Kenya - Uhuru rejects changes to mobile T-bill investment law
President Uhuru Kenyatta has rejected changes to the law that would have allowed retail buyers to invest small amounts in State securities, including through mobile phones.
He said the changes suggested were already in the works, with the Central Bank working on a system to allow easier trade in government securities.
The proposed changes to the Central Bank of Kenya Act would have forced the banks’ regulator to lower the minimum amount one can invest in T-bill below the current Sh100,000 and bonds under Sh50,000.
The Central Bank of Kenya (Amendment) Bill 2014 sought “lower minimum investment denominations” in T-bills and bonds without specifying amounts.
The proposed amendments were sponsored by Mukurwe-ini MP Kabando wa Kabando, but were referred back to the House on May 27.
Banks, insurers, and pension funds are the major investors in the government bonds, and the entry of many retailers has the potential of lowering the State interest rates and forcing lenders to channel more cash into the private sector.
Mobile phones have grown into a formidable medium of commerce, turning over Sh2.4 trillion last year, and though not related, equivalent of the current national debt.
T-bills and bonds are currently bought from central bank which is the agent of the National Treasury.
However, brokers and banks trade in the instruments at the secondary market.
Mr Muturi also informed MPs of Mr Kenyatta’s rejection of a Bill seeking to have a third of all government contracts allocated to the youth and protected under the law.
The proposals were made through the Public Procurement and Disposal (Amendment) Bill, 2014 by nominated legislator Johnson Sakaja.
Read the full story in Business Daily Africa 11 June 2015