Business highlights – Food prices rise by 25% due to drought, grain shortage

 

Kenya Power bows to pressure from Consumers Federation, announces plan to relax tough terms for unpaid bills

  • Kenya Power has relaxed its payment plan for accumulated bills in a move to appease consumers angered by its recent update of consumption records.
  • Hundreds of customers have either been disconnected or served with disproportionately high bills since the utility firm launched a countrywide meter audit campaign late last year.
  • The strategy had been put in place to recover billions of shillings in unpaid bills.
  • Following the new directive, customers are advised to visit the nearest Kenya Power offices to negotiate the option of staggering their payment of accumulated bills.

 

The offer came after the Consumer Federation of Kenya (COFEK) accused Kenya Power of slapping several customers with huge bills yet it is the one that had delayed in reading their meters.

The utility firm has attributed the delays in meter reading to inaccessibility of some premises, something that it says has prompted it to rely on estimates as basis for billing.

READ ALSO: Kenya Power on track to connect every consumer to grid by 2020

The firm’s officers are supposed to read meters every month, but that has not been happening. COFEK went public over the surprise billing on Tuesday.

Food prices rise by 25% due to drought, grain shortage

  • Food prices have risen by as much as 25% following the raging drought and a cutoff of grain imports from neighbouring countries, the National Drought Management Authority (NDMA) has said.
  • The drastic increase has pushed up the country’s overall inflation to 6.99% in January from 6.35% in December last year.
  • Kenya National Bureau of Statistics data shows the cost of selected foods rose 1.66% in January from 1.31% in December.
  • The price of flour hit a five-year high last month.

 

The Drought Management Authority has confirmed that current food prices are 10 to 25% above their five-year average and are expected to continue rising.

In the marginal agricultural markets, retail maize prices have also been on an upward trend since October 2016 due to low supply.

The Authority added that poor performance of the short rains means that most households will not have stocks from their own production and will, therefore, rely on markets.

READ ALSO: Environment Ministry in plans to combat drought as state moves to ensure food security

The average price of a kilo of maize was selling at Ksh41.08 in December 2016 and has risen to Ksh46.41 this year.

A kilo of beans has gone up from an average price of Ksh130 to Ksh133 this year. A two-kilo packet of maize flour increased to Ksh120 last month from Ksh115 in December, while that of wheat flour is retailing at Sh132 up from Sh130. The NDMA says wholesale maize prices in urban markets of Nairobi, Kisumu, Eldoret and Mombasa rose by up to 12 per cent between November 2016 and January 2017.

AAR targets youth, employees with Ksh5 million post-retirement medical cover

  • AAR Insurance has unveiled a post-retirement medical cover for employees aged below 60 years.
  • The product targets Kenya’s youth and comes at a time when the uptake of retirement schemes among the younger population has been slow.
  • The insurer is now the third firm to launch such a product in the market.
  • The product has a limit of between Ksh1 million and Ksh5 million for inpatient services and Ksh100,000 to Ksh200,000 for outpatient services.

 

Dubbed ‘‘Afya Plus Post-retirement Cover’’, the product was launched in partnership with Octagon, a pension services provider that is also the scheme’s trustee, in Nairobi on Tuesday.

The scheme comes follows the launch of a similar product by pension fund manager Alexander Forbes, dubbed Ngao Milele.

Enwealth Financial Services in partnership with APA Insurance and Apollo Asset Management are marketing Anaya Post-Retirement Healthcare Fund launched last year.

READ ALSO: SMEs set to benefit from Sanlam development plan as firm moves to deepen insurance penetration

AAR Insurance Managing Director, Caroline Munene said the new product would ensure that retirees have peace of mind by freeing them from exhausting their pension benefits on medical bills.

Retirement Benefits Authority (RBA) CEO, Edward Odundo said the regulator was aware of the challenges in the sector. He said the RBA would work to strengthen the management of the retirement benefits schemes.

 

Businesses, Internet users lose Ksh18 billion to cybercrime

  • New estimates show that cybercrime cost Kenyan Internet users and businesses about Ksh18 billion (US$171 million) in 2016.
  • Global financial consulting firm Deloitte has predicted that losses due to cybercrime could hit a new record this year.
  • The firm states that criminals will continue to take advantage of increased Internet connectivity and users’ lax security measures unless something is done to stop them.

 

Deloitte predicts that the cost of cybercrime could rise by as much as 30 per cent in 2017. The company attributed the high rates of cybercrime to low awareness of threats among local businesses as well as a lack of investment in cyber security.

Mr Erik Van Der Dussen, Deloitte Associate Director for technology warns that high usage of mobile phones without accompanying security software is leaving a lot of Kenyans vulnerable to cyber attack.

Cybercrime is a rising menace in Africa. In a report released earlier this year, IT security firm Serianu, 93% of surveyed African companies acknowledge that cybercrime is affecting their organisations. Yet, expenditure on cyber security remains low. In addition, 96.1 per cent of cyber security incidents are not reported as companies opt to protect their reputations.

READ ALSO: Cyber-attack on the University of Nairobi social media sites been contained

Deloitte has urged local companies to vet devices that they allow onto their networks. In the long term, cyber security has to be incorporated into boardroom-level planning, said the consultancy.

These recommendations were included in a report released by the firm on Tuesday. The Technology Media and Telecommunications report predicts industry trends in 2017.

Deloitte also predicted that use of biometric features on mobile devices and in payment systems locally will rise.

Lenders, including Equity Bank and Standard Chartered Bank are already using fingerprints to identify customers during transaction.

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