The Kenya Kwanza administration has made the latest radical attempt to rein in the runaway cost of living crisis by raising the cost of borrowing.

The rate - the highest in a decade and near levels last witnessed in 2012 during the Kibaki era, is in a bid to stabilise the flagging shilling and rein in the runaway cost of living, according to CBK Governor Kamau Thugge, who is also the chairman of the apex bank's decision-making organ, the Monetary Policy Committee (MPC).

The tightening of liquidity is, however, expected to hurt access to credit for individuals and companies, with borrowers set to feel the financial pain of the increased cost of loans. 

This could translate into banks tightening their lending standards.  

Banks have steeply increased the cost of loans with interest rates beyond 20 per cent, leaving their customers with a massive debt servicing burden. 

The latest increment comes at a time when the high cost of living is already squeezing Kenyans hard.

The sharp rise in interest rates also threatens to choke economic growth as it will lift borrowing costs and encourage cutting costs or saving over spending, investing, and hiring, experts warned. 

If lending dries up, that could weigh down on the value of stocks, real estate and other assets besides crimping overall demand—a recipe for a painful recession.  

At the same time, higher rates have increased borrowing costs.

Dr Thugge, however, defended the hike, saying it is the best weapon to cool off the shilling in the prevailing circumstances.

In a rare press conference last evening, Dr Thugge acknowledged the country's currency crisis, saying it has resulted in negative consequences throughout the economy.

He emphasised that the depreciation of the shilling has adversely affected Kenya's investment climate and has increased the burden of debt repayment, while also intensifying the cost of living.

“Foreign investors are hesitant about coming because of the exchange rate. Same thing with domestic investors,” said Dr Thugge. “Depreciation is having a strong impact on the cost of living,” he said.

The depreciation of the shilling, caused by the surging US dollar, has led to soaring prices of essential goods, further exacerbating the financial distress faced by many Kenyans.

Additionally, the ongoing food and energy crises, linked to Russia's invasion of Ukraine, have compounded the economic challenges.

A weakening shilling is causing pain to importers and consumers across the country, hindering the government’s efforts to rein in the stubborn cost of living.

Kenyans are forking out more to purchase basic commodities as the shilling continues to weaken due to external pressures, posing a fresh political and economic headache for the Kenya Kwanza administration.

Restless Kenyans want the Ruto administration to put measures in place to shield consumers and companies from the full impact of surging energy and food costs.

The weakened shilling has hurt the stubborn inflation, which measures the rate of rising prices and remained at 6.8 per cent, in September 2023 despite CBK’s efforts to tame it. Dr Thugge said nearly half of the cost of living measure is linked to the shilling woes.

“This to decisively deal with the issue of inflation,” he said.

“This explains why we've taken this strong action so that we can address the issue of cost of living and debt service payment.”

Experts, however, said the monetary policy stance would herald economic pain for already hard-pressed Kenyans.

“This would make the economy even weaker, push up the cost of goods and so on,” said Deepak Dave of Nairobi-based Riverside Advisory.

“It would also make the government’s deficit financing even more expensive.”

Dr Thugge, however, said the CBK’s action “removes the uncertainty” of the exchange rate movement. “We are aware of its potential costs one being the impact it will have on growth,” said Thugge.

“If we continue with the situation where people don’t know where the exchange rate is going tomorrow it's not healthy for the economy.”  The local instability in the exchange rates means that with Sh1,000, many families can no longer buy as much as they used to get a few months back.

The shilling has been on a free fall, hitting an all-time low against the dollar in the recent past, signalling inflation and higher costs of imported goods.

CBK data showed the shilling exchanged at an average of 153 against the dollar yesterday. However, some traders were exchanging it at Sh160 to the dollar. A weak shilling is harmful to the country given it is an import-driven economy.

Kenya imports numerous goods, including cars, petroleum, machinery, medicine and pharmaceutical products, vegetable oil, wheat, clothing and shoes.

A weaker shilling will keep the price of imports such as fuel elevated.  By Brian Ngugi, The Standard

The High court in Kampala has ordered the Uganda Medical and Dental Practitioners Council to forward a list of King Ceasor University (KCU) students to the ministry of Health for internship deployment across the country.

This follows a decision by the Uganda Medical and Dental Practitioners Council not to forward the names of more than 100 students of KCU for internship deployment. But now in his November 30 decision, justice Musa Ssekaana issued an order of mandamus (an immediate order) compelling the council to forward the names of the applicants and other medical graduates from KCU for the national medical internship programme.

Ssekaana also declared that the applicants and all medical graduates from King Ceasor who completed their bachelor of medicine and bachelor of surgery have a right to be deployed for internship and the decision not to deploy them was illegal. 

Two students; Brian Munyambabazi and Ronald Masereka sued the attorney general and the Uganda Medical and Dental Council seeking a declaration that the decision to exclude them and 136 other graduates from KCU in the internship placement was unfair, illegal, unlawful, biased, unreasonable, unenforceable, irrational, null and void and of no legal effect.

Records show that although the attorney general has been exonerated for having been sued wrongly, on July 27, 2023, the ministry of Health issued a press release wherein it communicated that it had received clearance to deploy medical interns to 58 internship centers across the country. 

