Bankelele

Kenyan Vitalstatistix

2012-01-15T11:57:00.000+03:00

Sample these common humorous quotes about statistics: Definition - the science of producing unreliable facts from reliable figures; 98% of all statistics are made up; statistics are like bikinis - what they reveal is suggestive, but what they conceal is vital

As Kenyans celebrate the open data movement of 2011, some in the finance and planning department of banks, and many companies and offices involved in analysis are probably lamenting the loss of one of the most useful statistical publications that the Kenya Government used to put out – the Monthly Economic Review from the Central Bank of Kenya.

The document was a treasure of vital information such as from GDP growth by sector, monthly inflation comparisons (over several years), overnight & inter-bank rates, bad loan positions, Kenya's monthly exports & imports (numbers and sectorial components), tourist visitor numbers, manufacturing output, vehicle imports, Kilindini port volumes, composition of Kenya local and foreign debt, gold holdings, money supply etc. that many found to be very useful.

The last report put out was in August 2011, and while there's little doubt that such information is still being collected, for some reasons it's not being shared anymore. And this may have coincided with the shillings’ haywire.

The report compiled reports form diverse parts of the economy and published them in a nice easy to use format compared to some difficulty obtaining the same from the official Bureau of Statistics or having to wade through speeches of Ministers or Permanent secretaries for the information.

Cheque Truncation Part III

2012-01-12T15:10:00.000+03:00

The much vaunted cheque truncation may be here at last after a notice at the bank branch that it will be in effect from Monday - January 16 - six months later than scheduled. Cheques may now take as little as one day to clear. However the notice also reminds & cautions bank customers that even cheques they write will hit their account within a day of presentation - and that they should watch that they don't get inconvenienced .i.e. issue cheques that bounce (bad for them, good for the bank which will hit them with more charges)

Having cheques clear faster is also a matter of necessity for banks if they hope to have cheques remain relevant and preferred for small payments. The number of cheques used in Kenya in 2010 (15.7m) and 2011 (16.7) was lower than the 16.8 million used in each of the two years before - and having a cheque book is less of factor when people open personal accounts.

The volume of transactions and money moved by M-Pesa and other mobile money systems show they are the preferred way for instant payments. Banks did not help themselves in this by relegating banker's cheques (previously the preferred way of paying school fees) to a slower clearing cycle - same as other regular cheques (to guard against fraud), even before direct deposits (to school accounts) and M-Pesa established themselves. By having cheques clear faster ensure they don't go the way of the travellers' cheques.

More on cheque truncation in Part I and Part II

Blogging in 2011

2012-01-08T22:07:00.000+03:00

Last year was a very busy one, but which meant there were fewer blog posts. However, there was more collaboration and guest posting, as well as more travel tales, but with limits in what to write. While there were many more events to attend (sometimes two a day), there was some difficulty in finding what to write that was not better expressed on in short posts on twitter.

Fortunately, life as a consumer of goods, services, and information was an data source of posts - and here are the most read posts (published in 2011), some of which had links to others in the top 25.

1. Mututho a.k.a. the new Alcohol Law in Kenya was the most read post of the year.

2.Kenya bank rankings was a list of the top Kenyan banks for 2010.

3. Farewell Mars Group was written when this Kenya anti-corruption watchdog group suddenly shut down it’s website (but it's now back online).

4. Prepaid Electricity meters were rolled out by the Kenya Power & Lighting Company and many people who were in the dark searched online for information about the new system.

5. A post about Overlappers and bad driving was the most popular motoring post.

6. Pepsi in Kenya was about their quiet re-entry to this market. Somewhat related was a link to my guest post about KFC in Kenya (No. 24) that was published in the UpNairobi magazine.

7. Banks introduced a new cheque design & clearance system. But did it flop? (No. 23)

8. Guide to Accra by @Coldtusker was the top in the series of African capital travel series write-ups.

9. Another of the travel series was the Guide to Addis Ababa by @Kahenya which proved very useful as it gave me a last minute reminder not to fly to Ethiopia without a yellow fever certificate. Other popular travel tales were from the Hague (No. 19), Gaborone Botswana (No. 22) by @MarvinTumbo and Asmara in rarely visited Eritrea (No. 25).

10. More driving tales rounded up the top ten – this one focused on Thika Road as did another a guest post wondering how Kenyans will maintain Thika Road (No. 13) when the Chinese contractors leave.

11. Unplanned Infrastructure in Nairobi was the most popular real estate one, along with other posts on sector developments (No. 14), Tatu City (No. 20), and other Golf Resorts (No. 21)

Fun with Wordle

2012-01-06T13:20:00.001+03:00

Inspired by Rookie Manager, here's a Wordle snap of some top words contained in this blog;

Boeing 787 in Nairobi

2011-12-27T06:48:00.002+03:00

Boeing brought a new 787 aircraft to Nairobi as part of their Dreamliner World Tour in mid-December.

Boeing were presenting the plane to their customers who had ordered the plane in record numbers, but then had to wait for a few years more for delivery due to delays in completion of the plane. It's first flight was scheduled for 7th August 2007 (07-08-07) but this took place in 2010 and while airlines like Kenya Airways were supposed to have received Dreamliner planes in September 2010, currently there are still only 2 Dreamliner planes in customer service (both with All Nippon Airways Japan. And while Kenya Airways (KQ) had billboards and newspaper adverts showing the 787 plane in their corporate colours, it was a Boeing coloured jet that was flown in by KQ's Captain Paul Mwangi after a similar presentation in Addis Ababa.

There was a dinner held at the KQ headquarters the second night that the Dreamliner was in Nairobi that I was fortunate to attend. It was also a treat to meet many of the 40 staff Boeing staff who accompanied the plane on the tour through Africa and the plane attracted hundreds of visitors including local CEO's, passengers and even a Kenyan born Rolls Royce engineer.

MC Jeff Koinange started the evening off with his tales of how he used to be a PanAm airline steward making on board announcements and this led to the discovery that his voice would take him into journalism, and later Prime Minister Raila Odinga talked growing up in UK (Kisumu) where he watched amphibious planes land on Lake Victoria (flying routes from Europe through Benghazi, Khartoum, Juba, Kisumu, Salisbury, Johannesburg) and later recapped a sequential history of Boeing aircraft development. He later spoke of KQ which rose out of the grounding of East African Airlines, it’s early loss making years as a state airlines, the heavily debated decision to privatize it, the repayment it has made to Kenyan taxpayers, and plans to make Nairobi for an African hub with a new terminal to be built next to presidential pavilion and a second runway (reason for Syokimau demolitions)

KQ Expansion: The Airlines CEO, Titus Naikuni, spoke of the group's turnover of Kshs 90 billion and plans to double the fleet from 34 to 68 aircraft in five years (now ordered 787 and Embraer and 777-300's which can carry 400 passengers towards that). But he cautioned that there are not enough pilots in the country (that days' newspapers had KQ ad's seeking new pilots for Embraer jets) and that the airline may hire foreign pilots' out of necessity . He also said that they are happy that the airport (JKIA) is now showing construction progress and commended the Kenya Transport ministry for bilateral negotiations that have enabled the airline to fly new routes in Africa.

