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Parliament Allocates Sh1bn to The PSC for Internships

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In a budget revision for the financial year starting July 2019, parliament has included an allocation of Sh1 billion for the purpose of hiring interns who will be earning a monthly stipend of Sh25,000.

The National Assembly Budget and Appropriation Committee has directed the Public Service Commission (PSC) to employ interns sourced from all the constituencies.

This would present a great opportunity for fresh graduates to earn money as they gain much-needed experience especially as the current employment rate stands at 40 percent.

Kenyan employers have long since complained of the quality of graduates entering the job market. The graduates are said to lack experience and specialized skills, thus leading firms to spend a lot on on-the-job training.

“Increase allocation for Public Service Commission (PSC) by Sh1 billion for monthly stipend of interns,” said the BAC. This is one of the recommendations that must be adopted by the Treasury into the budget for the fiscal year starting July.

The move will also assist the government in mitigating a potential job crisis in the civil service which will lose 60,000 workers by June 2020.

Since public service salaries eat up half of all government revenues and make it harder to finance development projects, the hiring of interns would ease the bloated wage bill by replacing some of the retirees.

According to data from the Kenya Bureau of Statistics (KNBS), the economy generated only 78,400 new formal jobs in 2018; a decline from 114,400 created in 2017, worsening the situation for school leavers.

A number of NSE-listed companies blamed a tough business environment as the reason for offering early staff exit packages for employees, which poses further complications for those currently employed.

With more students enrolling for studies, the number of vocational training centers rose by 26.6 percent last year to 1,502 with universities increasing from 61 to 63.

With fresh graduates generally perceived as being inexperienced and unskilled, their opportunities for direct employment after school are usually low.

This then leads to a high level of unemployment in the economy unless both the private and public sectors generate jobs at a faster rate.

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Banks

Sh1,000 Notes Abroad to be Exchanged in the Country, CBK Says

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Patrick Njoroge, the Central Bank of Kenya (CBK) Governor, has urged those with the old Sh1,000 notes that are out of the country to exchange them in Kenya before the October 1st deadline elapses.

The Governor dismissed permitting conversion of the old currency outside the country, adding that the CBK had alerted all foreign banks to cease recognition of the old notes.

He further said that banks outside the country will not be receiving any new notes to aid in conversion, contending that this would defeat the process of demonetization.

“If you have the Kenyan currency and you happen to be outside the country, there is only one way to get value for it before October 1. You have to take a trip here and go through the procedures outlined in the Gazette notice and subsequent releases,” said Dr. Njoroge when speaking at a press briefing yesterday.

“You cannot convert it to any other currency out there since this would defeat the process of demonetization.”

Earlier this month, notices were issued from the Bank of Tanzania and the Bank of Uganda discontinuing the conversion of the old currency in their banks. In addition, they have directed their countries’ banks to apply more stringent due diligence processes to all currency flows.

The procedures to be followed for currency conversion by locals will also be followed by those coming into the country.

Dr. Njoroge has warned that measures have been put in place to thwart any efforts to clean illicit money in nations involved in significant financial transactions with Kenya.

After the East African Community allowed free movement of goods and people across member states, the Kenyan shilling is frequently used in business transactions in neighbouring countries.

The result is that this money comes back home through those trade routes and official currency repatriation mechanisms between central banks of countries in the Community.

He also said that the deadline will not be extended, arguing that an extension would create a loophole for those seeking to clean their dirty money to do so.

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Safaricom and Equity in Deal to Offer Loans to Contractors

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Safaricom contractors that may find themselves short on cash will now be able to access as much as Sh200 million in unsecured short-term loans following a deal between the telco and Equity Bank. This will help the contractors to maintain cash flow positions before receiving payment for their services.

The firm wrote a letter addressed to its business partners in which it said that the aim of the deal is the creation of a more procurement-ready business. The main beneficiaries will be Safaricom dealers, suppliers, and agents.

In the fiscal year ended March 2019, Safaricom had 440 dealers, 156,000 M-Pesa agents, and 1,164 suppliers.

“We are pleased to inform you of our partnership with Equity Bank which will offer our partners financing solutions linked to purchase orders and invoices,” said Francis Murabula, Safaricom’s head of supply chain management, in the letter.

He is asking the dealers, suppliers, and agents for consent to share their information including contact details, invoice and purchase order information to enable loan processing for potential firms.

Contractors will be able to borrow from Equity before or after they fulfill their contractual obligations with Safaricom.

The terms and amount of the loan applied for will depend on each company’s credit rating.

Therefore, for a contractor to qualify for an unsecured loan of up to Sh200 million, they have to be using unpaid accounts for goods and services that have already been provided to Safaricom as their collateral.

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Bolt Announces Expansion to Kakamega, Thika, and Kisumu

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Estonian ride-hailing firm Bolt, formerly called Taxify, has announced its expansion to three more towns in Kenya. This as it continues to widen its reach across the country, in competition with Uber and Little Cab. Uber operates in Nairobi, Mombasa, and Thika while Little Cab operates in Nairobi, Kisumu, and Mombasa.

On Wednesday, the firm launched its services in Kakamega, Thika, and Kisumu; bringing the total number of towns it covers to five, including Nairobi and Mombasa. This makes it the largest taxi-hailing platform by geographical coverage in the country.

“After Nairobi and Mombasa cities, it was natural that Bolt would gradually expand across the country. We now intend to build new communities in Kisumu, Kakamega, and Thika as we continue to gain the trust of the Kenyan people,” said Ola Akinnusi, the Bolt Country Manager for Kenya, at the press conference.

“Launching in these areas will allow us to provide a safe and affordable avenue for passengers to get a ride.”

The firm also unveiled a rapid expansion plan for East Africa, whose five-year strategy will focus on the provision of local transportation options that include tuk-tuks and boda-bodas.

Bolt revealed that it charges a 15 percent commission on net profit, leaving its drivers with 85 percent.

“We are always looking out for partnerships and opportunities that will enable drivers to reduce the cost of doing business and have better earnings. We have always believed that happy drivers translate into better customer service for the riders,” said Akinnusi.

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