Disinvestment in Kenya

After the greedy, selfish & irresponsible actions by the politicians - PNU, ODM , ODM-K, NARC, etc - Kenyans are agitating for 'more'. The problem is that ALL the 'agitators' are government employees. So not only do we have the BLOATED cabinet, we have to pay more to civil servants.

So who suffers? The private sector who face tough trading conditions, poor infrastructure, insecurity & now have to contend with higher taxes. Nobody is paying attention to the vital industrial & agriculture sector on whom we rely on for real wealth creation.

Why are we surpirsed when many manufacturers relocate their factories to other countries, farmer abandon their crops, businesses default on loans and horticulture exporters move to Ethiopia?

Nurses give ultimatum to government

Teachers want higher salaries

Increased violent crime affecting businesspeople in Nairobi

Prison wardens strike for higher salaries and better conditions

Even the prisoners are on strike for higher pay!

Mungiki threat is killing the rural economy

Kenya needs to emulate India's dynamism...

I have said many times on my blog that Kenya needs to look to India for (positive) ideas & solutions on growth... Of course, we need to adapt these for Kenyan needs... and cut the corruption out!

Well Laila Macharia agrees... in her Business Daily article linked here...

Why is Kenyan labour costly vs Chinese labour?

China is growing in importance as a food exporter even with the recent 'food scares' in Japan and USA.

China has 1.2bn people but why is it that Kenya (a poor country with low 'cost' of living or low standards of living) can't compete with China?

Our flower, tea and horticulture exporters are crying over the strength of the KShs (vs the US$) while lamenting high costs of production,of which labour is a huge part, which makes them increasingly uncompetitive in world markets.

Why is Kenyan labour so expensive vis-a-vis China or India yet we have a (unofficial) 50% unemployment rate?

GoK spends & naps while Kenyans suffer...

Since Kenyans MPs earn huge salaries & perks ($180,000+) they do little but bicker in parliament while important economic matters are ignored.

Amos Kimunya plans to raise KShs 27bn (US$48mn) to fund extra expenditures. 70% of the funds will go for recurrent expenditure including OPERATING EXPENSES of the new ministries! Not for 'development'.

KPA needs $320mn to expand the port at Mombasa. The Japanese will loan them the money IF the GoK acts as a guarantor. The doubled capacity would enhance Mombasa's reputation as THE port in E & C Africa. It would create 1000s of jobs for Kenyans and earn Kenya additional forex.

Well, the parliament needs to approve the guarantee but, hey, they don't give two hoots. Why? They care more about a position in the bloated government rather than the country.

I think Kenyans are fools for electing these fools...

We need to get some serious lawmakers in parliament. Why do we have thugs, fossils, thieves and conmen as MPs? Because Kenyans elected most of them except those who rigged themselves in. I am ashamed that Kenya is being held back by the MPs we have.

We do have some bright sparks e.g. Martha Karua (I might not like her politics but she is a go-getter), James Orengo, Anyang Nyongo, Raila Odinga (when he stops politicking), Amos Kimunya (please STOP politicking!), etc. We need leadership from them. Now.

A Tale of two(2) SafCon Prospectuses

Yes, it turns out that the GoK issued a 'revised' prospectus that most investors were unaware of. Does anyone know what the full extent of the 'changes' were?

The Safaricom OFS has been controversial from the beginning starting with the 35% allocation to foreigners to the Mobitelea's 'hidden' shareholders & stake.

Zimbabwean Follies... Worth a laugh!

Zimbabwe was a jewel in Africa but for the disregard of (just) law, bad politics and worse economics!

Minister for Agriculture Mechanization, Joseph Made, to a White farmer in recent times:
"Why do you white people always hide behind the law"

Then he goes on "We made the law we can change it"

Huh? JM, you idiot... it's the law! You made it and if you do not like it, change it! You are the government!

BTW, like Kenya there are superfluous ministries in Zimbabwe as well. There is a Minister for Agriculture as well, rugare gumbo. No wonder Africa is rich in resources but poor as hell in "wealth".

What next a Minister of Toilets - in charge of wiping mugabe's arse?

BTW, the Z$ is at Z$241mn vs US$1 (and the US$ has been tumbling of late).

Is Africa politically regressing?

Sigh... Africa doesn't have much luck with Ms... exception being Nelson Mandela...

(dan) moi - thief, murderer, turncoat, cheat...
mwai (kibaki) - well, google the Kenyan blogosphere... 42 member cabinet...
muamar (gadafi) - nutcase but believes he is entitled to be Africa's king...
(bob) mugabe - where do I start with him? Virtually destroyed Zimbabwe....

museveni - once seen as progressive but... he is after anyone he perceives as a political opponent or critic. Sad...

Will Africa see deliverance any time soon?

KAA needs to be privatized

I don't want to sound like an apologist for Kenya Airways but the Kenya Airports Authority has not helped KQ's cause.

Corruption and poor management at KAA has led to a roof collapsing at Mombasa Airport. Last year the runway lights were not working leading to flight delays and cancellation of night flights.

KAA has not repaired or replaced the underground cables for months. They rigged up a jua-kali system which was bound to fail.

KAA needs to be privatized. Immediately!

KQ is not off the hook either. Though larger and better run than most African airlines, it remains a poor competitor to the Middle Eastern and European carriers.

More stockbrokers to bite the dust?

6 brokers on the Watchlist according the Business Daily.

Bob Mathews - In trouble once. In trouble again?
Discount Securities - The owners tried to sell it at an inflated price but no-one bit at the time.
Reliable Securities - In the news before. Jos Konzolo was the former NSSF head honcho.
Crossfield - Securities - No idea.

Solid Securities - Now NIC Capital. An operational matter or a problem with the prior owners. NIC Bank has enough money to keep them in business. NIC owns 60% of SS but I expect an 'internal' Rights Issue will increase their stake.

Ngenye Kariuki & Co - A surprise on this list. It has been a 'steady' firm with a large retail base. The owner is a hands-on manager (unlike Nyaga Stockbrokers).

Does any one have more to add on these firms?

And a new broker- Chartered Capital. Info from Bankelele.

I think the value of the 'licenses' will drop from the astronomical figures bid by Old Mutual (KShs 452mn) and Renaissance Capital (KShs 256mn). Rumours have it that there are another 4 new licenses waiting to be issued.

Coldtusker becomes a TRILLIONAIRE...

On 10 April 2008, the Z$ was at Z$50mn:US$1
On 25 April 2008, the Z$ is at Z$220mn:US$1

Coldtusker is probably a Trillionaire.

I tip in the 100s of millions. I carry at least 1bn in loose notes & change.

(OK, put in perspective for those boggled by all the zeros... Z$1 trillion = Z$1,000,000,000,000 so it equates to approx US$4,500)

Link to the OMIR rate

Banks on a roll...

Equity Bank is in the process of acquiring Uganda Microfinance Ltd. The smart folks at Equity are doing an all-share deal that will leave their 'extra' capital ready for more investments.

KCB is expanding in Uganda, S. Sudan, Rwanda & Tanzaia. It will go for a Rights Issue to raise KShs 5bn. It has an excellent 1Q 2008 (when the troubles affected large swathes of Kenya) with a record KShs 1.7bn (pre-tax) profits.

Co-op Bank wants to go public. They plan to raise KShs 5bn as well. I think they should go for KShs 10bn & will find takers for the shares since the Safaricom refunds will be itching for an avenue for re-investment. Of course, the other banks will be happy to lend additional funds for the IPO.

Central Bank of Kenya K may be forced to sell the Grand Regency to the highest bidder. It is not all in the bag but I would like to see a transparent auction.
I think the auction should allow the winner to put down 20% and pay the balance within 1 year. This will mean more bidders & a higher price. The 'pay later' will allow bidders to pay more since they can look for additional financing after the bidding process is over. If they default, CBK keeps the 20%.