Ethiopian vs. KQ: As KQ prepared for their Dreamliner arrival & party events, Ethiopian Airlines ran some in-your-face ads in Kenyan newspaper with the caption that the first 787 landing in Africa was at Addis Ababa, and flown by an Ethiopian pilot. True on both - as Ethiopian Airlines which is a much older airline than Kenya Airways, with a longer history with Boeing and closer relationship in terms of customers, maintenance, training etc. Ethiopian was the first African Airlines to order the 787, (and they have even ordered Airbus A350 which is yet to be built)

Dream Flight?: There was some expectation over the three days that invited guests of Kenya Airways would get to fly on the 787 over Kilimanjaro and Mombasa but that was not to happen. The flight took place with on the last days with only a few Kenya Airways staff on-board, and passengers will have to wait till the end of 2013 to fly on KQ - or given the local African rivalry, Ethiopian may use one on the Addis Nairobi route to feed off our impatience!

Read more on the 787 Dreamliner

Guide to Lilongwe

2011-12-19T12:06:00.000+03:00

A guest post by @chiefnyamweya, an Artist, Web-enthusiast, and Comic Creator.

Getting there: You can use Ethiopian Airlines at a cost of Kshs 62,500 (~$735) (and Kenya Aiways too). You have to have a yellow fever certificate. On arrival, you face the risk of losing checked in baggage, and as there is a severe fuel crisis, a taxi into town could cost $50

Getting around: I didn't pay much attention, as we had access to a private vehicle. But on the flip-side to the fuel crisis, there are no traffic jams!

Speak English, as Swahili is useless there, and you'll endear yourself if you learned a little Chichewa. The one phrase I picked up (since it was said a lot to me) was "Musojela!!" or "You'll get Lost!" Take any normal precautions as you'd take in Kenya, and I never once saw an AK-47 wielding cop here.

Hotels: You can get some very decent accommodation at Kshs .4,000 ($47) per night. Electricity is patchy, like Kenya, but a bit worse.

Dining: Excellent fish. They eat Ugali too, and their pineapples are sweet, but without the sting.

Communications: This was problematic. Roaming was expensive, and it was better to call Kenya, than have someone call from Kenya as you'd both be charged - and this was at about Kshs 25 per minute.

Shopping & Sight-Seeing: For shopping, there is Shoprite in both Blantyre and Lilongwe, while the two sights I got to see were Lake Malawi and Mount Mulanji. A local legend I heard about was about (people) disappearing on Mt. Mulanji.

Surprises: - Excellent roads here
- Women kneel in the presence of men when serving food or washing their hands (among other perceived gender inequalities)

Guide to Bamako

2011-12-19T11:59:00.000+03:00

Getting There: Kenya Airways has direct (7 hour) flights to Bamako on Sundays and Wednesdays. Ethiopian Airlines also comes to Bamako but through Addis Ababa, and these costs about $1,000 - $1,200.

Getting Around: The airport is small hence has low traffic. Most people get visas upon arrival at US $40 and a taxi from the airport to hotel is about $50.

Motorbikes are the main mode of transport and they are driven both by ladies and men. There are old Ford model matatu-like minibuses with benches, but not doors or windows - and people crowd in there with their goods.

This is a French-speaking country with the local language being Bambara

Hotels: Most hotels offer and charge for bed-only, no breakfast.

Shopping & Sight-Seeing: Popular tourist buy items are local fabrics called Bazin. However, the market is not for the squeamish, as among the foods, fabrics, and artisans selling their wares, you may also find people skinning & selling monkeys, snakes lizards rats and dogs - mainly for voodoo. Also influenced by Benin, dogs are sold & eaten.

Odd sights: There are many instances of double births, and you see women begging on streets with small kids who are twins.

Urban Inflation Index: December 2011

2011-12-16T12:52:00.000+03:00

What a year it has been, mostly not for the better with petrol and dollar prices setting records, and accompanied by other shortages. The Kenya government started a military anti-terror expedition in Somalia, and as war expenses can drastically alter government spending budgets, it was recently decided to bring the mission to the United Nations and have them offset the war cost to some extent.

On to the index comparing prices to three three months ago and year ago!

Gotten Cheaper:
Foreign Exchange: 1 US$ equals Kshs. 84 compared to Kshs 95.6 three months ago and 80.5 a year ago. That snapshot does not capture the roller coaster quarter the shillings has hard, dropping to an unprecedented level of Kshs. 107 to the dollar (and being ranked as one of the worst performing currencies in the world) before the Government instituted an interest rate hike and cut back liquidity to the banking sector. While the shilling was in free fall, and few could explain why, a World Bank blog post revealed that Kenya's exports were (at the time) not enough to meet the country's fuel bill, (Three years ago it cost Kshs 79 /$)

Staple Food: Maize flour, which is used to make Ugali that is eaten by a majority of Kenyans daily. A 2kg pack costs Kshs. 113, down from a record high of 119 in September, but still almost double the Ksh.s 69 cost in December 2010 (Three years ago it cost Kshs 97)

Other food item: Sugar : A 2 kg. Mumias pack which was Kshs. 385 in September is now 375, but still almost double the Kshs 195 of last December. In other news Kenya seems to have applied for another extension of a COMESA import cap, denying consumers the option of cheaper sugar imports to protect the largely uncompetitive local producers who have trouble ensuring adequate supply of sugar into supermarkets.

About the same:
Communications: These are largely unchanged though Safaricom announced a modest price increase by of voice call tariffs (which Orange are itching to follow) and @Kahenya says that corporate m-pesa tariffs have also been increased.

Beer/Entertainment: A bottle of Tusker beer is Kshs 180 ($2) (at a local pub) , unchanged from three months ago. The alcohol sector has a lot of competition now with the new brands being launched (Miller Genuine Draft) and others revived/getting new marketing pushes (Redds, White Cap Light, Heineken, Windhoek, Sierra) in a realignment of brands and owners between East African Breweries (EABL) and SAB Miller.

More Expensive
Fuel: A litre of petrol was Kshs. 124 up from 117.7 in September and 94.3 last December. Two days ago, in reaction to threats of transport operators to go on strike during Christmas week, the Energy Regulatory Commission (ERC) announced the first ever price reduction since the introduction of the price control regime - and for Nairobi the cost of petrol will be Kshs 119 (~$6.2 per gallon) till January 15 2012. (Three years ago it cost Kshs 92.7)

Utilities: Pre-paid electricity is about Kshs 2,500 per month (up from the regular purchases totaling 2,000). There are rolling blackouts as seen in the ads run by the Kenya Power company, spreading the shortfall across the country.

LPG - Cooking gas has been in short supply in different parts of the country, with many sellers in Nairobi not having any stock to sell for weeks. Those that do are selling them at increased prices - e.g. cylinders that used to costs Kshs 2,500 for 13KG, are selling at between Kshs 3,200 - 5,000 if you can find them.

2011 Kenya Bank Rankings

2011-12-16T09:53:00.000+03:00

Comparing to last year with the 2010 top banks

11. NIC and National Bank (No. 7 last year) both with Kshs. 70.2 billion ($790 million) in assets and profits of about Kshs. 2 billion as at September 2011. National Bank falls from No. 7 as it has been passed by some fast growing banks on the list. Quiet year, NBK has grown it's loan book by 52% compared to a year ago, but had less profit than last year which is odd for most banks. NIC is about 28% larger than a year ago in asset and will have about 3.75 billion in profit for 2011

10. Citibank Kenya (9. last year) September assets of Kshs. 71.6 billion and profits of 3.25 billion in another quiet year for the bank.

9 Diamond Trust (10) September assets of Kshs. 74.6 billion and profits of 2.4 billion deposits up 35% and loans up 45% from a year ago but with expenses growing at a slightly faster pace than income .

