News and Analysis
November 22, 2024
.jpg)
It has been an eventful week as September begins. New motor vehicle number plates with a controversial compliance fee were launched as newly elected MPs laid out a fresh list of perk demands including pushing for a generous health insurance cover that has raised eyebrows.
This is happening as more private hospitals threaten to reject NHIF cards. Kenya National Bureau of Standards (KNBS) inflation data portends even tougher times ahead as inflation inched closer to 9%.
For this and more, let’s take a recap of the business news that made the headlines over the last seven days and how this may affect your pocket.
Joint findings by consultancy firm Deloitte and data firm DataEQ from a study of consumer sentiment on Twitter published on August 29, showed that many users expressed regret for opting in to Safaricom's Fuliza overdraft facility.
“While the bulk of neutral Twitter conversation pertained to comments about transactions and vendor promotion, some themes that had lower volumes of conversation were more emotive. For example, consumers frequently referred to the increase in loan uptake in Kenya, with many expressing regret in signing up for Fuliza loans” the report says, in part.
“Other consumers claimed that their limits were too low and questioned whether Safaricom trusted them to pay back higher values of short-term loans” it adds.
This was attributed to the cost of the facility. Fuliza charges a fee of 1.083% daily or 395.2% annualized.
Kenyans borrowed Ksh503 billion through Fuliza in the year ending March 2022, or Ksh1.37 billion per day.
The survey involved tracking over 300,000 Twitter posts, further adding that a majority expressed concerns over the debt burden.
“Despite acknowledging the convenience offered by M-Pesa, Kenyan consumers expressed unhappiness around how quickly the fees and related charges add up and developed workarounds,” an excerpt from the report reads.
Read Also: Coping With Debt: How To Deal With Debt of Any Size
Car owners face a 6-month jail term or a fine of up to Ksh20,000 if they fail to get the new digital number plate in the next 18 months.
The new plates were launched by Interior Cabinet CS Fred Matiang’i on August 30, 2022. The plates have inbuilt security features aimed at curbing crime in the country as well as bringing an end to the duplication of number plates.
Motorists can acquire the new number plates from the National Transport and Safety Authority (NTSA) at a fixed cost of Ksh3,000.
The Interior CS urged Kenyans to get the new number plates within the stipulated window following which a major crackdown will be launched across the country.
Government data shows that Kenya had 3.9 million registered cars at the end of 2020, a figure that is said to grow at an average of 400,000 vehicles each year.
Healthcare providers under the Kenya Faith Based Health Services Consortium (KFBHSC) and the Rural Private Hospitals Association (RUPHA), have announced that about 660 private hospitals plan to withdraw outpatient services for members of the National Health Insurance Fund (NHIF).
The consortium’s chairman, Dr. Samuel Mwenda, says this due to what they described as a mismatch in rates and delays in signing contracts by the national insurer.
They claim that instead of the agreed-upon Ksh1,400 per beneficiary per year, NHIF branch offices have been requesting invoices quoting Ksh1,000.
The hospitals further revealed that the insurer was yet to distribute physical contracts for the 2022-2024 cycle.
The NHIF and private hospitals have often locked horns over issues ranging from delayed payments, accusations of patient overcharging and insurance fraud among others.
Last week, NHIF dropped a bid to have top earners contribute 1.7 percent of their gross salary from the current maximum of Ksh1,700 in response to a petition before parliament against the move.
The Deloitte Kenya Banking Sentiment Index shows that only Absa (12%) and Co-op Bank (2.6%) have received a net positive sentiment from customers online of all commercial banks in Kenya.
The report revealed that the majority of Kenyans had a bad digital experience when interacting with Kenyan banks, which was primarily caused by system outages or app downtime.
The report prepared by Deloitte tracked 336,434 consumer posts over a one-year period.
It observed a lackluster level of responsiveness to customers displayed by banks on social media, with only 53% of priority conversations receiving a public response.
This translates to almost half of customer queries going unanswered. According to Deloitte, there is a growing impetus for banks to improve their customer focus by continuously improving their digital offerings and responsiveness to changing customer needs.