EABL goes green by building a local plant for canned beer. The cans are made of aluminum & can be recyled. The savings are in transportation since bottles are 'heavy' compared to cans. I hope more jobs are also created by bringing the manufacturing home.

New varieties of rice will boost production in Africa leading to better food security. Why should we 'import' rice, maize & wheat? In addition, self-sufficiency means fewer means for government employees to skim Kenyans (e.g. sugar and maize import scandals). Let the farmers earn a decent living!

We need to force the State (GOK) to give up ownership of assets such as KAA, KPA & KPC. Of course, what I want to see are CLEAN deals meaning no favoritism to entrenched interests.

NEMA after the Nakuru debacle is showing a greater interest in our environment but I have a gut feeling that corruption runs rampant there. Maybe I am being a little too skeptical?

There is light at the end of the tunnel!

Back to Basics - Economics, Finance and Wealth Creation

I have spent too much time on politics. My blog was supposed to be business-oriented with little politics. I too the turn when Kenya's politics became self-centered on the politicians greed rather than good governance.

Since the "Grand "Thieving" Coalition" is in place with crooks & thugs like fred gumo as ministers, I need to look to the Kenyan business community for hope.

To the future. May it be peaceful & prosperous.

Ah, the Kenya we know...

Apparently the Libyans want in on Kenya but in a back-handed manner. They want to buy the Grand Regency Hotel for a song.

Mukesh Ambani (of Reliance India) & partners are offering an estimated KShs 8-12 bn while the Libyans want in at KShs 1.6bn. That is a glaring difference. I wonder who gets the difference between the 2 bids?

Solution: An open bidding process with a 20% deposit & allow the winning bidder to seek financing within 12 months. Failure to pay for the GRH in 12 months means forfeiting the deposit. In the meantime, the bidder can run the hotel JOINTLY with the CBK appointed receiver.

Kenyans will stand to benefit as they will get the best price for the asset they have paid for through their taxes.

Similarly, there is the issue of the Refinery. It is old & inefficient and needs a major upgrade but the GoK is stalling by not selling its shares to Essar - who won the tender by paying the highest price - nor agreeing to pony up 50% of the capital needed for the upgrades. The Libyans want in but they did not pay the highest price back then so why would they do so now? Kenyans lose no matter how you slice or dice it!

Solution: The GoK should let KPRL sell shares in KPRL to the Kenyan public to retain Kenyan ownership. So the GoK will be co-owners with Essar & the Kenyan public. It would be unsafe to cede the refinery to the Libyans who will favour OilLibya vs the other Oil Marketers e.g. Kenol, Total, etc.

Zim$ at 123,000,000 per US$

I am just fascinated by the rapid devaluation of the Zim$ vs the US$ (which is going through its own devaluation). If I could map out against the Euro, GBP or KShs, the Z$ devaluation would look even worse.

What do you expect with 100,000% inflation? And puhleeze don't blame the 'colonial' powers since they are long gone.

Zim$ drops faster than a rock!

The Zim$ has crossed the 100,000,000 mark. Yes... you can get Z$100,000,000 for US$1. On 11 April 2008, I blogged about the Z$ at 50mn. It has only gotten worse, a lot worse but, hey, I am on my way to becoming a TRILLIONAIRE!

KQ's fortunes looking up...

North America is Kenya's 3rd largest tourist market. If Kenya can get an Open Skies agreement with the USA (& Canada) it will reduce KQ's costs & increase passenger numbers by bypassing European hubs.

Furthermore, Delta which plans flight from USA to Kenya via West Africa is a member of SkyTeam, and can add code-share passengers to KQ's regional flights while allowing KQ to sell additional seats/destinations on Delta flights. Then, KQ can compete with SAA for passengers from southern Africa traveling to N.America.

Whereas high fuel prices hurt KQ, its larger/stronger financial base can make KQ - if well managed - a long-term winner as many marginal African airlines are expected to collapse during 2008.

Of course, all is not rosy but KQ should not let up on investing in new efficient planes, better facilities & staff training.

Safaricom IPO(OFS) gets murky.

It seems there are 2 sets of rules in Kenya. One for the politically connected & then the other...

I am pissed that 35% of shares were 'reserved' for foreigners. This has denied "Wanjiku" who contributed mightily to SafCon's huge profits shares while giving them to foreigners - chosen by morgan stanley - who may have vested interests with the government folks. The foreigners get MORE shares than "Wanjiku". The Retail Pool includes ALL East Africans.

Here is another stinker. dyer & blair which does NOT fully comply with the CMA rules is allowed to buy as a QII but other investment banks are not. Of course, we know jimnah mbaru is close to the government.

Is the CMA merely incompetent or is it playing favourites by issuing a 'clarification' 3 days prior to the close of the Safacon IPO?

Yes, Kenya is back to normal.

Suicide Jumper

Not for the squeamish... but here is a picture of a suicide jumper.

----------------
Listening to: Tristan Prettyman - Madly
via FoxyTunes

Kenya - Corruption back on track...

paul pattni is back in the news. He 'surrendered' the Grand Regency Hotel to the CBK last week. KACC's wildly over-paid - & lousy performer - head honcho claimed 'victory' after spending tens of millions...

Anyway, turns out that the hotel was 'sold' without any competitive bidding... I am sure the authorities will make funny noises about how the buyers bought it legally...

Yep, Kenya is back to normal. kibz & cronies have 4.5 more years... and they have started not one second too soon...

Zimbabwe Billionaire...

LOL... My 'wealth' in Z$ just shot up 34% in a week...

US$ 1 = Z$ 88,270,000 (OMIR rate)....

I was joking about being a 'trillionaire'... well... it might be sooner than I thought!

How does Bill Gates calculate his wealth in Z$.... can Excel display the figures?

Bloggers pissed off at bloated cabinet...

Cartoon courtesy of The Standard


Well... The Standard headlines were "Bloggers fury over the new cabinet".

M of "Thinker's Room" has done it again!

Why bloggers are pissed off:

1) State overdraws at CBK. This means higher interest rates or inflation!
2) Overlapping & nonsensical ministries created for solely political reasons.
3) Politicians are frittering our money away. moses wetangula - I gave him a C - said this "Government would only spend an additional 10 per cent of its revenue".
4) Unnecessary spending on new cars, offices & palatial residences while Kenyans starve & IDPs are ignored.
5)Continued insecurity. The mungiki are causing havoc & saitoti - an F from me - can do nothing.
6) More scandals to come when the crooks behind goldenberg merged with those behind anglo-fleecing. Of course, there are thugs like fred gumo as well.


BTW, at least Balala seems a good choice - well the hoteliers think so. I gave him an A.

Is Mungiki related to PNU?

Why is it that the gov't can't stop Mungiki?

Since PNU (& its 'owners') has control of the gov't with george saitoti as the minister for internal security... why is it that no-one does anything about the mungiki?

The chaps in Kisumu & RV were killed by the police. The police spokeman called a news clip a 'rambo-like movie'. Why can't they use live bullets against the mungiki? Or is it the police cannot touch the mungiki?

14 deaths - in just one night - and counting...
Is there a parallel government?

What is saitoti doing, if anything?

List of Cabinet Ministers + my grades!

My comments in RED.
I have little info on most of these guys & gals. Please feel free to add more on or about them.
With my limited knowledge about these folk I will grade those I know from a scale of A-D. The there is F which means an utterly pathetic decision or choice. Note that the grade will also reflect their suitability for the position.

Musalia Mudavadi: Deputy Prime Minister and Local Government

B+

I think he did a decent job as Fiunance Minister but I was disappointed when he capitulated to kanu (& moi) in exchnage for the VP post which lost him credibility.

Wycliffe Musalia Mudavadi was born on September 21, 1960 in Sabatia, Vihiga District. He ventured into politics in 1989 following the death of his father, Mr Moses Budamba Mudavadi. Upon his election, President Moi appointed him minister for Supplies and Marketing. He has gone down in Kenya’s history as the shortest serving Vice-President after Moi appointed him only weeks to the 2002 General Elections.

