Can Africa be salvaged... in my lifetime?

Africa as a continent fails in almost all positive metrics against any other continent... even Central & South America (I deliberately N. America as part of "America") which has seen its share of troubles over the past few decades including military juntas, hyper-inflation, etc...

S. America threw off the colonial yoke, suffered economic downturns, military regimes, etc but even they have surpassed Africa... by a distance... as of 2008... Whereas some part of Africa always has a famine every 2-3 years led by the superstar Ethiopia... I have never heard of a famine in America. Well, one in the recent past anyway.

Mexico with all its myriad problems and smaller oil & gas reserves than Nigeria beats Nigeria hands down!

Asia - even with laggards like Burma/Myanmar and Mongolia - has done much better than Africa. South Africa may be a 'performer' in Africa but barely makes the cut in Asia. Since 1990, many S.E. Asian countries have done much better than S.Africa including Taiwan, S.Korea, China, India, etc...

Japan's (or China's) economy is larger than the whole of Africa (including S. Africa and Arab Africa). Then there are the oil-rich gulf states, India, Taiwan among others... Even Russia is primarily Asian by land mass.

Would it be considered genocide if we (as Africans) lined up 90% of African politicians and shot them... dead... using an extra bullet just to make sure... Then bury them six feet under...

Nairobi City Council - Idiots or Smart?

Nairobi's inefficient City Council which has huge problems with a bloated workforce, corruption, poor enforcement of important by-laws, poor/outdated sewage system and poor maintenance of the road network.

Oh, but dare you prune the flowers in YOUR garden... the City Council will be on your neck... or is the joke on us since it opens more avenues for corruption!

Set a thief to catch a thief...

Yep, the whole gang behind the scandals during kibz' 2002-2007 run are all out i.e. the charges have been dropped against them...

Whereas Raila is asking John Githongo to return and even promised to find a place for him in the government... the folks associated with anglo-fleecing are all back...

mwiraria and the rest have gone scot-free. Anglo-what?

kamani & co - the Kenya Police (hardly a bastion of cleanliness) dropped their demand for the arrest of the kamanis. aNGLO-WHAT?

pattni & somaia are out an back in business thanks to deals with KACC. saitoti was 'released' as well... and got a job back as a minister!

East African - Errors Galore!

So the story is about 'small' firms being able to list on the Dar Stock Exchange...

However companies that wish to enlist through the enterprise growth market will have to have been in operation for three years, and will require a capital of $200,000 million as a precondition before being listed as opposed to the $500,000 million that is required for the main market segment on the DSE. But in case a company is operating as a subsidiary in Tanzania but is listed in country of origin, then it will be required to have at least immovable assets worth $500,000 million in Tanzania.

Well... unless they are talking Zimbabwean Dollars... and that would not make sense either...

So according to the East African... a 'small' business has to have capital of $200,000 million ($200 billion)... this would mean the firm would be an immediate entry into the top 500!

Kenyans & AGMs

Sunny Bindra writes about AGMs becoming entertainment rather than serious affairs.

I have been to a few AGMs and most are pathetic where little business is done & hardly any serious questions are asked.

The questions revolve around food (or lack thereof), freebies, share registrars and food. Yes, Kenyans take their 'free' food seriously.

I think firms should follow the Jubilee system which gave out vouchers for discounted Life Insurance. This keeps the riff raff out. The firms that want to curry favour with the shareholders - so no tough questions are asked - include BAT & Nation.

The Nation AGM started late courtesy of a song & dance gig - Sunny doesn't mention it but that is what he is referring to. I did like the 'newspaper' giveaway which is a nominal cost to them but did they have to do the bag?

It is disgusting to watch certain shareholders - names withheld - who are worth 10s, if not 100s, of millions scrambling for food. We know who they are.

Then the question time... the same shareholders ask the same questions year in, year out. They are long-winded and take ages to get to the point. If they ever do!

Then there are the shareholders who get flustered when there are 2 AGMs at the same time. They literally run from one to the other not for the questions but the food & freebies!

I have written on the waste of time these AGMs can be.

