Friday, January 18, 2008

Jan 18: From ODM to Icarus

three weeks after the ill-fated elections and three days of mass protests

The Disruptions in the work flow have been a nuisance to the country, while the violence is threatening to cut off Central Africa. But how long before President Yoweri Museveni decides to drive eastwards for another road trip eastwards to check out the situation for himself?

If ODM’s goal is to grind the country to a halt, it may take a while. With tax collections significantly down, the pending Safaricom IPO which I thought will be an election winner could turn out to be a (one time) budget lifesaver – expected to yield over 30 billion shillings in Q2 of 2008.

ODM is now specifically targeting companies linked to key government personalities like Citi Hoppa, Brookside and Equity Bank. This sounds far-fetched and could lead to retaliatory attacks (ODM personalities are also business people); it's also an extension of silent boycotts that people have undertaken on their own. E.g. people who only selling petrol to their kinsmen, while others boycott pubs or have stopped reading the Nation or Standard/KTN because of their perceived political leanings.

While George bush is trying to revive the US economy through bipartisan tax breaks, but here we have two sides who won’t even sit down with each other. If they don’t, the crisis may soon spin out of control as the race for the presidency assumes historical dimensions

cut & paste: The Central Bank has introduced business continuity guidelines for all banks. However, it seems to be an update of an IT disaster preparedness document that's a few years old, and does not mention any of the words - crowd, riot, security, cash, ATM – and only one mention of ‘police’. In short, it does not address many of the challenges banks have faced.

Insurers with hearts: Some insurance companies like pan Africa and Heritage (CFC) making exception on a case by case basis to assist business people victimized in the riots. As a rule, insurance companies have no responsibility to cover such acts

Such as Business coping: Ukwala supermarket, which was destroyed in Kisumu, lost all their financial records. They are asking suppliers & partners to provide them with statements, delivery reports, and invoices as at December 31 and not to bank any of their cheques.

But can’t please everyone: like thieves who take advantage of busy police battling rioters, some unscrupulous borrowers are also using the economic shutdown to plead with banks for delayed repayment and favorable revision of loan terms when the haven’t really been affected.

Signal of confidence: On Wednesday, Imara Holdings introduced a new fund targeting the Diaspora willing to invest in east Africa. It’s an open fund with minimum investment of 6.5 million shillings (~$100,000) and will be sold through Kenya’s ICEA

- Recognize us: Barclays have eaten humble pie for two years, but who would have through that high-street Standard Chartered would open a branch in Eastleigh?

Local Icarus: what happens when you fly too close to the sun

- From PSD Blog; nominate a women entrepreneur to the doing business group of the World Bank.

Current open jobs
from the papers this week
- APA Insurance: unit managers, account managers. Apply to
- Safaricom: VAS Propositions Manager, Channel Development Manager, Key Accounts Executive – apply online. But for the position of chief information officer - but apply though pricewaterhousecoopers executive selection division (ESD).


Anonymous said...

Professionals For ODM Forum on Blogspot
Interesting blog on the Economic boycotts and how ODM is reaching out to the Middle Class support.

Very smart strategy on ODM's side to start calling for Economic Boycotts. They are now reaching out to a more effective group of citizens.

mugi said...

The good news about ODM's change of tact from mass demos to targeting of business owned by "Kibaki's friends/sympathisers" is that, anxiety will reduce and some semblance of normalcy (and sanity) can return, and more importantly, loss of lives will STOP.

I am not sure how effective ODM's new strategy will be and I do hope it does not lead to looting/vandalism of these businesses. Equity Bank, is after all, a public company. ODM leaders are also business persons and therefore, these sanctions will may also apply to ODM businesses. A chinese manufacturer flooding the Kenyan market with gas cylinders?...etc. There are no winners and it certainly not a winning strategy by ODM.

observer said...

This whole issue is taking a deadly and dangerous twist that I am afraid that if not fixed will bury us all. The ethnic character of the political stalemate moving to the economic realm is very dangerous and counter productive. I have had the privilege to travel and study to many of emerging and developed economies of Asia and South America; I think we should be modeling our economic and social development after their success. These countries are moving rapidly towards the demands of the 21st century that are greater integration, agility and mobility and we are devolving to crude constructs of the 19th century.

