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IKO NINI BWANA SEED

Kenya defers Sh85bn loan repayments on cash crunch

The International Monetary Fund (IMF) headquarters in Washington, DC. In its latest review of the progress on implementing projects under its 38-month credit scheme, the IMF said Kenya failed to pay 0.7 per cent of the country’s GDP to external creditors.
Kenya failed to meet Sh84.6 billion debt repayment obligations in the year to June due to a cash crunch and instead carried over the payments to the current fiscal year.
The public debt rose to Sh8.6 trillion adding more burden on service costs, with more than Sh945 billion used to pay domestic and external lenders in the 2021/22 financial year.
In its latest review of the progress on implementing projects under its 38-month credit scheme, the International Monetary Fund (IMF) said Kenya failed to pay 0.7 per cent of the country’s GDP to external creditors.
The IMF did not make public the identity of the creditors.
“A constrained borrowing environment meant that planned external commercial financing did not materialise. Lack of funds contributed to 0.7 per cent of GDP in unpaid obligations that were carried over to the 2022/23 financial year,” IMF stated.
Kenya’s GDP was Sh12.0982 trillion by 2021, according to the Central Bank of Kenya.
The IMF said while Kenya grew its tax revenue and cut budget deficits, the country’s debt pressures remained high.
The lender added that a mix of factors, including huge amounts spent on subsidising fuel, high inflation and disruptions in global supply chains drained Kenya’s efforts on growing revenue and cutting the budget deficit.
“Significant unbudgeted spending in the early months of this fiscal year, much of it for fuel subsidies, posed an additional challenge. There has been progress on fiscal adjustment needed to address debt vulnerabilities though pressure remains elevated,” the lender said.
Taxes growth
The government cut the budget deficit from 8.2 per cent of the GDP to 6.2 per cent, during the year, while Kenya Revenue Authority (KRA) grew taxes from 12.6 to 13.7 per cent of GDP, crossing the Sh2 trillion mark for the first time.
Announcing a planned release of Sh52.7 billion in lending to Kenya under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) in the coming weeks, the IMF said nearly half of the money would be prioritised to cover external financing needs due to the ongoing drought.
“Upon completion of the Executive Board review, Kenya will have access to SDR 336.54 million (equivalent to about $433 million), bringing the total IMF financial support under these arrangements to about $1,548 million,” a statement by IMF heads of the delegation to Kenya Mary Goodman and Tobias Rasmussen read.
“This latter amount includes proposed augmentation of access of SDR162.84 million to cover external financing needs resulting from drought and challenging global financing conditions.”
The IMF says the new government must continue with measures to grow revenue further while controlling spending in a bid to cut budget deficits.
“It will also be important to move ahead with structural and governance reforms. This includes completing efforts to publish beneficial ownership information for awarded government contracts, which will be a major step towards greater transparency and accountability,” the statement said.
“Reform of financially-troubled state-owned enterprises – including Kenya Airways and Kenya Power – will also be key.”
President William Ruto’s initial measures to do away with fuel subsidies and reinstate variable cost adjustments in electricity prices led to a rise in fuel and power prices.
Treasury in the quarter that ended June tapped Sh40.87 billion from the dollar reserves the CBK received from the IMF in form of special drawing rights in August last year. – nation.africa

Tea hits nine-month high above set minimum price

A worker at Empire Kenya loading tea for auction and export.
Tea prices at the Mombasa auction have for the first time in nine months traded above the government set minimum price as the beverage continues to record impressive performance.
Data from the East African Tea Trade Association (Eatta) indicates that a kilogramme of the commodity traded at $2.46 from $2.42 in the previous sale.
The price of tea at the auction has for the last nine months been selling at below $2.43, which is the minimum price that the Ministry of Agriculture set for all Kenya Tea Development Agency (KTDA) produce.
The KTDA accounts for at least 85 percent of the total tea that is sold through the Mombasa auction.
Beverage from other 12 African countries also trade at the facility.
The good price also saw the volume of tea withdrawn from the auction decline to 29 percent down from 31 percent that was recorded in the previous sale.
“There was good demand but at irregular levels with prices following quality for the 197,500 packages (13.2 million kilogrammes) available for sale. 139,740 packages (9.3 million kilos) were sold with 29.25 percent of packages remaining unsold”, said Eatta.
The price of tea at the auction has for the last seven weeks been on the upward trend, raising farmers’ hopes of good earnings in the current financial year. The weekly sale had been witnessing low prices since June this year.
The lower prices were attributed to a decline in demand from buyers owing to the economic woes in Pakistan and the Russia-Ukraine war that resulted in logistical challenges.
Data from the Tea Directorate indicates that tea earnings in seven months to July grew to Sh80 billion when compared with Sh71 billion that was recorded in corresponding period last year. The price per kilo in the review period went up to $2.53 from $1.93 in the previous season, boosted by a relatively high demand for the beverage and high exchange rate against the shilling. – businessdailyafrica.com