So why do I go? While the scramble for the food is going on, I can corner the MD or FD...

$3 million house for VP

WTF?

When we have lots of poverty, pathetic roads & lousy services... ka-loser gets a $3 million house. I wonder how much more we will spend annually to keep him in style?

And I believe this excludes the cost of land since it was built on government owned land...

Another ka-loser aka scammer jesse jackson goes after Barack Obama... Ati "I want to cut his nuts off."

Uchumi real estate & Grand Regency Hotel

Apparently one of Uchumi's buildings for sold for a song as well.

If a transparent process had been followed then there would be no question of impropriety but it was not.

So kirubi & kimunya are in the same boat. They may be innocent. They might not have benefited from the sale but it seems neither followed a transparent process.

kirubi is also known to have political goodwill/connections with the current government. I think he was at the head of kenatco - which collapsed during or soon after his time there - which is a pale shadow of it's former self.

Orengo vs Kimunya. Don't threaten but sue! And may the truth prevail...

Kimunya claims Orengo asked for a bribe (KES 3 million) from Adan+Wetangula Advocates. Furthemore, kimunya claimed that Orengo 'revealed' the GRH scam only after Orengo was told by A=W that there was nothing for him!

Orengo denies he asked for a bribe from A+W while A+W also denies the incident. So Orengo said he will sue kimunya. Well, Orengo should not threaten kimunya but actually sue him. Pronto. We want to hear the truth. The only concern is whether the AG will take over the case & enter into a Nolle Prosequi order.

On the other hand the AG seems to be on the 'other' side for once. Nevertheless, the Solicitor-general is thought to be a PNU/kimunya supporter. Of course, the AG is brilliant at figuring out in which direction the wind blows!

I do not think kimunya benefited directly from the GRH deal but he needs to reveal all instead of being the fall guy. Who is he protecting (rhetorical question)?

When will Kenyans get to doing some real work instead of politics?

And look at what our neighbours are doing in the name of 'good governance'.

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Listening to: Matthew Good - Born Losers
via FoxyTunes

No to subsidies!

Kenya should desist from subsidies even if they are politically expedient. Especially if all they are politically expedient! Whereas agricultural subsidies seems a good idea they will create 'leaks' as politicians & civil servants resort to corruption.

Kenya needs to fight - at the WTO - other countries that provide subsidies to its industries & agricultural entities.

Solutions:

• Better infrastructure so products can move easily to & from all parts of the country. This will reduce costs of transporting foods as well as reduce wastage.
• Better access to credit facilities but through private institutions e.g. KCB, Equity Bank, etc.
• Change from 'imported' crops (e.g. maize, wheat) to local/native crops like Sorghum, Millet, Cassavas, etc.
• Secure our forests & water catchment areas.
  
• Reduce population growth. Kenya's population grows much faster than it's real rate of growth. This is unsustainable. China has improved its per capita income by introducing severe measures to curb population growth. I do not advocate what they did but we need to work at reducing the rate.
• Improve agriculture outreach services while reducing direct subsidies. These better techniques can help farmers improve yields.
  

Olympia Capital Holdings - Final Results 2007-8

OCHL has gone through an interesting year as follows:

• Rights Issue (over-subscribed) which raised 420mn
• "Loss" of OCC (Botswana) as a subsidiary but later regained after OCHL's Rights Issue
• Inclusion of Paul Wanderi Ndungu (of CMC & KQ fame) as a director
• Increase in Issued Shares from 10mn to 40mn
• Change of year end from 31 Dec to 28 Feb (see the prospectus)
  

The results of 2007-8 were not anything to write home about. They can be downloaded from www.investinginafrica.net but the commentary was interesting (pasted below). Clicking on the subject header above will link to a Business Daily story on OCHL.

OCHL's financing costs in 2007-8 were horrendously high but the process of a Rights Issue in Kenya takes too long so funds were 'borrowed' in the meantime. The Rights Issue in Botswana was concluded much sooner than in Kenya coz faster approvals. The repurchase of shares in OCC(B) did hurt OCHL since they were purchased at 50% more than what they were issued at 6 months earlier.