MainaT said...

The thinly disguised anti-Kikuyu theme that runs through pretty much everything ODM has done since its inception is the genesis of our current problems.
Its good to see nobody is condemning it or concerned that we are prepared to destroy our economy for sake of politicians who met & hugged on Tuesday to ensure they'd get their 850k+ pay packet at the end of this month.

observer said...

I just came from one of chat sites, it seems now that Kenyans on both sides of the divide are advocating for economic apartheid. How soon before we start to hear of secession?

bankelele said...

Pro4odm: too early to say

mugi: there are some well known targetss but unlss you lift teh corporate veil, to know who truly owns a company, how effective can it be?

observer: as I said they are all business people (ODM & PNU) with interests in all sectors of the economy. how will they differenciate? But God forbid talk of secession, surely our politics can not go that far

MainaT: I think they had to re-adjust when they realised that the economy was being strangled.

pesa tu said...

@bankelele: I think the move by insurance companies and Banks to pay claims and reschedule loans is motivated by good commercial sense rather than altruism.
For example, if u dont reschedule a loan it goes bad and ur bank makes a loss.
By rescheduling it and even lending extra money.the Loan remains on the books, plus u earn more income in the form of interest and charges.

Kiggz said...

The economy is taking a bigger beating than most people realise.

Tourism is done and will not pick up till 3 years from now. All the tour operators will leave out Kenya from their brochures this year and next year will come over to access the situation on the ground. Virgin Atlantic will stop flights to Kenya come 21st of January. KQ will probably reduce its local flights to 3 a day. Precision Air will stop its flight between Mombasa and Dar-es-saalam because seriously who is flying to Mombasa? Go to the airport and see how aggressive those taxi drivers have become to get an idea of how bad the situation is.

There were reports of tea pickers downing their tools and taking off from Nandi. This is not a surprise to me because I had noticed that in 1998. The tea factories do not have local staff but employ people from other parts of the country mostly Kikuyu's and Kisii's. I do not see them returning to their jobs soon. That is another export earner going down the drain.

Horticulture might survive but not with mass action going on in the streets. Expansion might be a problem as the farmers might loose on extra cargo storage as flights to and from Europe will reduce dramatically.

Kisumu is in ruins. The fish processing factories have been burnt down and I doubt that hey will be rebuilt soon. Tanzania and Uganda will love this as Kenya has been getting the bulk of the fish trade. Unfortunately this is not a good image for Kisumu as it is one of the millennium cities and was placed to be the major economical hub in Western Kenya. I do not see any foreign investor putting up a factory in Kisumu soon.

Pictures yesterday of people uprooting the railway line in Kibera is for me the final straw. I had the opportunity to talk to an RVR South African worker on a flight from Mombasa to Nairobi and he told me that they were having problems getting railway tracks because China has bought up all the steel in the world. There is a 2 year wait on delivery of new tracks. Museveni is going to love this especially since he was calling for the railway to be used more.

The EU has suspended aid to Kenya this means that the Northern Corridor, being built using EU funds, will remain as it is, as there will be no funds to finish it. Expect an increase in the transport costs to Mombasa and Kisumu & Eldoret especially in light of the high oil prices.

Kenya has been depending a lot on its service sector for jobs. This jobs will definitely disappear as people will have less to spend. Our manufacturing base has been taking a beating from cheap imports from China and Dubai. We should brace ourselves for a couple of hard years ahead.

Banks as you say Safaricom will be the thing that will save this years budget that is as long as ODM does not disrupt the sale!

bankelele said...

pesa tu: good point, banks actualy have more success with bad debts by rescheduling, accomodating the borrower, and working out a repayment proposal - not by going foreclosing or to court (It's not just ODM who know the courts are a dead end ;-])

Kiggz: a sad prognosis you have, but likely to be tru esp. for tourism. I was really saddend to see those youth rip up the railway line - what did that accomplish REALLY?

Anonymous said...

