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A customer picks fruit at a supermarket in Nyeri on August 7, 2021.
Kenya’s inflation rate has hit a 19-month high in September as the recent fuel price hike starts hurting households.
Latest data from the Kenya National Bureau of Statistics (KNBS) shows that this month’s inflation rate grew to 6.91 per cent in September, the highest since February last year when it stood at 7.17 per cent.
KNBS Director-General Macdonald Obudho said on Thursday that the rise was driven by an increase in prices of food and non-alcoholic beverages, housing, water, electricity, gas and other fuels.
Mr Obudho said prices of commodities under food and non-alcoholic beverages rose by 10.63 per cent, transport by 9.21 per cent and housing, water, electricity, gas and other fuels by 6.08 per cent between September 2020 and September 2021.
“The CPI increased by 0.32 per cent from an index of 115.710 in August 2021 to 116.077 in September 2021. The month-to-month Food and Non-Alcoholic Drinks’ Index increased by 0.11 per cent between August 2021 and September 2021. This was mainly attributed to increase in prices of some food items, which outweighed the decrease in prices of others,” KNBS said.
This comes at a time when the Central Bank of Kenya (CBK) has raised alarm over the direction the inflation rate has taken, warning that though it has the tools to deal with second wave of inflation, it cannot deal with imported inflation.
“The principal drivers where the inflation is coming from are things that don’t react to monetary policy. That is really the point. It’s not that we are sitting doing nothing,” CBK Governor Dr Patrick Njoroge said.
The regulator’s inflation target is between 2.5 per cent and 7.5 per cent.
“No matter how much we change or tighten monetary policy, it won’t affect the imported price of Murban oil. The prices will be passed on to consumers in the usual way. That is the first-round effect,” Dr Njoroge said.
He said the second-round effect is when fuel prices lead to an increase in other costs such as transportation, electricity and others.
“If we allow inflation to just surge into the worst case, we would be missing on our mandate. That is not a scenario that we are willing to do nothing about. There will always be an active scenario, which is when we come in and take policy action to stop inflation from surging,” he added.
KNBS says that relative to August 2021, prices of carrots, oranges and cabbage increased by 3.25, 2.43 and 2.10 per cent, respectively. In contrast, prices of tomatoes, maize flour (sifted) and spinach decreased by 2.30, 0.99 and 0.83 per cent, respectively.
The housing, water, electricity, gas and other fuels’ index increased by 0.91 per cent between August 2021 and September 2021. This was mainly attributed to increase in prices of kerosene, electricity and gas/LPG.
There was a slight decrease in house rent during the same period.
The transport Index increased by 1.17 per cent mainly due to increases in prices of petrol and diesel that went up by 5.91 per cent and 7.3 per cent respectively.
Bus fares of city public service vehicles also recorded an increase of 0.64 per cent. – nation.africa.
Akinwunmi Adesina, President of the African Development Bank
Egypt, Nigeria, Kenya and South Africa accounted for more than a third of the incubators and accelerators and 80 per cent of investment in Africa.
Egypt, Nigeria, and South Africa were also among the top three countries that attracted the highest foreign direct investment in the past 10 years.
In Africa, the concentration of venture capital and private equity has mirrored the evolution of accelerators such that the support for innovation and entrepreneurship has grown, as reflected by the number of African startups and their increasing acceptance into accelerators and incubators around the world.
Today, Africa has nearly 650 tech hubs that include accelerators and incubators, and the countries with the greatest number of accelerators are also those with the greatest share of venture capital financing, according to a new report by AfDB.
The report titled ‘Entrepreneurship and Free Trade Volume II – Towards a New Narrative of Building Resilience’ examined the state of African entrepreneurship within a global lens while highlighting developments and suggesting future directions for entrepreneurship in Africa.
In the report, Egypt, Nigeria, Kenya and South Africa were mentioned as the top African countries that accounted for more than a third of the incubators and accelerators and 80 per cent of investment in Africa.
According to the report, Egypt, Nigeria, Kenya, and South Africa account for more than a third of financing in Africa, reflecting a measure of concentration. The report further stated that “All regions and populations have differing degrees of entrepreneurship, which is true in Africa and elsewhere.”
The report added that “Although this is not the only measure of entrepreneurship, there are reasons to explain why some countries push ahead faster with startups, ecosystem development, and commercialisation. In the cases of these four countries, their economies and populations are larger than most African countries,” the report stated.
Another critical insight from the report showed that Nigeria, Egypt and South Africa were among the top three countries that attracted the highest foreign direct investment in the past 10 years.
According to the report, Egypt attracted FDI of about $56.2 billion between 2011-2020, followed by Nigeria with about $45.1 billion and South Africa with about $41.3 billion in the same period.
