Kenya - Afrikan Heroes

Bigger Market Share For SWVL In Kenya As It Partners Matatus For Long Distance Trips

November 13, 2020

Before now, you would need to hail ride-sharing startup SWVL for trips only within the Nairobi city. Although there was a previous announcement in February this year that the company would be exploring long distance journeys, now, it looks clearer. In a landmark partnership with local matatu cooperatives (saccos), SWVL has made it possible to hail public buses, popularly known as matatus, via the SWVL app for long distance trips say, from Nairobi to Kisumu or from Nakuru or Eldoret to Nairobi.

*Dip Patel, the General Manager for Swvl in Kenya*

“We are looking to make it easier for Kenyans to make their journeys upcountry, especially as we approach the festive season next month. This desire is what prompted us to partner with the matatu saccos who already provide this service and help them in streamlining the process of filling up their vehicles by giving them a digital platform,” said Dip Patel, the General Manager for Swvl in Kenya.

Here Is What You Need To Know

The long distance rides will be available on the SWVL app and can be booked in the same way as regular rides within the city. All you need to do is pick a date and time as well as your location and destination. The app will then proceed to give you options of the available rides and you can choose the nearest and most convenient time for you.
In the meantime, SWVL customers can travel to a total of twelve upcountry destinations including Naivasha, Nakuru, Molo, Eldoret, Narok, Bomet, Kericho, Kisii, Kisumu, Nyeri, Nanyuki and Machakos.

A Major Win For Matatus Themselves

Perhaps the fear of disruption that came with the arrival of the Egyptian ride-hailing startup, SWVL, in the Kenyan public transport sector has been quelled. Matatus are now part of the grand scheme of things and will, going forward, not only determine the future of SWVL in Kenya, but also its success .

One of the saccos, Metrotrans Sacco — a leading PSV transport Saccos operating in Nairobi — is already leading the new chapter. The union has rolled out 45 additional new buses from Isuzu East Africa with financing from Co-op Bank in form of a lease worth Kes 225 Million. The lease will enable the Sacco to respond to increased demand in their existing routes and to also serve their customers better by offering cashless payments enabled by technology company SWVL that allows users to make and track bookings through the SWVL app.

*Top 10 startup funding deals in Africa, 2019*

Swvl’s Operation In Kenya

Swvl recently invaded its Kenyan market with over Sh1.5 billion ($14.5 million) investment to finance an aggressive route expansion plan in Nairobi.

Swvl, already operational on multiple Nairobi routes, has set a target to grow its network to 500 routes served by 1,000 buses.
The app-based public service transport operator which started in Cairo, is seeking to take advantage of Nairobi’s chaotic and largely unreliable public transport system.

“Kenya is a market with a need for a stable solution for the perennial traffic snarl ups and SWVL believes that we can be of great benefit to the local consumer and the transport sector as a whole,” said founder, Mostafa Kandil.

Before now, the tech company has been leasing its vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes. The company tops up the daily collection if the earnings for the day are less than the daily leasing amount, but collects any income above the agreed rate.
The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.
The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.
In early October 2019, Kenya’s National Transport and Safety Authority (NTSA), the authority in Kenya in charge of road use and safety asked SWVL and Little Shuttle to cease operations or face arrests for operating under Tour Service License but engaging in commuter services.
SWVL’s license was restored in May this year.

“We aim to continue our operations and we are very pleased about the consideration of the regulatory framework to incorporate technological developments coming up in the industry,” said SWVL’s General Manager, Dip Patel.

The firm says its popular routes include Ruiru to the CBD/Upper Hill, Karen to CBD/Westlands via Upper Hill, Ongata Rongai to Westlands/CBD via Upper Hill, Ruiru to Westlands, Ndenderu to CBD/ Upper Hill, and Kikuyu to CBD/ Upper Hill.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Kenya Cuts Tax For Local Vehicle Assembly Companies

March 10, 2020

Kenya’s President Uhuru Kenyatta has asked the National Treasury and the Kenya Revenue Authority to immediately institute actions aimed at reducing taxes for vehicles that are fully assembled locally.