When all is said and done one cannot shift the blame for the current crisis we have from the shoulders of one Mwai Kibaki, MP for Othaya. So what if ODM runs a campaign with a thin veneer of anti-kikuyu? That is only a perception which his PNU has rubbed into the psyche of just about every kikuyu I have met. They are all in MORBID fear of Raila, as if he is some monster from outer space!!!??? That does not allow him to quash the peoples will in electing same Raila to the presidency. Moi let go and love him or hate him, the relatively uneducated man from sacho knows how to run a country better than the London school of Economics educated Mwai when t comes to the critical decisions.

It is also true that we cannot ask for development, or only think of this while the basics - eg human freedoms, free speech, ability to elect our own leaders - are being trampled upon with impunity. That is why we are Kenya and not China!!! The chinese model works only in china, nobody has been able to replicate it elsewhere - ask the russians!!!

Economic sabotage has been used as a tool in wars severally and in fact is very effective when one has no boots on the ground. Truth be told the Michukis and Kenyattas killed KBS and stripped KCC respectively in order to build their current businesses, they have behaved like the Russian Oligarchies and given nothing back to our societies. They now play hardball from the comfort of their cash lined coiffered dwellings. Perhaps this may be the only language they may's better than the language of war.

Secession? That certainly is a step beyond majimbo, if Central wants to, let it!!! They can then choose their own president all the time , get developed rapidly while the rest of us animals from the west sort out our peculiar problems. It would just be GREAT. Lets go for it!!!

Anonymous said...

ODM Cabinet List

kijanaa said...

Most of these comments are Pure propaganda aired by opinionated (nothing wrong with that) individuals who have long made up their mind, regardless of the ever evolving situation on the ground. Am sure we all have close relatives who have witnessed, or have been through unimaginable atrocities, however, unless you actually live in the affected areas (directly affected), or have had a close contacts with those affected, all you/we are doing is justifying/reinforcing our beliefs. Bankelele, you remain one of the few neutral blogs that I’ve visited so far and for that you continue to surprise me.
I know who I would have voted for and why, but so far he, and the opposition, continue to disappoint me. This however I think presents an opportunity for someone else, and so far Kalonzo seems to be he. Call him an opportunistic (aren’t we all?) but so far he seems to be the only sober minded politician. Odinga or Kibaki in power wouldn’t have changed any of my plans, but I’ve been forced to re-evaluate.
Let’s assume we all spoke one language, (I know… I know…), have one culture but live in different regions of the country, whom would you have voted for and why?

just-mimi said...

Banks, I must start say I've always enjoyed a browse of your blog for biz news from Jamhuri but now politics seems to have overshadowed all else.

I think the economic boycott is pretty tricky and I am skeptical as to how effective it will be:

-knowing the real owners is not straightforward as observed
-there is a touch of biting the hand that feeds thee

just-mimi said...

Banks, I must start say I've always enjoyed a browse of your blog for biz news from Jamhuri but now politics seems to have overshadowed all else.

I think the economic boycott is pretty tricky and I am skeptical as to how effective it will be:

-knowing the real owners is not straightforward as observed
-there is a touch of biting the hand that feeds thee

observer said...

Only a rapidly growing economy will

1. Produce increased government revenues to fund all the projects we were promised.
2. Create a private sector that is larger than the government sector, which I believe is the real cause of corruption and “our time to eat” mentality.
3. Lower the numbers of Kenyans living bellow the poverty line.

Any activity that affects this is anti-Kenya and should be condemned in the harshest measures that includes, stealing elections, ethnic cleaning, vandalism, police brutality, economic apartheid etc, you know the list its all the stuff that we have chosen to have condemn selectively or the selective amnesia and judgment we have exhibited depending on what side of the argument you are on.

Anonymous said...

This is Africa said...

This happened in Liberia in 1989, it might happen in Kenya in 2008 if no one stands down.

Watch the similarities between the Liberian situation and the Kenyan situation. Very similar - with small differences.

This Is Africa - The Liberian Story

Brinley said...

It is pretty hard to do business in such situations. Would be investors might not push through with their plans thinking about the unstable condition. Can I tell you about the Young Entrepreneur Society from the a great resource for entrepreneurs.


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