Connect with us

Business News

IMF suspends Kenya’s $1.5 billion loan talks2 minutes read

The two-year standby loan facility, which expired in September last year, is intended to cushion the shilling against external shocks

Published

on

IMF suspends Kenya's $1.5 billion loan talks

Kenya’s talks with the International Monetary Fund (IMF) for the renewal of a $1.5 billion standby credit facility have collapsed.

This follows the exit of the country’s treasury’s two most senior officials in an anti-corruption purge, leaving the country exposed to economic shocks.

An IMF delegation expected in Nairobi in July, cancelled the visit after Treasury Secretary, Henry Rotich and his Principal Secretary, Kamau Thugge were charged with corruption offences.

Collapse of the talks left in abeyance, the renewal of the standby credit facility intended to cushion the Kenyan shilling, which last week, depreciated to a four-month low against the US dollar.

The two-year standby loan facility, which expired in September last year, is intended to cushion the shilling against external shocks and raise the country’s credibility in the eyes of foreign lenders.

Rotich had in May this year, said that he expected to conclude talks with the IMF over renewal of the loan in two months.

“They did not come,” says Geoffrey Mwau, the Treasury’s director-general in-charge of budget, fiscal and economic affairs, while declining to disclose reasons for cancellation of the visit.

Being in good books with the IMF is considered a plus as it gives comfort to foreign lenders, who are currently holding in excess of $26 billion Kenyan debt.

The new Treasury Principal Secretary, Julius Muia in an interview says plans are underway to re-engage the IMF, with the possibility of resuming talks next month.

The new Treasury officials will be laying the groundwork for fresh discussions with the IMF during the Fund’s annual meetings in Washington starting October 14-20.

“We’re arranging for a detailed engagement with the IMF during its annual meetings in Washington starting from October 14, from there they will be coming in November, which is when we will kick off discussions in a structured manner,” Muia adds.

Kenya initially secured the two-year IMF precautionary facility in March 2016. It expired in March last year, but was extended up to September.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

Tell your story the right way

Have you witnessed a news worthy event? Want to become our citizen journalist and tell your own stories?

Send your stories to us or contact us via:
Email: Click to email us
Social media: Twitter and Facebook @NewsCentralTV
WhatsApp: Text or call +234 901 190 0000 .

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading
Click to comment

Leave a Reply

Business News

Jumia shuts down travel department in Nigeria

Published

on

Jumia Travel shuts down operations in Nigeria

Managing Director of Jumia Travel Nigeria, Omalara Adagunodo has announced the shutdown of Jumia’s travel operations in Nigeria. This follows reports of Jumia shutting down its operations in Cameroon and Tanzania.

A Twitter user with the handle @njinjoya tweeted: “So Jumia Travel just closed down operation in Nigeria?”

Another Twitter user claiming to be a staff of Jumia Travel lamented: ” Woke up this morning to hear the franchise I worked for in Jumia, Jumia Travel, is no more…so sad, buh still grateful to God…
New chapter, digital marketing n SEO “

Travelstart is expected to take over Jumia Travel’s operations in Nigeria according to a Jumia Travel staff who spoke under condition of anonymity.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

Tell your story the right way

Have you witnessed a news worthy event? Want to become our citizen journalist and tell your own stories?

Send your stories to us or contact us via:
Email: Click to email us
Social media: Twitter and Facebook @NewsCentralTV
WhatsApp: Text or call +234 901 190 0000 .

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Business

South African airways to go into business rescue

Published

on

South Africa’s minister of Public enterprise, Pravin Ghordan, has declared the government’s resolve to “rescue” national carrier, South African Airways.

The move comes after a week of speculation on the airline’s future, which is loss-making and has been unable to raise funding to continue operations.

It is proposed that the government will give the airline an extra $137 million with a second tranche of the same amount to come from existing lenders.

The failing airline which has not made a profit since 2011, has lost more than $2 billion over the past 13 years and experience some internal turbulence last month, when staff went on strike over plans to cut a fifth of its workforce.

“It must be clear that this is not a bailout. This is the provision of financial assistance in order to facilitate a radical restructure of the airline,” Pravin Gordhan says.