Uhuru Kenyatta: Deputy PM

D+

His showing as Minister for Local govt was pathetic. His interpretation of rules when appointing/nominating councilors was worse. He thinks he is his father but this is a different country. Rewarded for his support of kibz for abdicating his position as the leader of the official opposition.

Son of jomo 'land grabbing kenyatta'. Many thought he was fresh face but he is his father's son.

KIRAITU MURUNGI: ENERGY

The South Imenti MP holds a Masters degree in Law from Harvard University and a similar one from the University of Nairobi. When the Narc government took over in 2002, Mr Murungi was appointed to the Ministry of Justice and Constitutional Affairs. He was moved to the Energy ministry, which he has retained in 2005, upon replacement at the Justice ministry by Ms Martha Karua. Mr Murungi has also served as a shadow Attorney -General from 1998 to 2000.

JOHN MICHUKI: ENVIRONMENT and NATURAL RESOURCES

B

I would have given an A if he was in the Roads ministry.

Why was he moved from the Ministry of roads. He was a go-getter who got things done. Remember when he, while in Transport & Communications, clamped on the Ma3s in Nairobi?

He was born in 1932 in Murang’a District. He joined the government service after his ‘O’ level examinations, and was appointed to the Provincial Administration as a clerk in 1957. He was then promoted to the position of district officer in 1961.

The Kangema MP who studied administration in Oxford, has served in the ministries of Transport and Communications, Provincial Administration and Internal Security and that of Roads.

AMOS KIMUNYA: FINANCE

A -

The 'minus' is for making unrealistic predictions about economic growth in Jan 2008. I hope he remains a reformist.

I don't like it when he pandered to politics & mobitelea otherwise he does a decent job when he is not dabbling in politics. Keep out of silly politics and folks will respect him.

The MP for Kipipiri in Nyandarua District, Mr Kimunya was born in 1962. He graduated from the University of Nairobi with a Bachelor’s degree in commerce and accounting. Appointed the Finance ministry following a Cabinet reshuffle in 2006, replacing former minister David Mwiraria. Mr Kimunya has previously been the Minister for Lands.

MOHAMED YUSUF HAJI: DEFENCE

He was born in Garissa District in North Eastern province on 1940. He is the current Ijara MP on Kanu ticket. After completing the East Africa Certificate of Education (EACE), he joined the Provincial Administration as a District Officer and rose to the position of Provincial Commissioner between 1970 and 1997. He first joined Parliament as a Nominated Member in 1998 and was later elected in 2002 and last year on a Kanu ticket. He was appointed the Minister of State for Defence in January 2008.

JOHN MUNYES KIYONGA: LABOUR

Born in 1966, Mr Munyes attended Lokitaung primary school and Lodwar High School for his Ordinary Level and Advanced Level education. He was first elected to Parliament in 2002 on a Narc ticket after which in 2003, he was appointed an assistant minister in the Ministry of Water and Irrigation. Two years later, Mr Munyes was promoted as minister of State for Special Programmes in the Office of the President. In January, he was appointed minister for Water and Irrigation.

GEORGE SAITOTI: PROVINCIAL ADMINISTRATION AND INTERNAL SECURITY

F

I have no kind words for him. Perhaps I will give him an F-

Crook, scamster, corrupt & overall pathetic. Turn to lead whatever he touches. A bad move. He was part of all major scams including goldenberg & anglo-fleecing.

When Narc came to power in 2002, Prof Saitoti was appointed the minister for Education. In 2008, the Kajiado North MP, was named to the powerful ministry of Internal Security and Provincial Administration.

He holds a Bachelor of Arts, Master of Science and PhD in Mathematics, from University of Brandeist (USA), Sussex, Brighton and Warwick University, England respectively. He joined the University of Nairobi as a lecturer in 1972 where he rose to be the chairman of Mathematics Department before he was nominated as a Member of Parliament and minister for Finance in 1983.

He was appointed Vice-President and Minister for Finance in 1989. He has also previously served as the Vice-President and Minister for Planning and National Development after the 1992 General Election.

In 1997, he won the same seat and was appointed minister for Planning and Development without the VP, but in 1999 he was re-appointed VP. He was moved to the Ministry for Home Affairs, still in his capacity as VP.

After the 2002 General Election, he retained his seat and was appointed minister for Education, Science and Technology.

CHIRAU MWAKWERE: TRANSPORT

C -

I hope he uses his 'learning' to further the transport sector but...

Another lousy minister. He runs a ministry where he has a major conflict of interest. He has admitted to owning matatus so he is NOT interested in regulation or safety standard in the industry. He needs to rid himself of conflicts.

The MP for Matuga constituency was born in 1945 at Golini, Kwale District. He first trained as teacher at Kenyatta College, now Kenyatta University between 1964 to 1966 before proceeding to the University of Birmingham, United Kingdom and later to the University of Reading.

He obtained a Master Trainer from the University of Connecticut, USA and a Master of Science in Maritime Studies and International, Transport from the University of Wales in Cardiff in 1982 and 1986 respectively.

Before joining politics in 2002, he had previously served as an ambassador to Harare and accredited to Mozambique, Swaziland and Lesotho. He has also been a principal at Bandari College. From January to June 2003, he was appointed an assistant minister in the Ministry of Foreign Affairs and from June 2003 to June 2004, the minister for Labour and Human Resource Development.

DR NOAH WEKESA: FORESTRY AND WILDLIFE

I have no idea but should't he have been in charge of the Ministry of Livestock?

He was born on August 21, 1936, in Western Province. He holds a Bachelor of Veterinary Medicine and Surgery (BVMS) from Edinburgh University in Scotland, Royal (Dick) School of Veterinary Medicine and is a Member of Royal College of Veterinary and Surgeon, (H.SC) in Makerere University College.

Dr Wekesa has been a divisional veterinary officer in Ol Kalou, South Nyanza and Kisii districts and served as the provincial veterinary officer in Nyanza Province. In the political arena, Dr Wekesa was elected MP for Kwanza constituency in 1988. In 1997, he was the presidential campaign manager of former Vice-President Michael Wamalwa.

MOSES WETANGULA: FOREIGN AFFAIRS

C

Another poor chice. We need someone urbane. I would have liked James Orengo for this post. Of course, PNU wanted their guy here but there are much better choices then wetangula.

He was born on September 13, 1956 in Western Kenya. He holds a Bachelor of Law (LLB) Honours from the University of Nairobi and a Diploma in Legal Studies. He has been an MP for Sirisia since 1993.

He was previously as an assistant minister for International Affairs in the Ministry of Foreign Affairs and became a minister when the half Cabinet was named.

SAMUEL LOSURUN POGHISIO: INFORMATION AND COMMUNICATION

C-

Great. Put an idiot in charge of Information & Communications. The idiot has no idea about where a vibrant communications sector can take us. This is a villager who got lucky.

The MP for Kacheliba first entered Parliament in 1988 and has never lost his seat since then. A former lecturer, the MP was named the minister for Information and Communication when President Kibaki appointed half the Cabinet in January.

DR NAOMI SHABAN: SPECIAL PROGRAMMES

She was born in 1963. A dentist by profession, Dr Shaban was first elected to Parliament in 2002 and was Kanu’s shadow minister for Tourism. She was appointed the minister for Special Programmes after recapturing the Taveta seat.

She has been busy handling the crisis of the internal refugees. She served as senior dental officer in Kajiado District until 1995 when she went into private practice.

PROF SAM ONGERI : EDUCATION

The Nyaribari Masaba MP was re-elected to Parliament in 2007 after losing the seat in 2002 General Election to his perennial rival Dr Hezron Manduku. He has previously served at the minister for Health.