8. Commercial Bank of Africa (8) with September asset of Kshs. 75.7 billion and profits of 2.04 billion. Corporate bank made new came under political rad on the banking side, opened new branches in new malls in Nairobi like Junction, Galleria and then has re-branded in October with new logo. as excepted a rights issue is planned to right a capital adequacy position

7. Investment & Mortgages (last year 11) September assets of Kshs. 79.5 billion and profits of 3.2 billion in a quite year for the bank except for its' rapid growth and entry into mortgage finance.

6 CFC Stanbic (6) September assets of Kshs. 145.2 billion and profits of Kshs. 2.38 billion. The bank just announced a rights issue. Earlier in the year, has some board changes with new Chairman, and this is the first year of separation of the assets of the insurance from the banking

5. Standard Chartered (4) September assets of Kshs. 165.7 billion and profits of Kshs. 5.49 billion. This is one of the few banks to have a lower profit than a year ago (Kshs 6.1 billion). Opened new headquarters, but it's automation of customers service has led to some customer frustration - retail and corporate

4. Cooperative (3) September assets of Kshs. 167 billion and profits of Kshs. 5.45 billion. East African Newspaper this week announced that they will withhold divided to finance capital growth and postponed a planned rights issue to 2013 - and it was awarded best bank in Kenya by the Financial Times of London

3. Equity (5) September assets of Kshs. 172.6 billion and profits of Kshs. 8.25 billion. Another award winning year for the bank who pioneered agency banking model which has been followed by KCB and Co-Op. In the news doe accolades for their CEO, a deal to collect park fees for the Narok Council in the Masai Mara, becoming the latest Kenyan bank to diversify to Rwanda, but also for an about turn with the rest of the banking sector when they raised their lending rates from 15% to 25%

2. Barclays (2) September asset of Kshs. 180.9 billion and profits of Kshs 8.9 billion. A quiet year of modest growth for the bank in danger of being overhauled by Equity

1. KCB (1) September asset of Kshs 273.9 billion and profits of Kshs. 8.6 billion. Increased it's gap from Barclays, and matches Equity’s reduced growth rate. Emphasized connectivity across East Africa, had a management shake up - and with i's regional presents, it has assets of Kshs. 322 billion ($3.6 billon) and profits of Kshs. 9.1 billion ($103 million)

Guide to Bangui

2011-12-14T22:54:00.000+03:00

A guest post by @Anahi_Ayala who visited this CFA-zone country, that was home to the infamous former Emperor Bokassa, and which now has another grandiose project from a modern-day self-styled emperor - Gaddafi

Getting There: From Nairobi, you can take a direct flight to Bangui that's just over three hours, and a round trip costs about $1,000. Alternatively, you can fly with Ethiopian Airlines. However this is a longer flight - with stop over in Addis Ababa of 4/5 hours, then another flight to Douala (Cameroon) where passengers proceeding to Bangui are not allowed to disembark during a 1hr 30min) and then you take off to Bangui - and so the entire trip including layovers, is around 12 hours.

Visa's are done before hand, and the process is pretty easy and they usually give 3-month visas. There is no tax to on arrival, but to leave the country you pay a 10,000F tax (~$22 USD).

At Bangui Airport, the customer system is pretty meticulous: They search the bag of each person, and if you have goods that they think you have to pay extra for they will start shouting crazy prices - But you can settle it down with some bargaining and perhaps paying a bribe.

Getting Around: A taxi to town costs around 1500F ($3). People normally use shared taxis (which fit in as many people as they can) and there are also buses which leave from the main bus station in Bangui and go almost everywhere in the country. These take long time to arrive due to crazy conditions of the streets and sometimes break down along the way. Another way to do long distance travel, is using cargo vans (People sit on the top of the cargo. Some of the destinations (like the north of the country) take around 4 or 4 days to get there, while others like Obo can take around 7 days.

I was always going around by myself and had no problem, but one needs to be careful anyway since here in CAR poverty is at the extreme: a teacher salary is around $200, meaning that a normal person get around $50 a month. So if you go around with $100 in your pocket and people see it, is not good. I have friends here that got robbed in the street, but never anything violent: people just take your money from your pocket when there is a crowd.

Corruption is also widespread so if you get stopped by a policeman and you are doing something illegal this can cost you a lot of money. The interesting part of this is that the local population gives you advice in the street if they see you are doing something stupid – like someone told me to remove my phone from the back pocket to put in the front, or at the airport they came to tell me that my luggage did not have a padlock and that it was advisable to get one.

Security outside Bangui is another issue. The road from Bangui to Obo (South East of the country) is often attacked by the LRA (Lord's Resistance Army), so no one really uses it (you can take a UN flight to go there, twice a week, which costs $100 per ticket and you need to reserve to see if they have space – maximum $15 per person). The route from Bangui to Bambari (North) is also often attacked by bandits - normally there is no violence involved, they just rob you, get money & anything valuable and then let you go. The entire 5 regions in the North of the country are controlled by different rebels groups and the government suggests not to go there. Only private charters go there and there are no humanitarian agencies working in those areas, only visited by the Diamond Mines people (who have no problem going in and out).

Getting around, you spend around 8000F (including eating outside) in Bangui ($18). Outside Bangui not more than 3000F ($6)

The local language is Sango, but each region also has a local dialect. The national language is also French, but outside Bangui, few people can understand it and it is rare to hear them use it, and no one understands English

In Bangui there are around 3 newspapers published which publish not more than 500 copies: the quality is horrible, as they are all politically driven and the news is distorted in order to favor the political side take by the newspaper. Also there are no newspaper in English.

Business & Infrastructure: Where to Stay: There are several hotels in Bangui, all very expensive and with terrible services. One of the best one is the J&M hotel, which cost around $100 a night for a single room. They claim they have internet but it does not really work properly. They have 4 different locations: the J&M one is the best one, the others use the name but have a lower quality of services and rooms.

Another hotel is the Hotel du Centre or Hotel Central. It also costs $100 a night and the service is terrible: rooms are dirty and everything is broken. The hall of the hotel looks like an old school pub and it smells old.

There is a super luxury hotel that is being built by Gaddafi (well, was Gaddafi). It is supposed to be super fancy, with swimming pool and super nice rooms, but I have no idea how they think it will stay open as there is simply no way they can sustain the costs as there are not that many people that need a hotel in Bangui!

Another possible place to stay, is a center managed by the Nuns, and is part of the main cathedral of the city. The center is supposed to be for the missionaries that come to work in the country, but they also host guests for short time. It costs around $50 for a single room, the rooms are super simple but clean and they also offer breakfast with the room. You can have lunch and dinner of you want too for an additional $10. The nuns are very nice and dinner, breakfast and lunch are all served in a common room and at a common table (fixed hours: 7AM, noon and 7PM).

Electricity is not reliable at all, and it often went away in the middle of the day and during the night. Every office here has a generator to survive. I counted in my office and on average the electricity goes away every 30 minutes or one hours, sometimes for short periods, but sometimes for hours. Outside Bangui there is no electricity in the main cities or in the villages: everything works with generators and normally around 6pm, depending on the places, everything turns dark. Likewise, with water provision, there is no water in the houses, and everything is taken from water pumps.

