The week will be remembered as the first time in Kenya's history when the price of a 2kg packet of unga went above the Ksh200 mark.
If you were to buy maize flour and cook ugali today, it would be the most expensive ugali ever made in Kenya given the rise of flour prices to an historic high.
This comes at a time when Kenyans are still grappling with the effects of increased fuel prices that were effected just a week prior.
On top of the maize flour crisis, the same week also saw mass layoffs (at least 400) at a major brewery, further compounding a slow good-news week. However, there were some positive headlines that hit the news desks as well.
In today’s edition of Money Weekly, we look into all the above, as well any other news touching on finance that stood out.
Kenyans now have to dig even deeper into their pockets as the price of unga spiked to unprecedented heights over the last week.
A 2kg-packet of Jogoo brand is retailing at Ksh204, Pembe at Ksh208 and Ajab going for Ksh206.
Top of the range brands like Amaize and Hostess are now retailing at Ksh204 and Ksh220 respectively, up from Ksh167 a week earlier.
A 90-kilogramme bag of maize flour also went up to now retail at Ksh6.500, reflecting the impact of dwindling supplies.
Millers have warned that prices will most likely continue to rise in the coming days due to a lack of sufficient stocks.
Maize flour is one of the most consumed food products in many households across Kenya.
On June 20, Keroche Breweries laid off 400 workers after its Naivasha plant was shut down by the Kenya Revenue Authority (KRA).
Keroche Breweries CEO Tabitha Karanja, took to Twitter to express her views on the ongoing wrangle with the taxman.
“I was also at pains as I looked at all the beer in the tanks that we shall be forced to drain to waste and wondered why and how the relevant ministries remain so indifferent to the dire consequences of the current closure of the company’s factory,” reads an excerpt from her tweet.
Karanja went on to plead with the national government to support struggling industries, particularly local industries that lack parent companies in other jurisdictions, unlike multinationals, to provide them with support.
The latest casualties of layoffs at Keroche will join the millions of other jobless Kenyans dealing with the hardships of a shrinking economy.
On June 21, KRA announced plans to auction 193 motor vehicles alongside other imported merchandise. This is the last customs auction for the financial year 2021/2022
The tax authority explained that the move was aimed at recovering millions in taxes following the expiry of a notice issued last month.
“Goods will be auctioned pursuant to provisions of section 42 of the East African Community Customs Management Act. Notice is given that unless the undermentioned goods are entered and removed from the custody of the Customs Warehouse Keeper, Kilindini, within thirty (30) days of this notice,” reads a section of the gazette notice.
KRA invited bidders to view the goods at 16 different warehouses, stating that the number of goods at the warehouses has been on the rise.
Among the goods listed for auctioning are: 193 cars, sewing machines, tea processors, 48 forty-feet containers, and second-hand clothes.
Many traders importing cargo through the Mombasa port have been having trouble clearing their shipments on time.
Sticking to the taxman, KRA officials will now start using body cams (wearable cameras) in an effort to rein in corruption and kickbacks.
Speaking to the press on June 22, KRA Commissioner General Githii Mburu, explained that the body cams will be installed mainly on tax officials working in the domestic tax department, customs and border control.
This is as some of its employees are accused of allegedly aiding in the fraudulent clearance of cargo among other suspected tax related crimes.
Notably, KRA revealed that it loses an estimated Ksh12 billion every year from excise tax evasion alone.
According to data from the Treasury, the taxman collected Ksh324.81 billion more in tax revenue in the 11 months through May 2022, than in the same period last fiscal year.
The notable increase was attributed to KRA’s adoption of a robust intelligence network to penetrate corruption and tax evasion cartels, including last year’s move to have some of its employees monitor social media posts that went viral.
According to data from the Central Bank of Kenya (CBK) Kenya’s money supply rose by Ksh3.69 billion to Ksh 252 billion from a month earlier.
The surge in cash in circulation outside the banking system is at a four-month high, with speculators attributing the phenomenon to the August 2022 general election and the spending that comes with it.
Ahead of the August polls, politicians and their backers have been splashing the cash in their countrywide tours, with no expense spared.
For example, according to the Kenya Civil Aviation Authority (KCAA), there has been a spike in the number of helicopters owned or leased by politicians during election years.
Data from the South African Revenue Service also revealed that Kenya imported 325 helicopters for lease from South Africa in 2020 alone.
Notably, in August 2021, IEBC chairman Wafula Chebukati released the campaign expenditure limits for candidates and parties for the 2022 general election.