DALMAS OTIENO: PUBLIC SERVICE

He is the MP for Rongo and a former Cabinet minister in the Moi regime.

He bounced back to Parliament after he defeated former MP Ochillo Ayacko in last year’s General Election. Ever since he lost his seat in 1992, Mr Otieno has unsuccessfully tried to recapture the Rongo seat.

His poor choice of party was largely to blame for this. He was for a long time one of the staunch Kanu supporters in Nyanza Province, which was largely considered an opposition zone. But in the run up to last year’s General Election, he radically shifted allegiance to support Mr Raila Odinga and ODM. He is a banker by profession and was drafted into Mr Odinga’s think tank at the party’s headquarters.

JAMES ORENGO: LANDS

A-

I hope he cleans up the mess called Lands in Kenya. Smart guy who should radically change the way land is bough, sold & transferred in Kenya. But does he have what it takes to go after the grabbed land starting with kenyatta?

James Orengo won the Ugenya parliamentary seat in last year’s elections on an ODM ticket. He had been in the cold since the 2002 elections after losing the seat to Archbishop Stephen Ondiek.

Mr Orengo, a lawyer by profession, is also a former presidential candidate. He vied for the 2002 elections in an SDP ticket and lost to President Mwai Kibaki, the eventual winner. He is law graduate of the University of Nairobi.

Mr Orengo is well known for his fight against unjust rule. He has spent a good number of years in detention over his crusade for democracy. Orengo was among the Young Turks who brought about the what can be considered as the second liberation, when he, Michael Wamalwa Kijana, Kiraitu Murungi, Paul Muite and old guard like Jaramogi Oginga Odinga, Masinde Muliro and Martin Shikuku formed the formidable Forum for the Restoration of Democracy, a vehicle that nearly pushed KANU out of power.

PROF ANYANG’ NYONG’O: MEDICAL SERVICES

B

By the time he finishes his speech, the patients will have been buried or is he deliberate in what he says? He is a smart guy but his weird pronouncements worry me. why don't we have a health professional or an administration guy here?

He is the Kisumu Rural MP and former minister for Planning and National Development in the Narc regime.

Born in 1945, the political scientist was first elected to Parliament in 1992 . But in 1997, he backed Mrs Charity Ngilu for the presidency in what many said undermined Mr Odinga’s supremacy in Nyanza Province.

He subsequently lost his seat to Mr Ochoro Ayoki but was nominated by SDP. In 2002, Prof Nyong’o teamed up once again with Mr Odinga and have since been bosom allies. He is the current secretary-general of the Orange Democratic Movement party.

OTIENO KAJWANG’: IMMIGRATION AND REGISTRATION OF PERSONS

Born in 1956, the Mbita MP was first elected to Parliament in 1997 on a National Development Party ticket. Mr Kajwang, of the ‘Bado Mapambano’ fame is also considered a staunch supporter of ODM leader Mr Raila Odinga.

He has Law degree from Makerere University in 1982. In Parliament, he has served in the Standing Orders and Public Investments committees. He was also a member of the select committee on the Review of the Constitution, Select Committee on the Death of Robert J. Ouko and Select Committee on the Death of A.W.Ndilinge.

CHARITY NGILU: WATER AND IRRIGATION

B+

Fesity. Considering she represents one of Kenya's driest areas, I hope she makes a difference.

She is one of the renowned political heavy weights in Kenya’s politics. She was first elected to Parliament in 1992 on a Democratic Party of Kenya ticket. She then left the party and joined Social Democratic Party (SDP).

Mrs Ngilu became the SDP’s presidential candidate in the 1997 elections where she came fourth. In 2002, she was among the leaders who formed Narc. She became the party’s chairperson and President Kibaki appointed her as Health minister in his first Cabinet.

In the lead to last year’s General Election, Mrs Ngilu was dropped from the Cabinet after she threw her weight behind Mr Raila Odinga of ODM in the presidential race. He, however, won her Kitui Central seat on Narc ticket.

NAJIB BALALA: TOURISM

A; Almost perfect. He is from the Coast. He knows how important tourism is for Kenya & more so for the Coastals. He should move to make the Coast safer by cracking down on crime & drug smuggling. Of course, he needs the help of the Police & Internal Security. Well, good luck with that!

He is an ODM Pentagon member. He was born on September 20, 1967 in Mombasa. He schooled at a local primary education from Serani Boys before going to Kakamega High.

He later joined the University of Toronto and the John F Kennedy School of Government at Harvard from where he acquired an international education background in Business Administration, International Urban Management and Leadership from.

The MP for Mvita joined politics in 1998 when he was nominated as a councillor within the Municipal Council of Mombasa. He was subsequently elected as Mayor of the Council.

WILLIAM OLE NTIMAMA: NATIONAL HERITAGE AND CULTURE

C; Past his "appointed by" date. The guy needs to retire or die. Its a pity he is still in a gov't that really needs new/fresh untainted blood.

The veteran politician is one of the longest serving MPs in Parliament. He was first elected in 1983 when he trounced a former Kanu national treasurer the late Justice ole Tipis. During his stint in Parliament, Mr Ntimama has always been a member of the Cabinet apart from the period between 2005 and 2007 when he was discharged from his ministerial post, alongside other LDP ministers, after the defeat of the proposed Constitution during the 2005 referendum.

MUTULA KILONZO: NAIROBI METROPOLITAN

C; What the *ff is this ministry? kilonzo is a gun for hire. He was kanu's lawyer when kanu was stomping on the wananchi. A pity he got in as MP. Even worse that he is in gov't but apart from a car & benefits there is little for him to do.

Mr Kilonzo first entered parliament in 2002 after he was nominated by Kanu, which was his party by then. He had also acted as the party’s lawyer for a longtime. Mr Kilonzo came to emerge as one of the outspoken and brilliant MPs while in the opposition.

He was one of the prominent politicians in ODM before it split. Mr Kilonzo joined ODM Kenya led Kalonzo Musyoka and became one of the big names in the party. During the elections, he easily won the elections on the party’s ticket. President Kibaki appointed him as one of the Government negotiators during the Kofi Annan-led peace talks.

CHRIS OBURE: PUBLIC WORKS

B- ; He did a decent job as Finance Minister. The ministry is superfluous but I hope he can make something of it since he is versed with contracts & finance.

Has represented Bobasi constituency at intervals. Remarkable was between 1983 and 1992, a period during which he served as an assistant minister. Born in 1943, Obure is an alma mater of the University of Nairobi from where he graduated with a Bachelor of Commerce degree in 1968. He also undertook several professional studies that saw him become a member of the Chartered Institute of Secretaries and Administrators (CISA).

He later worked with Kenya Breweries as a company secretary and director. Earlier Obure was the company secretary for Bata Shoe Company. He was a prolific footballer with Gor Mahia and Kenya Breweries football clubs.

He had the foundation of his political career at the university where he was the student union’s vice-president in charge of campus affairs. He ventured into national politics in 1969 when he contested but lost the then Majoge-Bassi seat.

He again lost in 1973 won in 1983. He became a casualty of the multi-party elections of 1992, losing to Stephen Manoti who he defeated in the 1997 General Election. Obure has served as Minister for Agriculture, Foreign Affairs and later as Finance minister.

DR MOHAMMED KUTI: LIVESTOCK DEVELOPMENT

He was in the last Cabinet but President Kibaki did not re-appoint him when he named his 17-member Cabinet in January. Dr Kuti, who is a medical doctor, was first elected to Parliament in 2002 on a Kanu ticket.

He was then appointed to the Cabinet in 2005 when President Kibaki formed the Government of National Unity that incorporated Kanu and Ford People into the then Narc coalition Government. And he later left Kanu to join Narc Kenya. Dr Kuti was re-elected on a Narc Kenya ticket.