Communications: Safaricom has roaming here but I did not use it to tell you how much does it costs. You can register with Orange and Telecell for them to activate your SIM card, but this may take more than 48 hours for the activation to actually work. If you want to use a USN bundle for this, you need to find a unblocked one (Orange had no bundles available anymore when I was here). All those bundles are second hand Huawei modems: You may buy a broken one, a blocked on and so on - and once you manage to have one that is working, you need to go to Orange or Telecell with your modem, the SIM card and the computer for them to set up the parameters. For Moov they said you just need to send an SMS, but I will only believed it if I see it then, since here everything is different when you ask then when you actually do it.

Overall, the cost of an international call is around $1/minute and using data on your mobile phone is a nightmare with local SIM cards.

Food & Life (Bars): The main dish is fish (capitain) and something very similar to Ugali, but done with Tapioca. They eat a lot of meat - goat, chicken and beef, but almost no vegetables. The local beer is called Castel but they also have Sudanese beers and Mocop Beer from Cameroon. One beer is 1000Fc ($2.5) in Bangui and around 500FC ($1.75) outside Bangui.

Shopping & Sight-Seeing: The main shopping area is the market in the center of the city called Marché Central and it is just blocks from Bangui's port. They have beautiful clothes and very good handcrafts. There is no such a thing as a shopping mall in the all country.

One place to visit in the country is the Les Chutes de Boali (Boali Waterfalls) which is around 2 hours away from Bangui. In Bangui there is the Musee de Boganda (Boganda Museum), which offers artifacts of the Central African Republic's history, and a collection of musical instruments. Another thing to see is the Place de la Republique, at the very heart of Bangui, with its large white arch were built as a monument to Jean-Bedel Bokassa, the corrupt dictator who was overthrown in 1979.

Shockers: How poor it is, how miserable, how there is absolutely nothing and how devastated it is, and the fact that they eat dogs, cats, and rats. That’s weird.

First World Problems in a Third World Country

2011-12-12T18:18:00.000+03:00

Ory (@kenyanpundit) reigned some of us with a recent comment that people are complaining on twitter about a lack of parking at the Junction Mall in Nairobi, while there are people near there who don't have enough food to eat.

I realized that it's something that happens a lot. Today I spent the whole morning searching for cooking gas (LPG) which has been in short supply in Nairobi for about a month. Is that a superficial or a genuine subject worth ranting about?

Other common complaints on twitter include:
- Not having tap water or being caught in darkness when the electricity distributed by Kenya Power goes off (including both at Jomo Kenyatta International Airport - JKIA)
- MPesa downtime which are almost a weekly routine with Safaricom
- Bad service issues at the bank or with an internet service provider
- A delayed Kenya Airways flight
- Newly done roads that develop potholes within a few weeks
- Companies that don't respond to email
- Satellite TV that cuts off when it starts raining
- The increasingly bad traffic (and bad driving styles) around Nairobi

These are hardly life altering situations to tweet or complain about - and seem like trivial first world problems in a third world country. But they are unnecessary inconveniences for busy people with plans and appointments who have become accustomed to things like having regular electricity & internet connectivity, the ability to send money by phone at any time to any corner of the country, the convenience of boarding a flight to Mombasa and arriving in time for a court case or business appointment & return to Nairobi the same day, not having to pay a bribe or tip to get good customer service from a government or private office etc.

They have expectations of service that, when not met cause a un-anticipated re-deployment of resources usually precious time e.g. six hours driving around town, burning (sometimes scarce) petrol in search of (LPG) cooking gas or having to call in a previous favour to accomplish a routine matter.

The sad thing about this is that (at least in Kenya) politics is the missing link, and people here become accustomed to have low expectations about political class (Sonko) and their decision making. This is a fatal assumption as the 2007 election period showed and as we grapple with unnecessary & expensive challenges of infrastructure, distribution, under-employment, inflation, corruption, taxation, the solutions require the adherence of the political class to leave the third world

2011 Africa Awards

2011-12-09T02:12:00.001+03:00

The award ceremony for the Awards took place in Nairobi on December 8. Sponsored by Legatum and Omidyar, this is the fifth year, and they received 3,300 entries from around Africa. Kenya has had numerous winners (AAR, Bio Deal, Colour Creations, Craft Silicon, Virtual City) , so it was not surprising that of the ten finalists, only one was Kenyan outsider (in financial services). Also it was nice to see and read about small and growing companies from other African countries that are not necessarily in the technology space

Criteria for eligibility consideration was the companies had to have a turnover of $1 - 15 million, a profitable track record of 2 years, at least 10 employees, not be subsidiaries of other companies, among other rules.

The overall prize of $100,000 went to Securico a woman founded security company that has thrived (edit) in inflation wracked Zimbabwe. It is an ISO certified company, with a turnover of $13 million and engage in diverse fields of security a workforce of 3,400 employees

There were six winners of $50,000:
- Chocolate City group which has a record company
- Expand Technology makers of smart card solutions from Mauritius. Their Kenya projects include Kenol cards and KWS Smart cards
- Pepperoni Foods from Nigeria
- SoleRebels from Ethiopia makes shoes, and are now available through Amazon.com
- Unique Solutions of Gambia which has grown from a cyber café to an ISP with reach in rural Gambia
- Victoria Seeds which grows seeds and has developed and trained a network of farmers in Uganda

Other finalists were:
- Cellular Systems of Senegal
- First Atlantic semiconductors from Nigeria
- Investeq Capital Kenya
The Africa Awards website has more info on the finalists.

Celebrating the Cocktail Napkin

2011-12-08T18:06:00.000+03:00

In Nairobi, there are thousands of conversations that happen at restaurant lunches or over evening drinks in bars. Most are mundane, sports related, money driven, contemplation of sex, and sometimes they are about business.

A lot of conversations don’t go anywhere beyond the bar. But out of a few of these, some will - through a chat, watching TV, or other exchange of idea - experience a moment of clarity (Think Pulp Fiction) - a realization of logic, or a plan or an urgent action to be taken.

However, by having one more drink or a new conversation, the idea is forgotten, or shot down or entrepreneurial innovation is mentally discarded as being unfeasible

One way to transform the moment of clarity into action is by using a cocktail napkin – i.e. sketch out ideas, plans, or action points to be taken after the bar session. Some great ideas initiatives around here, are the products of cocktail napkins like Praekelt and SwiftRiver.

So how can we celebrate the cocktail napkin? Kengeles Pub used to have a bell that they would ring, when a bar VIP walked in - perhaps the person who has had the million dollar idea can use it to signal that (i) he is not to be disturbed or distracted (ii) he has to dash out to start working on his life-changing plan (iii) he will settle the bill on his next visit!

Also bars can avail pens & classy note pads for aspiring people to jot down their ideas. This will help when (the next morning) the entrepreneur empties his pockets to find a crumpled, soggy napkin with illegible writing Also the note pad paper will look important enough that the spouse or maid about to do the house washing, will not throw it into the trash.

Guide to Dakar (Senegal)

2011-11-22T18:52:00.000+03:00

A guest post by Angela (@Honoluluskye)

I will preface this entry by saying that this was a very short trip for a conference, held at a luxury hotel. Being very busy with conference events, I was unable to travel out of the hotel environment more than a couple of times. Hence, I know that this is a skewed perspective of the country, but hope it helps!

Getting There I flew the most direct route available from Nairobi to Dakar via Kenya Airways. We stopped in Mali on the way over and stopped in Ivory Coast on the way back. Including the one-hour stop to refuel, the entire flight from Nairobi to Dakar took approximately 9 hours. The roundtrip flight cost of $1,450 was more than it costs me to fly to the US from Kenya!