Plush is OCC's largest subsidiary & has been performing below par in 2007. I hope it's performance improves. Kalahari Floor Tiles is the 'star' of OCC's subsidiaries but OCHL gets only 51% of the benefits/profits from KFT.

The other acquisitions (Natwood & Mather+Platt) benefits, if any, will show up in 2009. I have said that 2009 is when OCHL is expected to shine as its cash (420mn) will have been fully invested. 2008 remains an acquisition year for OCHL. Of course, that is mere conjecture on my end hoping that Kenya & S.Africa remain peaceful & grow!

There was an increase of 20% ownership of Avon Properties but the property firm cannot be consolidated since it is less than 50%.

There will be substantial costs associated with the new PVC tile plant including paying for it, installing it & working capital. I hope the marketing team is up-to-speed since the production is expected to triple vs the old plant. The prospectus had some rosy numbers for Dunlop plant.

A housing/construction slowdown in Kenya will severely hurt Dunlop since the plant will be commissioned as the construction industry sees a slowdown. I hope Dunlop can export to COMESA as well as compete & lock out the PVC tiles from China & Egypt. The core product/ingredient is petroleum based & that is a concern in the future. A plus for Dunlop is that higher transport costs from Egypt/China to Kenya may make Dunlop's products more competitive though the Kenyan market will shrink with higher prices.

All in all, I see a better 2008 (got to get that PE down to reasonable levels) and an even better 2009. Of course, I hope Kenya and S.Africa does not see a recession or violence!

Commentary
The 14-month period ended 29th February 2008 was a very eventful time for the group. • Our subsidiary, which is listed on the Botswana Stock Exchange, Olympia Capital Corporation (OCC) migrated to the main board from the venture capital board and had a successful 1:1 rights issue in March 2007. This was to pay off debt used in the acquisition of 74% of Plush products (pty) Limited and resulted in our slipping from a majority position. In August 2007, we purchased shares putting us back in a controlling position in OCC.
• In September 2007, we had an oversubscribed 3:1 rights issue on the Nairobi Stock Exchange (NSE) and raised Ksh 420 million. These funds have enabled us to look for expansion in existing and new areas. It is difficult to compare the year ended Dec 2006 with the period under review, mainly because of the acquisition of Plush in Dec 2006, which has now been consolidated for the full period and that the cash raised on the NSE, was raised in the later part of the period under review. Board Appointments: Following our rights issue in September 2007, we invited Mr. John Simba and Mr. Paul Wanderi Ndungu to our board. Thus increasing the number of directors to seven and we also had an increase of executive directors from one to two, with the appointment of Mwangi Wamae as Chief Operations Officer. Financials: As expected, turnover increased significantly from Ksh 397 million to Ksh 1.4 Billion. Profit from operations increased from Ksh 30m to Ksh 74m. Unfortunately, due to heavy borrowing, prior to the rights issue, interest costs rose from Ksh 4m to Ksh 36m. Without factoring new acquisitions and due to the rights issue being held at the end tail of the period, we expect this to come down significantly in the next year. Dividend: Our AGM will be held on 4th August 2008, and we intend to pay a dividend of Ksh 0.20 per share on 11thAugust 2008 to shareholders registered in our books at the close of business on 23rd July 2008. Our books closure dates will be 24th and 25th July. Post Balance Sheet Events: Following the end of our financial year on 29th Feb 2008, we have made three key investments. OCC entered into agreements to purchase 50% + 1 share in a Cape Town based business called Natwood (www.natwood.co.za). Olympia Capital Holdings Limited (OCH) entered into agreements to purchase 49% of a Kenyan business in the provision of Fire Systems, Water Services and Mechanical Installations called Mather + Platt Kenya Limited (www.mplattkenya.com) OCH has also increased it’s shareholding in Avon, the property company from 27.5% to 47.5%. Our focus is now on the growth and profitability of the businesses in our stable. I am also please to note that the new tile plant for our Kenyan subsidiary Dunlop Industries Limited is now on the high seas to Kenya. We expect this plant to be on line by October 2008.