According to the Kenya National Bureau of Statistics (KNBS), the country's overall rate of inflation in August was a record high of 8.5%, up from 8.3% in July.
This was primarily due to increases in commodity prices for food and non-alcoholic beverages (15.3%), transportation (7.6%), and housing, water, electricity, gas, and other fuels (5.6%).
The Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services, increased by 0.4% from 125.05 in July 2022 to 125.58 in August 2022.
Prices of Maize flour and sugar increased by 4.7% and 4.1% in August 2022, respectively, compared to July 2022.
Kenya Power will no longer allow banks and third-party vendors to sell electricity tokens for prepaid customers from September 1, 2022.
This decision was attributed to what the power distributor described as an increase in complaints about delays and cases of billing fraud
Moving forward, pre-paid customers can only buy tokens through the M-Pesa Pay Bill number 888880, M-Pesa Pay Bill number 888888 for post-paid customers and 888899 for new connections.
Kenya Power investigations last year revealed that rogue employees had collaborated with fraudsters to target unsuspecting customers via the WhatsApp, Telegram, and Facebook platforms
The company also claimed that the said employees, working with third parties, were generating and selling prepaid tokens, costing the company an undisclosed sum of money.
Safaricom is the biggest private sector contributor to government coffers as per public financial records.
In its annual report for the fiscal year ended March 20, 2022, the telco stated that it paid the government Ksh124.7 billion in taxes, duties, and license fees, an increase from Ksh105.92 billion the previous year.
The government also owns 35% of Safaricom, or 14.02 billion shares, and received a dividend of Ksh19.5 billion from the company during the period.
A total of 7 large firms contributed close to Ksh300 billion to the National Treasury in taxes, duties, and licence fees during the period. These are:-
Newly-elected MPs have had their push for insurance cover adjustments to also cover massages and beauty treatments thwarted by the Parliamentary Service Commission (PSC).
The lawmakers, however, will receive coverage that includes a Ksh10 million in-patient per family where each family member will have the following individual limits - Ksh300,000 for outpatient, Ksh150,000 for maternity, Ksh100,000 for dental and Ksh100,000 for optical.
Pathology, X-ray, ultrasound, CT and MRI scans, radiotherapy, inpatient physiotherapy, nursing procedures, home nursing care, and daycare surgery are among the other services that are covered up to the full in-patient limits.
The newly elected legislators, who are yet to be sworn in, have vowed to challenge the decision to do away with sitting allowances.
Last month in a gazette notice, the Salaries and Remunerations Commission (SRC) scrapped plenary sitting allowances that saw each MP and Senator earn Ksh5,000 for every sitting - this will save taxpayers over Ksh1 billion annually.
The committee sitting allowances have, however been retained and the basic pay of legislators increased by Ksh134,000 to Ksh710,000 per month.
The legislators have threatened to initiate the disbandment of the SRC once they are sworn in.
According to a circular issued by the Salaries and Remuneration Commission, each governor who leaves office will be paid 31% of their annual basic pay as a gratuity for each year served.
This means that each outgoing governor will receive a gratuity of Ksh17.2 million, while their deputies will receive Ksh11.55 million.
County heads who served one term will earn a total of Ksh275.2 million, while those who served two terms will earn a total of Ksh721.83 million.
In the recent general elections held in Kenya, 16 governors were sent home, while 21 did not defend their seats after serving their second and final term in office.
As small individual domestic shareholders and foreigners sold their stakes in the leading telco, local institutional investors have purchased Safaricom shares worth Ksh9.5 billion.
According to regulatory filings with the Capital Markets Authority (CMA), local institutional investors such as insurance companies and pension funds purchased 340.7 million shares between August 2020 and July 2022.
Individual investors, including billionaires, have reaped the most benefits from Safaricom as they have accumulated shares in the company.
Chirag Minesh Solanki and Kalavati Menesh Solanki are the largest individual shareholders, each owning Ksh980 million.
.png){kind=small}
Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.