There were no unexpected taxes upon arrival. As an American citizen, I was lucky in that I also did not need a visa, and they simply stamped my passport upon entry. It was not as easy for my Kenyan colleagues as some had not arranged for a visa’s prior to leaving Kenya and therefore had to leave their passports at the airport. But at least they were able to enter the country! Not sure if they had to pay some fees on their way out…

Language: French is used everywhere. There is also mother tongue for many people though and I heard some Wolof being spoken in downtown. I believe there may be an English newspaper though I did not see one. It was difficult for me to communicate because I don’t speak French and most don’t speak English.

Getting aroundI had a free hotel transport van waiting for me so don’t know the real cost of taxi from airport. But I found out that from the Radisson Blu back out to the airport via taxi, (flagged down from the hotel), was about 5,000 CFA (~ 10 USD). I know that this was expensive, and it’s the maximum that you pay.

I hired a taxi to take me to the various markets in Dakar for three hours. The driver started out saying 20,000 CFA; we haggled and he was pretty stubborn, until we finally agreed to 12,000 CFA. But he accompanied me around to all of the markets and also acted sort of like a bodyguard/escort the entire time, which I appreciated. Therefore, I ended up giving him 18,000 CFA for about 3.5 hours of driving around. Usually, reasonably short, one-time, taxi rides should cost about 1,000 CFA (and if you can speak French you can probably get it down to about 850 CFA).

Popular transport for locals are walking and also a matatu-looking bus (see picture). These are usually brightly painted, and the doors open up on the back of the vehicle making them sort of look like police vehicles. I am not sure the French name for these vehicles…

It felt very safe walking around, even at night, as is the case in many Muslim countries, however the advice given was to take a taxi. There were also many MANY joggers/runners alongside the beach during sunrise, and sunset and you’d observe many practicing Muslims, washing their feet and faces in the street.

Business & Infrastructure
- CommunicationsInterestingly enough, upon immediate exit from the airport, all of the touts waiting outside were trying to sell… ORANGE SIM cards for mobile phones. I had a Safaricom line, but did not activate it for international use, and so it did not work in Senegal. The Wi-Fi in the hotel was not as good as I would have expected.
- Roads: They were smooth tarmacked roads, with NO TRAFFIC! Woah! And it’s 4 pm on a Wednesday! How is that even possible??
- Hotels: I stayed at the Radisson Blu which was incredibly expensive, in the range of 200-450 Euros/night. It had reliable electricity, but I don’t know if it was run on a generator.

Shopping & Sight-Seeing: Some of the major shopping markets are Cour des Maures, Sandaga, Tileene, Colobane, HLM. Sightseeing places were the National monuments and Institut Francais. The beach is two minutes out of the airport, and as soon as you get off the airplane you can smell the salt in the air… nice!

Getting around, I spent 10-20 USD on food and about 100 USD on gifts. I learned that Senegal has very nice silver jewelry. Here is an artisan/jewelry maker whom I was impressed with by his creative designs and reasonable prices.

- Food & Drink: The main local dishes were fruits, vegetables, and rice. There are some nice French places to eat as well.

Summary: Similar to Cairo but more African/French.

Guide to Kampala

2011-11-19T07:25:00.001+03:00

A guest post by a visitor to the exotic land of Museveni and Matoke!

There are several airlines flying daily to Entebbe (the international airport is an hour’s drive from Kampala) and these include Fly540 and Kenya Airways which cost about $250 and $300 respectively for a round trip. There is also Air Uganda which just celebrated its fourth anniversary this month.

Getting There: Entebbe Airport was fantastic, well organized, manned, signed, and even though we landed at midnight, it put JKIA to shame. The best thing I like about it was that there were no forms to fill!. The taxi was $35, but I think we got taken for a "ride" - we were approached by the official airport taxi guy and shown those rates, but were sat in another taxi and he didn't even give us a receipt! Maybe we were easy targets as the last people leaving the airport that night.

Getting Around: Most locals walk and take matatus and boda bodas. Boda bodas are popular because the traffic is so horrendous. We got around in a car provided by our clients, and our driver was the owner of a car hire company that our clients use often. He drove a Rav4 and said it costs about 60,000 Ugandan shillings per day to rent, which is about $25. I'm guessing this does not include the cost of fuel.

Kampala was very secure, I walked around in the evenings too , and there were army and police guards everywhere. However, many have really bad attitudes and are clearly on power trips. Also, I didn't venture into the kind of places that might be more prone to crime.

Hotels: Serena was overbooked and bumped us! So we paid $150 at Imperial Royale for a single B&B, which is just behind Serena. The hotel was nice, spacious and clean, but they didn't have hand towels which was weird. I didn't have time to shop around and ask about other hotel rates. There were a few power cuts everyday I was there, but I didn't pay attention because I was in places where they had generators.

Communications: I roamed with my Safaricom (linked to MTN Uganda), and the reception was terrible. Incoming text messages came in days late and I went hours with no reception at all. My colleague got a local number while he was there and it wasn't better at all. I'm not sure about costs. Internet speeds at the hotel we stayed at and at the offices and even with a 3G Orange SIM card in an iPad were slow.

I used English because I mostly interacted with professionals, but I took a small taxi and the driver spoke to me in Swahili. The local English newspaper was a joke! - clearly censored heavily by Museveni's cronies and full of shallow stories.

Bars & Restaurants: The local dish is MATOKE, MATOKE, MATOKE! People eat Matoke for all 3 meals! There is a dish called Luwombo ~~Lumbwana~~ (I think) that is delicious - it is chicken, fish, or beef wrapped in Matoke leaves (surprise, surprise!) and slow cooked with groundnut sauce. The groundnut sauce is also served with most meals and it quite delicious and healthy. I didn't have the opportunity to drink a beer.

I was surprised that they spoke a lot about Museveni. Most people complain about the kind of things we complain about (in Kenya) - roads, corruption and unemployment. However, I think Ugandans are tired of fighting and war, so although they complain, they have resigned themselves to the fate exerted by the rich and powerful. This might explain why Uganda didn't join the Arab uprisings wave after Museveni stole the election.

Sight-SeeingI think Gorilla trekking is getting popular. There is a small hotel called Casia Lodge that someone recommended highly, as a gorgeous place. It's alright and the view is nice, not stunning. Kampala is a green city and the lake is huge, so all the fixings of a nice view, I guess.

Biggest Surprise: Sooooo....there is an interesting place called Honey's Pub near Pride Theater, if I remember correctly. Now, I don't know how to even begin describing what I saw there! Some Ugandan tribes have girls who, from an early age, certain parts of their bodies are stretched. A lot. More than you can imagine. I'm not talking about breasts. It was freaky! So many of them become exotic dancers (which you and I both know is just a euphemism for "strippers"). It was definitely something a lot of businessmen, especially from Europe, were keen on seeing and were floored by!

Guide to Tel Aviv

2011-11-18T06:12:00.001+03:00

Land of the Bible, History, and personal fitness!

Getting There: Ethiopian Airlines is the fastest way from Nairobi for now, cost is between $800 - $1,200 with a stop-over in Addis Ababa. In Tel Aviv, clearing out of the airport takes four hours minimum as there are many security checks, and it's a very busy airport (over 50 flights were taking off to various destinations on that one night). Also, the airport staff are not very friendly

Getting Around: The cost of taxi trip from/to town is approx $50 and taxi's are the way to go, many locals uses cars, bicycles & motorbikes. You feel very secure walking around, and there are no specific restrictions, electricity is reliable, and you spend about $100.

