News

Events that will shape 2021

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Ms Jane Karuku, the new EABL chief executive. FILE PHOTO | NMG

Locals take over top EABL, BAT jobs

East African Breweries Limited (EABL) and British American Tobacco (BAT) will from January 1 be managed by new chief executives following the changes announced in December.

Jane Karuku will assume office as the new EABL group managing director while Crispin Achola will also start a similar role at BAT.

The changes come after the respective companies announced that the term of the current managing directors—both being foreigners— are expiring December 31. 

In the last four and a half years Andrew Cowan has steered EABL while BAT was in the hands of Beverley Spencer-Obatoyinbo.

The appointments now place the two firms in the hands of Kenyans with John Musunga also set to replace Ms Karuku as the new Kenya Breweries Limited managing director, effective March 2021.

Ms Karuku’s appointment marks a promotion since she has been the managing director of the Kenyan unit —Kenya Breweries Limited— since September 2013.

For Mr Achola it will be the return for an insider who served BAT for 19 years before exiting in 2017. 

More foreign loans

Kenya is expected to get an approval of a $2.3 billion (Sh250.4 billion) loan facility for budget support from the International Monetary Fund executive board, which is set to meet in February.

Kenya has applied for the extended Fund facility programme to support the next phase of Kenya’s response to Covid-19 including an initial disbursement of $725 million (Sh79 billion) in the first half of 2021.

The loan will help the government fill the budget gap whose forecast for this fiscal year has been increased to 8.9 percent (Sh1 trillion) of gross domestic product from 7.5 percent (Sh841.06 billion) in June.

This is in the backdrop of revenue shortfall with tax receipts falling short of Sh384.3 billion target by Sh41.75 billion in the first quarter to September.

Previously Kenya had kept away from direct budget funding from institutions like the IMF and the World Bank during former President Mwai Kibaki’s regime with most of the support coming in the form of project support.

However spiralling debt that has become unsustainable hitting Sh7 trillion debt or 69.2 per cent of the economy in August has forced a return to the multilateral lenders.

The country has turned to the IMF and the World Bank for cheaper loans concessional loans tapping Sh100 billion from the World Bank and Sh79.3 billion from the IMF.

Nairobians elect governor

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Impeached Nairobi governor Mike Sonko. FILE PHOTO | NMG

Nairobi residents will head to the polls on February 18, 2021 to elect another governor following the impeachment of Mike Sonko.

Senate on December 17 overwhelmingly voted to impeach Sonko — the vote was won at 27-16 for each of the four charges levelled against him.

Section 32A of the County Governments Act provides that once a vacancy occurs in the office of county governor, an election should be held within 60 days.

Former Kiambu Governor Ferdinand Waititu is among eight aspirants that are eye the post.

Jubilee Secretary-General Raphael Tuju said former Dagoretti South MP Dennis Waweru and businesswoman Agnes Kagure had shown interest in the seat.

The Senate commenced impeachment proceedings against Mr Sonko after 88 out of Nairobi’s 122 MCAs voted on December 3 to impeach the governor.

They accused Mr Sonko of among other crimes, gross violation of the constitution and other laws, and abuse of office, commission of crimes and lacking the mental capability to run the county government.

Kenyans decide Building Bridges Initiative (BBI) fate

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President Uhuru Kenyatta and former Prime Minister display a copy of BBI Report during the presentation at Kisii State Lodge. PHOTO | PSCU

Kenya is set to hold a referendum mid-2021 with the BBI team estimating that it will happen between April and June.

The poll, coming ahead of the 2022 General-Election presents the biggest hurdle for economic recovery from Covid-19 pandemic.

Kenya’s economic growth traditionally slows down during election years on political jitters that create uncertainty, which hurts new investment decisions by businesses.

During the last General-Election in 2017, for instance, the economy slowed to 4.9 percent from 5.9 percent, the first in a five years that it grew below five percent.

