By Margaret Njugunah
Approximately 155 million mobile money transactions worth US$2.7 billion are conducted in Somalia every month, making it one of the most active mobile money markets in the world.
According to a World Bank finding, mobile money has superseded the use of cash in the country, with over 70 percent of adult Somalis using mobile money services regularly.
Somalia outpaces most African countries in the market, despite its fragility and underdeveloped financial institutions.
Lead ICT policy specialist at the World Bank Tim Kelly says private sector actors have given Somalia a unique opportunity to leapfrog towards widespread financial inclusion.
“World Bank will continue to support the partnership between the Central Bank of Somalia, the National Communications Authority and the key private sector actors as they deliberate on an appropriate regulatory framework for the sector,” Kelly said.
The country, however, lacks robust consumer protection and know-your-customer requirements.
The challenge for policymakers and regulators is how to mitigate system vulnerabilities and avoid macroeconomic effects in the event of service disruptions.
“Reducing costs and promoting greater stability is a top priority for the overall development agenda for the financial sector, ensuring that regulation does not stifle innovation by leveling the playing field is a very close second,” said Thilasoni Musuku, Senior Financial Sector Specialist at the World Bank Finance, Competitiveness and Innovation Global Practice.
Kenya climbs to 4th position in global flower exports, earns over $800 in 2017
Red Lands Roses in Kenya produces some of the boldest shades of roses, from a glossy red to a bright yellow and even a vivid pink. Every single bundle of flowers is carefully prepared for export to several countries, with China being one of their biggest markets.
This flower farm is just one of many in Kenya, which is the fourth largest exporter of cut flowers in the world. In fact, Kenya’s floriculture industry earned more than $800 million in 2017.
“On a daily basis we export 36,000 tons from this country,” said Clement Tulezi, the CEO of Kenya Flower Council. “So we are moving into a place where we want to market ourselves better, we want to brand ourselves better as a country, and also brand the Kenyan flower.”
“We are doing Beijing, we are doing Shanghai, and we are doing Guangzhou,” said Irene Nkatha, the sales manager of Red Lands Roses. “We started with one shipment per week, now we are doing two to three shipments per week. The distance is short. It’s only one day to go to Guangzhou, it’s only two days to go to Beijing.”
One of the main companies Red Lands Roses exports to is Jiuye Supply Chain in Guangzhou.
“We chose to introduce flowers from Kenya to China because of the vast number of varieties they grow, including some that you can’t find in other regions,” said Qi Bo, the director of Jiuye Supply Chain’s flower department.
The length of Kenya’s flower vase life is also an attractive quality for many.
“When you export like a stem today, it will take 14 days to 21 days in vase,” Nkatha said.
Qi Bo said there is a 25 percent yearly increase in demand for flowers from Kenya in China, and the company expects to double its imports to five million in 2018.
“In 2017, we imported 2.5 million flowers from Kenya,” he added. “Kenya has advanced breeding and planting skills as well as the cool-chain storage and transport technologies, which China is lacking.”
Scandal-ridden Finance Minister seeks exit from Ramaphosa’s cabinet; Rand tumbles
South African Finance Minister Nhlanhla Nene has asked President Cyril Ramaphosa to remove him after he admitted to visiting the home of the Gupta brothers, friends of scandal-plagued former leader Jacob Zuma, Business Day said on Monday, sending the rand lower.
Nene has become a divisive figure after testimony he gave at an inquiry into allegations of corruption by the Guptas, in which he admitted to the previously undisclosed visits. He made a public apology about the matter on Friday.
Zuma and the Guptas, who face numerous allegations of using their friendship for mutual self-enrichment, have consistently denied any wrongdoing.
Business Day cited unidentified government sources as saying that Nene made the request to Ramaphosa at the weekend. Nene did not answer calls for comment.
“Government sources said Nene approached Ramaphosa after the highly negative public reaction to his apology to South Africans on Friday for the meetings with the Gupta family when he served under Zuma,” the South African newspaper said.
It said the issue was likely to be raised at a meeting of the ruling African National Congress party later on Monday.
The rand fell more than one percent on the report.
Nene is a key ally of Ramaphosa, who reappointed him finance minister in a cabinet reshuffle shortly after he became president earlier this year.
Ramaphosa has made clean governance and the kick-starting of an economy mired in recession top priorities.
Several ministers and government officials have been implicated in the widening graft scandals around the Guptas.
One common theme that has emerged is visits to the family’s sprawling Johannesburg property, which is why there has been public anger regarding Nene’s revelations.
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Nene has also been praised by commentators for standing up to Zuma.
He told the inquiry he was fired by Zuma in December 2015 for blocking deals that would have benefited the Guptas, particularly a $100 billion nuclear power deal with Russia that could have crippled Africa’s most developed economy.
But Nene’s opponents say he was involved in corrupt deals with the Guptas when he was deputy finance minister and head of the state pension fund. He denies ever helping the Guptas.
Opposition parties have called for his resignation.
Kenya to increase borrowing as budget gap grows
Kenya is likely to borrow another Sh600 billion this financial year after revenue shortfalls, pushing the country deeper into the debt trap.
It had earlier been forecast that borrowing would be capped at Sh558.9 billion.
Despite a pinching tax on fuel, the gap between spending and revenues has continued to increase, prompting the Treasury to revise targets for the Kenya Revenue Authority (KRA).
The budget deficit has grown to Sh600 billion, with tax revenues expected to drop to Sh1.8 trillion, down from Sh1.9 trillion projected in the 2018/19 Budget.
Finance Principal Secretary Kamau Thugge said the dismal results from the taxman made the Government to revise its expectations.
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“We had made projections based on what we expected KRA would collect but performance was bad, especially the last three months and so we had to adjust,” Dr Thugge said.
This means that Kenya’s targeted fiscal deficit will rise to six per cent, from a targeted 5.7 per cent, which was still seen as high by the International Monetary Fund (IMF) and formed its basis to push for debt management.
Kenya’s financing deficit over the past few years has been oscillating between 8.4 per cent in 2014 to 7.4 per cent in 2015, then 8.8 per cent in 2016 and last year, it stood at 6.9 per cent. The plan was to cut it to 5.7 per cent this year and then 4.3 per cent next year.
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