Considering how fast 2021 has been speeding along, one cannot help but wonder if someone secretly added a supercharger to 2021.
Well, this might sound like a joke, but scientists actually say that the earth is moving faster than it has in the last 50 years – which is why 2021 seems to be in a rush.
As we bid farewell to July and prepare to usher in August, Kenyans have something to smile about – such as the signing of Ksh20 billion in deals between Kenya and the UK, as well as an expected review in mobile call rates.
However, it still seems that the full effect of the pandemic is yet to be fully comprehended with companies like Centum making its first full-year loss in 42 years, and revelations that in the Covid-19 period about 20% of SMEs in Kenya closed down.
It is against this backdrop that we take a look at the biggest money news from the last 7 days, and how they could affect the contents of your wallet.
The Communications Authority of Kenya (CA) is expected to lower the rates charged by telecommunication companies for interconnecting customers, something that could lead to lower call tariffs.
This will come as a reprieve to Kenyans, who are already dealing with reduced spending power due to the Covid-19 pandemic, as well as an increase in calling costs following the recent revision of excise duty on telephone services to 20%, up from 15%.
In a notice dated Tuesday, July 27, the regulator said that advancements in technology have made mobile communication more efficient, thus the need for a review of these charges.
The authority last reviewed these charges, which are commonly known as mobile termination rates (MTR) in 2015, pushing the rate to Ksh0.99.
A downward revision of these charges is likely to trigger a price war between the top mobile operators in the country. At the moment, Safaricom charges Ksh4.87 per minute to call rival networks, while Telkom and Airtel charge Ksh4.30 and Ksh2.78 respectively.
If the mobile termination rates get slashed by the CA, these rates could drop even further. However, analysts expect Safaricom, the leading telco with the largest market share to challenge this proposal.
In October 2020, the High Court ruled that a set of laws – among them laws that introduced taxes on M-Pesa transfers and fuel, as well as a Ksh18 levy on Kerosene – were illegal because they did not have the backing of the Senate.
The High Court had given Thursday, July 29, 2021 (today) as the deadline by which Parliament needed to have gotten the approval of the Senate, otherwise the laws would be abolished.
However, on Tuesday, July 27, the Court of Appeal extended the deadline to November 5, 2021, which is when the court will deliver a judgment on the fate of the laws.
Among the laws in contention include the Statute Law (Miscellaneous Amendment), the Tax Laws (Amendments), the Finance Act 2018, and 20 other laws.
The extension is a win for the government, with Attorney General Kihara Kariuki saying that the taxes collected under these laws will help fund key government operations and programmes, such as the Big Four Agenda.
However, the extension of the deadline means that Kenyans will continue feeling the pinch of these taxes until the court pronounces itself on the matter in November.
Despite the challenges posed by the Covid-19 pandemic Kenyans still looking for ways to invest their money, with the Capital Markets Authority (CMA) reporting that the total assets held by Collective Investment Schemes have grown by over 80% over the last 3 years, which saw them cross the Ksh100 billion mark in December 2020.
Between December 2020 and March this year, these funds grew by more than 6%. At the end of March, Collective Investment Schemes managed over Ksh111 billion for Kenyans, up from Ksh104 billion just three months earlier.
Despite facing woes over the performance of its unregulated products, investment firm Cytonn has seen Kenyans increase their investments in its regulated funds by 17% between December and March 2021, pushing the funds pooled under the firm’s regulated products to Ksh960.2 million.
Meanwhile, Acorn Holdings Group has seen its second green bond, which closed on Friday, July 23, oversubscribed by 146%. The bond, which had a target of Ksh1.438 billion, ended up raising Ksh2.096 billion.
This comes at a time when a report by rental space firm, Notify Logistics, shows that Kenyan women have surpassed men in investments during the pandemic. This is, in part, due to a pandemic-driven realisation that the traditional family setting of depending on a male breadwinner is no longer sustainable, the report observes.
“Over the past 9 months, 72.9% of all our clients were ladies venturing into business in Nairobi, Mombasa and Kisumu. Only 27.1 percent were men,” adding that the average age of investors in their Rent-a-Shelf model was 27.
“The average age of investors during the pandemic was 27 years. The youngest being 21 years old while the oldest is 36.”
In related news, the just released Nairobi Metropolitan Area Land report by Cytonn Research, reports that Athi River and Ongata Rongai are the best places to invest for people looking for high returns.
Land in Athi River appreciated by 8.7% over the last 12 months, while land in Ongata Rongai appreciated by 8.9%. Other areas with good land returns according to the report include Ruiru, Juja, Embakasi, Karen, and Kitisuru.
Central Bank of Kenya (CBK) governor Patrick Njoroge said on Wednesday that in the first half of 2021, the Kenyan economy has bounced back from the negative impact of the Covid 19 pandemic.
This is as the CBK Monetary Policy Committee (MPC) retained the base lending rate at 7% for the ninth straight time on accommodative policy stance and stable inflation.
The Governor noted that the recovery was supported by strong performance in the real estate, education, ICT, and construction sectors.
Among the factors that have helped CBK determine that the economy is improving include improved tax collections by the Kenya Revenue Authority (KRA), a spike in the profitability of banks, as well as reduction in bad and non-performing loans.
Despite the optimism by CBK, however, the economy is not out of the woods yet. For the first time in 42 years, Centum Investment Group reported its first full-year loss.
In the financial year ended March 2021, the firm posted a loss of Ksh1.37 billion, which is a huge decline from the Ksh4.63 billion net profit reported by the firm in the previous financial year.
Despite the loss, Centum still paid dividends to its shareholders, with each share earning a Ksh0.33 per share, while total dividends amounted to Ksh218 million.
This is in contrast to the previous year, where the firm gave dividends of Ksh1.20 per share, or a total of Ksh798.66 million.
In yet another report, the Medium and Small Enterprise Covid-19 Tracker Survey, which was carried out by CBK, the Kenya National Bureau of Statistics (KNBS) and FSD, reported that 20% of small businesses have closed permanently since the start of the Covid 19 pandemic.
The closure of small business and first time losses by a company that has been in the green for close to half a century are signs that, despite the optimism, the economy is not back in shape yet.
And finally, Kenyans have another reason to smile after the government inked deals with the UK government, which will see over Ksh20 billion channeled to the private sector.
The deals came on the first day of President Kenyatta’s three-day tour to the United Kingdom. The funds are expected to give a boost to the manufacturing, housing and energy sectors.
They will be channeled through the UK’s Department for International Development (DFID), which channels the funds directly to players in the private sector, rather than lending directly to the state.
Private sector companies that have previously benefited from such funds include Brookside Dairy, M-Kopa Solar, Garden City, Equity Bank and Athi River Mining.
Additionally, more than 3,000 unemployed Kenyan nurses and health workers will be employed under the UK’s National Health Service (NHS) in a deal secured by the president.