PROF HELLEN JEPKEMOI SAMBILI: YOUTH AND SPORTS

A former lecturer of Egerton University, Prof Sambili surprised many when she captured the Mogotio parliamentary seat on a ticket of little known United Democratic Movement (UDM) party.

It was her first time into politics and went to pull another shocker by becoming the first woman to be elected by the Tugen community. Born 1950, Prof Sambili was the Director of International Linkages and Study Abroad at Egerton University before running for the seat.

MOHAMMED ELMI: DEVELOPMENT OF NORTHERN KENYA AND OTHER ARID LANDS

B+ ; I am not enthusiastic about the ministry. couldn't it be a department? At least the guy understands the problems faced there. well, good luck!

The Wajir East MP was elected for the first time to Parliament in the last General Election. The MP was born in 1950 and was the Regional Programme Manager of Oxfam before joining politics. In 2004, Mr Elmi was honoured by Queen Elizabeth for his contributions.

BETH MUGO: PUBLIC HEALTH AND SANITATION.

D ; I don't have much faith in her abilities. She is a political survivor rather than much else. A pity she is an MP let alone a minister. The idiot wante to excise land from Lenana School on some fake pretext but intended to 'allocate the land to herself & cronies.

Mrs Mugo has represented Dagoretti constituency since 1997 when she trounced the then seasoned Chris Kamuyu to clinch the seat on a Social Democratic Party (SDP) ticket.

She repeated the feat in 2002 when she resisted the temptation to back her first cousin and then Kanu presidential candidate Uhuru Kenyatta and stick with Narc and easily retained the seat. Previously, she served as assistant minister for Basic Education.

ESTHER MURUGI MATHENGE: GENDER AND CHILDREN AFFAIRS

Won in Nyeri town to romp into the 10th Parliament. She first contested the Nyeri Town parliamentary seat in 2002 but lost during nominations to the former MP P.G. Muriithi. She earned her revenge five years later, trouncing Mr Muriithi at the Party of National Unity (PNU) nominations.

DR PAUL OTUOMA: FISHERIES DEVELOPMENT

I do not know much about him but his credentials seem importnant for the job. I think it's silly to have an entire ministry for 'fishing'. There are many more deserving sub-sectors in agriculture e.g. tea or coffee. In any case, I think this was a ministry designed for political reasons!

Dr Otuoma, 41, is the Funyula MP. He trounced the Vice-President and long-serving area MP Moody Awori in the last General Election. The minister was born at Sio Port village in Samia South. He was a pupil at Khalsa Primary School in Nairobi between 1974-1980 and later joined Eastleigh High School for his O level and Nairobi School for A level.

Between 1987-199, he was at the University of Nairobi where he studied Bachelor of Veterinary Medicine. He also holds a masters degree in Business Administration.

Between 1992 and 1993, he worked with ICRC in Somalia before he quit to join Bayer Africa where he was posted to Johannesburg South Africa as a manager in 1997. He resigned in 2003 to engage in private business.

JEFFAH AMASON KINGI: EAST AFRICAN COMMUNITY.

He is the MP for Magarini on an ODM ticket. A lawyer by profession, Mr Kingi tried and lost vying the Magarini seat in 2002 and a by-election later after the High Court nullified the election of Mr Harrison Kombe.

WYCLIFFE AMBETSA OPARANYA: PLANNING, NATIONAL DEVELOPMENT AND VISION 2030:

All I can ask is... what the F**K????

Mr Oparanya was first elected into Parliament in 2002 on a Narc ticket as the MP for Butere. He successfully vied for the Butere seat in the last General Election on an ODM ticket. Born in 1956, the minister served in the Parliamentary Investment Committee and the Departmental Committee on Finance and Trade.

Joseph Nyagah: Co-operative Development

Lucky guy. He has no standing among GEMA politicians but lucked out as part of ODM's pentagon.

ODM Pentagon member, Mr Joseph Nyagah has a Masters degree in Business Administration. Nyagah served as Kenya’s ambassador to the European Union. He captured the Gachoka seat in 1997 and was appointed Information and Broadcasting minister in the Kanu Government. In last year’s election, Nyagah lost the Gachoka seat to PNU’s Rev Mutava Musyimi. ODM has nominated him to Parliament.

William Ruto: Agriculture

B+ ; Power is what Ruto has. He delivered Rift valley to ODM. he could have been the Deputy PM if he wanted to. A powerful ministry considering Kenya remains an agricultural economy. The B+ is for his unsavoury dealings in YK'92.

Eldoret North MP, Mr William Ruto was born in Uasin Gishu District in 1966. Ruto graduated in 1990 with a BSc Degree Botany and Zoology. He was first elected to Parliament in 1997 on a Kanu ticket. Ruto served in the Cabinet for a few months before Narc trounced Kanu in the 1997 elections. Ruto later joined ODM where he was a menber of the Pentagon team.

Fred Gumo Regional Development Authorities

F ; Warmonger & absolutely selfish. Pity he made it in as MP. As a minister, the scandals from his office will be many. ODM made a big mistake. gumo should have been shunted aside.

Westlands MP, Mr Fred Gumo, once served as Assistant minister in the Office of the President. He started his political career in 1974, when he was elected a councilor in Kitale. He became Kitale Mayor in 1976. In 1979, he was elected MP for Kitale. His second term was cut short by a successful petition against him by the late Masinde Muliro. Former President Daniel Moi appointed him chairman of the City Commission in 1989.

Sally Kosgei Higher Education, Science and Technology

DR Sally Kosgei occupied the top position of Head of Civil Service and Secretary to the Cabinet under Presidents Moi and Kibaki. She was born in 1949. Kosgei went to Aldai Girls Primary School, Alliance Girls High School, The University of Dar es Salaam and then Stanford University in the US. She first taught at the University of Nairobi before moving to the Ministry of Foreign Affairs. Kosgei served as the Kenyan High Commissioner to the UK.

42 Ministers + prez + pm + 2 deputy pms = too many leeches.

Yes, expect higher taxes as Kenya has a cabinet of 46 members. Then there is muthuara & wako. No wonder we remain a 3rd world country. And we will for many more years!

Oh, then there are 50 asst ministers! And at least 50 Permanent Secretaries!
At this rate, Kenya won't join the ranks of the developed countries until the year 2100... I will be long dead by then!

Here is the list...

I think they should have left Michuki in Roads. He is a go-getter. What is he going to do in Environment?

Again - Apple TV is not GTV

When will the Business Daily learn?
Where are their journalistic ethics?
Or does no-one at BD research before they publish?

I think Apple should sue BD for misrepresenting their product.

Kenyans sing the Indian National Anthem

Coldtusker declared a Billionaire

oIts official... coldtusker is a BILLIONAIRE.... Heck, he might be a TRILLIONAIRE... by the time you read this...

The ZIM$ went from $50mn:US$1 to $60mn:US$1 in 2 days!

Anyway... KShs 1 will get you (almost) Z$1,000,000

So... a KShs 1,000 = Z$1,000,000,000 (1 billion!!!). I don't even bother about a million... Chump change...

I am Movin' on up!

P.S. The American (short scale) version of the billion is being used.

Tanzanians screwed by Bank of Tanzania!

Tanzanians are being screwed by their own Central Bank (Bank of Tanzania) regarding the SafCon IPO... What a pity but more shares for Kenyans!

Heads up from Bankelele.

Well... Ugandans are far luckier!

sam ' I can't count' kivuitu at it. Again.

It's bad enough the idiot won't resign but he just won't shut up!

Chairman Samuel Kivuitu Wednesday said reports that ECK would be appearing before the Kriegler commission as the principal subject of the investigation were “intended to mislead the public and destroy the commission’s credibility.”

What credibility? It was shredded to bits after the 2007 elections!