“Further, to make locally assembled vehicles more affordable and available to Kenyans, I have also directed that the National Treasury and the Ministry of Trade, Industry, and Cooperatives hold discussions with financial institutions to create special products for locally assembled vehicles,” he further stated during his address to the media outside State House, Nairobi.

Here Is All You Need To Know

Uhuru made the demand at the launch of two of the first locally assembled Mahindra vehicles.
The Mahindra Scorpio Single and Double cabin pick-ups were assembled at the Associated Vehicle Assembly (AVA Kenya) plant in Mombasa -AVA is a wholly-owned subsidiary of Simba Corporation Limited.
Uhuru emphasised on the need for motor vehicle assemblers, in consultation with the National Treasury and the Ministry of Industry, to work out a mutually agreeable framework that will ensure the benefits accruing from the tax incentives are passed on to the consumer.
He then lauded Mahindra Motors, stating that the car manufacturer has joined the list of other globally renowned automotive brands that have chosen Kenya as their home such as Toyota, Peugeot, and Volkswagen.

“We appreciate your sustained investment in Kenya as it is a vote of confidence in our ever-improving business environment.

“This fact has encouraged my administration to continue to make every effort to revitalize the contribution of the manufacturing sector to the economy,” the President told the Simba Corporation leadership team that was led by Group Chairman Adil Popat.

At the beginning of 2019, the government proposed to implement a National Automotive Policy which effectively would see an eventual ban on imports of second-hand passenger and commercial vehicles.
However, this was faced with stiff resistance from the used car industry with the government eventually having to suspend their push to change the regulations on May 7, 2019.
Data from Kenya’s Road Transport reported that there were 3,280,934.000 registered car units in Dec 2018, which was an increase from the previous number of 2,989,788.000 units for Dec 2017.
According to the Kenya National Bureau of Statistics (KNBS), a middle-class Kenyan is anyone who spends between Ksh23,670 and Ksh199,999 a month, which sees them well placed to take full advantage of the effects of tax cuts in the motor vehicle industry.
However, it is important to note that a recent economic survey by KNBS (2019) states that loans and advances from banking institutions increased by 12% to Ksh442.3 billion in 2018 from Ksh358.6 billion in 2017, which could imply that this specific class -identified with massive spending, may be borrowing to sustain their lifestyles.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

New Blockchain-Backed Currencies to Support Cash Transfer Aid In Kenya ’s Remote Areas Launched

November 28, 2019

Laying your hands on cash in Kenya’s remote areas could be a tall order, but Kenya, partnering with Red Cross and other international agencies have found a way to make this more possible. The partnership would now leverage a new global network of blockchain-backed community currencies to supplement direct cash and voucher assistance programs for Kenya ’s most vulnerable communities.

The two-year blockchain project will test, develop and distribute eVouchers, or Community Inclusion Currencies, held in mobile wallets on feature phones in some of the poorest areas in Kenya where national currency is scarce.

“We need new financial solutions such as blockchain-based community currencies that can support the long-term resilience of marginalised communities, said Dr Asha Mohammed, Secretary General Designate of the Kenya Red Cross Society.

“Regrettably, the bulk of direct aid flows out of communities too quickly to provide lasting impact. With the Community Inclusion Currencies, we give an opportunity to activate key community members and resources that normally remain largely underutilized and outside monetary economy. Community Inclusion Currencies are a globally replicable tool for communities to build resilience and fight poverty.”

