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The East African : Jun 21st 2015
The EastAfrican 26 ROAMING FREELY Rwanda, Kenya SMS rates to fall Ta≥i≠ cha≥ges on text messages and accessing mobile data ac≥oss the two count≥ies will be ≥emoved late≥ this month By CHRISTABEL LIGAMI Special Correspondent S ending a text message and accessing mobile data between Kenya and Rwanda will soon be tax-free for mobile phone subscribers. The two countries have agreed to remove tariff charges this month, for short message services (SMS) and data in order to fully implement the One Network Area initiative they adopted last year. However, subscribers in Uganda will have to wait until the country’s phone operators are ready to implement the proposal to remove taxes on SMS and data roaming across the three countries. “Consultations on the cost and technologies applied in mobile data and SMS roaming are still underway by the stakeholders, and the One Network Area for data and SMS will be implemented at the end of August,” said Uganda at the recent Northern Corridor Infrastructure Summit in Kampala. The cost of an SMS while roam- ing in Rwanda and Uganda will be $0.12 in bundles, and $0.22 out of bundle; in Kenya, sending an SMS will cost $0.11 in bundles, and $0.20 “Consultations on the cost and technologies applied in mobile data and SMS roaming are still underway by the stakeholders.” Uganda government out of bundle. In the One Network Area, part- ner states agreed that the wholesale price for SMS within the region will not be more than $0.30 cents per SMS, inclusive of all applicable taxes, and the retail price will not exceed $0.60 cents per SMS. The retail rate is the cost incurred in distributing SMSs and calls within a country. The wholesale rate is the agreed interconnection rate between networks. Wholesale charges represent the fees the visited network charges the home network for letting its customers roam on its network. The new charges were agreed on by the partner states at a meeting of regulators held on March 5 based on their consultations with the operators; the resolution was adopted at the Summit earlier this month by Presidents Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda and Paul Kagame of Rwanda. The drop in roaming charges is expected to stimulate growth in the telecommunications sector and promote cross-border trade. Kenya and Rwanda reported that they have completed linking their SIM card registration to their national ID databases, and are awaiting a legal opinion by their Attorneys General on the data sharing framework of the National ID and SIM card data before August. Uganda’s issuance of IDs has commenced; the legal framework required to provide for linking SIM card registration with the National ID database is now ready, and the BUSINESS JUNE 20-26,2015 Bypass to g≥ow t≥ade, tou≥ism By GITONGA MARETE The EastAfrican LAST WEEK, the Kenya National Highways Authority (KeNHA) announced that the ground-breaking ceremony of the Dongo Kundu bypass will be done soon. The road from Miritini to Mombasa port is expected to improve movement of goods from the port, and will take 36 months to complete. “Mobilisation of equipment is now complete and soon the contractor will commence the project,” said Charles Njogu, in-charge of communications at KeNHA. The project is divided into three ONE NETWORK AREA The One Network Area initiative was agreed on last year. It has led to a decline in mobile phone communication rates across East Africa. The decision to create the One Network Area was reached at the Heads of State Summit in October 2014 in Uganda. Kenya, South Sudan, Uganda and SIM card and ID data integration will be complete by the end of October. According to the Northern Cor- ridor ministers’ report presented in Kampala during the summit, Kenya and Rwanda have finalised the process of registering all the SIM cards and deactivating the unregistered SIM cards. In Uganda, the process of deac- tivating unregistered SIM cards is ongoing. However, the regulation of interception of the Communica- Rwanda will be the first countries in the region to benefit from an expanded initiative that will include data and mobile money services. East Africa has more undersea cables than other area on the continent, making bandwidth and Internet connectivity relatively cheaper. tions Act 2010 is inadequate, and will be amended by December. Some of the challenges in imple- menting the One Area Network area since its adoption are grey traffic, which is leading to loss of revenue for governments and operators, and the absence of harmonised regulations for mobile financial services across the region Central banks are spearheading a study on the provision of mobile financial services across the region. Nai≥obi halts govt spending until July 1 By JAMES ANYANZWA The EastAfrican KENYA HAS suspended all new procurement contracts with its suppliers until the new financial year starts on July 1. The decision came as a result of questions about the allocation of Ksh50.4 billion ($520 million), approved by the country’s legislators to facilitate government operations until June 30. Cabinet Secretary Henry Rotich told The East African that all new government procurements were suspended from June 1 to curb wastage of public funds. “No new contracts will be signed until the next financial year because we want to correct pending bills,” said Mr Rotich. The Treasury said it aims to clamp down on unnecessary spending by government ministries, departments and agencies (MDAs), as they rush to complete their budgetary allocations before the close of the financial year. “We want to avoid that last minute rush to spend. It is part of controlling expenditure because at the last minute, people reallocate mon- ey and spend it on buying items that are not essential,” said Mr Rotich. Kenya has instructed all government agencies to prepare their procurement plans two months before the end of the financial year to avoid underutilisation of development funds. “We want to help people to plan properly because waiting until May and June to start spending is not good. That has been the problem,” Mr Rotich added. Uptake of funds The country’s uptake of development funds is estimated at just 50 per cent of the amount allocated annually, caused by lengthy and cumbersome procurement procedures and delays in the release of funds by the Treasury. Data from the of- $520m Amount approved by Kenya’s legislators to facilitate government operations until June 30 fice of the Controller of Budget shows that overall expenditure by MDAs during the first half (July-December) of the current 2014/2015 financial year stood at Ksh629.1 billion ($6.48 billion), representing an absorption rate of 39.4 per cent. “There is a need for timely release of both recurrent and development funds and realignment of the releases to work plans,” said Controller of Budget Agnes Odhiambo. The use of funds for development projects was Ksh129.2 billion ($1.33 billion), translating into an absorption rate of 26.1 per cent, and recurrent expenditure inclusive of consolidated fund services, was Ksh499.9 billion ($5.15 billion), an absorption rate of 45.3 per cent. Economists estimate that about a third of Kenya’s annual budget is wasted on corruption and non-core expenses executed outside the procurement plan. “People should prepare in advance so that there is no crisis or emergency,” said Thomas Kibua, a senior economist atAfrican Development and Economic Consultants. “Spending should be aligned to a procure- ment plan, and nothing should be purchased outside the plan,” he added. Construction of the Dongo Kundu bypass. Picture: File parts, with the first being construction of a 10km stretch from Miritini to Kipevu, linking the port with the Mombasa-Nairobi highway. The second section covers Mwache to Dongo Kundu, which includes building of long-span bridges, and the third section will be from Dongo Kundu to Kibundani to join Likoni-Lunga Lunga road. William Kidima, a Ugandan business representative in Mombasa, said construction of the road will improve movement of cargo to neighbouring countries. “We are glad that something is being done,” he said. The road has also has been hailed as the solution to the problem of congestion at the Likoni ferry. With over 300,000 people and 5,000 vehicles using the channel each day, the Kenya Ferry Services needs to address the problem of ferry breakdowns and delays. Railways in the region transport just five per cent of cargo from the ports of Mombasa and Dar es Salaam; the rest is ferried by road. “If you look at the two port cities, there is poor planning of infrastructure. And with the low offtake of cargo by the railway, the ports have been choked, a situation that has stifled trade and slowed growth of the regional economies,” said Kenneth Mwige, secretary general of the Intergovernmental Standing Committee on Shipping. The tourism industry will also benefit from the new road. “Tourism at the South Coast has never achieved its potential due to the challenges at the Likoni channel. The road will unlock the potential of Ukunda and Diani,” said Kenya Association of Hotelkeepers and Caterers executive officer Sam Ikwaye.
Jun 14th 2015
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