Uhuru rejects changes to mobile T-bill investment law

President Uhuru Kenyatta has rejected changes to the law that would have allowed retail buyers to invest small amounts in State securities, including through mobile phones.

He said the changes suggested were already in the works, with the Central Bank working on a system to allow easier trade in government securities.

The proposed changes to the Central Bank of Kenya Act would have forced the banks’ regulator to lower the minimum amount one can invest in T-bill below the current Sh100,000 and bonds under Sh50,000.

The Central Bank of Kenya (Amendment) Bill 2014 sought “lower minimum investment denominations” in T-bills and bonds without specifying amounts.

The proposed amendments were sponsored by Mukurwe-ini MP Kabando wa Kabando, but were referred back to the House on May 27.

A memorandum to Parliament delivered to MPs by Speaker Justin Muturi advises them to delete sub-section two of clause two of the Bill.

“It, therefore, follows that there will be no amendment to CBK Act and the Finance, Planning and Trade committee is guided accordingly,” Mr Muturi said.

On investing Sh100,000 in the bills that range from 90 to 364 or Sh50,000 in government bonds with tenor of between one and 30 years, additional investments in both cases is in multiples of Sh50,000.

Mr Kabando argued current thresholds have made it hard for ordinary Kenyans to buy the government papers which offers safe and regular income.

READ: House passes Bill seeking to lower threshold for securities

Banks, insurers, and pension funds are the major investors in the government bonds, and the entry of many retailers has the potential of lowering the State interest rates and forcing lenders to channel more cash into the private sector.

Mobile phones have grown into a formidable medium of commerce, turning over Sh2.4 trillion last year, and though not related, equivalent of the current national debt.
T-bills and bonds are currently bought from central bank which is the agent of the National Treasury.

However, brokers and banks trade in the instruments at the secondary market.

Mr Muturi also informed MPs of Mr Kenyatta’s rejection of a Bill seeking to have a third of all government contracts allocated to the youth and protected under the law.

The proposals were made through the Public Procurement and Disposal (Amendment) Bill, 2014 by nominated legislator Johnson Sakaja.

He said the amendment had been overtaken by events given that Mr Kenyatta had signed into law the Public Procurement and Asset Disposal Act, which takes into account what the Sakaja Bill sought to achieve.

“The president has also asked the House to set aside enactment of the Public Procurement (Amendment) Bill by Mr Sakaja because the sections he sought to amend have since been repealed by Public Procurement and Asset Disposal Act,” he said.

Mr Kenyatta also returned to the House for consideration a Retirement Benefits Bill.

The Bill, sponsored by Suba MP John Mbadi sought to award former Prime Minister Raila Odinga and former Vice President Kalonzo Musyoka hefty retirement benefits.

“I therefore refer the Bill to the departmental committee on Finance, Planning and Trade for reconsideration. Since the House has 21 days to consider recommendations from the president, I direct that the committee tables its report on or before Thursday June 18, 2015,” Mr Muturi said.