The report further stated that, “These countries dominate the African portfolio investment market as countries that show the greatest investment in startups generally have higher FDI and are among the few countries able to access the limited portfolio investment on the continent.”
“In fact, Egypt, Nigeria and South Africa ranked as the top three countries on the continent in terms of attracting FDI over the past decade. They also tend to dominate the African portfolio investment market.”
The report advised that there should be a restructuring and commercialisation of state-owned enterprises, adding that certain countries, including Nigeria, needed to note this advice. – africa.businessinsider.com
,National parks, museums and many other non-essential federal services could close during a government shutdown
The US Congress has passed a temporary measure to keep the government funded through December and avoid yet another federal shutdown.
It now heads to President Joe Biden’s desk to be signed into law.
Lawmakers faced a midnight deadline before funding lapsed, which could have forced federal museums, national parks and safety programmes to close.
The funding bill also includes money for hurricane relief and resettling Afghan refugees.
The newly approved funding ensures that federal agencies do not need to close down on Friday and hundreds of thousands of government employees will not have to take unpaid leave.
Of particular concern, given the ongoing Covid-19 pandemic, was the potential hit that health services could take. A plan prepared by the Health and Human Services Department (HHS) found that it may have been forced to send up to 43% of its staff home in the event of a shutdown.
On Wednesday night, Republicans and Democrats in the Senate reached a deal to keep the government open until 3 December, through a temporary budget called a continuing resolution.
The measure passed the Senate by a vote of 65 to 35 on Thursday, with 15 Republicans voting to support it. In the House of Representatives, the lower chamber, it passed 254 to 175.
It comes amid a week jam-packed with other policy hurdles, particularly the delicate negotiations over President Biden’s economic agenda.
House Speaker Nancy Pelosi said she will move forward with a vote on the president’s $1tn (£722bn) infrastructure bill Thursday. The bill would provide $550bn for roads, bridges, internet and other domestic priorities.
Congress also faces another pressing deadline: the US government is set to hit its borrowing limit within weeks.
Treasury Secretary Janet Yellen said this week the US will reach its debt ceiling – the limit on how much the US government can borrow – by October 18.
It has prompted dire warnings of a catastrophic default on the national debt that could reverberate through the US and the global economy.
Raising the debt limit will allow the US government to pay its existing obligations. Defaulting, though unlikely, could trigger an economic downturn and cause millions of Americans who rely on paycheques or aid from the federal government to go without.
The House, which is controlled by the Democrats, had already voted last week to pass a dual measure that would keep the government open and suspend the debt ceiling.
But Republicans in the Senate blocked the bill from advancing, citing the Biden administration’s plans to pass trillions of dollars in new spending as a reason not to raise the debt ceiling.
To many Kenyans, owning a home is the goal of a lifetime. To put up one, for those who choose to construct theirs, however, can be a winding process, with unforeseen delays and steep expenses involved.
Once the home is complete, though, the joy is unmatched.
The joy and relief of becoming a homeowner, however, can be short-lived should the house turn out to have structural defects.
From asymmetrical and curved walls to broken pipes and wall leakages, defective fittings are every builder’s dread. This disappointment isn’t uncommon in Kenya, what with counterfeit building and construction materials saturating the market.
In some instances, customers consciously settle for cheaper construction materials to save on cost, ending up buying inauthentic materials and the attendant collateral losses.
There are also cases where unscrupulous traders cash in on lack of buyer knowledge to sell fakes. Either way, the result is the same: loss of money, time and labour.
As the cost of construction in Kenya soars by the day, many builders are unable to resist the lure of cheaper construction materials. Manufacturers, though, warn that counterfeits could cost you more than loss of money. If your house collapsed, for instance, you will lose not only your investment, but people may die in the process. But just how bad is the counterfeits situation in Kenya?
Job Wanjohi, the head of policy, research and advocacy at Kenya Manufacturers Association (KAM), says that about 40 percent of all manufactured goods in the country are counterfeits.
There is no other sector that is as flooded with fakes as the building and construction industry, according to Wanjohi.
How to tell fakes from genuine goods
Are there ways for buyers to tell between fake and genuine building materials? What are the risks of buying substandard building materials? In what ways do they stand to benefit from buying genuine? What does the regulatory environment look like?
Vimal Vaghela, the chairman of the Kenya Plastics and Pipes Manufacturers Association, says that the most straightforward way to identify fake water pipes is through cost, which is usually between 10 and 15 percent lower than the authentic varieties. Buying cheap, he points out, can have devastating consequences.
‘‘Paying Sh200 for a piece of pipe that ordinarily sells at Sh220 may look like a very good deal, but when the pipe bursts inside the wall, say, six months later, you may be forced to pay up to Sh200,000 to break the concrete wall to fix the mess,’’ Vimal argues.
