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Manufacturers Warn of Looming Price Hikes - Money Weekly
Manufacturers Warn of Looming Price Hikes - Money Weekly
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Manufacturers Warn of Looming Price Hikes - Money Weekly

Money254 Team
February 2, 2023
Sample of alcohol bottles in a liquor shop. IMAGE| COURTESY
Sample of alcohol bottles in a liquor shop. IMAGE| COURTESY

Happy New Month! 

It’s been a busy last seven days. From plans to send 700 Nairobi Metropolitan Services (NMS) employees home to farmers getting relief due to subsidised fertiliser prices to reports revealing that most Kenyans do not have a retirement savings plan, there have been a number of developments in the world of money.

As we do every Thursday, here's our weekly summary of the top money news from the last seven days that could have an impact on your money.

Farmers to Start Buying Cheaper Fertiliser This Week

This week, farmers will start buying government-subsidised fertiliser as the government starts distributing it to different counties around the country with the arrival of the first batch of imports.

Key maize-growing counties like Uasin Gishu and Trans-Nzoia received the first batch of fertiliser as a result of the distribution, which has come before the March planting season.

At least 10,000 tonnes of the product had been moved from the Port of Mombasa to upcountry in preparation for planting, according to Agriculture Principal Secretary Harsama Kello.

In order to lower the cost of production encountered by farmers last year, when the commodity reached a high of Ksh6,000 per 50kg bag, the government aims to send roughly 3 million bags of cheap fertiliser to farmers ahead of the planting season.

In comparison to what they would have paid in the market, farmers will now spend Ksh3,500 for a 50kg bag of planting fertiliser.

Read Also: Fertiliser Scam: How Meru Villagers Lost Thousands in Packaged Goat Manure

Manufacturers Warn of Looming Price Hikes

Manufacturers have threatened to increase prices for consumers if the Kenya Revenue Authority (KRA) increases taxes on alcoholic beverages, cigarettes, juice, and cosmetics.

Rajan Shah, the head of the Kenya Association of Manufacturers (KAM), urged the government to maintain the current levies, saying that raising them would make Kenyan goods less competitive, stimulate the production of counterfeit goods, reduce government revenue, and cause job losses.

In an ambitious effort to expand tax collection, the National Treasury proposed a 300% price hike for excise stamps last month.

Beginning March 1, 2023, the stamp price for cosmetics would increase from 60 cents to Ksh2.50 under the Excise Duty (Excisable Goods Management System) (Amendment) Regulations.

Fruit juices and non-alcoholic drinks like sodas will now have a stamp fee of Ksh2.20 as opposed to the previous 60 cents.

If approved, stickers on beer bottles will go from Ksh1.50 to Ksh3, while stickers on spirits, wines, and tobacco products will rise from Ksh2.80 to Ksh5.

Read Also: Cost of Living: Survival Lessons From 9 Hard-hit Countries

700 NMS Employees to be Sent Home

The County Government of Nairobi plans on dismissing 700 enforcement officers that were hired by the Nairobi Metropolitan Services (NMS) in order to close a personnel deficit in the county government in 2021.

The workers will be relieved of their duties upon the end of their contract, according to a letter from Tony Kimani, Chief Officer for Security and Compliance at the county covernment, dated February 1, 2022.

NMS completed its tenure and relinquished over management of Nairobi County matters to Governor Johnson Sakaja following the 2022 general elections.

The officers' three-year contracts, which are extendable if they perform well, have them working as constables for the County Government of Nairobi.

Last year, when NMS started hiring new employees, it declared that the additional hires would enhance the number of officers available for duty as well as help replace those who had departed the service as a result of natural attrition.

Read Also: Every Employee’s Nightmare: Loss of Income

Nurses, Midwives to Access Study Loans

Kenyan students pursuing careers in nursing and midwifery can now apply for flexible and affordable study loans.