The country’s worst performance in recent years came in 2008 when the economic growth plunged to 0.2 percent from 6.9 percent a year earlier due to deadly skirmishes that followed the disputed presidential poll that forced a power sharing deal between then President Mwai Kibaki and opposition chief Raila Odinga.

The Independent Electoral and Boundaries Commission is verifying signatures submitted in support of the BBI.

Once the verification is complete, the electoral agency will submit the Bill to all the 47 county assemblies for consideration. They will have at least three months to consider it.

From the county assemblies, the BBI will be sent to the two houses of Parliament and introduced as a bill. BBI then becomes a new law if it gets majority approval in parliament.

Among its most prominent proposals are changes in the structure of the Executive and the Legislature, with the creation of a premier and two deputies from the majority party in Parliament.

According to a timetable contained in the bill, most of the changes will be done in six months to two years after the referendum. The timeline means that most of its implementation would fall in the remainder of President Uhuru Kenyatta’s term; just in time to shape the 2022 General elections.

Digital tax test as KRA goes for online businesses

Kenyans and foreigners selling goods and services online will start paying a digital tax in January 1 as the government sets sight on an additional Sh2 billion in tax revenues.

The government expects to tax all downloadable digital content such as e-books, films, mobile applications, subscription-based media such as newspapers, over-the-top content such as streaming services, music, games, e-tickets for concerts and restaurants, transport-hailing services and any other digital market place service providers.

The move coincides with a huge shift towards online marketplace witnessed during the coronavirus pandemic as buyers and sellers sought to limit contact  while observing social distancing rules and movement restrictions to stop the spread of the pandemic.

Over 1.8 million lost their jobs and many turned to the internet to start small businesses they could operate from home.

KRA is set to target all goods and services provided through online platforms attract including foreigners supplying Kenyan customers especially when payment for the service is done through a Kenyan bank.

However some have warned that the tax is likely to make Kenya uncompetitive leading to job losses.

Next-generation passport compliance deadline

Kenyans with old passports have until March 1, 2021 to acquire the new digital ones that conform to international passport security standards.

The government extended the deadline for the migration by a year to allow Kenyans living abroad and those yet to replace their passports with the new East African Community biometric passport to comply.

Digital passports were launched in 2017 as part of the country’s commitment to the International Civil Aviation Organisation (ICAO) standards. The e-passports have more security features than the previous one.

Those who will not have acquired the new passport will be barred from travelling effective March 1, 2021.

Deadline for compliance was extended twice the deadline for acquisition of the e-passports with the second one coming with setting up of additional centres.

The centres were set up in Nakuru, Kisii, Eldoret and Embu. In the diaspora, applicants can get them in Berlin, Paris, London, Washington DC, Johannesburg and Dubai.

Ethiopia to grant operation licences for foreign telcos

The Ethiopian government is expected to issue its first telecommunications licence to a private investor, paving the way for Safaricom to stake a claim to the vast market. Safaricom made its application for the licences through a consortium that includes parent companies Vodafone and Vodacom and will be expected to follow up with the plan when bidding opens in the New Year.

Ethiopia, with 108 million people and about 50 million phone subscribers is seen as a big prize by multinational mobile companies even though civil instability has been a concern. 

The government of the Horn of Africa country has embarked on liberalising the economy with reforms such as grant of licences to foreign mobile network operators and sale of a stake in Ethio Telecom seen as the initial steps.  Other telcos eyeing licenses include Liquid Telecom, Etisalat, Snail Mobile, Axian, MTN, Orange, Saudi Telecom Company and Telkom (South Africa).

Ethiopian Communications Authority (ECA) disclosed in June that it had received 12 expressions of interest for the issuance of two new full-service telecommunications licences.

Safaricom will be hoping that Ethiopia grants it a licence that includes mobile money service provision.

The telco had disclosed in August that it expects a reduced bid price for the license if ECA insists that only the locally-owned non-financial institutions will be allowed to offer mobile money services.

ID cards to become invalid

National identity cards will be invalidated in December as a switch to the Huduma Namba cards takes effect.

