The Unvarnished Truth...

A cartoon by Patrick Gathara... so true... I think Kenyan political cartoonists are among the best in the world...

Its official - the Kenyan Army involved in internal "security"

The initial deployment of army officers was ostensibly for "humanitarian" purposes. No more... the Army was deployed in Nakuru.

Whereas we welcome the enforced peace the army brings - they are well armed & trained to suppress enemies - but it is a slippery slope. Will these actions embolden them to take a more active part in our politics?

How to jump-start the economy...

Simpler than it seems... at first.

1. PROTECTION of lives & property. Shoot to kill any thieves/muggers/looters. Of course, my assumption is that the police are part of the crooks' networks. Kenyan police are known to be behind many robberies.
2. Allow peaceful demonstrations. This will allow for the venting of anger while directing police efforts to (1) above. Savings from police overtime, tear gas purchases, etc... Of course, kibz' hardliners would rather the police kill innocents than preserve Kenyans' properties.
   
3. TAX breaks/reduction. Sure the government will "lose" income but the economic boost will be enormous. This is a time to suspend or eliminate many punitive taxes on agricultural products & inputs. Unfortunately, the corruption networks are getting stronger. Mumias has PUBLICLY complained about the non-action by police on smuggled sugar.
   
4. PR campaigns. Yes, these are needed to boost tourism. The campaign has to include new markets like China & Russia. Tourism remains a key driver of our economy. The ancillary industries/sectors e.g. agriculture, transport, etc that need tourism will start growing. This is an expensive process & might take 6-12 months before the benefits kick in.
   
5. Expand private/public partnerships. Fire political appointees like george muhoho at the KAA. We need PRIVATE SECTOR initiatives that have a positive ROE. KQ has been begging for a larger airport but the idiots at KAA proposed an expansion (2008-2011) to cater for 4mn passengers. KQ expects 4mn passengers on its own by 2011. We need a larger pipeline from Mombasa -Kampala. We can't control the Ugandans but let's extend it to Kisumu. There will be a steep learning curve but there is little choice. I expect the ROE requirements for private investors might raise prices BUT the efficiencies will negate these cost increases over the mid-term.
6. Reduce barriers to business. The License Raj needs to be eliminated. Hong Kong & Singapore have a one-stop shop. The idiocy of standing in line to pay taxes is STUPID. The same with (insert city/town/county) license fees. Spending hours in line to pay for services. I am glad KPLC has finally expanded their pay points to include Posta. Now we need to pay these ONLINE.
7. Reduce government expenditure. kibz has planned for 34 ministers. That means 34 Mercedes cars or Range Rovers or BMWs. Then there are asst ministers who do little. Add ex-officio members. And their staff. And chase cars. And perks. Sigh... I should have stood for office...
8. Rebuild/build infrastructure. PPP are the way to go. A new highway to Uganda would immediately boost our exports. A decent road to Namanga would allow Kenyan manufacturers dominate the region. A new highway to S.Sudan would allow Kenyans a foothold NOW before others get in. I believe the future of Kenyan exports lies in Africa not Europe.

These are simple prescriptions but they can help cement Kenya's future in an increasingly tough world.

Losses galore... (Economic...)

The economic toll continues...

• Malindi hotels close down...
• Bananas going to waste...
• Corruption networks still up & running... (BTW, ephraim maina was elected to parliament on a Safina ticket... as well as being a kibz supporter...)
• Ugandan soldiers in Kenya?... Not necessarily but a loss of business for Kenya(ns)?
  
• Tourism players need a helping hand...

I am not taking bets but I expect the gov't "demands" of refunds from ephraim maina's kirinyaga construction will be "resolved" soon in favour of ephraim maina.

Ushahidi.com

Many have written about www.ushahidi.com which is a project by Hash & friends...

I am no "web" expert but I will try and get the link on my blog... In the meantime, if you come across violence being perpetrated by anyone be they PNU, Police, Army, Ugandan Army, ODM-K, ODM, goons, crooks, etc... please try and post it to http://www.ushahidi.com

A commendable effort by Hash & friends.

Kenya vs S.Korea (just for laughs)

Kenya vs S.Korea

Round 1

Land & Water Mass: 582,650 sq km vs 98,480 sq km
Irrigated Land: 1,030 sq km vs 8,780 sq km
Population: 37mn vs 49mn
Literacy: 85% vs 99%


Round 2

GDP (PPP basis 2007 est): $58bn vs 1,206bn {This is NOT a typo!!!)
GDP (official exchange rate 2007 est): $19bn vs $824bn {This is NOT a typo!!!)
GDP per capita (PPP basis 2007 est): $1,600 vs $24,600


So... why the above info? Well, it turns out that President Lee of S.Korea plans to cut down the ministries from 18 to 13 to "slimline" his government. And our "brilliant" maybe he is(not) prez-in-residence, the Hon. Mwai Kibaki, has named 50% of his cabinet. This 50% amounts to 17 posts. So there are another 17 posts waiting to be filled.

