Starlink, Satellite Internet Providers Hit With New State Fees

In Today’s money news, Kenya's economy expanded by 4% in Q3 2024, slowing from 6% in the same period in 2023, according to KNBS. Capital Business  reports that the decline was driven by contractions in key sectors, including construction (-2.0%) and mining (-11.1%), amid reduced cement consumption and a 13.6% drop in credit to construction enterprises. However, growth in agriculture (4.2%), transportation (5.2%), and accommodation (13.7%) provided a boost. Inflation eased to 4.08%, supported by lower food and beverage prices. 

According to the Business Daily,  satellite internet providers, including Starlink, could soon pay an annual license fee of either Ksh4 million or 0.4% of their gross turnover, whichever is higher, under new regulations proposed by the Communications Authority of Kenya (CA). The proposal, which also includes a one-time fee of Ksh15 million, seeks to enforce technology neutrality and open the market to diverse satellite technologies.  While the changes aim to level the playing field, the higher fees may affect pricing for consumers and shape the satellite internet market's growth in Kenya.

In a report by Reuters the US dollar weakened as investors weighed reports that President-elect Donald Trump might soften his stance on proposed tariffs, raising questions about the broader implications of his trade policies. Concerns about potential inflationary pressures from tariffs, which could limit the Federal Reserve's capacity to hike interest rates, further impacted the dollar. Focus has now shifted to key US economic data, including December's services index, which could influence market volatility. Meanwhile, the eurozone saw steady core inflation at 2.2%, with the European Central Bank maintaining its deposit facility rate at 2.1%. Markets remain cautious over potential shifts in US economic policy and their global repercussions. 

Foreign investor net outflows at the Nairobi Securities Exchange (NSE) dropped to Ksh16.5 billion, reflecting reduced sell-offs compared to previous months. The Business Daily reports that the decline signals a potential stabilization in investor sentiment despite ongoing global economic uncertainties. The subdued outflows coincide with efforts to enhance liquidity and attract more participants to the local market. Listed stocks' performance continues to be monitored closely, particularly those included in the MSCI indices, which often serve as benchmarks for institutional investors.

From February 14, 2025, importers in Kenya must acquire marine cargo insurance digitally from locally licensed insurers, per a directive from the Insurance Regulatory Authority (IRA) and Kenya Revenue Authority (KRA). Citizen reports that the digital certificates, integrated with the Customs Management System, aim to streamline customs clearance. Importers need an active Import Declaration Form (IDF) to procure the insurance, with the process digitized to enhance efficiency and compliance. 

The length of new roads constructed in Kenya has dropped by nearly 70% during the first two years of President William Ruto's tenure, signaling a shift in policy from the infrastructure-heavy investments of former Presidents Uhuru Kenyatta and Mwai Kibaki. According to the Business Daily, state road agencies, including the Kenya National Highways Authority (KeNHA), the Kenya Urban Roads Authority (KURA), and the Kenya Rural Roads Authority (KeRRA), built a combined 1,037 kilometers of roads over the two fiscal years ending June 2024. This is significantly lower than the 3,330 kilometers constructed during a comparable period in the previous administration. The government has scaled down infrastructure spending to reduce the fiscal burden, as emphasized by Prime Cabinet Secretary Musalia Mudavadi.