Here Is All You Need To Know

The initiative will be delivered by the Norwegian Red Cross, Danish Red Cross, and Kenya Red Cross, together with Innovation Norway, Grassroots Economics Foundation and Sempo, an Australia-based technology firm.
This network will aim to improve the efficiency and effectiveness of the $1 billion a year distributed by the Red Cross in cash and voucher assistance programs by 2020.
Funding for the new platform was secured after feasibility studies in Tigray, Ethiopia and Kinango, Kenya, showed eVouchers could help local markets to keep capital within designated communities and improve household income by up to 50 per cent.
Other countries being considered for the initiative include Malawi, Zimbabwe, Cameroon, Papua New Guinea, and Myanmar.
The project has received more than US$1 million in funding from Innovation Norway, Aon, Dutch Postcode Lottery fund Stichting DOEN, and Danish logistics company DSV after earlier pilots funded by DOEN showed the community currencies were up to 20 times more effective than direct aid in producing sustainable impacts.

Securing The Community Currencies Through Blockchain

The community currencies will be securely held on a blockchain and available for users to exchange for basic needs within particular communities.
They can also be used across networks of other connected communities with their own digital currencies, with every transaction transferred and updated on the blockchain.
Community Inclusion Currencies will be exchangeable with rotating “seed” funds between multiple communities and supported by stakeholders, such as the Red Cross, microfinance institutions (MFIs), and social impact investors.
In previous pilots, seed funds of roughly US$7,500 formed the collateral for US$30,000 of the community currencies, which circulated to generate local trade worth more than US$150,000.

“Norwegian Red Cross believes that technology can help us reach more people affected by crises, with the financial resources we have available today,” said Tørris Jæger, international director for the Norwegian Red Cross.

“To stay relevant, it is crucial that the humanitarian sector also invests in new and innovative approaches.”

Whereas traditional cash transfers are limited by the precise amount of money budgeted for a specific humanitarian intervention, the community currencies benefit from a common financing practice referred to as fractional reserve, which holds back a fraction of deposits for lending or liabilities.
At the same time, the community currencies can use blockchain transparency to continuously revalue the credits created, a process that monitors and applies leverage to the pool of seed funding.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Only 2% Of Kenya’s Workforce Earns $1000 Per Month

November 20, 2019

The number of employed Kenyans earning more than Sh100,000 per month rose by 4.1 percent last year to hit 79,982, recording the highest growth among salaried workers although the growth is also likely to further entrench income inequality.

VICTOR JUMA writer at Kenya’s Business Daily

Data from the Kenya National Bureau of Statistics (KNBS), set to be released next week, will show that top earners increased by 3,178 members with the 4.1 percent growth outpacing all the other income groups whose ranks rose by a range of 0.3 percent to 3.8 percent.

Those earning more than Sh100,000 accounted for 2.89 percent of the 2.70 million formal workers captured in the Kenya Revenue Authority (KRA) database.

Top income earners

The top income earners include professionals with several years of experience, State officers, managers and individuals with one or more postgraduate qualifications.

At a minimum of Sh100,000, their pay is nearly six times the gross monthly per capita income of Sh16,833.

Nearly three quarters or 74.58 percent of formal sector workers earned below Sh50,000, reflecting the income inequality. The earnings inequality has partly been attributed to the previous centralised system of government, which guided sharing of resources since independence.

The devolved system of government, which took off in 2013, raised hopes of addressing the economic imbalance, as analysts say there is a need to offer incentives to attract private investors to counties and spread wealth.

KRA has consistently questioned data showing a measly 2.8 percent of workers are paid Sh100,000 and above, pointing to a larger share of high income earners whose lifestyles are not in tandem with the taxes they pay or their declared income.

The taxman says a sharp increase in imports of luxury items and multi-million-shilling investments in real estate have opened its eyes to a potentially massive tax leakage, which if tapped could yield billions of shillings in additional revenues to the Exchequer.

KRA’s argument is supported by the fact that only a few Kenyans have officially registered as belonging to the high-income earners’ bracket despite the growth in conspicuous consumption in areas such as Nairobi. The taxman reckons there are workers who earn extra cash from ventures such as real estate, dividends and royalties, but fail to declare the additional income.

Men dominate the top wage bracket as they do in other levels, the data shows.

Public sector

About 63.4 percent of men or 50,749 of them earned more than Sh100,000 compared to 29,233 women in this club, a gap of 21,516, which is roughly maintained in the other income bands.