He adds: ‘‘The cost of manufacturing pipes has gone up in recent years. This requires manufacturers to regularly review their price lists. Dealers of counterfeits hardly review theirs.’’
Across the world, warranties are perhaps the strongest assurance by manufacturers that their products are authentic, with commitment to either repair or replace them in case of failure. In the world of counterfeits, however, warranties are frowned upon. Bottom line? Don’t buy from dealers who don’t offer warranty on their products. ‘‘Any genuine manufacturer will give you a warranty in writing.’’
Did you know that you have the right to demand from a manufacturer or dealer a Kenya Bureau of Standards (Kebs) certificate as proof of quality of the product? Vimal says where none is provided, the right thing to do is to reject the product in question. He goes on to say that once authentic pipes and plastics are installed in a construction, builders need not worry about incurring additional costs to service them.
Ordinarily, high-density polyethylene (HDPE) pipes last for more than 50 years while polyvinyl chloride (PVC) pipes, which are popular among Kenyan builders, have a lifespan of up to 30 years, he says.
Polypropylene random copolymer (PPR) pipes last for about 25 years. Manufacturers concur that greed among some traders is the weak point in the fight against counterfeits in the market. Bobby Johnson, the chairman of the steel sector at the Kenya Manufacturers Association (KAM), says that traders out to make money often ‘‘have no moral responsibility’’ to sell construction materials that meet the established standards.
Buying genuine steel products for construction, he notes, guarantees the customer both durability and structural integrity of the building.
He explains: ‘‘Whether you’re buying reinforcement rods or roofing sheets, authentic products save you costs because they eliminate the need to carry out occasional repairs. You’re also cushioned from having to purchase more materials.’’
Every year, buildings, both occupied and under construction, topple over in Kenya, with many casualties involved sometimes. In each of the cases, officers from the National Construction Authority (NCA) question the integrity of the materials used.
Normally, findings of subsequent inquest will point to steel reinforcements that are too brittle to withstand the weight of the other elements, including stones and concrete –especially where the structure is a story building. Johnson attributes these tragic incidents to proliferation of counterfeit steel products in the market.
‘‘If sub-standard steel is used in construction, the structure is likely to collapse, to sink, sag or bend. This might cause injuries and loss of life. There are also obvious financial losses that the owner of the building bears.’’
KEBS, he says, has specified guidelines on the chemical, mechanical and physical properties of steel to be used for building and construction. But there’s a catch.
‘‘Without subjecting these items to lab analysis, it’s difficult to identify these properties and to tell whether the products are genuine or not.’’
Even so, a buyer could still determine the quality of a steel product by analysing some of the physical parameters such as diameter and length, Johnson assures.
‘‘These standards are available on the Kebs website. You can also request for them from the manufacturer,’’ he says.
Adds he: ‘‘It’s important to check whether the product is branded. Is the manufacturer’s logo clearly visible on the product? Does the item bear the requisite dimensions and markings as specified in the standard? If it meets this threshold, you may go ahead and make a purchase.’’
But how does the local steel industry address the nuisance of counterfeits in the market?
Johnson explains that Kebs and Kenya’s manufacturers of steel products carry out targeted market surveillance occasionally, and share useful intelligence thereafter. ‘‘This helps in the identification and immediate confiscation of counterfeit and sub-standards so as to protect consumers.’’
To deter entry of substandard goods and counterfeits into the country, Kenya Revenue Authority (KRA) too imposes specific duties on all imports.
‘‘KAM and Kebs are currently engaged in a joint sensitisation campaign to educate the market on quality of construction materials,’’ Johnson reveals, noting that the regulatory environment (both guidelines and laws) is strong enough to protect local consumers.
‘‘Cases of counterfeits have been on the decline in the last 10 years. The situation was worse before. That said, all players need to keep their eyes and ears open.’’
He, however, insists that there’s need for the government to heighten border surveillance to prevent entry of counterfeits into the country.
He adds: ‘‘Regulators should increase personnel and build their capacity to handle counterfeits. These officers must also work closely with other industry stakeholders to eradicate imitations from the market.’’
A shortfall in demand amid growing manufacturing capacity locally is to blame for the rise of counterfeit pipes in the market, Vimal notes.
‘‘Before, we used to export pipes and plastics to our regional neighbours. Now these countries have their own manufacturing plants. Some of these products find their way here, causing a glut. Manufacturers end up making cheaper, and often inferior, pipes to compete for the available customers.”
Yet builders’ loss of money isn’t the only harm suffered in the industry. Vimal notes that when the market is saturated with counterfeits, brand reputation is eroded, with manufacturers of genuine products bearing the highest cost.
‘‘Most end users will not know whether a product is genuine or not until after they have used it. When they discover the product was a fake after installation, this destroys their confidence in market players,’’ Vimal laments.
