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Kenya’s postal service fires 20 people over fake degrees
Kenya’s cash-strapped Postal Service wants to reinvent itself. But first, it must shed excess weight.
As part of that process, the service is auditing its staff and letting go of people who faked academic credentials. It will also lay off at least 1,000 people.
Here’s Adonijah on what’s driving those decisions:
“PCK’s business model took a beating after people ditched sending letters and new entrants like bus companies took over the courier business. According to government disclosure, the postal service has accumulated $45.9 million (KES6 billion) in losses over the past decade.”
Since 2023, the service has been in the works to reinvent itself to offer services like e-payments, e-governance and e-commerce. It aspires to become the go-to choice for logistics needs, not just within Kenya but potentially on a global scale. These plans are efforts to make the cash-strapped postal service become profitable.
But to do this, it has to stop burning cash, stabilise its business and go through some restructuring. That restructuring will lead to the layoff of about 500 employees as the postal service has too many employees on its payroll.
Already, over 20 Postal Corporation of Kenya (PCK) staff have been dismissed after a government audit of employee qualifications revealed fake academic credentials.
Although reducing staff with fake degrees wasn’t the initial aim of the restructuring plan, Postmaster General Tonui acknowledged it would contribute to the overall workforce optimisation goals. As part of the restructuring plan, PCK will be cutting back on the number of people they employ, going from 2,364 workers down to 1,860.
The plan to turn PCK into an e-commerce and logistics powerhouse hasn’t been smooth sailing. However, the Kenyan government threw PCK a lifeline with contracts to deliver medical supplies and passports directly to people. It also partnered with the Independent Electoral and Boundaries Commission (IEBC) for additional business. Its reinvention is still faced with hurdles from all sides: resistance from worker unions, and a tough market where even established private companies have struggled.
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New tax threatens ride-hailing business in Kenya
Once considered by many to be a lucrative hustle, gig driving in Africa is now fraught with complaints on all sides.
Driver partners say inflation, car maintenance and the ride-hailing company’s commissions eat into their margins.
The companies have to contend with a consumer base whose pockets are under pressure.
And if the Kenyan parliament has its way, Uber, Bolt and other companies will have to also figure out how to make their businesses work after paying a Significant Economic Presence Tax (SEP).
SEP? The new tax, which replaces the current Digital Service Tax (DST), will charge multinational companies like Bolt and Uber which have a substantial economic presence in Kenya a 6% tax on their gross turnover.
Representatives of Bolt argued that the SEP tax, when implemented, will completely erode their profit. Bolt argued that the SEP tax will mean a KES2 loss on every 500KES trip. If the SEP tax is approved, Bolt and Uber might be forced to pass on the cost to customers or reduce drivers’ commissions. The approval of the bill might also signal an exit for Bolt and Uber from the Kenyan market.
The SEP tax comes as President William Ruto plans to increase the country’s earnings. On May 14, Ruto announced plans to increase the country’s tax rate from 14% to approximately 22% by the year 2027. However, the president’s quest to boost Kenya’s revenue may have far-reaching implications for ride-hailing businesses.
As Kenya’s parliament prepares to make a crucial decision by year-end, the fate of ride-hailing companies in the country hangs in the balance.
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Ghana to increase 4G penetration by 65%
Since the launch of 5G in Africa, experts have held mixed opinions about it.
While some hold an optimistic view that the fifth-generation internet network will aid new development on the continent, some critics argue that the continent is putting the cart before the horse by failing to first address the affordability of mobile internet service.
Data affordability is only one part of the divide; other critics argue that there is a lot of room for improvement and adoption of the existing 4G technology, which currently falls short of the global average. Data from the GSM Association (GSMA) supports this argument: 4G only represents 16% of the mobile connections in Sub-Saharan Africa, falling below the global average of 55%. 3G represented 57% of mobile connections on the continent, while 2G represented about 26%.
Ghanaians believe that there is more room for improvement. The West African country plans to increase its 4G penetration by 65% over the next three years.
Despite the introduction of the 4G network in Ghana three years ago, the majority of folks in Ghana still use 3G. That’s about to change soon, as the country’s Minister of Communications and Digitalization, Ursula Owusu-Ekuful, said it will increase its 4G penetration from 15% to 80% in the next three years. Ghanaians will soon be able to stream videos on how to make better Jollof rice Nigerian jollof with blistering internet speed.
The country will team up with a newly formed Next-Gen InfraCos (NGIC)—a consortium of Ascend Digital Solutions Ltd. and K-NET—to achieve its goals.
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Rwanda set to launch its own CBDC
Central Bank Digital Currencies (CBDC) have grown in popularity since 2022, and Rwanda will join the long list of countries to issue one.
The idea for Rwanda’s digital currency gained momentum in November 2023. During the presentation of the central bank’s annual report, Governor John Rwangombwa announced to Parliament that a Central Bank Digital Currency (CBDC) was under development.
A feasibility study highlighted potential benefits and the Deputy Governor Soraya Hakuziyaremye explained the central bank addressed public concerns about privacy, stability, and potential financial disruption through research papers and consultations to ensure widespread adoption of the CBDC.
The central bank states that the new digital currency could help more people without bank accounts join the regular economy. Rwanda is also looking at a retail CBDC distributed through banks, with offline access being explored for those lacking internet or smartphones.
With a CBDC, government aid like tax refunds or food stamps could be delivered electronically in real-time, eliminating the need for mailed checks. The CBDC also ensures citizens have access to their money and send payments electronically without incurring extra fees.
While the CBDC holds promise for financial inclusion, it’s still on the drawing board. Other countries are ahead in developing their digital currencies.
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Here’s what we’ve got our eyes on
Kenya holds interest rates at 13% as the exchange rate stabilises
Canada to invest R3.7-billion in South Africa’s telescope project
Humane warns AI Pin owners to ‘immediately’ stop using its charging case
Written by: Faith Omoniyi & Towobola Bamgbose
Edited by: Muyiwa Olowogboyega
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