UK Cost of living: Household grocery bills ‘rise by almost £40’ in a month

Undated file photo of a man holding a shopping basket in a supermarket. Shoppers have witnessed an 11.6% surge in grocery prices for the past month, the highest level since 2008, according to new figures. Research firm Kantar has said this equates to a £533 annual increase in the average household’s grocery bill. Issue date: Tuesday August 16, 2022
The cost of the average annual grocery shop has risen by almost £40 in just one month, according to an industry report which is warning it is too early to say when food price inflation will peak.
Kantar Worldpanel reported a fresh record grocery inflation figure of 14.7% for the four weeks to 30 October, saying that shoppers now faced paying an average £682 a year more for their groceries, on a same-selection basis, compared to 12 months ago.
The sum was £643 the previous month, based on a grocery inflation figure of 13.9%.
There was also strong evidence to support a claim by Sainsbury’s last week that people were eating at home more to keep costs down as they prepared to face the impact from record winter energy bills.
Kantar reported a 5.2% leap in grocery sales over the 12 weeks to the end of October – the fastest rate of growth since April 2021.
Separate data from the British Retail Consortium (BRC) said that food shopping drove a 1.6% rise in overall retail sales last month.
Its chief executive, Helen Dickinson, said: “As the cost of living for consumers continued to rise, retail sales slowed in October.
“With November Black Friday sales just around the corner, many people look to be delaying spending, particularly on bigger purchases.
“Clothing and footwear, which saw stronger sales this year, declined as the mild weather meant customers held back on buying winter outfits.
“Meanwhile, electric blankets, air fryers and other energy efficient appliances continued to fly off the shelves as people sought future cost savings.”
Its report said that sales of supermarkets’ own label goods sales were 10.3% higher during the past four weeks, while demand for the cheapest ranges was 42% up.
Fraser McKevitt, head of retail and consumer insight at Kantar said: “Yet again, we have a new record high figure for grocery price inflation and it’s too early right now to call the top.
“Consumers face a £682 jump in their annual grocery bill if they continue to buy the same items and just over a quarter of all households (27%) now say they’re struggling financially, which is double the proportion we recorded last November.
“Nine in 10 of this group say higher food and drink prices are a major concern, second only to energy bills, so it’s clear just how much grocery inflation is hitting people’s wallets and adding to their domestic worries.”
Kantar said that dairy and dog food continued to be among products rising the highest in percentage terms.
Its data also showed that 10% of households purchased a pumpkin ahead of Halloween this October, while 700,000 fewer Christmas puddings were bought in advance of December. – nation.africa.