SAA, which has not made a profit since 2011 and has depended on government bailouts, suffered an employee strike last month, forcing it to cancel hundreds of flights and pushing it to the brink of collapse. 

Outlining what is expected from the process – described as the “optimal mechanism” to restore confidence in SAA as it seeks a future equity investor, Gordhan says the 2 billion rand provided by existing lenders will be guaranteed by the government and repayable in future budgets. 

The government, via the national treasury, will provide another 2 billion rand in a “fiscally neutral manner” with the full recovery of capital and interest on existing debt not impacted by the rescue proceedings. 

In a business rescue process, a specialist administrator takes control of a company with the aim of rehabilitating it to improve its chance of survival, or securing a better return for creditors than they would receive from liquidation. 

“This initiative demonstrates that the government will undertake the necessary bold steps in order to reposition its assets in such a way that they do not continue to depend on the fiscus and thereby burden taxpayers” , Gordhan adds.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

Tell your story the right way

Have you witnessed a news worthy event? Want to become our citizen journalist and tell your own stories?

Send your stories to us or contact us via:
Email: Click to email us
Social media: Twitter and Facebook @NewsCentralTV
WhatsApp: Text or call +234 901 190 0000 .

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Business

South Africa’s competition watchdog orders data rate cuts

Published

on

South African telecommunication behemoths, Vodacom Group and MTN Group could face prosecution if they do not agree with the country’s Competition Commission in the next two months to lower data prices.

A data services inquiry was launched in August 2017, in response to a request from the country’s minister of economic Development, Ebrahim Patel, following complaints from users about high data costs.

“What we found is that there is anti-poor pricing and we see it not only in tariffs but in data bundles as well. The prices for lower bundles are more expensive than higher bundles and there is no persuasive explanation [from the mobile operators] for this,” according to James Hodge, the Competition Commission’s chief economist.

In its final report, the Commission recommends that the two mobile operators must independently reach an agreement with the competition watchdog on substantial reductions on tariff levels, especially prepaid monthly bundles, within two months.

Patel, who is currently the minister of trade and industry says:

“If we want to grow the economy, we need to lower data prices.

“Within policy reflection, we have spoken about economic growth that is inclusive of young people and rural people. When data discriminates against poor people, it goes against public policy.” 

Preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%.

In addition to the imposed rate cuts, the mobile operators must also reach an agreement to cease ongoing partitioning and price discrimination strategies that may facilitate greater exploitation of market power and anti-poor pricing. The final report found there is a “duopoly between MTN and Vodacom” highlighting that data prices from these two market leaders are cheaper for users who have contracts than for prepaid customers. “The majority of prepaid customers are poor and have to buy daily or hourly data bundles”, says Hodge.

The report came down heaviest on the high costs of prepaid data bundles- to access 1GB prepaid from MTN, customers would have to pay R149, while an hourly data bundle costs R30. 

For Vodacom prepaid customers, 1GB costs R149, while an hourly 1GB data bundle costs R12. These bundles expire after an hour. 

Hodge says it is clear that MTN and Vodacom don’t charge these excessively high data prices in other countries where they operate. 

“There are strong indications that there is exploitative pricing [in South Africa],” he adds.

In response, both players have blamed the government for its failure to release mobile spectrum, highlighting a ‘significant difference in opinion’ between the Competition Commission and ICASA on a number of issues that are critical to data prices in South Africa. 

This difference of opinion, Vodacom says, is most apparent reviewing mobile data prices in relation to the allocation of spectrum to local mobile operators. 

Addressing mobile data prices, ICASA states that South Africa’s prices are neither extremely high nor very low in relation to other African countries or compared with countries that are more similar to South Africa in terms of their size and level of development. 

When put in further context with data on speeds and LTE coverage, it is clear that customers in South Africa are benefiting from a much higher quality of access than those in other African countries, says Vodacom.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

Tell your story the right way

Have you witnessed a news worthy event? Want to become our citizen journalist and tell your own stories?

Send your stories to us or contact us via:
Email: Click to email us
Social media: Twitter and Facebook @NewsCentralTV
WhatsApp: Text or call +234 901 190 0000 .

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Trending