To realise sanity in the building and construction industry, he emphasizes that Kebs must ‘‘put its foot down’’ and hold both manufacturers and dealers to account.
‘‘Kebs officers must patrol hardware stores and scrutinise products on sale. Cancelling licenses of those selling counterfeits will rid the market of substandard construction materials,’’ he says.
Says Johnson: ‘‘Don’t’ take the quality of steel products lightly. Not any steel product is suitable for your construction needs. Always hold brands to account. After all, you’re spending money on their products.’’ – nation.africa.
Mr Mukuria Ngamau, the Director of Quorandum Ltd, leaves the Anti-corruption Court in Milimani, Nairobi on September 30, 2021.
The Anti-corruption Court has fined a businessman Sh720 million for theft of public money from the Youth Development Fund.
If unable to raise the fine, Mr Mukuria Ngamau, the director of Quorandum Ltd, will serve 27 years in prison in default.
Chief magistrate Douglas Ogoti in Milimani, Nairobi, meted the sentence after finding Mr Ngamau guilty of five counts of looting Sh180 million from the Youth Fund seven years ago.
The magistrate also ordered him to compensate the State agency with Sh180 million, being the amount that was lost.
He was found guilty of conspiracy to commit an economic ctime, unlawful acquisition of public property and making false documents. He committed the offences on diverse dates between November 17, 2014 and May 4, 2015 within Nairobi county.
Evidence showed that Mr Ngamau and his trading company received the money without rendering any services and after forging contract documents for provision of ICT consultancy services.
The businessman colluded with former Youth Fund CEO, Ms Catherine Namuye (now deceased), and transferred the money to Quorandum Ltd through the Fund’s main account held at Chase Bank.
The magistrate said that the prosecution, through 31 witnesses, proved how the illegal transactions took place based on letters authored by Ms Namuye, as well as invoices and contract agreements.
According to evidence tabled in court, the magistrate observed that Mr Ngamau pitched the idea of an ICT consultancy tender to the CEO and they later discussed how to implement it.
While convicting the businessman, Mr Ogoti noted that procurement rules and procedures, as stipulated in Public Procurement and Disposal Act, were not adhered to.
Mr Ngamau had been charged together with the Fund’s former officials including the late Ms Nambuye and Mr Bruce Odhiambo who also passed away during pendency of the trial, leaving the businessman to face the music alone.
His wife Doreen Waithira was dropped from the case. – nation.africa.
Safaricom headquarters on Nairobi’s Waiyaki Way.
Safaricom fired 28 employees in the year ended March 2021 for fraud-related offences, a jump from 16 dismissals the year before.
The telco’s latest sustainability report released Wednesday indicated it conducted 36 investigations into alleged fraud, dismissed the 28 and warned 19 employees.
One case was taken to government agencies for further action.
The majority of the cases, 22, related to data privacy with eight involving breach of policy and four SIM swap cases. Two cases involved asset misappropriation.
Safaricom says it has established fraud management squads specialising in analytics, customer awareness and process reviews to drive safety for clients through accelerated use of machine learning and automation, continuous fraud awareness and process reviews.
“The squads have completed three key initiatives: targeting irregular subscriber registrations, focused awareness to customers and a review of the processes followed by SIM selling outlets,” Safaricom says in the report.
Data protection has become a key area of focus since the government set up rules to restrict the State and companies handling of information to prevent misuse imposing a fine of up to Sh5 million or one per cent of annual turnover for corporations.
A review by business advisory firm Ernst & Young shows that 41 per cent of firms transfer their clients personal data to third party service providers.
It found that 53 per cent of companies do not seek the consent of their customers, thus violating the law that protects sensitive private information.
Sharing of client information to third parties has led to unregulated text messages, unsolicited emails or marketing of services and products such as insurance policies.
Individuals also risk having their identities cloned, exposing them to bank fraud among other perils.
Safaricom said identity theft and social engineering fraud have been some of the most common forms of fraud targeting customers of the mobile money platform M-Pesa.
“We highlighted the issues through an above-the-line campaign under the tag Jichanue and Take Control, using radio, TV and digital channels,” Safaricom said.
“With the aim to reach all customers, we sent out over 63 million SMS broadcasts. Additionally, our digital channels reached 9.5 million people and our radio campaign reached over eight million people,” the telco said.
Fraud incidences are also conducted externally with hackers targeting weaknesses in systems.
According to the Communications Authority of Kenya’s sector statistics report for July to September 2020 there were 35.1 million cyber security incidents detected, representing an increase of 152.9 per cent from the same period a year earlier. – businessdailyafrica.com
A member of the public scans his finger during NHIF mass biometric registration in Nyeri County on June 2, 2021.