This is as a result of a partnership by Amref Health Africa, the Johnson & Johnson Foundation and the Higher Education Loans Board (HELB) to develop a sustainable education financing project in Kenya.

As part of the Global Nurse Education Finance Initiative, HELB CEO Charles Ringera said in a letter dated January 25, that the funding option is geared toward nursing students.

Kenya has a severe nursing shortage, with only 60,000 nurses serving a population of over 50 million Kenyans.

This makes it difficult for Kenya to attain sustainable healthcare and ensure that all people live healthy lives.

Those interested in applying for the loans should do so by June 30 on the HELB website.

Concerns as Most Kenyans Lack a Saving Scheme

Approximately 13.9 million Kenyans, the majority of whom work in the informal sector, do not have any kind of retirement savings plan.

Around 17.4 million people were employed in Kenya's formal and informal industries as of 2020, according to the Kenya National Bureau of Statistics (KNBS).

The report was presented during the current Minet Annual Pension Conference, which is taking place at a Naivasha hotel.

“The labour market is skewed towards informal employment at 83%. This is a time bomb and indicates that most Kenyans will retire poor,” the report says.

Jackson Nguthu, a representative of the Retirement Benefit Authority (RBA), noted that just 25% of the labour force, or around 3.5 million people, currently routinely contribute to retirement benefits programs.

“Out of this number, approximately 800,000 contribute to both the National Social Security Fund (NSSF) and the private occupational and individual schemes, with 2.7 million contributing only to NSSF,” he observed.

He urged the Trustees and service providers to continue raising awareness among the public about the necessity of saving for retirement, the need to make sacrifices and make additional voluntary contributions in order to reap the maximum benefits.

Read Also: 7 Reasons Why Retirement Planning is Important

CBK Grants Licences to 12 More Digital Lenders

The Central Bank of Kenya (CBK) has authorised 12 additional digital lenders to conduct business in Kenya, four months after issuing licences to the initial batch of 10 Digital Credit Providers (DCPs).

Out of an estimated 300+ lenders active in the market prior to the September 17, 2022 deadline for licensing applications, this brings the total number of licensed digital lenders to 22.

In a statement issued on Monday, January 30, the CBK revised the list of applicants to 381 from 288 in September 2022, bringing the total number of applications pending determination to 359.

The 12 digital lenders who have gained licences are:

  1. Inventure Mobile Limited (Trades as Tala)
  2. Jumo Kenya Limited
  3. Letshego Kenya Ltd
  4. MFS Technologies Limited
  5. M-Kopa Loan Kenya Limited
  6. Mycredit Limited
  7. Natal Tech Company Limited
  8. Ngao Credit Limited
  9. Pezesha Africa Limited
  10. Tenakata Enterprises Limited
  11. Umoja Fanisi Limited and;
  12. Zanifu Limited.

Read Also: 9 Types of Consumer Debts and How to Get Them in Kenya

Other Money News 

  • Kenya's inflation rate dropped by 10 basis points in January, reaching 9%. For the third consecutive month, inflation has decreased but has continued to exceed the top target set by the central bank of 7.5%. Inflation in December 2022 dropped from 9.5% in November to 9.1%. The slight decline over the past three months signals future hope for a reduction in living expenses, which have risen to record highs as a result of sharply rising food and energy costs.

Read Also: Cost of Living: Survival Lessons From 9 Hard-hit Countries

  • To reach Ksh3 trillion in tax income in the fiscal year 2023–2024, Kenya Revenue Authority (KRA) is set to start using surveillance drones. The taxman has started the process of procuring two unmanned autonomous vehicles (UAVs) that have a minimum range of 50 kilometres and will fly at least 3,500 metres above the area being watched.The drones' maximum flight speed is 80 kilometres per hour, and they will be able to automatically track objects. The government has been pushing to increase tax revenue by 30%, from Ksh2 trillion in the 2021–2022 fiscal year to Ksh3 trillion in the 2023–2024 fiscal year and Ksh4 trillion by 2025.

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