The highest-paying jobs are concentrated in the private sector, which had 68,526 professionals or 85 percent of all the top earners.

The public sector, including parastatals, the national and county governments, employed 11,456 of those taking home the largest pay cheques.

The education sector accounted for the largest share of those earning above Sh100,000 at 22 percent or 17,808 individuals, representing lecturers, administrators and high school teachers among others.

Financial services were second and accounted for 11,598 or 14.5 percent of the top earners, followed by wholesale and retail trade and repair of motorcycles and motor vehicles whose number stood at 10,909 or 13.6 percent.

Agriculture, which accounts for a third of Kenya’s GDP, trailed among the top-paying sectors with only 3.7 percent of the share of those paid above Sh100,000.

Three-quarters of Kenyans earn a monthly salary of below Sh50,000, according to the data.

At two million at the end of 2018, they include minimum wage workers such as domestic servants and professionals such as drivers, secretaries and some ranks of teachers and police officers.

The typical Kenyan employees, those paid between Sh20,000 and Sh29,999 per month, are represented in this group with a population of one million or 36.3 percent of the total salaried workforce of 2.7 million. It also includes the largest absolute number of employees of 781,964 with an income band ranging from Sh30,000 to Sh49,999 which can be considered the start of the lower middle class earnings threshold. This group has expanded the most in the past five years, adding 113,615 over the period.

Luxury items

The two million workers earning up to 49,999 are the most critical for the economy, accounting for a large share of aggregate demand for goods and services. Most of these employees spend the bulk of their incomes on necessities such as food, housing, clothing, education and minor discretionary items such as entertainment.

Higher-income households tend to save more of their earnings while also spending on luxury items such as cars and holidays.

The data shows that those paid between Sh50,000 and Sh99,999 per month form the next largest segment with a population of 623,228. This category includes most entry-level jobs for university graduates in diverse sectors such as banking, manufacturing, telecommunications as well as the civil service. They form the majority of the middle class whose growth has sparked a consumerism culture as seen in the expansion of global luxury goods brands, including cars, premium alcohol, fashionable clothing and smartphones. Their ranks have grown by 86,992 members over the past five years.

About 72,000 employees are paid below the per capita income level of Sh16,833, with the raising of the minimum wage over the years elevating more workers above this income level. Cashiers, drivers and clerks, for instance, have seen their pay set above Sh19,000 by the law. Kenyans earning between Sh15,000 and Sh19,999 saw their ranks rise by the smallest margin in the review period. Their numbers stood at 202,508 at the end of last year compared to 201,722 in 2017, an increase of just 786 or 0.38 percent.

The actual labour earnings across the country remain unclear, with most Kenyans employed in the informal agricultural sector. In total, however, the private sector has been doling out the biggest pay cheque in excess of Sh1 trillion last year or more than 70 per cent of the total wage earnings. This underlines the critical role of companies in creating and sustaining earnings from employment.

VICTOR JUMA writes for Kenya’s Business Daily

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Kenya’s Betting Company SportPesa To Return To Business As Kenyan Tax Appeals Tribunal Rules In Its In Favour

November 12, 2019

The end of the road may not be on the horizon for Kenya’s sport betting firm and Everton football club sponsor SportPesa, after all. The Kenyan Tax Appeals Tribunal has ruled in favour of betting operators that challenged whether a controversial gambling tax should be levied on player winnings, rather than their original stakes. The decision may pave the way for local operators such as SportPesa and Betin to return to the market.

“Today’s ruling is a significant development for both SportPesa and the wider betting sector in Kenya, reversing previous government policy that had rendered the sector commercially and economically unviable, with a major, negative impact on jobs, local economies and sports in Kenya,” SportPesa chief executive Ronald Karauri said.

Here Is All You Need To Know

Both operators stopped doing business in the country due to what they saw as a hostile tax environment.
The government in Nairobi hiked gambling tax rates from 7.5 to 35 percent.
In its ruling, the court determined that the tax could only be applied to a player’s winnings at the end of every month, and that the Kenyan Revenue Authority must collect revenue from customers, rather than directly from operators.
Ronald Karauri welcomed the ruling, suggesting that it may prompt it to reconsider its withdrawal from the Kenyan market.

