Wednesday, December 5, 2012

Saparmurat Atayevich Niyazov the Turkmenistan despot who ruled the country with an iron fist once wrote a book which was declared a must buy but even more incredulously, he had a Russian Soyuz rocket blast the book in a capsule to outer space so that it might remain for later generations to read.

Eva Chemgorem, a Kenya student from ISK (International School of Kenya) needed no such machinations to put her mark in outer space. Her winning poster “Africa united through satellites” won the DSTV Eutelsat 2012 best prize and will reportedly be copied on the side of a Eutelsat satellite that will be rocketed into space in her presence in France.

The competition also featured an essay writing competition won by a Ugandan student Anthony Oyom.

Oyom is the second Ugandan winner in that category in as many years.

The winners will travel to France to learn more about satellite technology.

Eutelsat is a key partner for Multichoice who run the satellite TV service DsTV. 

Monday, November 12, 2012


They were the first Kenyan companies to hit the billion dollar revenue mark but today they offer a study in contrasts.

While Safaricom appears to be on pace to post the largest profit in the region this year, KQ appears headed to post the worst loss.

Safaricom last week announced a Sh11.5billion pre-tax profit for the half-year ended September 30, 2012, KQ reported more than Sh6bn in pre-tax loss.

They both are in the business of connecting Kenyans to the world. Safaricom makes the bulk of its money from in-country operations (voice, MPESA) while KQ makes barely 10 per cent of its revenues from the country. It's most profitable routes are West Africa, Middle East and Europe.

While both have developed into bureaucracies, Safaricom has undergone a business restructuring while KQ's idea of restructuring has been to lay off workers. The top suites have not been changed and business seems to continue as usual.

Sunday, December 21, 2008


After a year or so of pretending to be mildly irritated while feigning disinterest, local banks have now woken up to the danger mobile cash transfer service M-PESA poses to their business and moved to curtail it.

The first signal that the industry was not happy was when out of the blue the finance minister John Michuki directed that M-PESA be investigated by the Central Bank of Kenya to prevent its misuse by money launderers or pyramid schemes.

Apparently, the banks have chosen a three-pronged attack. One, lobby parliament to become hostile to M-PESA although this hasn't worked as well as they expected. Two, use Central Bank of Kenya which is their regulator, to insist that M-PESA be halted until regulations are in place. How effective this approach is not known but it is worth noting that Zain which intended to launch its own money transfer service last month (November) had to hurriedly cancel it when CBK intervened citing legalities. Lastly, and curiously enough to sponsor cases against the service in courts across the country.

A closer look at M-PESA's growth reveals why banks would be worried. The service in less than two years (It was launched on March 6th 2007) has grown to more than 5million members and sees volumes of more than Sh10billion transacted every month according to official figures.

And its potential is even greater. Delayed by lack of regulation and non-recognition of electronic evidence by the Evidence Act, the service's potentially lucrative applications such as buying goods and services with M-PESA or running commercial websites where the service could be used for processing payments.

It is this fear that has prompted banks to circle the wagons to ward off this invader into their territory. Four banks led by KCB and Equity Bank along with Postbank and Cooperative Bank have formed a committee to "kill" M-PESA.

The four are said to have the support of international banks who because of corporate governance rules would not like to be directly associated with the committee.

However, efforts to bring Barclay's and Stanchart into the mix has failed while players in the industry say bankers are divided over the issue.

Wednesday, December 17, 2008


The Kenyan economy which just last year was riding historic highs and on its way to recording an unprecedented 7 per cent growth has like its big western counterparts hit the brakes hard. Growth this year is projected at 4.5 per cent and that is optimistic.

The largest contributor to GDP, Agriculture with 25 per cent, is in turmoil. Farmers do not want to deliver maize to millers holding out for better prices while government is working hard to stave off popular unrest over current high prices of maize flour. It is a tough balancing act with government having to step in and subsidize consumers from its already thin budget.

Coffee and Tea are in crisis with poor global prices and unrest in some of the sectors further hindering progress. Horticulture may be the only bright spot but this is also dealing with high fertilizer prices and has been hard hit by the high electricity prices which have plagued the country since June. Flowers typically have to have halogen lamps beamed on them 24 hours in greenhouses.

Although transport and communication has been growing, the manufacturing sector has not been doing so well in light of high fuel and power prices coupled with diminished demand as consumer purchasing power diminishes rapidly.

Tourism which accounts for just 1.44 per cent of GDP but is nonetheless an important source of foreign exchange and remittances from Kenyans abroad has not been faring well.

The government's fiscal budget for the year 2008/2009 is in shambles. Many of the areas it anchored its revenue projections on are proving unreliable beginning with the Kenya Revenue Authority. The taxman has already missed his first quarter revenues target and the climate is looking increasingly tighter. No less than the President himself has on time called on Kenyans to pay their taxes.

Much of the country's development budget is hinged on borrowed funds but these are not coming through. A Sh39billion international sovereign bond has had to be shelved while plans to raise Sh18.5billion via infrastructure bonds has also not materialized.

So what way forward?