A fresh round of mass registration for National Integrated Identity Management System (NIIMS), commonly known as Huduma Namba is set for April, targeting Kenyans who failed to beat the 2019 deadline.

ICT Cabinet secretary Joe Mucheru said Kenyans, would receive text messages from the State directing them where they would collect their Huduma Namba cards.

The card will have all the data merged and installed in an electronic chip, capturing details in the national identity card, National Hospital Insurance Fund and National Social Security Fund, among others.

Data collected through the Huduma Namba registration will be stored in the Integrated Population Registration System — the central location for easy electronic access by institutions, including private corporations that provide crucial and sensitive services.

At the touch of a button, it would produce one’s details stored at the various registries, including births and deaths, marriages and divorce as well as passport, among others.

Covid-19 vaccination

The first consignment of the Covid-19 vaccine is expected in Kenya in January, with initial beneficiaries being groups at high risk of contracting the virus.

Health workers, police officers, the elderly and teachers will be the first to receive the Oxford University-AstraZeneca vaccine to be made available in the first quarter of 2021, the Ministry of Health said.

At the same time, US drug maker Pfizer is lobbying the Kenyan government to include its vaccine as part of the Sh10 billion mass inoculation that has seen Nairobi favour rival firm, AstraZeneca.

The multinational drug firm said it is negotiating with Kenya and other African countries for governments to acquire and approve its vaccine in the global race for mass immunisation against Covid-19.

Kenya says it has set aside Sh10 billion to cover 10 per cent of the population and prefers Oxford-AstraZeneca vaccine because it is cheaper and easier to store compared to Pfizer/BioNTech, and Moderna vaccines. Pfizer has priced its vaccine at $39 (Sh4,350) for a two-dose course given three weeks apart and the vaccine needs to be kept at minus 70 degrees Celcius or below.

End of tenure at UNCTAD for Mukhisa Kituyi

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UNCTAD Secretary- General Mukhisa Kituyi: We do not see a controversy in our mandate as the organisation that leads the negotiation of new regulations for investment agreements. PHOTO | SALATON NJAU

His second four-year term is ending on August 31, 2021 after serving as Secretary-General at the United Nations Conference on Trade and Development (UNCTAD) since September 2013.

His attempt to clinch the position in 2009 flopped after the UN General Assembly unanimously endorsed the re-appointment of Supachai Panitchpakdi.

Established in 1964, UNCTAD is the principal organ of the General Assembly that deals with global trade, investment and development.

The former Kenyan Trade minister and lawmaker has had to contend with questions about whether he plans to rejoin the country’s public life, especially going for the presidency in 2022.

“The longest I am going to stay in the UN is another seven to eight months from now. There’s a very good possibility that when I am done with my job at the UN, I would rejoin Kenyan politics,” Dr Kituyi told the Business Daily in a recent interview.

“I believe in politics of purpose where you are driven by a desire to put into play the best practices you have seen elsewhere in the world, and have faith in the potential of Kenyan entrepreneurs to get us out of a very difficult economic situation.”

US presidential inauguration

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Former vice-president and US president-elect Joe Biden (left) and vice president elect Kamala Harris. AFP PHOTO

Former vice-president Joe Biden is set to be sworn in as the 46th President of the United States on January 20 at an outdoor inauguration ceremony.

Plans for the inauguration ceremony are likely to be scaled back owing to the coronavirus pandemic.

Mr Biden’s vice presidential pick, Sen. Kamala Harris, made history as the first woman and first woman of colour to be elected to the office.

Ms Harris will take oath of office from the West Front of the US Capitol in Washington, moments before Mr Biden is inaugurated as president.

American officials and other dignitaries are expected to gather at the inaugural platform, which is more than 10,000 square feet and holds more than 1,600 people for the swearing-in ceremonies.

When outgoing US President Donald Trump was sworn in in 2017, his Democratic opponent, Hillary Clinton, and her husband, former President Bill Clinton, were in attendance.

Mr Biden has maintained that Mr Trump’s presence at the event was far down his priority list. Mr Trump continues to refuse to concede the election.