“We have long advocated for a fair and level playing field and a regulatory and taxation environment that both supports business and inward investment, and is in the interests of Kenyan consumers,’’ he said.

“SportPesa will now reconsider the future of its operations in Kenya,” he added. “We encourage the authorities to take the Tax Appeals Tribunal ’s ruling fully on board and to now apply a reasonable approach to gambling regulation and taxation, in line with international best practice.”

Not Sure Of Returning To Business

Betin, meanwhile, declined to comment on whether the tribunal’s ruling will mean a return to the market, according the
The dispute over the winnings tax dates back to its introduction, with SportPesa arguing the tax removed incentive for customers to place bets.
Although the Kenyan High Court initially blocked collection of the tax, the Kenyan Revenue Authority and Betting Control and Licensing Board agreed on 1 July to withdraw the licences of 27 companies who failed to pay the levy, including SportPesa and Betin.
After the state ordered telecoms company Safaricom to block banking services to the 27 companies, leaving customers unable to deposit funds — a move SportPesa said violated a court order — SportPesa ended its sport sponsorships in Kenya and placed its 453 employees in the company on leave.
A SportPesa spokesperson told iGamingBusiness.com in early September that the company believed it was heading towards the resumption of normal operations after constructive talks. However, on 19 September, the Kenyan Parliament’s Finance Committee proposed a new 20% excise tax rate on betting stakes in the 2019/20 budget, an increase from the 10% stake proposed by the treasury in June.
In response, SportPesa that it would not operate in the country until the rate was changed, and laid off its Kenya-based employees.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Kenya Leads Other East African Countries By Number Of International Investment Deals— Report

October 11, 2019

Kenya attracted more than half of East Africa’s financial deals in the first eight months of this year, cementing its position as the region’s investment hub.

According to the latest research by corporate finance advisory firm I&M Burbidge Capital (IMBC), Kenya took up 57 out of the 87 deal that the region attracted over the period.

Kenya’s closest rival Tanzania, the report said, clinched a measly 11 business agreements.

Uganda, Rwanda and Ethiopia, on the other hand, posted eight, six and five deals respectively. According to IMBC, Kenya’s position was boosted by recent big-ticket transactions, including Actis LLC’s joint venture (JV) with South Africa’s Improvon Group.

“The two companies have created a JV called ImpAct to build a 40-hectare industrial business park development at an estimated cost of $111 million (Sh11.5 billion),” said the firm’s analysts Edward Burbidge and Linda Obwora.

“The new development will be called Nairobi Gate Industrial Park and will be Kenya’s biggest industrial real estate investment to date.”

According to IMBC, in the month of August alone, East African countries witnessed a total of 12 disclosed deals valued at more than $173.5 million (Sh18 billion).

“This brings the total deal value and volume for the year to date to more than $1.3 billion (Sh130 billion) and 75 respectively,” said the firm.

IMBC found that the highest volume of deals to date in the region was recorded in the financial services sector, which boasts 18 out of the 75 disclosed deals.

“Other sectors that have seen significant deal activity are the energy, oil and gas sector, healthcare sector and the agribusiness sector,” said the company in its report. The real estate sector despite attracting the least number of deals had one of the highest value sizes in the ranking at more than $159.4 million (Sh15 billion).

The research also showed that the region and Kenya in particular, attracted the highest number of deals in private equity at 36 while mergers and acquisitions followed with 19 deals.

Meanwhile, joint ventures and private equity (PE) exits in East Africa performed poorly, with each recording six deals. Bonds and commercial paper ranked bottom with one deal each.

However, the region’s mergers and acquisitions led the deal size at $562.6 million (Sh56.2 billion) followed by PE at $292.5 million (Sh29.2 billion ) while PE exits follow at $224 million (Sh22.4 billion).