CMA wants to kill of Venture Capital Funds

New laws threaten edge of venture capital firms

Written by Steve Mbogo (Business Daily)

April 10, 2008: My comments in RED New rules meant to guide the operation of venture capital firms have introduced high taxation and restrictions on investments that players say may threaten the sector’s survival. The rules are meant to regulate the venture capitalists — who take stakes in start ups and midsized firms and exit as the businesses near maturity — who have shown unprecedented interest in the Kenyan market over the last two years. The sector is now raising a red flag over a taxation regime that it says makes resident venture capital funds uncompetitive at the global level. This has seen some firms opt for other countries like Mauritius where the taxation is more favourable. I have blogged how Mauritius is diversifying its economy using brains... while Kenya... oh, well... Administration costs are also high as venture capitalists will now be required to have a contracted fund manager to oversee and allocate the investments of the venture capitalist. How does a small VC fund - managing KShs 100mn - afford a Fund Manager? Many VC funds start off much smaller. Peter Njoka, a partner at Aureos Kenya Managers which manages a venture capital company known as Acacia Fund, said such a manager is paid a management fee plus value added tax (VAT), yet the funds do not have any “vatable” services to sell. “The fund absorbs all the VAT of 16 per cent which eats into its resources and increases the cost of doing business here,” said Mr Njoka. He however said the new rules would help the industry grow to international standards faster. The industry might die or is left to the big boys. Warren Buffet does say that if he was born anywhere but the USA at the time he was born... he might have not been as successful! I can guarantee he would not have succeeded in Kenya with its arcane laws, corrupt judicial system, corrupt & incompetent politicians, the selfish NSE & incompetent CMA! The new Registered Venture Capital Companies Regulations (2007) define the principal objective of venture funds as provision of risk capital to small and medium size businesses in Kenya. The regulations however give venture funds flexibility in determining the kind of companies they invest in. They require the fund to have a minimum paid up share capital of Sh100 million shillings and proven history in operating such a fund. How the hell does a newly established fund have an operating history? The problem is the CMA is full of 'career civil servants' who do nothing better than do nothing! Get serious... Unless you invite foreign VCs how do yo expand the industry since there are only (officially) 9 VC funds. So this means no new local VC funds? Daniel Muchika of InvesteQ Capital says the regulations automatically lock out start up venture capital funds by demanding that eligible applicants produce audited statements for at least three years. Go figure... Are these guys born as idiots or did they learn to be idiots? For a venture capital fund to be registered, it must present the CMA with its preferred mode of divestiture from eligible venture capital enterprises, including details of risk factors that are specific to the chosen investment sectors, or sectors intended to be invested in. The company must also present a bank reference from a commercial bank. Erm, so if a VC fund is putting its own money into the ventures i.e. not borrowing... why do they need a bank reference? If the bank is lending to the VC then let the bank do its own due diligence! The regulations restrict venture capital funds from trading in real property; banking and financial services; and retail and wholesale trading services as their primary businesses. What is this idiocy? Why not let the VC funds do what they like! They are in business to make money! Real property could benefit from VC funds! “This means that venture funds have narrower options of investments. It means that venture funds have to scout for ideas that promise quite high return on investments, usually of at least 25 per cent per annum to compensate for this,” said Mr Muchika. So the CMA is raising the cost to the investees. An investee needs to provide 25% p.a. return to get funds from a VC fund. Let the VC fund decide what they want to make. Open the market to VC funds! Currently, there are nine private equity funds operating in the market, five with a combined capital base of over Sh4.9 billion have targeted SMEs in East Africa. But a 10th fund known as East Africa Development Bank Venture Capital Fund worth Sh2.6 billion will make an entry into the local market later this year. Others include Business Partners International Limited (BPI) launched in February last year, Grofin East Africa launched in mid-2005, Acumen Fund, InvesteQ Capital Limited and African Agricultural Capital that focuses on agriculture related businesses. The funds should also preserve transaction records for at least seven years and to verify the sources of their funds as well as investments to ensure they are not used as a conduit for funds sourced from criminal activities including money laundering and corruption. In this respect the regulations are seen as porous.

The "not so good" happenings in Kenya...

There is good stuff happening in Kenya but the bad overshadows the good... I know we can turn the corner but we need accountability from politicians & public officials. Wananchi lack the means to challenge silly rules, laws or regulations. We are taken for granted.

Water cost to rise coz of a tax on water! We have no say. I don't mind the tax if I knew a) what the money was used for b) if the money was used effectively.

Increased cost of electricity. KenGen will eventually raise its rates to KPLC which will in turn bill consumers. KPLC has to deal with vandalism that increases the cost for the rest of us. KPLC is not allowed to adequately protect itself & our police are not motivated since KPLC does not bribe them!

Where is NEMA when a lead smelter is being built in the middle of Nakuru? Where are the safeguards? Why does NEMA not provide information to the public? I don't mind the investment but will the benefits outweigh the risks? Are the chinese investors in Kenya for the long haul? While we are it, it is suspected that lead poisoning was the cause of death of 3,000 waterbucks at the L.Nakuru national Park. Sigh...

Where are kimunya, murungi & kibz who have been trumpeting the elusive benefits of 'chinese assistance'? The chinese got the oil exploration blocks they wanted then turned around & told Kenya to shove off... The loan of KShs 5.3bn has been reduced to KShs 2.2bn. Oh, I expect the chinese will insist that the materials, trucks & labour be imported from china!

kibz speech read in absentia in India highlights why he should have gone for the India-Africa Summit with some tough negotiators ( e.g. martha karua) to help ease Kenyan exports to India. Instead he (& karua's) are in Nairobi...

Venture Capital funds are renowned for their flexibility but the idiots at the CMA want to shackle them! How does a new VC firm provide 3 years of audited annual reports? Furthermore, I can understand protecting investors but the minimum capital requirements for VC funds is too high!

Mobitelea... need I say more... dan 'thieving' moi has been uncharacteristically quiet. Maybe he is counting his stolen safaricom/mobitelea earnings?

While politicians dither - but earn undeserved salaries - the ordinary Kenyan pays the price. Mortgage rates expected to rise since title deeds hold no value in many clash-prone areas. This will lead to a slowdown in economic activity where it is needed most!

Well... it turns out that SafCon (erm, I call it SafCon in my postings for a reason) might be lying to us... well, ooh lah lah... there is mobitelea... now it turns out that their definition of 'subscribers' includes inactive subscribers... Celtel has 2.1 'active' subscribers based on a 'chargeable' even in the past 3 months. So how many 'active' subscribers does SafCon really have?

The real subscriber base differential between Celtel & Safaricom might not be as high as we were led to believe. Celtel has a better quality network & attracts more business users with a much higher ARPU.

Revelation that the 9.2 million subscriber base includes active and inactive clients turns this figure into a reflection of the total number of people who have ever owned a Safaricom line since it was founded seven years ago. “Celtel has maintained its grip on the high revenue post-paid customers since its launch. That means it could have a high migratory flock of pre-paid users who join to enjoy cheaper tariffs,” said the analyst. He said the company makes its money from a stable number of post-paid, high grossing customers.

Lower those brokerage fees!

Finally the CMA is damning the high brokerage fees that allow lousy brokers to survive!

Some broker give inane reasons... that the broker fees help 'grow the market'... more like grow their profits for lousy inefficient service!

Itslong overdue for Kenyan brokers to embrace flat fees. Its long overdue for Kenya to have a 2nd stock exchange modeled on the all-electronic NASDAQ.

The NSE charges horrendous fees for having firms listed! You should eliminate the fees so more firms list! Brokers - who own the NSE - should make money off trades not listing fees!

India Grows Up...

Unlike some commentators on KenyanEntrepreneur, I believe Kenya has a lot to gain from closer economic ties with India. The racist tone overpowers any sensible discussion.

Anyway, kibz missed a great opportunity to visit with African & Indian leaders in India during the ongoing India-Africa Forum Summit which is meant to mimic the Africa-China Summit. Sometimes it these meetings that enhance cooperation between countries.