And Kenyans are upset at Dr. James Watson, a Nobel Prize winner, for making comments that... dare I say it...
Many of my readers know I wish we had a Lee Kuan Yew instead of jomo "I love grabbing land" kenyatta as a leader at independence.

Back to the cabinets. S. Korea has an economy almost 44x than Kenya's yet practices more fiscal restraint. Sigh...

Another "What The Fuzz" moment...

Courts getting closer to people, says CJ Story by NATION Correspondent Publication Date: 1/17/2008

The Chief Justice Wednesday urged a construction firm to speed up the new Malindi court project saying the delay was denying people justice. Mr Evan Gicheru said the Sh285 million project was behind schedule and should be ready by July. He said the completion of the new court premises countrywide would bring justice closer to the people. “We want to arrive at an ultimate level where the furthest court of law from any Kenyan is four kilometres,” he said. The CJ addressed a staff meeting at the Malindi old court chambers before visiting the multi-million new court site with the resident magistrate Mr Joshua Kiarie. On the Lamu court that was scheduled to end several years ago, Mr Gicheru said there were no funds to complete it. The CJ also urged Kenyans to resolve disputes through the courts instead of using street demonstrations or violence. “My message to Kenyans is this... Don’t use machetes. Use the legal system, which is efficient and reliable,” he said. WTF...? Lest I get sued... I shall keep quiet. Or is it that I am at a loss for words? Or is it that I can feel the bile rising? Please let me know what you think...

The carnage continues... Tourism sector

I want to highlight listed firms in specific sectors to see how they have been affected by the current instability in Kenya...

Tourism - TPSEA & KQ

KQ

• Loss on inbound traffic into Kenya esp from Europe. KQ opened route to Paris in 2007 but it seems doom & gloom. The drop in passengers is frightening.
• Competition has pummeled KQ on the LHR-NBO sector. Add the clashes & it gets worse during KQ's "profitable" Jan-Apr period.
• Many N.Americans (2nd largest tourist market) have stopped flying to Kenya.
  
• KQ has suspended the LHR-MBA route since there are few tourists willing to come to Kenya on holiday. The Jo'burg-MBA sector has been suspended as well. Therefore, all flights have to pass through NBO.
• Weaker KShs means higher fuel & interest costs.
  
• KQ's saving grace are the W.Africa bound passengers.
• High oil prices makes it worse. All airlines will suffer (except the Mid East).
  
• If peace prevails, then KQ will see inbound passengers increase from August 2008.
• Replacement plane (767) delivery in Oct 2008 to ease current equipment "shortage". The SAABs will be retired.
• Weaker KShs will "boost" profits in KShs but the break-even factor has increased.
  

TPSEA

• Lucky for them, they expanded to include the Tanzanian portfolio of hotels & lodges. Some loss of Kenyan business has transferred to Tanzania.
  
• Serena Nairobi is normally 85%+ occupancy at this time. They are at 20%. Yes, only 20%. They are bleeding money.
• Serena's other lodges are almost empty. Most tour operators prefer the tourists fly but this can be prohibitive to middle-class tourists.
• Serena Mombasa may be shut down for "renovations" until tourism picks up!
  

Economic Losses Mount for Kenya

In spite of various "all-is-normal" pronouncements by the (possibly illegitimate) government, Kenya has & will take a HUGE hit in 2008. I wonder if these "ivory-tower" mandarins, who get huge salaries no matter what, live in the same Kenya I do?

I can't go in much detail but I will highlight the major issues as I see them. Keep in mind Kenya is/was a US$12bn economy. KShs 780bn.

Tourism

• Cancellation of charter flights. Loss of immediate tourism benefits esp at the Coast.
  
• Many charter firms will adopt a wait-and-see approach just as they did in 1997. Some may NEVER return. This is a long term loss.
  