Asylum seekers in UK ‘forced to sleep on cardboard’ at immigration centre

Twenty-nine-year-old Samuel says conditions at Manston were grim, with dirty toilets, cold meals and showers, and people having to search for cardboard to bed down on.
A farmer from Eritrea who was in the Manston processing centre in Kent has told Sky News he slept on cardboard and was given cold hot dogs for lunch.
The 29-year-old, who asked to be referred to as Samuel, said it wasn’t what he was expecting after crossing the Channel by small boat in September and paying smugglers more than $5,000 (£4,400).
Samuel said he was cold and hungry and couldn’t sleep.
And, after more than a year travelling from Eritrea, he said he was unable to have a warm shower during his four days at the immigration centre.
“They gave me cake for breakfast, hot dog for lunch and for dinner chips. For me, it was bad. The food was cold and small. I was very hungry,” he said.
“We didn’t have toilet paper. The toilets were dirty.”
He said asylum seekers looked for cardboard to sleep on, as they didn’t have mattresses.
Samuel, who told us he fled from Eritrea to avoid military service, said conditions improved when he was moved to other accommodation in London.
He said: “When people come, they need food and safety and warmth. I came here to the UK for freedom and peace.”
Home Office minister Chris Philp this week underlined what a divisive issue migration is when he said asylum seekers had “a bit of a cheek” for complaining about conditions at Manston, which have been described as “wretched”.
The Home Office says it has reduced overcrowding and Manston is now understood to be a few hundred over its 1,200 capacity.
After well over a week of criticism over its “broken” immigration system, Home Secretary Suella Braverman has announced the national roll-out of a scheme to speed up asylum applications.
Ms Braverman said: “It is not right that the British people are picking up a £2bn bill every year because the asylum system has been broken by an unprecedented wave of illegal migration.
“We still have a long way to go, but these steps show our commitment to tackling the asylum backlog. Processing claims more quickly will help remove those who illegally come here from safe countries, while also ensuring those in genuine need receive our protection.
“There is no one silver bullet, but we are redoubling our efforts on multiple fronts to tackle this unacceptable situation.”
The Home Office says it is streamlining processes and increasing the number of asylum caseworkers.
There are currently 100,000 asylum seekers waiting for a decision on their claim.
Kent MP Roger Gale, who has Manston in his constituency, told Sky News: “The home secretary came down and saw the situation for herself on Thursday, and spent a considerable amount of time with me at the facility.
“I think for the home secretary, that was an eye-opener. I think she’s got the message.
“We’ve got to get to grips with the processing of the asylum claims on the one hand, and separately, we’ve also got to find a long-term, pan-European international solution to an international problem.” – skynews

What is the problem at Kenya Airways as pilots want board, executives out?

KQ pilots issued a 14-days strike notice demanding for the ouster of the board and executives.
What is the problem?
Kenya Airways (KQ) pilots on October 19, 2022 issued a 14-days strike notice demanding for the ouster of the board and executives citing undisclosed governance and leadership issues.
The other issues raised were failure to implement pay agreements (CBA), victimization of Kenya Airline Pilots Asociation (Kalpa) members and payment of monthly pension contribution for staff.
Did KQ management resign to avert the strike as demanded by the pilots before the 14-days period lapsed?
Kenya Airways (KQ) chairman Michael Joseph spurned repeated calls to step down together with the airline’s CEO Allan Kilavuka by pilots.
Mr Joseph, who was handed a fresh three-year term chairman in July, informed the carrier’s workers through memo that there is no justification for their resignation.
The pilots had called for the ouster of the CEO and the board as well as a return of the pension perks to avoid grounding planes.
How else did Kenya Airways respond to strike threats by its pilots?
Kenya Airways, before the expiry of the strike notice period, sought court orders to stop the strike citing the risk of paying hefty fines on cancellation of flights, cash flow strain and revenue losses.
KQ said the strike will cost them approximately Sh300 million per day. In a week, this translates to Sh2.1 billion.
Did the High Court heed to KQ’s plea?
The Labour Court temporarily stopped the strike, which is now threating to ground KQ operations to a complete stop and derail its recovery from effects of travel restrictions that followed the Covid-19 pandemic.
Employment and Labour relations Judge James Rika said he was not sure whether the case that was brought before him was a claim or a petition, dealing a major blow to the union then.
The judge directed that further orders before the duty judge will be issued on November 8, 2022.
What did KQ pilots do upon the expiry of the 14 days strike notice?
Kenya Airways (KQ) pilots defied the High Court order that was issued by Justice Rika that had stopped the flyers’ planned strike to down their tools effective yesterday.
The pilots argued that upon the expiry of the strike notice, they were at liberty to “exercise our right to withdraw labour forthwith as enshrined in Article 41, Chapter 4 of the Kenyan constitution.”
What was the immediate impact of this strike to KQ?
The move by KQ pilots to down their tools saw a dozen of flights operated by the fliers cancelled across major airports including Jomo Kenya International Airport (JKIA).
About 23 planes destined for regional and international destinations were canceled at the largest airport in Kenya and East Africa yesterday with two KQ planes that were scheduled to leave for Mumbai rescheduled.
About 10,000 passengers were also stranded at the airport after their flights were delayed or rescheduled, with many of them blaming Kenya Airways for the mess.
This strike action, according to the board, will cost KQ approximately Sh300 million per day. In a week, this translates to Sh2.1 billion.
Did KQ pilots accept to tweak its demands to avert the crisis?
KQ pilots, through Kalpa, have categorically stated they will not go back to work until their demands are met. Kalpa has listed four irreducible minimums that must be met by KQ management before they can resume work.
This includes resumption of staff provided fund. They have also insisted that they will only go back to work if union members, including first officer Mwenda Mabura, James Karuiru, Tracey Adhiambo and Washington Nyakinda whom they claim were dismissed illegally, are reinstated back to work.
Kalpa is also demanding that KQ must adhere to all signed documents that have been agreed between Kalpa and KQ and any future deviations will be in consultation with the union.
Is KQ management willing to meet Kalpa demands to resolve the stalemate?
Yes. KQ management has urged pilots to reconsider the industrial action, saying it is ready to sit down with Kalpa to resolve the stalemate.
Kenya Airways argues that this is not the time for sabotage adding that the strike will water down recovery efforts made by the airlines in the last few months.
The strike, KQ says puts at risk the goodwill and support they have received from its customers, the government and the Kenyan taxpayers. – nation.africa.