Accommodation & Communications: The Hotel which cost about $170 per night had Wi-Fi (spots are not too common in town) and fixed line calls from the rooms. International calls were available on particular cell line bundles, but I was not able to use a personal (Safaricom) line.

Food & Drink: Meals consisted of various meat dishes, preceded with handsome quantities of salad. Beers cost about $7 a pint in a restaurants, or $4 in a corner shop/ supermarket.

Most of the conversation are in Hebrew, but the locals we interacted with wanted to know about our country etc. and vice versa. Local legends include Ben Gurion (who the international airport is named after) and Raoul Wallenberg. All mainstream newspapers are in Hebrew, but the Hotel also issued a leaflet in English

Shopping & Sight Seeing: The main shopping areas for tourists are Allenby St Market and Dizengoff Centre and they mostly buy Jerusalem mementos, and jewelry. Sightseeing included Jerusalem City, and the Dead Sea

Biggest surprises about the city: The obsession with fitness and healthy eating. Lots of people can be seen jogging in the evening, or riding, and all meals are served with lots of salads first. Fitness levels of the citizens are high, with no potbellies in sight, and even people in pub all look like athletes!!

Real Estate Moment: Not about Syokimau

2011-11-16T23:59:00.000+03:00

I don’t own land outright, but I know people who do and have worked on some securities that relate to land. So here are are five trends in real estate deals that drive lead to good & bad outcomes

1. Not all land deals are equal: There is greed & fraud among buyers and officials including government (county & ministry) who will approve incorrect land & building transactions, valuers who will inflate property prices, contractors who will undercut on building materials & costs etc. There can be fraud anywhere, but mostly it is with developers who will score deal after deal and move on from a controversial piece of land. A good tip is to look out for prime, but idle or under-developed land (open parking lot, cheap Mabati (iron roof) pubs & eateries) - which mean that there's probably a story there about ownership that deters those who know from investing too much in structures on the land. But such deals are the minority and should not deter people from investing in land. Note - these houses in Syokimau were being advertised at last month's homes expo at a cost Kshs. 4.8 to 9.2 million.

2. Land is finite: Land is still one of the best investments, for the simple reason that its quantity is not increasing. It’s uses are changing with generations, migration and population changes resulting in different demands for land use (e.g. forest, agricultural or rural to residential, commercial or urban) but the amount of land available is the same (the rare reclamation of land by dredging notwithstanding)

3. Banks have failed: By banks being prudent as lending institutions, this has resulted in a situation where there are very few mortgages in the country – about 20,000. This means that (i) banks have not convinced Kenyans that they are perfect partners in the construction or purchase of houses (ii) people are building out of savings, other income or unsecured loans (iii) by not using a bank for land deals, buyers & builders miss out on the professional advice that could be helpful in the land buying process.
4. Herd Mentality: Investment group, savings club, SACCO’s and other collective vehicles have been popular ways to invest in land. They have worked with, or as developers themselves to scope out, purchase, sub-divide, and sell land to their members, and other interest parties.

Buyers then flock to these developments because groups and peers who have invested convey security and more so as word spread fast via ads in the newspaper, or whispers in bars and church. While initial investors in these schemes may have been quite cautious with calculated risks, later investors will have seen the value of plots (and their entry price) triple and watched as other members put finishing touches to lovely houses that they are still dreaming of - and this can lead to a temptation to rush in without doing the usual land checks. But what if the original land deal was fraudulent? Does anyone check for the mother title or original drawings & approvals? If they took a loan or paid for professionals to assist, they may find out that the deals were not as good.

5. The Government is not Stupid or Evil: The government creates and keeps records, and the government does not issue title deeds in a casual way. Many properties are built without a title deeds or without owners having got all approvals. But the government has an institutional memory and does not forget. You won’t sell a property without clearing arrears on land or paying stamp duty.

The government also does not forget that it owns land and as Syokimau owners found out the way, the government may sit idle, but it will act when it’s convenient or necessary. Legend has it that Ugandans soldiers discovered Migingo Island when checking for insecurity points ahead of the 2006 commonwealth summit (CHOGM), and now, while KAA has tolerated the Syokimau houses for years, now that the country is at war with Somalia, the proximity of the houses to Nairobi's international airport (JKIA) may have escalated security concerns.

Idea Exchange: TED Global, Richard Branson, Student Opportunities

2011-11-16T23:26:00.006+03:00

The 2011 Africa Awards ceremony take place in Nairobi on December 8 and reward entreprenual excellence & efforts. This year the odds are strong that the winners of the total $400,000 of funding prizes won’t be Kenyans as the nominees shortlisted are soleRebels, - Ethiopia, Unique Solutions – Gambia, Expand Technology - Mauritius, Chocolate City Group , FASMicro, and Pepperoni Foods (3 from Nigeria) Cellular Systems International – Senegal, Victoria Seeds – Uganda, Securico - Zimbabwe and InvesteQ - Kenya.

The Awards are held in conjunction with Convergence Africa also in Nairobi on the same day and which features Richard Branson among other speakers and leaders.

Africa Leadership Academy: The world famous school in South Africa is taking on the next crop of students leaders. Application details are online and the Deadline is 12 December 2011.

Africa Enterprise Challenge Fund: Has a new round of financing for renewable energy and climate adaptation technologies. It is aimed at for-profit companies with eligible projects in the East Africa region and Funding will be in the form of grants and repayable grants of between US$ 250,000 to US$ 1.5 million. Details here.

Google Photography Prize: Google + is seeking photographs submitted in ten categories (main ly by university students). More details.

NetFund: Identify individuals, educational or community institutions with project, initiatives or campaigns that contributes towards environmental management and are worthy of an award. Details here and deadline is January 30 2012.

Reuters Business News Workshop Fellowships: This is a five-day course in London next year, that is open to as journalists or regular contributors to print, broadcast or online media organizations. D/L November 25 (Found at Yipe)

TEDGlobal 2012 takes place in Edinburgh, Scotland in June 2012 with 50-plus speakers and performers from all over the world. See registration details.

Edit

Australia Awards: The Government of Australia has scholarships to Kenyans in priority development sectors. They include masters levels (D/L Feb 28) and short term professional development (D/L 16 December). More details here.

Chevening Scholarships: The Chevening Scholarship Programme for Kenya 2012-13 is now open for applications. It facilitates post graduate study program in the UK available for up to 12 months or for short courses or research. details here and the deadline is Jan. 23, 2012.

CNBC Africa: Top Trader is a new reality television show that will in 2012 follow the trials and tribulations of Africa’s top amateur traders> The competition is now open to public; there are more details on CNBC Top Trader and the D/L is Jan 21.

FiveByTwenty program of the Coca Cola company to create five million women entrepreneurs in the coca cola ecosystem by 2020. The pilot had 100 young women trained in Nairobi in financial & distribution training and become sales partners and more are invited to apply to coca cola 5 BY 20 technoserve as producers, suppliers, farmers (project nurture) etc. if they meet some criteria.

Google Africa Internships: This is a continuation of their summer internship program, now open for new applicants, and more Google Internship details can be found at the Africa blog.

Pasha: Latest round of funding from the Kenya ICT Board. Details here and D/L is Dec 3.

CNNMultiChoice African Journalist 2012 Awards. Details here and D/L is Jan 26.

