2021, and 27,756 in 2020.
The recently introduced funding model allows government-sponsored students to receive loans for tuition fees in private universities, although they do not qualify for scholarships.
This adjustment could potentially force some private universities to consider measures such as staff reductions to sustain their operations or even contemplate closure due to severe financial constraints.
SMEs accepted in the KIEP (Kenya Industry and Entrepreneurship Project) 250+ initiative will gain access to financing and technical support to enhance their productivity and foster innovation.
Through a Ksh5 Billion fun in partnership with the World Bank, the program will provide performance-based grant funding to successful SME applicants, facilitating business growth, managerial and technical skill advancement, and the adoption of advanced technologies.
Principal Secretary of the State Department for Industry, Dr. Juma Mukhwana, affirmed the government's dedication to selecting SMEs nationwide, with a specific focus on empowering women-owned businesses, which will constitute 20% of the beneficiaries.
Eligible SMEs can conduct their registration at: https://250plus.kiep.go.ke.
Fuel prices are set to remain unchanged in the current month's evaluation conducted by the Energy and Petroleum Regulatory Authority (EPRA).
In an official statement, EPRA's Director General, Daniel Kiptoo, made public that the government has established a fuel stabilization fund via the Petroleum Development Fund. This fund will be used to reimburse importers of the fuel commodity.
Consequently, the cost of one liter of super petrol will remain at Ksh194.68 in Nairobi, diesel will maintain its price at Ksh179.67, and kerosene will be available for Ksh169.48.
For motorists in Mombasa, the prices will also remain constant: Ksh191.62 per liter for super petrol, Ksh176.63 per liter for diesel, and Ksh166.43 per liter for kerosene.
These unaltered prices will be effective until September 14, 2023.
A recent survey conducted by the Central Bank of Kenya (CBK) indicates that CEOs in the private sector anticipate a reduction in hiring for the remainder of the year due to a challenging economic environment.
Interestingly, the sentiment is different among CEOs in the banking sector, who foresee an increase in hiring. This positive outlook in the banking industry is attributed to its better profitability throughout the year compared to non-bank sectors.
The CBK survey, conducted prior to the August 9 monetary policy committee meeting, reveals that 70% of non-bank respondents do not anticipate hiring more employees in the second half of the year. This figure is higher than the 65% recorded in March who had similar expectations.
Companies have been grappling with elevated inflation, resulting in higher input costs.
Additionally, the weakened value of the Kenyan shilling against the dollar has led to increased expenses for imported raw materials and goods which has in turn negatively impacted sales, as consumers, who are also affected by inflation, find it increasingly challenging to afford the available goods and services.
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A Bill introduced by Mandera South MP Abdul Haro aims to establish a centralized database for universities, allowing employers to instantly verify the legitimacy of academic degree certificates provided by job seekers.
If approved by Parliament, this initiative will eliminate the need for job seekers to physically visit their former universities for certified copies of their degrees.
The proposed Universities (Amendment) (No. 2) Bill, 2023 also highlights the advantages of online digital certificates, particularly in instances where there are university strikes, elections, and epidemics when obtaining timely approvals can be challenging.
Access to the database will adhere to the provisions of the Data Protection Act, ensuring that the collected information is used solely for its intended purposes.
The introduction of this digital database is anticipated to address the widespread issue of fake academic certificates, a concern in an economy witnessing a rising number of job seekers.
This move could help mitigate intense competition for limited job opportunities.
The Employment and Labour Relations Court has issued a verdict stating that if employees do not specify their retirement age, employers should use the standard retirement age established for the public service.
The court also emphasized that this approach must be handled carefully and communicated to the employee well in advance.
Justice Monica Mbaru's ruling highlighted that unless the employer has prompted the employee to provide their birthdate information, they cannot later decide on a retirement date unilaterally.
She mentioned that a government circular pertaining to retirement, which was considered in a separate case, aimed to enhance transparency and certainty in employment. It allows employees to state their birthdates, providing employers with a level of assurance about the retirement timeline.
In her decision concerning an appeal brought by former security guard Kenneth Ouma, Justice Mbaru indicated that the retirement age of 55 years had been modified to 60 years, which has been consistently applied as a recommended practice over time.
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