HOW THIS AFRICAN COUNTRY IS TAKING OVER THE WORLD

The Republic of Kenya is a nation known for its huge and differing social heritages. by producing amazing people who become prominent world leaders from politics to athletics, from producing world presidents to celebrities, from actors to philanthropists, from great cultural heritage to the large ethnic groups it resides, it is safe to say, Kenya is one of the few countries that are immensely blessed.
Till today, kenya is still amazing the world by producing world leaders. With recent news of Rishi Sunak who is on the race to replace Liz Truss as UK Prime Minister.

Unauthorized persons accessed IEBC systems, Karua tells East African Court

Martha Karua, the Azimio la Umoja coalition running mate in 2022 presidential elections.
Narc Kenya party leader Martha Karua has moved to the East African Court of Justice censuring the electoral commission for a “shoddy” job and the Supreme Court for dismissing the 2022 presidential election petition that was challenging President William Ruto’s win.
In the petition, Ms Karua, who was the running mate of Azimio la Umoja presidential candidate Raila Odinga in the August 9 elections, has sustained her previous claim that unauthorized persons accessed the election systems of the polls agency and altered the election results.
She alleges Independent Electoral and Boundaries Commission (IEBC) ceded control of its systems to external service providers and as a result unauthorized persons gained access and deleted, altered and uploaded voter registration information and electoral results.
The former Cabinet Minister has also accused the Supreme Court’s Registrar of failing to render true results of the scrutiny of presidential election materials.
Among the questions she has raised against the Chief Justice Martha Koome-led apex court is lack of consistency in its judgments on presidential petitions, questioning whether the Supreme Court can rule one way in one election and another way in another election.
She wants the regional court to order the relevant organs of the Kenyan government to conduct investigations into the allegations of electoral irregularities and malpractices in the 2022 presidential polls.
She also wants the regional court to declare that determination of the presidential petition by the Kenya’s Supreme Court was not done in accordance with the provisions of the Constitution and the country laws.
In the petition filed jointly by Ms Karua and the Muslim for Human Rights (Muhuri), it is alleged that Supreme Court violated their rights and those of other citizens in how it handled the election dispute. Both were petitioners at the Supreme Court.
They allege that the Supreme Court refused to examine all the evidence presented before it, neglected to fully inquire into the technology applied and condoned IEBC’s cover-up in refusing to grant access to its technology critical to determining the matter fairly.
Curtailed rights
They allege that the actions of the Kenyan government through IEBC together with the Supreme Court curtailed the rights of citizens, registered voters and candidates.
The alleged violated rights include rights to freely access information in order to make informed electoral choices, rights to campaign, to vote or be voted for and the right for one’s vote to count.
They have raised eight violations against the Supreme Court, among them a claim that the Kenyan top judges failed or refused to ensure that all parties to the presidential petition were accorded a fair trial, with equality of arms.
“In particular, failing to ensure that the IEBC which is a public entity, provides the information necessary to vindicate the rights of the Applicants, other petitioners and citizens of Kenya fully and timeously, as the law required,” reads the petition.
It also allege that the Supreme Court failed to take cognizance of the evidence lodged or presented by Ms Karua, Muhuri and other petitioners against the election of Dr Ruto.
Another claim is that the apex court failed to provide for an adequate scrutiny of the elections and that the court’s Registry failed to render a true and comprehensive account of the results of the limited scrutiny that had been allowed.
They fault the Supreme Court for finding that the Chairperson of the IEBC Mr Wafula Chebukati conducted an election in an unlawful manner, on the one hand, yet failing to assign a legal consequence for the breach.
“Authoritatively finding that the chairperson of IEBC conducted an election in an unlawful manner yet failing to assign a consequence to this. Deploying a standard of proof that is inappropriate in the circumstances,” the petition indicates.
Set criteria
They add that the Supreme Court failed to assert the applicable law on the proper standard of proof in presidential election petitions, failed to adhere to the court’s own set criteria in its 2017 judgment and treatment of all votes cast.