Guide to Dar es Salaam

2011-11-14T23:09:00.001+03:00

A guest post by Josiah Mugambi - @JMugambi to a neighbouring coastal city with good manners and good food, proper Swahili and while Ujamaa is strong, so is government corruption as in Kenya

Getting there: Transport options from Nairobi include road (driving a car or taking a bus for the over 900KM journey) and air with Kenya Airways / Precision Air which is a 1:15 duration. There are at least two flights each way daily, with a return ticket going for about 410$.

The Julius Nyerere International Airport is smallish, and when busy, the queues for arriving passengers waiting to clear with immigration can be long. However. they seemed to be able to handle the large number of arriving passengers reasonably well. On this day, there was a large number of people waiting buy their visas on arrival, however I did not need one as East African citizens ordinarily do not need a visa for stays of less than three months. Visa requirements are easily found online

Once out of immigration, it is possible to change money at one of the few forex bureaus at the airport. (1 USD was equal to about TSh 1770 at the time of my stay)

Getting Around: Taxi's are readily identifiable, mainly white with yellow or green stripes. A cab (most if not all are not metered) from the airport to the Oyster bay area costs about 35-40k Tsh (approximately 20-25 US$) meaning that one to town would be slightly less as it is closer from the airport.

Most people use the "dala dala" public transport vehicles to get around; which are clearly distinguishable. The 'City Bus' operates several routes, which are clearly indicated on the front and side, with fares (nauli in Swahili) starting at 300-450 Tsh ( ~ $0.20) for most city destinations.

'Bajaja's - three wheel Bajaj scooters are another popular form of transport for those who want added flexibility without paying for a taxi. They are however sometimes driven rather recklessly. For shorter distances, some may opt to walk but the hot and humid weather can be a disincentive.

Communications: I was able to use both my Kenyan phone lines in the country. I avoided roaming data (usually expensive anywhere in the world) as much as I could. For internet access, one can get a data modem from any of the four local mobile operators (Vodacom, Airtel, Tigo, Zantel) with Wi-Fi available in some locations (mostly restaurants). I noticed that the mobile market in Tanzania is more evenly spread among the four major operators: Vodacom 37%, Airtel 30%, Tigo 25%, Zantel (Zanzibar focused) 8% (2010 stats from CGAP)

Vodacom Truck

Where to stay, What to eat If you are at the central business district for business, it would be probably wiser to stay closer to town. Reasonable hotel rates start at $100-150 depending on location, and hHtels around Sea Cliff area tend to be more expensive. I stayed at the Colosseum Hotel & Fitness Centre mostly because of the state of the art gym. I also liked the Mediterraneo after visiting it briefly with friends.

Any (modern) economy is heavily reliant on electricity and Tanzania is no exception. I noted that the hotel I was staying at had a backup generator that seemed to go on nearly every night, implying that demand for electricity at peak hours was very high.

One thing that I loved about Dar was the quality of food. Many Kenyans go to Tanzania and say that things happen slower there, but when it comes to food, it's probably for a good reason as most of the time, the food is freshly cooked and delicious (and served in good quantities too!).

I loved the Mshkaki (a form of Kebab, either roast beef or fish) which one can order with lightly roasted bananas - absolutely delicious. If there's anything I miss from Dar it is this! I'm not one for beer, but the average price of a bottle starts at around 1500 TShs ( less than $1), and some (familiar) sodas (Coke, Fanta, Sprite) are sold in 350 ML bottles.

All in all, daily one can expect to spend anything from $10 to over $45 depending primarily on your mode of transport and choice of food.

Language, Stuff to do: Being from Kenya it was not too difficult to communicate in Swahili to locals, though their grasp of the language exceeds that of most Kenyans. I had an interesting conversation with a traffic police lady (after we got pulled over for a routine check) and she said that they (Tanzanians) get really amused about how Kenyans speak Swahili. They are very conscious about grammar while in Kenya we tend to gloss over poor Swahili (unless one is doing an exam of course).

Mlimani City

I visited the Mlimani City Complex which is an interesting development bordering University of Dar Es Salaam, with a office complex hosting multinational firms, a shopping centre and a residential park. This is a popular shopping location outside of the city centre with a large supermarket as well as a theatre and several banks. The Sea Cliff area is popular especially for tourists who buy African art, and Tanzanite stones.

I noted that many security guards are armed with a shotgun which lent some semblance of security (unlike in Kenya where your ordinary watchman would have at most a piece of wood to defend himself). Walking around is not advised in lonely places especially on the beach.

As with many coastal areas, the main leisure activity would be visiting the beach. I especially liked Kunduchi beach, situated north of the city centre, with its white beach and from which several wind surfers took advantage of the excellent conditions to show off :). A weekend excursion would be to tale a short trip to Zanzibar by boat, but I was not able to do this.

Economy and Society: In Kenya, there is a lot of talk about corruption, but even in Tanzania many of the locals complain about the corruption that is rife in government. There have been several corruption scandals lately and my taxi guy was rather emotive about the subject.

Mwalimu Julius Nyerere is still highly regarded by many, though some say that he held back economic development somewhat (compared say to Kenya). I however admire the level of social integration present. Unlike in Kenya, there is a distinct sense of unity (possibly due to Julius Nyerere and Ujamaa) and 'negative ethnicity' is virtually unheard of - Something Kenya could learn from its neighbour!

Also, unique, I noticed children holding 'School Children Crossing' signboards at the zebra crossings helping fellow students cross the road, and that drivers respected their right to cross :). Tanzanians are generally courteous and respectful, (a sign of ujamaa?), and generally follow traffic lights and rules - another thing I liked about Dar.

All in all, a good place to visit, especially on holiday.

Shares Portfolio November 2011

2011-11-12T18:23:00.000+03:00

Comparing changes to three months ago and a year ago, investor confidence has dipped further, and the Kenya shilling is even weaker, having fallen past the Kshs. 100/$ to the dollar before last week's drastic rate hike by the Central Bank brought the rate back to to 95, but which also pushed most commercial banks loan rates to 25%

The Stable
Barclays Bank ↓
Bralirwa Breweries (Rwanda) ↑
British-American Investments (Britak) ↓
Diamond Trust Bank ↓
East African Breweries (EABL) ↓
Kenya Airways (KQ) ↓
Kenya Commercial Bank (KCB) ↓
Kenya Oil Company (Kenol) ↓
Scangroup ↓
Stanbic (Uganda) ↔
Uchumi Supermarkets ↓

Review: The Portfolio is down 2% in the last three months as is the NSE 20 Share Index, which is also down 2%.
- Best performer: Bralirwa 24% (only share that has appreciated in this Qquarter)
- Worst performer: Britak -38%, Kenya Airways -25%
- In: Britak
- Out: None
- Increase: KCB, KQ
- Decrease: None

Other
Splits: None
Bonus: None
Dividends: Interim from Kenol, and Barclays, and it was pleasant to be able to encash a Bralirwa Rwanda dividend cheque over the counter at KCB in Nairobi - unlike with Stanbic (UG) Uganda, that takes about a month clearing and the bank charges can take a huge chunk out.

Events:
- Safaricom shocked with a 47% drop in half year profits to September 2011.
- Kenya Airways got shareholder approval for a rights issue to finance fleet expansion in the next few months (Said to be at Kshs 21/= which is about where the share is now.
- Tanzania has the Precision Air IPO and Tanzania Breweries sale but the mixed signals - welcoming/shutting out East Africans, and not getting proper approval from Kenya’s capital markets means there's likely to be little cross-border participation once results are announced.

Data: The NSE now has a shares app for Android mobile phones and signed a partnership creating two new FTSE NSE indices.