The IEBC wanted the identity of the donors revealed, while MPs wanted this to be confidential and only made public in case of a probe.
As the leading cryptocurrency, Bitcoin, struggles to stabilise, the ongoing meltdown in the cryptocurrency industry could push an estimated 4 million Kenyans into the red zone.
By today evening, 1 bitcoin was trading at Ksh2.39 million from Ksh3.39 million exactly one month ago on May 23, 2022. A Ksh1 million loss in value in 30 days.
Known for its wild price swings, the crypto market has shed more than half of its value since November 2021, triggering online meltdowns from nervous investors.
According to Blockchain analytics firm Chainalysis, a firm that ranks countries on crypto adoption, Kenya has about four million crypto-investors to date.
The sector is unregulated in Kenya, making it difficult to determine the value of digital assets held by the majority of tech-savvy Kenyans. However, rough estimates put it in the billions of shillings.
The 4 million or so Kenyans are said to have invested in cryptocurrency to preserve their savings, carry out international transactions, or for commercial use, such as purchasing goods to import and sell.
Of concern is the fact that Bitcoin - the world’s biggest cryptocurrency, dropped to as low as $17,592.78 on June 18, 2020, falling below the key $20,000 level for the first time since December 2020.\
Notably, in February 2022 the CBK solicited public input on the potential introduction of a digital currency to provide some benefits, particularly in lowering cross-border payment costs.
According to a survey investigating the saving and investment behaviour among Kenyans published on June 20, over 83% of Kenyan couples indicated that being in a relationship has had a positive impact on their financial positions.
The findings come after the recent concern over the increasing rate of single parenthood in the country
The study carried out by pension administrator Enwealth Financial Services in partnership with Strathmore University and the Institute of Human Resource Management (IHRM), further revealed that the most common saving channels are Savings and Credit Co-operative Societies (SACCOs) and pension schemes.
In addition, even though 60% of the respondents had adequate knowledge to make investment decisions and constantly consumed financial knowledge material, only 12% ascribed to a structured saving culture.
“83% of those who do not save, attribute it to recurring expenses and inadequate disposable income while 84% of the working population regularly send money to their extended family for daily expenses,” the survey detailed.
It further recommended that during marriage counselling sessions, financial management should be given a priority.
An International Rescue Committee IRC backed program called Refugees in East Africa: Boosting Urban Innovations for Livelihoods Development, or simply Re:Build, has received raving reviews and made it to the headlines.
The facility provides refugees with microloans to start small businesses, and operates like a savings and loan association.
Re:Build is a 5-year project aimed at empowering 20,000 urban refugees with their own businesses in Nairobi as well as Kampala.
IRC has since revealed that the micro-loans have already helped 260 refugees in Nairobi to start their own small businesses.
It works like this: Refugees and locals form groups of 15 to 30 people who contribute to the program.
The funds are deposited into a mobile money application account, from which members can borrow as microloans to start and run a small business. Members in Nairobi say the project has greatly improved their financial situation.
Kenya hosts about 550,000 refugees and asylum-seekers, 87,000 of them based in cities. Their participation in Kenya’s economy hinges on such integration projects that boost financial inclusion.
Jubilee Holdings shareholders will receive a total dividend payout of Ksh 1.1 billion for the fiscal year ending December 2021.
The decision was approved during the virtual 2021 Annual General Meeting (AGM) held on June 15, 2022, confirming the board’s recommendation of a final dividend of Ksh13 per share.
The insurer recorded a 66% growth in profit before tax, from Ksh 5.1 billion in 2020 to Ksh 8.4 billion in 2021.
Notably, the surge in profits was credited to a deal worth Ksh 11 billion that involved the sale of 66% majority stake in the firms’ general insurance business to German insurance giant Allianz.
Lastly, this week (June 21) also, the Senate passed the motion to raise the country’s debt ceiling to Ksh 10 trillion.
As per the Senate records, only three voted against the motion, with 27 senators backing the proposal.
Earlier at the National Assembly, Majority Leader Amos Kimunya explained that raising the debt ceiling would allow the National Treasury to borrow Ksh846 billion to plug the budget deficit in the fiscal year starting July 1, 2022.
Notably, the latest Kenya Economic Update Report (June 2022) published by the World bank, shows that its lending and that of the IMF (International Monetary Fund) helped finance Kenya’s current account deficit, maintain foreign reserve coverage and finance the monthly fuel subsidy of about $66 million.
The borrowing, secured in the past year, drove the public debt to Ksh 8.4 trillion ($72.41 billion) in March 2022.