“The Supreme Court failed to assert the applicable law on the obligation of the IEBC, rather than of candidates, to ensure that the elections are free and fair and are free from violence, intimidation, improper influence or corruption; are conducted by an independent body, are transparent and are administered in an impartial, neutral, efficient, accurate and accountable manner,” says the petitioners.
Their case against the IEBC is that Commission failed to ensure that it had sufficient internal capacity to conduct the elections without undue reliance on external service providers over whom it had insufficient control.
They add that IEBC procured electoral materials, including the electoral technology, in violation of the country’s Constitution and applicable procurement laws and best practices.
“IEBC failed to properly register or recognize eligible voters and thereby disenfranchised them. IEBC failed to properly compile, maintain and update an accurate and clean voter’s register. It also failed and refused to publish the voter’s register in accordance with the strict timelines stipulated in law,” they state through lawyers Donald Omondi Deya and Esther Muigai-Mnaro.
Their joint Reference claims that IEBC failed to properly manage the August 2022 elections by ceding critical aspects of the process such as the electoral technology and results management to persons it had no control over.
In addition that the Wafula Chebukati-led commission failed to undertake a comprehensive audit of the register and failed to publish full results of the audit as provided by law.
Another allegation is that Mr Chebukati sidelined the other commissioners in the process of counting the presidential votes and declared results that had been rejected by the majority commissioners.
Apart from the affidavits they have filed in support of the petition, they say that they will call expert witnesses and adduce reports and statements of observers and the Election Observations Mission (EOMs) to the 2022 electoral cycle in Kenya.
They also intend to adduce formal reports of governmental and intergovernmental bodies, no-state actors and other documentary evidence.
They want the regional court to declare that presidential election and the results announced on August 15, 2022 was not done in accordance with the provisions of the electoral laws.
Resulting from the alleged non-compliance with the law and principles of governing elections, the results were vitiated.
They are also seeking a declaration that the judgment of the Supreme Court was not done in accordance with the provisions of the Constitution and laws and principles governing electoral dispute resolution.
“The applicants plead for an order directing the relevant organs of the Kenyan State to conduct prompt, efficient, impartial and professional investigations into all violations enumerated,” reads the petition.
In addition, they want an order that the government “makes full reparations, including paying (them) compensation and damages”.
“We are filing this Reference not only to enable the truth to come to light, but also so that we can secure guarantees of non-recurrence of failures in this sensitive area of elections in future,” they stated. – nation.africa.

Economy is almost certainly in recession and the picture ahead is murky

The Bank of England in the city of London. The pound suffered further falls on Wednesday after the UK Government was heavily criticised by the International Monetary Fund over its handling of economic policy.
The UK economy is now almost certainly in recession. It will not be pleasant. This is a recession which will be felt in most households’ pockets – both through the rise in energy prices and shop prices and the rise in the cost of borrowing.
And when it comes to the cost of borrowing, things are certainly getting tougher. Today the Bank of England raised its official interest rates by 0.75 percentage points, meaning if you’re on a floating rate loan tied to Bank rate the increase will be immediately reflected in your monthly repayments. In a sense, the Bank is merely doing what most people had expected and what markets had already priced in: in other words, the current fixed rate loans out there on the market already assumed something like this happening. Remember that point: we’ll come back to it.
So we know the economy is in recession. We know prices are very high and times are looking tough – especially if you have a mortgage which needs to be re-fixed soon. But here’s where the certainty ends and the murkiness begins.
Normally the Bank of England produces one main forecast in its Monetary Policy Report – the quarterly document in which it gives its sense of the state of the economy. But this time around it did something unusual: it produced two, and gave quite a lot of prominence to both of them.