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

SportPesa lays off 453 after closing Kenyan operations

October 5, 2019

SportPesa has announced that it has made its 453 Kenyan employees redundant after closing its operations in the country, as it urged the country’s authorities to repeal the 20% excise tax rate on all stakes that caused it to withdraw from the market.

The operator had been in the midst of a long dispute with Kenyan operators, centred on a different tax, since July, but this appeared to be approaching an end after what a SportPesa spokesperson described as “positive discussions with the Kenyan Revenue Authority” in late August.

However, On 19 September, the Kenyan Parliament’s Finance Committee proposed a new 20% excise tax rate on betting stakes in the 2019/20 budget, an increase from the 10% stake which the treasury proposed in June.

On 25 September, MPs voted the budget through, including the 20% tax. SportPesa said in a statement that it would not operate in the country until the rate is changed.

The company confirmed to iGaming Business today (4 October) that the closure of its business meant that all of its employees in Kenya would be laid off.

“We regretfully closed our operations in Kenya as a result of a long-running hostile regulatory and taxation environment in the country,” a SportPesa spokesperson said. “This included a recent decision by the Kenyan legislature to impose a 20% excise tax on all betting stakes, which is based on a fundamental misunderstanding by the Kenyan treasury of how revenue generation works in the bookmaker industry. Such taxes render the betting sector in Kenya commercially unviable.

“As a result, we have been forced to make 453 employees in our Kenyan operations redundant, which was an extremely difficult decision for the company to take.

The spokesperson said that, through layoffs, the new tax will end up resulting in a significant loss of tax revenues for the Kenyan government.

“This means that in addition to the billions of Ksh in lost government revenues that will result from the closure of betting companies’ operations, the livelihoods of taxpayers across the country are also now directly impacted, as are the many individuals that they themselves may privately employ, such as domestic staff,” the spokesperson said.

“The economic and social impact of the government action therefore continues to be felt by Kenyan business and Kenyans themselves, with many individuals now without employment and the important social investment in grassroots sports delivered by betting companies now under threat.

“We urge the Kenyan government to reconsider its current agenda.”

In August, Kenyan president Uhuru Kenyatta called upon the country’s lawmakers to pass a total ban on gambling in the country,

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Ride-Sharing Startup Swvl ’s License Has Been Suspended In Kenya

October 2, 2019

Swvl just made in roads into Kenya, but all that has been put to a stop by Kenya’s National Transport and Safety Authority (NTSA), the authority in Kenya in charge of road use and safety. Digital public transport services SWVL and Little Shuttle were asked to cease operations or face arrests for operating under Tour Service License but engaging in commuter services.

“We have shut down their (Little and SWVL) licenses because there are comprehensive regulations on how to operate a PSV,” NTSA director general Francis Meja said.

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SWVL and Little Shuttle were poised to disrupt the public service sector by providing booking options, extra comfort and scheduled departure times in the chaotic segment.
In a notice from the NTSA Deputy Director Communications Dido Guyatu, the authority said it has blacklisted specific vehicles operating under the two companies and their TSL invalidated.
NTSA indicated that both firms had been notified of the suspension of operations until the necessary licenses for operating PSV’s were obtained or an exemption from the authority.

“Let them just follow the law so that we can facilitate them to do business in Kenya. Let them come to us… we are open for discussion to allow them do business in Kenya. It’s a fact that you cannot do business in Kenya without a proper license,” said Mr Meja.

In his response, Little Shuttle CEO Kamal Budhabhatti said the company is seeking audience with NTSA on a way forward.

“The buses we operate have countrywide TLB license, which allows us to move on any route. We do not operate as a matatu on fixed route. Our route is based on supply and demand software technology,” he said.

Compliance With The Suspension

A spot check by Nairobi News on Tuesday on Tuesday in Nairobi established that SWVL was still ferrying passengers despite the suspension.

The company’s General Manager in Kenya, Shivachi Muleji, said they are in talks with the government to ensure that they are fully compliant.