India remains a 3rd world country but world-class in IT & engineering. It provided advanced manufacturing & engineering to Boeing. Even GM, Ford & Airbus use software & design firms in India.

Yet Indian technology is better suited for Africa than (most) European, American or Far-east Asian technology since India shares common attributes with most of sub-Saharan Africa. They have a large poor population, huge population crammed into cities/slums, large base of small-scale/subsistence farmers.

Since India is facing labour shortages in IT, what better way for all to benefit than outsource some BPO work to Kenya? This in turn will lead to work higher up on the ladder.

Indian firms are heavily involved in construction work in the Middle East. Hopefully, Africa - & Kenya - can provide expertise or labour to these firms. The conditions the workers face are not ideal but at least they are real jobs. Kenya needs the remittances.

bob ' the murderer' mugabe tries populism again...

mugabe lost the election in spite of his attempts to rig them, so he hits back at the White farmers to deflect attention from the 'delayed' announcement of the election results.

Apparently, most White farmers bought the land post-independence so were not complicit in the land grabbing by the Brits but they make convenient scapegoats. Reminds me of dan 'thieving' moi who blamed the Asians/Indians for all the ills the country faced while it was him & his cronies who were really behind the scams & violence that rocked Kenya.

BTW, Zimbabwe now imports maize since the idiotic cronies of mugabe who got/stole the land can't farm it!

All major scams in Kenya have political support from kenyatta's land grabbing to goldenberg & now anglo-fleecing. How could such scams take place without kenyatta, moi & kibz knowing of them?

KPLC - Change the law!

We need to think out of the box to prevent crime. I say let's allow KPLC to 'electrify' the transformers so the crooks can get a nasty shock even if its lethal!

Currently, KPLC is not allowed to electrify the transformers... which emboldens thieves. I say... we should change the law!

Kenya's economy suffers major hit

Finance minister, amos kimunya, predicts 4% growth. This is in sharp contrast to 7% he predicted in the midst of the clashes in Jan 2008. vs 7% earlier.

kibaki did an excellent job earlier by reducing barriers to economic development during 2002-3. Politically, it is a different story. Economically (& politically) Kenya could become another Zimbabwe.

Due to the political crisis - partly of kibz own making - kibz will skip the important India-Africa trade conference. I believe India is the model African countries need to emulate. India is a large democratic country with diverse cultures, languages, political views & peoples. It was a British colony until 1947 & has or been through all sorts of problems that Africa faces, faced & will face. I think kibz should go to India. It is vital for us as a nation to learn how to improve ourselves.

India has a homegrown (efficient) rail system that Kenya can learn from. Kenya needs to improve its railways. Soon.

India has a robust telecommunications system - compared to other developing nations - by using homegrown technology. Sam Pitroda was one of the architects of the system. Of course, Kenya's thieves-in-charge gave up control of Safaricom to Vodaphone in exchange for a bribe.

Another story of new Indian investment in Kenya. Also an interesting side story on how they are encouraging the growth of Kenyan football.

Kenya needs to negotiate with the Indians & Chinese to secure its position in the supply chain for Tea. Kenya -the world's 2nd largest exporter- faces aggressive Indian, Sri Lankan & Chinese competition in the export market. Tata Tea bought out Tetleys & Kenya must ensure its are not locked out of the UK market.

Kenya needs to get serious. We have a decent port that whose throughput can be doubled - damn the politics - in 5 years. We can expand & improve the railway - a god start with its privatisation - to lower transport costs. We need an airport to handle 10mn passengers by 2010 to accommodate KQ (4mn passengers) among other airlines.

We need severe penalties for breaking laws - and enforcement - that protect businesses from theft, destruction & fraud. We need a powerful ombudsman who can protect Kenyans against powerful government functionaries & politicians.

Instead all we do is related to politics, politics & politics!

Kenyan politicians killing the Golden Goose...

Nyanza province is among Kenya's poorest regions. Yet an American investor who has converted part of the area into a series of financially viable projects is being hounded courtesy of corrupt politicians. What a pity!

How will Kenya attract the Capital (FDI & local investments) it needs with this behavior?

Kenya should be increasing its ability to feed itself with worldwide grain shortages. We need strong laws & enforcement against corruption. I say we should hang the corrupt councilors. We need to learn from Singapore that metes out severe penalties for corruption.

I do not support subsidies but we have to provide incentives e.g. better roads, zero corruption, open markets & lower taxes to encourage production.

Where are Kenyan gov't honchos who should be aiding Kenyans do business in Sudan?
On the other hand, the Indian gov't is aggressively helping Indian firms establish themselves in Africa.

Kenya will waste money on silly cabinet inaugurations. I am disappointed how raila has capitulated to the trappings of power. They should be spending the money selling Kenya to investors & tourists!

Instead of supporting the "Grown Under The Sun" campaign that will provide more jobs to our farmers, exporters, KQ & myriad other folks... the Kenya govt is NOT sufficiently funding the campaign but funding the purchase of new cars & crap for the new ministers!

New Cabinet Lineup...

Here they are...

An alternate link with names...

Great cartoon that hits the nail on the head...

Kenya's New Cabinet is neither Lean nor Clean...

(Huge) Sigh... the 40 ministers is NOT a LEAN cabinet... maybe (just painfully laughing myself to sleep) it will be clean...

Put in perspective... I estimate KShs 4bn will be needed to fund the lifestyles & salaries of 1 prez, 1 VP, 1 PM, 2 deputy PMs, 40 ministers, 80 asst ministers and all the razzmatazz (chase cars, houses, allowances, travel, security) that goes with their positions...

The sale of 25% of Safaricom will raise KShs 50-55bn... If the money was invested in 1 yr T-Bills the interest (8%) would just cover the above costs!!! No wonder there are no more complaints from either party about selling Safaricom's shares!

In the meantime, Kenyans pay:

• 50%+ in taxes on petrol while the oil companies (8% percent gross margin) are blamed
• relatively high income (25-33%) taxes on low thresholds while MPs pay almost nothing
  
• 26% in taxes on airtime while MPs get 'free' airtime allowances
• high duties & taxes (approaching 100%) on cars while MPs get cars duty free
  
• taxes on benefits like housing & car allowances while MPs pay nothing
  

The MPs, prez & VP, PM & deputies are EXEMPT from many of these taxes!

For all the posturing... is there a LEADER among the elected politicians?

Sigh... I have said many times, we are cursed. We need a Guy Fawkes. We need a Lee Kuan Yew. We need LEADERS.

Another pathetic article from Business Daily

Kenyan newspapers need to improve on the quality of research, reporting, editing & presentation. The Business Daily is a premium financial paper which should be in the forefront of quality but fails on many occasions. This is just on of many examples of poor reporting. My comments & questions in RED. House of cards