 

Why? Well, it comes back to the fact that money markets have been on a rollercoaster recently. As you’ll recall if you’ve followed the ride, in the wake of the mini-budget, expectations for where the Bank’s interest rate was going next year leapt up to over 6%. Since Liz Truss’s exit, those expected rates have begun to fall, to the extent that as of this week they were expecting a peak of 4.75%. That’s a big change.
And these numbers matter enormously: the higher the rates, the more households who will struggle to make their repayments and the tougher life will get for businesses, many of which will struggle to operate. So even a change of a few fractions of a percentage point will make a big difference.
That brings us back to the Bank’s latest forecasts. It has to base those forecasts for the state of the economy off an assumption of what’s happening to those interest rates. So it typically takes a two week “snapshot” of what money markets expect for borrowing rates and then builds a forecast around it. Normally that’s a pretty uncontroversial exercise, but not this time. Because as we all know, those rates were all over the place following the mini-budget and the ensuing gilt market meltdown.
The upshot is that the Bank’s central forecast – the one we usually look at – is particularly bad. It involves eight successive quarters of contraction: that would be the single longest recession since comparable records began in the early 20th century – though it would be much less deep than nearly all of those downturns. It would see the economy shrink by nearly 3% and unemployment get up to 6.5%.
But here’s the thing: that forecast is based on market expectations that Bank rate would get up to 5.25% next year. And the Bank is unusually explicit today that it thinks that is very unlikely. So that recession forecast is a little bit of a chimera: it is based on a scenario which will probably not happen.
So here’s where that other forecast comes in. The Bank produced a separate set of figures which ignore all that market mayhem and just imagine rates stay where they are, as of this afternoon, at 3% in perpetuity. On the basis of that forecast, there is still a recession, but it is barely more than half the depth of its central forecast and doesn’t last half as long. Unemployment doesn’t peak as high. Household income isn’t quite as badly hit. It’s tough, but not awful.
So: is that forecast a more reliable picture of the impending months? Well, not necessarily, for two reasons. First, the Bank said explicitly today that it thinks it will have to raise interest rates again, albeit not as high as markets were expecting a few weeks ago. What that means is anyone’s guess, but the signal is that they might not even have to rise as high as the 4.75% markets are currently pricing in. But that does mean a slightly worse outlook.
Second, the Bank’s forecast doesn’t make any assumptions about what the government’s Autumn Statement is going to do to the economy. And given everyone expects the government to cut spending and/or raise taxes, it’s a fair assumption that that could also bear down on economic activity.
It’s complicated
So, as you can see: it’s complicated. I know that’s not especially helpful if you’re after a quick summary. But it’s a fairer reflection of where we are. The UK is in recession, but it’s worth being a little wary of the more lurid headlines out there about how it’s the “longest in history”. The Bank is saying that’s a possibility if rates went higher (and it doesn’t currently think they will).
But there is another interesting thing going on here, which comes back to that point I made at the start – that when the Bank moves its rates it is, in a sense, reflecting what people out there in the market are expecting it to do. Those expectations matter – and the Bank can often influence them itself.
Today’s Monetary Policy Report contains some pretty heavy hints that the market has overshot its expectations about where Bank rate will go in the future. In other words, the report itself could plausibly persuade investors to notch down their expectations for where interest rates are heading next year.
If that happened, we would be left with an interesting paradox: that even as it raises interest rates even more than it has ever done since it became independent in 1997, the Bank could actually push down what markets expect that eventual peak to be.
In other words, this interest rate increase could be reducing the real-life cost of borrowing in the mortgage markets. Fixed rate loans could get cheaper as a result of today’s events, not more expensive.
Perhaps that sounds topsy-turvy, but then it’s no more weird than many of the other turns of this rollercoaster in recent weeks. – skynews

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