Egyptian start-up app SWVL currently has 150 buses on 100 city routes and last month indicated that it would inject Sh1.5 billion into the Kenyan market.

Meanwhile, it is still unclear when Little Shuttle will return to the road.

The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.

The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.

Swvl’s Operation In Kenya

Swvl recently invaded its Kenyan market with over Sh1.5 billion ($14.5 million) investment to finance an aggressive route expansion plan in Nairobi.

Swvl, already operational on multiple Nairobi routes, has set a target to grow its network to 500 routes served by 1,000 buses.
The app-based public service transport operator that launched in Nairobi on a test basis seven months ago has already signed up 150 buses on 100 city routes.
The firm, which started in Cairo, is seeking to take advantage of Nairobi’s chaotic and largely unreliable public transport system.

“Kenya is a market with a need for a stable solution for the perennial traffic snarl ups and SWVL believes that we can be of great benefit to the local consumer and the transport sector as a whole,” said Mr Kandil.

The tech company leases the vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes. It tops up the daily collection if the earnings for the day are less than the daily leasing amount, but collects any income above the agreed rate.
The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.
The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.

“We’re building a mass transit system. The investment will keep us going in this market,” said Shivachi Muleji, SWVL general manager for Kenya.

The firm says its popular routes include Ruiru to the CBD/Upper Hill, Karen to CBD/Westlands via Upper Hill, Ongata Rongai to Westlands/CBD via Upper Hill, Ruiru to Westlands, Ndenderu to CBD/ Upper Hill, and Kikuyu to CBD/ Upper Hill.
According to Mr Muleji, the company is in negotiations with local Ford dealers and a financial institution to provide vehicles at 20 percent cheaper than the market rate as well as financing options for drivers. This is aimed at growing its bus network to meet the demand of the planned route expansion. The app company, which has received pushback on some of its routes from PSV (matatu) operators, says it is engaging some Saccos in the sector to invest in the business.
The service currently charges a flat rate of Sh200 but has plans to offer distance-based pricing at the end of 2019 or early next year.

“Kenyans are picky consumers so you have to offer a premium service for the extra 10 percent you charge,” said Mr Muleji.

Read also: Egyptian Transport Startup Swvl targets Nigeria, Africa And Asia before the end of 2019
Tech-based solutions in the transport sector have been causing a ripple locally with Uber making its entry in the taxi business several years ago despite protests by taxis at the onset.
Kenyan-based Little Cab also offers a similar shuttle service in the market while Safiri is still in the pilot stage of data collection.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

SportPesa Becomes The First Casualty Of Kenya’s Anti-Gambling Taxation

SportPesa, Kenya’s leading online sports betting has folded up. This is the second and possibly the last sign that it has been incapacitated by the new tax regime introduced by the Kenyan government against gambling firms. The first was when it pulled sponsorship from the country’s sports teams after the government in Nairobi hiked gambling tax rates from 7.5 to 35 percent.

This tax decision will have a damaging impact on both customers and treasury,” the company stated in its reply. “Further compounded by the currently in-effect 20% Withholding Tax on Winnings, the economic incentive to place bets will be completely removed as the taxes will deprive consumers of their total winnings. This will have severe consequences for licensed betting companies, which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya.

Here Is All You Need To Know

SportPesa and other sports betting entities have faced significant government opposition in Kenya.
Last month, Uhuru Kenyatta, the country’s president, called on lawmakers to ban gambling. His call came after the country’s Betting Control and Licensing Board ordered telecommunications companies to suspend the shortcodes and paybill numbers the sportsbooks used to exchange funds with their customers.
Part of the backlash from legislators stemmed from social concerns. One lawmaker noted a rise in suicides from young men who took up betting on sports through their mobile devices.
Kenyan officials also expelled nearly 20 foreign business leaders who were working for sportsbooks in the East African nation.
SportPesa and Betin then joined forces to file a lawsuit against the government, but that the country’s Supreme Court dismissed the legal challenge. In doing so, Justice John Mativo noted SportPesa’s license had expired, which meant the company could no longer operate legally until it reapplied for one.

