What to look out for in 2022

December 17, 2021 - Reading Time: 4 minutes - By Amrit Labhuram

As 2021 draws to a climax, numerous developments on both the national and international sphere will have spillover effects into the new year. 

Below is a summary of 2022’s highly anticipated and potential socio-economic, political and legal impacts: 

  1. Additional Lockdowns and Curfews

Following the latest mutation of Coronavirus into the Omicron variant, the government might decide to reinstitute curfews and social gathering restrictions to curb the spread of the new variant in the new year.

  1. Ruling on Minimum Taxes

Several petitions were placed before the High Court seeking to halt the implementation of minimum tax, on the basis that it was unconstitutional. The minimum tax is charged at the rate of 1% of gross turnover and is applicable where the installment tax payable is lower than the minimum tax payable. KRA in September 2021 appealed against the decision before the Court of Appeal, where it currently sits pending determination.

  1. Implementation of the draft Access to Information Regulations, 2021

Once enacted the Regulations shall provide for the process of proactive disclosure of information by public entities and private bodies and the procedure for requesting access to information pursuant to the Act.  

  1. The draft Capital Markets (Investment Based Crowdfunding) Regulations, 2021

The regulations once passed will apply to investment-based crowdfunding platforms in Kenya. They will also apply to persons who are operating investment-based crowdfunding platforms in Kenya. The regulations can open up opportunities for crowdfunding to boost the local economy, further bolstering Kenya’s position as an economic powerhouse in the region. 

  1. Reduced Electricity Bills

Implementation of  the recommendations of the Presidential Taskforce on Review of Power Purchase Agreements. The recommendations shall reduce power bills by 30% and shall be implemented in two tranches of 15% each; with the first 15% to be reflected in December bills, and a further 15% reduction, in the first quarter of 2022.

  1. Future of Huduma Namba?

Following the High Court ruling rendering the roll out of Huduma Namba illegal, the AG’s office has appealed the ruling before the Court of Appeal, seeking re-validation of the Huduma Namba national identity management system. The outcome of the case is highly anticipated as it may further delay the envisioned roll out of Kenya’s first comprehensive national identity management system. 

  1. Implementation of 3rd economic stimulus package

Implementation of President Uhuru Kenyatta’s economic stimulus package that was announced during the Mashujaa Day Celebrations. The economic measures and interventions his government announced on 20th October 2021 seek to reinvigorate the economy from the effects of the Covid-19 pandemic. The 13 economic strategic interventions will cover: agriculture, health, education, drought response, policy, infrastructure, financial inclusion, energy, and environmental conservation.

  1. Evidence of KRA social media surveillance

The Authority has sought to enhance tax compliance through verification of information shared online vis-a-vis tax returns that have been submitted by particular individuals. As 2022 unfolds, data from the KRA will determine if the efforts to conduct social media surveillance will result in an increase of tax revenue collected.

  1. Building Bridges Initiative (BBI) appeals to Supreme Court 

The Court of Appeal declared the BBI process unconstitutional, null and void. President Uhuru has been adamant that he is in support of the constitutional amendments proposed stating they would have ensured political stability. The BBI Bill recommended the creation of office of the Prime Minister and two deputies in what the proponents said would have ensured fair representation in the Executive.

  1. Elections and NC4

The National Computer and Cybercrimes Coordination Committee (NC4) has been tasked with cracking down on misuse of social media especially as the country approaches the General Election in 2022. The establishment of the NC4 has been heralded as a proactive step towards ensuring the upcoming 2022 General Election is a truly democratic process and free of ethnic violence. However, the following questions will be answered in 2022 as the NC4 performs its mandate: 

  • Should social media companies be expecting summons and data access requests on persons suspected of engaging in hate speech?
  • How will freedom of expression and the right to access information be balanced during the elections?
  1. Enactment of Data Protection Regulations 2021

The highly anticipated enactment of three data protection regulations will operationalise the Data Protection Act and provide the Office of the Data Protection Commissioner with the institutional and legal framework to commence enforcement of the data protection laws. 

The enactment of the regulations is expected to coincide with an increased influx of data protection complaints as data subjects are more likely to lodge complaints to a fully operational regulator.  

  1. Increased Electric Vehicle adoption

Caetano Kenya, the official Hyundai car dealer in the country has announced the arrival of the first new electric vehicle (EV) – the Hyundai KONA Electric to be commercialized in Kenya. This announcement is timely following the recent hike in fuel prices after the Energy and Petroleum Regulatory Authority scrapped fuel subsidies. Furthermore, Opibus and Kiri EV have designed and manufactured local Electric Bikes, while ChargeNet Kenya has begun setting up EV charging stations across Nairobi. The increased adoption of EVs shall assist Kenya in meeting its obligations under the Paris Agreement to mitigate climate change. 

  1. Environmental Social Governance (ESG) Compliance

The Nairobi Stock Exchange (NSE) has released the Environmental, Social and Governance (ESG) Disclosure Guidance Manual that requires companies listed on the NSE to report publicly on their ESG performance at least annually. The NSE has offered a one-year grace period from the issuance of the guidelines for listed companies to interact and familiarise themselves with the ESG reporting process. Therefore, listed companies shall be legally obligated to publish their reports from mid-2022 

Listed agri-business firm Kakuzi Plc on December 16, 2021 released its ESG report as listed firms begin to adopt NSE guidelines requiring the annual publication of such disclosures.

  1. Central Bank Digital Currencies

Kenya is exploring the use of a Central Bank Digital Currency (CBDC) to settle cross-border payments according to the Central Bank Governor, Dr Patrick Njoroge. A CBDC is money that exists solely in electronic form, issued and regulated by the nation’s monetary authority and backed by the government. The adoption of CBDCs can ensure access to legal tender if cash were unavailable and increase the efficiency of payment systems. 

  1. Enactment of a Critical Infrastructure Act

There is a pressing need to develop an Act that would provide for the establishment of an institutional framework for the designation and protection of critical infrastructure, establishment of a national database of critical infrastructures, and undertaking research in order to identify the challenges and vulnerabilities faced, including those from cyber threats. The Act should apply to protection of physical infrastructure like the National Optic Fibre Backbone (NOFBI) as well as virtual infrastructure such as cloud environments.

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