The ministry released a deployment list for the interns under revised terms as guided by the government indicating that they were to deploy 1,901 medical interns within the available budget of a net monthly allowance of Shs 1 million per intern to facilitate accommodation and feeding and that all interns were expected to report to their various training centers by August 3, 2023.

A day later, the ministry forwarded the list of medical interns to the internship placement centers. The list had medical graduates from all universities teaching bachelors of medicine and surgery (MBCh.B) in Uganda and outside Uganda except for medical students from KCU. 

The applicants said they studied their course for five years and graduated and as such, in refusing to deploy them and their classmates it was irrational, unreasonable, and unfair more so, since there was no reason given for failure to deploy them.

Ass. Prof Joel Okullo, the chairperson of Uganda Medical and Dental Practitioner’s Council opposed the case saying the National Council for Higher Education (NCHE), together with the council in the exercise of its statutory duty unanimously agreed that the graduates from KCU of the MBChB program could not be forwarded for the pre-registration. 

This, he said was after two inspections including one done by the 3rd Joint East African Community Medical and Dental Practitioners Councils/boards inspection team conducted found that it did not meet the minimum standards for training medical students registrable in the East African Community.

They said they had the duty of safeguarding society against ill-trained, unqualified, and inexperienced medical practitioners. However, the students insisted that their university’s medical school was accredited by NCHE to teach bachelor of Medicine and bachelor of Surgery and this accreditation has never been withdrawn.

Court heard that the university has all the facilities to teach the course and during the 3rd, 4th and 5th years when the students do clinicals in Mulago, Kiruddu and Kawempe hospitals together with students from Makerere University. Further, it was noted that the students are taught and trained by the same staff at these hospitals and some of the Medical Council staff have taught the students of King Ceasor University throughout this period of five years.

In his decision, Ssekaana ruled that actions of the Medical Council in refusing to recognize medical graduates of KCU would amount to usurping the powers of the NCHE which is mandated to accredit universities to teach medical courses. He said the exercise of the power conferred under the Medical and Dental Practitioner’s Council should not be interpreted to render another statutory body useless or subservient to its authority. 

Ssekaana said he was satisfied that the university is licensed by the NCHE to teach the profession in question and there is no way their successful graduates cannot be deployed for internship.
“The 1st respondent/Medical Council pursued a purpose outside the four corners and took in irrelevant considerations and they have failed to set out reasons for the decision of denying the applicants and other graduates of King Ceasor University. The absence of reasons may infer that the 1st respondent pursued a purpose that is different from the one that is empowered under the law," said Ssekaana. By URN / The Observer

MANYARA, Tanzania

The aftermath of heavy rainfall on Sunday night resulted in devastating floods in northern Tanzania, killing 49 people and injuring more than 85 others in the Manyara region, officials confirmed on Monday.

Queen Sendiga, Manyara regional commissioner, told reporters that the death toll has risen from to 49 from 47 reported a day earlier after two more dead bodies had been recovered from mud.

“We expect the death toll to rise as some people are still missing,” she said.

Sendiga attributes the deaths to a barrage of landslides triggered by torrential rains that pounded the impoverished region, causing part of Mount Hanang to erode and bury nearby homes.

“The government has deployed security forces from the military, police, fire, rescue, and other organs to help with rescue operations,” Sendiga told Anadolu.

The impact of the floods has been particularly severe in the Gendabi ward and the central area of Katesh town, the administrative headquarters of the Hanang district. Homes and residences were swept away by mudslides, leaving some individuals feared to be trapped.

Sendiga said the floods have rendered the highway from Katesh to Singida region impassable due to the debris, as houses and trees have been engulfed.

Samson Kileo, a Hanang resident, called for government intervention to repair damaged infrastructure, including roads and homes.

President Samia Suluhu Hassan, currently in Dubai attending the UN climate change conference COP28, expressed deep regret for the incident. She symphathized with the flood victims and directed all government forces to focus on rescue operations and preventive measures in the affected area.

“We have received with great regret the news of heavy rain in the Manyara region causing damage to Katesh. We console to the victims of the incident. I have directed all government efforts to be focused on rescue operations to prevent further disasters,” Hassan said.

The incident has prompted a shift in government priorities, redirecting efforts from the environmental meeting in Dubai to address the urgent crisis in Hanang. The president acknowledged the disappointment caused by the incident, attributing it to unforeseen circumstances.

A remarkable incident emerged that reflects the strength of the human spirit and the power of collective action in times of crisis.

Reports have surfaced of a harrowing episode involving a 9-year-old boy who found himself trapped in the swift currents of cascading muddy water, interwoven with debris and logs, as it flowed down from higher grounds.

The vivid image of the child, devoid of clothing, caught in the treacherous stream, paints a grim picture of the vulnerability faced by Hanang’s residents during this natural disaster.

Onlookers, spurred by the sound of a crying child, did not hesitate to plunge into the water with courage that defied the severity of the situation.

“We had to hold our hands and move slowly to where the baby had been trapped to rescue him,” said Michael Qorro, a resident of Hanang.

Miraculously, the rescuers managed to reach the stranded boy and pull him to safety. The fact that he emerged from such a perilous situation with only bruises surprised the rescuers who rushed to his aid. 

Despite the traumatic experience and the force of nature he faced, the boy was in good health. By Kizito Makoye Shigela, Anadolu Agency