Major Sponsor in Soccer

Even with its troubles in its native country, SportPesa still enjoys a relatively high profile in Kenya’s sports betting industry. This is thanks in part to the sponsorships it holds with soccer teams and leagues across the world. That includes Everton, in England’s Premier League, and Hull City, which plays in England’s second-tier Championship league.

Read also: Kenya Welcomes New Currency As Deadline For Phase Out of Kenya’s Old KSh1,000 Elapses

However, even British lawmakers have begun to question whether its professional soccer teams should enter into partnerships with sports betting operations.

SportPesa also serves as the official African betting partner for LaLiga, which runs the top soccer leagues in Spain. It also sponsors Italian club Torino FC.

“If local communities enjoy it, we know that our involvement can be an extremely positive influence for all concerned,” SportPesa says on its partnerships page. “While we offer valuable financial support, we also go much further: helping clubs build capacity and join corporate social responsibility initiatives to create value for players, teams, communities, and businesses.”

Mass layoff

The move comes after another firm, Betin, sent home all its employees saying they have run out of finances.

According to the firm’s management, efforts to hammer a deal with the government which could have seen it resume operation have failed, forcing the firm to send home employees.

“Management has had several extensive meetings with the government entities regarding the company’s licence without much success,” read an internal memo signed by the managing director.

“Given all these, we have had financial constraint as you might all expect. As a result of the deterioration of the profitability, the management has had to rethink its operating model and to proceed with the exercise of termination on account of redundancy.”

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Côte d’Ivoire and Kenya Named Rising Stars of Global Trade

September 30, 2019

A new report released over the weekend by Standard Chartered Bank titled Trade20 Index has identified Cote D’Ivoire and Kenya as some of the rising stars in global trade. The Index which examines 12 metrics across 66 global markets made up of major global economies plus the major economies in each region reveals 20 economies that are most rapidly improving their potential for trade to grow with African economies making the first and third in the Standard Chartered Trade20 Index, which identifies the markets with the greatest potential for future trade growth

Saif Malik, Regional Co-Head, Global Banking, AME, Standard Chartered

According to the Report, Côte d’Ivoire is the market that has most rapidly improved its trade growth potential over the past decade. The Report which identifies the 20 rising stars of trade places African markets Côte d’Ivoire in the top spot and Kenya at number three. The Trade20 index determines each market’s trade growth potential by analysing changes within the last decade across a wide range of variables, grouped into three equally-weighted pillars: economic dynamism, trade readiness and export diversity.

The Report which examines 66 markets around the world points out that while existing trade powers like China and India continue to rapidly improve their trade potential, African economies are making particularly strong progress from a relatively low starting point. Kenya, it said, is consolidating its position as the trading hub of East Africa, while Côte d’Ivoire is cementing its position as a West African trading hub. Ghana also performs well in the index, placing just outside the top 10.

A breakdown of the findings of the Report show that Côte d’Ivoire and Kenya have significantly improved their trade readiness, demonstrating that investments in infrastructure and business environment improvements are paying off. Côte d’Ivoire and Ghana also fare well for economic dynamism, with Côte d’Ivoire enjoying robust GDP and export growth, and Ghana seeing an influx of FDI

Commenting on the findings, Saif Malik, Regional Co-Head, Global Banking, AME, Standard Chartered, said that Africa being home to some of the world’s fastest-growing economies, has the potential to become a much bigger player on the global trade stage. He noted that the continent is already connected with the trading powers in Asia, particularly China, through the Belt & Road Initiative, and with the launch of the African Continental Free Trade Area, we see numerous growth opportunities for trade and investment in the years ahead. Mr. Malik equally noted that the growing young, digitally-savvy population and an increasing female workforce will aid in the continent’s economic transformation.

While most traditional trade indices are based on a market’s present performance, the Trade20 index captures changes over time to reveal the markets that have seen the most improvement within the last decade. This enables us to identify the economies where recent positive developments may point to acceleration in trade growth potential.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.