Written by James Makau

Grapgic Illustration by: Conrad Karume April 3, 2008: Over the last three weeks, Kenyan banks have been trying to lure investors to borrow money from them to buy Safaricom shares. Some banks have even gone to the extent of analyzing the account activities of their customers and suggesting the amounts they would be entitled to with earnest letters promising growing riches backed by debt. This is not the first time that banks have done this with financially disastrous results that did not deliver quick riches. This is a poorly phrased sentence. If the results were 'financially disastrous' it is expected they would not deliver quick riches so why even bother mentioning it? Graphic with a 'c' is the correct spelling. And aren't illustrations graphic so why say its 'graphic illustration'. While the Central Bank remains silent to the issue of banks encouraging their customers to speculate on the stock market with loans underwritten with deposits, the law bars banks from doing the same using their own capital. In the US and UK, which represent one of the best developed markets, lending customers money to speculate on the stock exchange, which is also known as margin trading, is one of the most closely regulated aspects of the financial markets. Neither Nairobi Stock Exchange and Capital Markets Authority nor the Central Bank has guidelines on consumer margin trading. But as millions flock to the Nairobi Stock Exchange (NSE) to invest in Kenya’s biggest privatization deal, they have to decide whether their best option is to invest in shares using borrowed cash or using their hard-earned money. There is no doubt that using other peoples money to buy securities can produce fabulous profits and big investors do it all the time, however such share-trading strategies come with huge risks that the average investors can barely understand or control. In order for a small investor to make money on shares bought using bank loans, the economic conditions must be such that the price of this security appreciates significantly to cover the original cost invested, interest rates and other fees on the loans, brokerage commissions and most importantly, reduced purchasing power of the shilling caused by inflation. What has inflation do with anything here? You are comparing shares purchased using cash & loans so in both cases the effects of inflation remain constant. In the case of Safaricom, investors have blind faith that the company will continue reporting super profits. “There is no guarantee that the share price will rally so much as to cover a sizable portion of the loan one may take, largely due to the likely minimal allocation,” said Resa Imbuye, an investment analyst at Old Mutual Asset Managers. This is what happened with investors when KenGen and ScanGroup were brought to the market. In the case of KenGen, banks were offering customers loans that went to Sh1 million, however, when it emerged that the Government could not satisfy the demand for the shares the maximum allocation was fixed at 6,500, which worked out to Sh78 million. Wow, last time I checked the maximum allocation was NOT for Shs78 million. A simple mat error but very misleading! As the Government refunded Sh18 billion, thousands of investors found themselves with excess unplanned debt that had not been factored in their investment plans. For those who speculated in the stock market, it would turn out to be nightmarish as the NSE tumbled in the first quarter of 2007, losing a lot of money for most people. The debt was taken BEFORE the allocation & refunds thus it was 'planned'. All someone had to do was use the refund to pay down the loan. Of course, there was interest owed but this was nowhere near the original loan amount. I do not understand how the author links the refunds with unplanned debt to losing money in 1Q 2007. The only beneficiary of these transactions were brokers who got their commissions and commercials banks which continue to receive interest rates on this loans. As opportunities to lend investors evaporate, banks had found an easier way of entrapping investors with expensive loans. There is no trap. Do banks force them to take loans? Just as brokers don't force clients to buy shares, banks can't force you to take loans! To grasp the gravity of this entrapment, notice that while KenGen and Scangroup share price has doubled, their returns have not matched the interest rates going up to 20 per cent charged on the loans that were issued and inflation continues to gallop. OK... if the price of the shares have doubled (100%) in less than 2 years then why can't they keep up with 20% interest rates? I assume the refunds were used to pay down the loans. After all this was not a personal loan but a 'business' loan. Though Suntra Investment, one of the brokerage firms selling has rated Safaricom as a strong buy, it however warns that investors should be careful. “A word of caution is necessary. In view of the large number of retail investors that will come on board, as they try to cash in on the small gains, the impact of this could keep the price subdued for a while,” says an investor’s note issued by Suntra Investment Bank. For Safaricom to make money for investors, a lot will depend on how both the economy and the company performs. The economic outlook will affect the ability of businesses to make profits and taxes paid to the Government. All these factors affect the movement of interest rates. So far, the situation does not look good for the economy and Finance Minister Amos Kimunya expects it to slow down to a growth rate of four cent. Inflation is running high because of food shortages caused by political violence and this will affect demand for goods and services, meaning lower corporate profits and high unemployment. As businesses default on loans, this could increase interest rates. Since the shares loans are pegged on the prevailing interest rates, this means that investors will struggle servicing them. Loan defaults do not necessarily mean increase in interest rates. Increase in rates generally lead to higher defaults. As for Safaricom, the company is expected to continue making a lot of money, but it will face increasing pressures from Celtel, France Telecom and Econet Wireless. This means that in a weak economic environment, it will be tougher to make the kind of money it has been making. The situation however could be the opposite and things get rosy and everyone gets rich. But the watchword here is that the fortunes could swing like a pendulum both ways and investors with heavy debt loads could suffer most. “A point of caution needs to be given to investors many of whom are not sophisticated. The returns they receive from the IPO may not cancel out the interest payments and inflation which very few have factored in,” reckons Mr Sam Omukoko, the managing director at credit ratings agency, Metropol East Africa Ltd. This makes sense beacuse its not the author who is making the statement. During the Kengen IPO for instance, banks were lending at a rate of between 17.5 and 20 per cent. As Kengen’s share price shot up to levels three times its opening price, many speculators raked in tidy returns even after factoring inflation. But for the Eveready IPO in December of 2006, investors looking to play the markets through margin purchases got severely burnt as the share shot up but consequently slumped to levels below the opening price. With inflation hovering in double-digit figures and bank lending rates currently between 15 to 18 per cent, it would be a massive gamble to borrow with the objective of investing in the stock market. Again, inflation is good if you have borrowed since the payments are 'devalued' with time. With inflation at 15% and interest at 20%, this means a real rate of -5%. Experts say that any form of borrowing should be to meet a need. Investing is a want and really does not warrant any borrowing. Borrowing to invest amounts to a speculative move in that the borrower is at the mercy of positive market movements for them to at least recoup some of the repayments they’ll be making to the banks. Analysts say that one should really be wary of loans targeted on stocks, and should at the most take a personal loan, and then ‘invest’. “With this strategy, an investor will be able to sell at his own discretion without reference to the bank. Should a client default, banks are more than willing to take up most these shares through nominee accounts,” says an analyst on condition of anonymity. Erm, ok... so why would a bank want shares that a client doesn't want? If the bank is 'happy' taking up the shares, it means the consideration is higher than the loan in which case the client should sell the shares and repay the bank! Some banks have made the deal even more tempting by letting the customers pay interest for the time the loan is outstanding, however brief. There have been cases where some organisations even arrange with the financiers for a concessionary deal. How is it tempting to allow for the payment of interest while there is an outstanding loan? I thought the 'temptation' would be a deferred interest loan! “While some of these practices are in line with those in free markets of willing lender and willing borrower, both borrower and lender must ideally compute the effects of both the upside and the downside,” says Mr Cassim Jivraj, financial advisor at PFP Financial services. “It must be noted that on the borrower/investors side the possible downside and its effects are not often thought through very much,” says Mr Jivraj. Currently, banks are unwilling to receive lump-sum repayments from these financing deals. At the end of the day, some investors may be exposed to credits they were otherwise unprepared for. What does the author mean? I can't make head or tail of the statement. Kenyan banks want the refunds applied to the loan if there is no additional collateral pledged. It would be unwise of the banks not to 'ringfence' the refund. But with the euphoria surrounding the Safaricom IPO and coupled with the massive demand for shares, a number of banks see this as yet another excellent opportunity to cash in with their loans Nine years ago, banks financing of stocks or margin trading, was extremely prudent. An investor was required to come up with an estimated 30 per cent of the financing while the bank topped up the rest. In 2006 however, banks switched gears, lending finances up to a maximum of 80 per cent of the funds with investors putting in as little as 20 per cent. And with the unsecured loan products targeting mainly salaried individuals, banks were assured of a steady interest repayments pegged on salary inflows and the share as collateral, should a borrower default. Most banks are still sitting pretty and have not suffered a bit, although that cannot be said of investors. To most banks, they will have to get the clients paying using other income streams and not necessarily cash obtained through sale of the shares. Based on the relationship with the bank however, loan rescheduling can be agreed upon over the repayment period and the amount. But the truth is the chance of success for the IPO is not assured. In most advanced markets, margin purchases and short selling are done but again with very high risks. Hedge funds have high returns but with high risks because they implement these strategies. Currently, focus has turned on them (hedge funds) because of the high risks that are sometimes not well compensated for by the returns the investors get. OK, what a twist. We are talking simple borrowing here not complex derivatives, associated leverage, betas & deltas. Why does the author jump from one to the other when there is little correlation between the two? “I feel there is limited, if any, benefit for borrowing to invest,” reckons Mr Imbuye.