Friday, October 31, 2008


Raila Odinga, the Prime Minister of the republic of Kenya enlivens gatherings. Closing the first ever infrastructure bond organized for State Corporations and Municipalities in Nairobi this week, he did not disappoint. Think BIG was his message. He did not want to talk about bonds, he told the conference, because those gathered had just gone through two days of bond talk and they probably knew more about them than he did. He however wanted to tell them it was possible to build the nation using such innovative methods even when it seemed there was no money. Dubai Port was built through innovation, the PM said. Sometime back when the world famous free port was just a decrepit affair, the gulf-Arabs went to London and found listed on the London Stock Exchange, a struggling constuction company. They bought into it then in dramatic fashion, announced to the world that the company had just been awarded a huge contract to modernize the Dubai Port. The languishing company's stock rocketed on the LSE and Dubai was able to raise the money it needed to modernize its port. The PM then spoke of the innovation of the British colonialists who in just 5 years (1896-1901) built the Mombasa-Kisumu 900 Km railway line using crude technology and imported coolies from India. Since 1963 we have not added a single inch to that railway line, Raila decried. The Grand Coalition will add at least an inch to that rail line, he promised. On energy the PM spoke Nuclear -challenging Eddie Njoroge to boost his company's (KenGen) output by considering a Nuclear power plant with at least 1000MW capacity. Other issues included the roads and the Port. Why punish an importer by first of all delaying his cargo for more than a month and then charge him demurrage charges? It is wrong! said the PM.

In Dubai cargo takes a maximum of 48 hours from the ship docking, through processing and clearance to loading it onto the trucks for onward travel.

Tuesday, July 22, 2008


It was reported in the media recently that foreign investors who bought into Safaricom's IPO, were on average responsible for about half the shares sold on the NSE.

That they are getting out is worrying enough - as it would definitely undermine the confidence that people have in the share and probably influence more sell-offs.

But more telling and perhaps more worrying is the fact that their sell-offs have had ready buyers in the name of Fund Managers. Big funds like NSSF, Old Mutual, BAAM etc.

These are likely buyers whose initial appetite for the stock was unmet by the dismal allocation percentages and had therefore planned to come to the secondary market to satisfy their needs.

However, recently Safaricom has begun to dip touching new lows this week.

What is most worrying is that investor appetite may have been met and additional shares to the market may not see the uptake that has been there.

This essentially would mean more shares on offer than buyers available.

The price it doesnt take a genius to see would head only one way -South.

And the fundamentals that people ignored for so long - that you cant have everyone buying into a share and expecting it to rise - who would be buying? --are coming true.

Friday, April 4, 2008


The jokers at treasury are at it.

After issuing unrealistic growth figures for this year's GDP, they are now revising their forecast downwards by two-percentage points.

But what they are pretty good at is hiding behind situations.

With inflation running away, Treasury bureaucrats are busy shifting blame to the post-election chaos.

Never mind that inflation was up and on the rise even before the elections - THAT'S WHY HIGH PRICES WERE A CAMPAIGN ISSUE!

The Central Bank is sleeping period!

Njuguna, the colourless governor of CBK, has been issuing statements oddly at variance with the economic situation on the ground.

He has ignored the fact that liquidity is out of hand in this country.

His own institution reported being unable to shore up the rate of expansion of the money supply in the country.

The money in the system grew by 21 percent against a benchmark of 15 per cent that the CBK had set for itself.

From campaign funds, to foreign dollar inflows to investments and the like, the nation is flush.

It's no wonder banks, usually keen to hedge themselves against credit crunches at times of IPOs are now lending with abandon to would-be buyers of Safaricom.

Of course the CBK has been silent on this malaise just as it stood silently as gullible masses took their money to pyramid schemes last year.

It would help if once in a while the bank gave cogent and intellectually feasible guidance on our economy.

But one does not know what the so-called reserve bank holds as its philosophy.

Never mind that economic models that were thought to be sound in the West are craning over and the FED, the Bank of England, the ECB and the BoJ are all scratching their heads and offering differing solutions to the same problems.

At least there they acknowledge there is a problem. And by all indications, they are trying to get to the bottom of it.

At "BENKI KUU", no one is admitting there is a problem let alone giving signals of what they want to do.

It is immaterial that the so-called CBK market operations are notoriously unreliable as an intervention measure.

To begin with, the CBR unlike the religiously-watched US Fed rate has little if any impact on market players operations.

Secondly, it would seem odd for the CBK to begin mop-up operations when the country is desperate to maintain growth and high cost of credit certainly doesn't spur growth.

Third, Safaricom IPO might do that for the CBK by sucking up the liquidity in the market.

Fourth, government and humanitarian agencies spending on relief is likely to keep bloating liquidity.

Finally, unless CBK begins to admit that liquidity is as much a factor in this current inflation as the post-election chaos, it will keep providing explanations far into the future even as inflation approaches 25%.

PS: post-election disruption of production should only have affected ready produce in so far as the current consumer products are concerned and even then, those hiccups should have been overcome by now.


If the secondary effect, that is the disruption of the planting season thru - displacement, high fertiliser and diesel prices - has not yet been felt since the harvest season is still some months away, what will happen when that time comes?