By David Onjili
Barclay’s economic projection
Barclays Africa launched their 2018 macroeconomic report last month. In the report, they highlighted key areas likely to affect the economy in the sub-Saharan region. Kenya’s projections were positive, with Barclays expecting the economy to grow to 5.5% in 2018 from 4.6% in a similar period in 2017. The company bases this growth on the fact that the political climate of 2017 has passed, and that the rain pattern this year is likely to be better spread and regular – meaning good agricultural returns.
According to Barclays, both tourism and agriculture are expected to be resilient while the construction sector will likely slow down. Public debt is expected to grow to 61% while the GDP will rise to $83 billion (Sh8.4 trillion) in 2018 from $76.7 billion (Sh76.7 trillion) in 2017.
In the report, the global economy is expected to grow from the 3.7% witnessed in 2017, although there may be fluctuations. Amongst the fears are US policy catalysed by the Trump administration, Italian election, and European politics like Brexit and of course Catalonian referendum in Spain.
Kenya Airways
Finally, the long awaited news is that national carrier Kenya Airways will from July fly directly to the United States of America. She joins South African and Ethiopia Airlines as carriers with direct flights to USA. While making the announcement in Nairobi, Managing Director and KQ Chief Executive Sebastian Mikosz said that the carrier would use its modern Dreamliner 787 on the route cutting travel time by some 7 hours. Flying from Jomo Kenyatta International Airport (JKIA) directly to JFK airport in New York will be a daily affair. Kenyans in the USA and both at home are very excited on this as it would open up the region to increased business opportunities.
Blockchain in Kenya
Nairobi will on 22nd and 23rd of March host the World Blockchain Summit. The meet will bring together IT experts and regional business gurus to deliberate on blockchain and its potential to improve business efficiency – a blockchain can simply be defined as a digital ledger where transactions made in cryptocurrency are chronologically and publicly recorded.
In the meantime, Joe Mucheru, Kenya’s Cabinet Secretary for ICT, revealed that a government taskforce is in place to evaluate how it can exploit the use of blockchain. Mucheru revealed how several government ministries like the health and lands ones were already testing how the technology could be applied. There was possibility that the government can use blockchain to create a fool proof lands records that are not only correct but digital and impossible to be accesses by unauthorized individuals. A move the government hopes will solve the nightmare that exists at the lands registry.
Inflated electricity bills
Nairobi lawyer Apollo Mboya , together with Electricty Consumers Society, sued Kenya Power for backdating power bills, which would have left consumers with a hefty burden. This was after several Kenyans had complained to receiving inflated bills since October 2017. Justice Chacha Mwita issued temporary orders stopping KP from inflating power bills to recover Sh10.1 billion that the company had lost as revealed in their year ending June 30, 2017 financial statements. Adjusted figures currently show that Sh2 billion was recovered, and the debts stands at Sh8.1 billion.
Lawyer Mboya sought the courts to compel Kenya Power not to disconnect her customers since their bills were as a result of inflated figures. He also wants the court to declare that consumer rights were infringed by the inflated bills and that the court should issue an order directing the Auditor-General to form a commission and conduct a detailed financial and forensic audit to determine the amount that should be recovered by Kenya Power. The orders by Justice Mwita remained until the case, slotted for 30th of last month, was heard.
On their part, Kenya Power Chief Executive, Kenneth Tarus, attributed the inflated bills to an upgrade in the billing system and went further to state that the company was correcting the anomaly. Energy Cabinet Secretary Charles Keter refuted claims that they were backdating electricity bills that had led to the inflated bills. As a sign of goodwill from the company, Kenya Power has begun public awareness campaigns to educate approximately its 6.5 million clients connected to the grid on how her billing is done.
(Below is a sample from Kenya Power on how you can calculate your bill)
Nation Media Group lay offs
In 2016, Nation Media lay off some more than 150 staff when it closed 3 of her radio stations alongside a Swahili television station. This trend seems to be continuing following a communique that it plans to lay off some 150 employees. The process which immediately starts and should conclude by mid-February will affect staff in her print division affecting the newspaper and magazine staff.
Like many other mainstream media businesses world over, NMG print division has been greatly affected by the proliferation of several online publications which has cut into her advertising revenues. In the 2017 half year results, the print revenue declined by some 6.4% points although the company attributes her restructuring was a key component that has helped her remain stable in the harsh times.
Online retail
Kenya’s online trade market is being shaken by the entry of Africasoko. Jumia and Safaricom’s Masoko which are the dominant players are being challenged by the 24 hour delivery time initiated by Africasoko once a consumer orders for good online. While it takes an average of 2-3 days for a customer within Nairobi to get purchase goods, those outside the city normally receive their good within a period of1-2 weeks. With this entry, the customer is ultimately going to be king as the competition to offer better services picks up. The real taste of the pudding is in the eating, consumers wait to see how Africasoko delivers on this.
Finally…
Did you know that Nairobi County has 5 major revenue streams – parking fees, land rates, single business permits, billboards and advertisements, and building permits?
According to the Integrated County Development plan, Nairobi County recorded a 40.7% growth in revenue between the years 2013/2014 and 2016/2017. This translated in an average of 74.05% revenue collection, with land rates accounting for Sh10.27 Billion in the four years. Despite the overall growth in the four years, revenue collection dropped in the 2016/2017 fiscal year by 6.7% compared to 2015/2016. ^
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