• Hotels are almost empty. Whereas January sees 70%+ occupancy coz its winter in USA & Europe, the maximum seems to be 35% for "new" arrivals. Taking into account that some hotels have closed that means true occupancy (vs available beds) is closer to 20%.
• KQ loses traffic both local & European traffic. KQ has been growing rapidly since it was privatised. This may be its first year that it sees a drop in passenger & revenue growth. KQ - a Kenyan firm - contributes directly to Kenya by buying foods, blankets, services, etc from Kenyan manufacturers. Not to mention Kenyan staff.
• Many Game & National Parks are no-go areas for tourists. These include L. Nakuru National Park & Mt. Elgon National Park.
• Cancellation of conferences. Kenya was becoming a preferred destination for these regional conferences BUT there are other options e.g. Uganda which has recently built 1,000s of rooms for CHOGM.
• Kenya's #1 forex earner about to drop a few places. Estimated losses in 2008 will be KShs 60bn. 7.7% of Kenya's GDP.
  

Horticulture

• Loss/waste of produce destined for Europe during the holiday season. This produce rotted as it could not get to the airport.
• Penalties for missed or late deliveries by the exporters.
• Ethiopia & Uganda will "eat" Kenya's lunch as European importers diversify their suppliers. Long-term damage to Kenya.
• #2 forex earner with substantial effects on the economy in terms of jobs. Losses could be KShs 40bn (5.1%). The loss of jobs & services associated with horticulture will just add to the misery.
  

Transport & Infrastructure

• 100s (if not 1,000s) of cars, matatus, lorries & buses were destroyed. In Kisumu an entire car dealership was destroyed. This reduces competition among transporters.
  
• Kenyans will have to pay more to transport goods & people to Rift Valley, Nyanza & Western province.
• Damaged roads - in addition to the pathetic roads we already have - coz of idiots who dug trenches across them or blocked them with debris.
• Knock-on effect on everything. Cost of commodities, services, etc will all go up fueling inflation.
• Phone firms have losts sales & equipment. Hopefully, they will upgrade their equipment soon.
• The port is congested. This affects exports from Kenya. Goods in transit to Uganda are also affected thus denying Kenyans income & jobs.
  

Fiscal & monetary

• Increase in cost of basic commodities. Some of these "costs" will not go down. Inflationary pressures can be felt all over.
• Increased government expenditure on providing aid & relief to displaced victims.
• kibz announced relief packages to businessmen. I am worried that the funds will be wasted by (1) incompetent government employees (2) corruption (3) selected beneficiaries aka tribalism.
• Kenya govt will see cessation of donor aid. Whereas the budget might not "use" donor aid in its calculations, many projects benefit from it. These are projects the government has either ignored or not interested in.
• Increased gov't borrowing from local markets will crowd out the private sector.
• Huge potential payouts by insurance firms will affect the balance sheets of these firms. Some will collapse.
  

Exports

• Exports to COMESA & E.Africa accounts for 35% of Kenya's exports. Larger than any other region.
• Uganda is working with Tanzania to set up an alternate route for fuel imports.
• Kenya has lost markets in Burundi, Zambia, Rwanda & Somalia to others. The S.Africans are moving in. They provide stability that Kenya does not.

Local Manufacturing

• Local manufacturers are stuck with goods they can't sell esp to the "opposition" strongholds.
• Exports have slowed down to a trickle due to transport restrictions.
• Many firms are laying off workers. Some had started hiring last year in anticipation of increased business in 2008.
• Many firms have been severely affected by the slowdown & are in trouble with the banks. They can't service their loans.
• I expect some bankruptcies in 2008. A real pity.

Agriculture

• Idiots burned factories & equipment in tea-growing areas. The loss of exports will affect Kenya.
• Farms are laying off workers. They can't process the produce coz the factories are damaged.
• Crops are rotting since harvested crops can't be transported to the buyers. This is especially so in the Rift Valley region. Losses all around.
• I have discussed exports above.
• Dairy farmers are losing KShs millions DAILY since they can't get their milk to the processors. KCC's Eldoret plant remains closed.

Diapora

• They pumped in huge amounts over the past 2 years. Some of them will stop. Why build a house in Eldoret if it can be destroyed?
• Many invested on the NSE. Why do so if the growth prospects are diminished?
  

There are a few (legitimate) beneficiaries:

• Media - Politics is emotive & the media is taking full advantage. I am sure sales of newspapers, radio & TV ads have gone up.
• Building suppliers will start benefiting from reconstruction but it will be a slow process.
• Some firms will come out stronger as they will consolidate market share. This is a blow to a market economy by stifling competition.
  

The corruption networks will grow stronger as the government borrows more & accounts for a larger % of the GDP.

Overall... Kenya is in a funk. There is hope but in 2009 & beyond IF there is peace. It is difficult to say what teh real growth will be but probably around 5%. The loss of momentum will affect us far in the future.

Oh, and the bloody MPs, ministers, prez & cronies continue screwing us for more while the economy shrinks.