African Business Travel Writing

2011-11-09T22:51:00.001+03:00

The African travel writing series (tag 'Kenya Domestic Tourist' is one that is about a couple of months old now. It’s origin was a conversation with a banker friend who had worked in Nigeria, and talked of people flying with ‘delicious’ Brookside milk from Nairobi to a land where every food item was imported and there was little in the way of a local health scene.

These, and other fantastic bar tales, may have been exaggerated, but it was an interesting led to query to inquire & get the feedback of ordinary Africans (not professional travel writers) who were visiting other African countries and get them to write about their travels, business climate and observations of life there.

So we have posts from Botswana, Cameroon, Eritrea (not a failed state), Ethiopia, Egypt & Tunisia (after popular uprisings in 2011), Zambia, Ghana, Mauritius, Morocco, Nigeria, and others in the works like Zimbabwe (described like visiting a relative who used to have money) and Senegal. A few more posts have fallen by the wayside but they may be completed one day...sometimes you have to persuade people to chat over a round of drinks, instead of an omelette breakfast.

By no means are the rules of observations absolute, as they are the varied experiences from people making unique trips. They have encountered situations like amazing courteous service, hostility for saying the wrong thing, unexpected airport taxes, varied ease of changing currencies & making phone calls home, free seating on some West African flights (no boarding passes issued), and seen beautiful & historic sights. They have also proved quite useful going by comments received (& most recently for me as a crucial last minute reminder to carry a yellow fever card to Addis).

Thanks to the various contributors to the series so far including @CarolMusyoka, @Coldtusker, @G33kmate, @Kahenya, @KKaaria @MarvinTumbo, @ZackMukewa (the latest one is from Indonesia which is not in Africa, but is an interesting popular tourist destination to benchmark against) and a couple of other contributors. These are all interesting, hardworking people (do follow them on @twitter) involved in other business endeavors and hopefully they will share more travel tales until trips to capitals of all African countries are covered.

Guide to Jakarta

2011-11-09T18:46:00.000+03:00

Tales of kindness, Spa’s, Obama, smoking, the largest McDonald’s in the world, all in a guest post by Zack Mukewa. (Note, The Indonesia Rupiah is Rp. 8,900 to 1USD. So fairly Rp 100 to One Kshs. is fine).

I had a very low opinion of Jakarta and Indonesia in general before going there, but I was pleasantly shocked in Jakarta which is the capital of the expansive Republic of Indonesia

Getting There: From Nairobi to Jakarta, you can take two or three flights, three in some cases depending on the airline, e.g. Emirates, Qatar, Gulf Air – and cost about $1,300 - $2,000. On average it takes five hours from Nairobi to Dubai and a further 8 - 12 hours to Jakarta dependent on route and airline. This matters as some passengers may have to wait for up to 8 hours for a connecting flight from Dubai. But not to worry, as the duty free airport at Dubai is interesting enough. Just avoid 'The Gallery Lounge' near Gate 210 – where in an attempt to kill time the Kenyan way, I regrettably had a single Heineken for US$29!

There are several countries who’s residents are allowed to obtain visa to Indonesia at the terminal on arrival, including South Africa and Egypt from Africa. However, for others, they have to get visas at embassies in their home countries.

This is a short process, 15 minutes though there are few points where queues can delay you. Beware of some Airport crew ready to make a quick buck if you seem clueless, as happened to a Ugandan pal (pun intended).

Getting Around: Outside the airport you will find two types of taxis... Blue and Blue/Green both of which are metered. Green taxis are thought to be the safer and are quite cheap. Indonesia produces its own oil (hence lower fuel costs) so for a distance like Karen - City Centre - Westlands you will pay fairly 15,000 Indonesian Rupia...about Kshs. 150! Most Cab guys speak some English...not so good but you can communicate. Useful words are Selemat Pagi/Maalam/Sore - Good Morning/afternoon/evening and also Terima Kasih/ Thank you. Say those and mention English, they will find someone good at it to help.

Jakarta City is beautiful... Much like New York in impression. It’s fast, as they have lanes for public shuttle buses that arrive every minute, and they fill to the brim. No one pickpockets here, and they were shocked when I told them about our Nairobi bus stop tales. Jakarta also has extremely high humidity, and with temperatures in the 32-38° range, you should dress reasonably.

Hotels: Hotels are varied; I stayed at the NAM Center and at the Aston Hotel – and at commercial hotels in Indonesia, it’s common to find everything ensuite. Also they have karaoke bars which are a big thing over there, piano bars, spas, gyms. However beware of the spa...especially if the attendant asks your marital status..that is all!

Jakarta is a big City, with a total population of about 12 million people. Observing, the streets you can quickly gather the leaders of corporate Indonesia are based here. Lot’s of black cars are dot across several islands, and there are boats at most coastlines for those who wish to rent, some yachts too belonging to those with offices in the city .

Shopping & Sight-SeeingThere are many places to visit in Jakarta, starting with the National Monument . From high up there you can see the State House, many Capitol Buildings and other interesting sites in Jakarta. You can also visit the school which (US President) Barack Obama attended, and they have a monument erected there. Being a black man in Jakarta, it seemed expect everyone wanted to take a photo with me – and I never saw any other black people other than those in the group I came with…Maybe I should pull an Obama senior stunt, in that side of the world :-)

The City has high end shopping zones and your basic shoppers zones. For comparison, if you go to Indonesia Shopping Mall in upmarket Jakarta, you will buy their national shirt called Batik for Kshs. 10,000, but if you go downtown at Block M, you will get it at Kshs. 1,000.

Being in an earthquake prone zone, the city is built to accommodate earthquakes. Yet they also have high rise buildings as high up as 60 floors, and are building a subway under the main road infrastructure.'

Food & Bars: Sad to say, the food is horrible! I ate rice and spaghetti for all meals, breakfast, lunch, dinner, and I was thin by the time I left. The food does not have soup and is cooked in a funny, typical South Asia stuffy way. Not to worry as there are other (pricey) options, including one of the largest McDonalds outlets in the world which is found in Jakarta, and a whole lot of Pizza Huts and KFC outlets too. For sports bar fans, check out Manchester United Sports Bar... it is said Sir. Alex has been there. Sorry, Arsenal fans, I didn’t see anything for you - guess all the fans there hanged LOL!

People smoke a lot in Indonesia - Remember the stories in the news & internet about a 6 year old chain smoker? That was from there; Samata Island! As a matter of fact, in most social places you will be given free cigarettes after buying a beer. Heineken costs about Kshs. 300-700 in most places I visited.

Summary: I could easily not stop writing about Jakarta, and will have some more tales at my blog. Keep checking here though, for a guide on Bandung and Bali which will l be uploaded soon.

Jakarta is a beach capital, its a corporate capital, its a shopping capital. It has the kindest of people, really, the kindest human beings are from Indonesia – and it has absolutely hot women. Jakarta is out of this world! Indonesia Airlines has a tagline that says Indonesia, Unforgettable! – and it is true. Unforgettable.

ALN 2011 Day 3

2011-11-06T23:33:00.000+03:00

The final day of ALN, brought calls to embrace politics, more lessons in banking & political leadership, an update on the status of the network, and appearances by 50Cent and African royal(think ‘Coming to America’)!

(Excerpts, not the full day proceedings)

Needs and Leads (N&L): This was a mid-morning session for attendees to find tangible ways to collaborate with other ALN members. Each speaker had three minutes to talk about their work and their needs, without using slides or PowerPoint to make a connection. They included

- Mike of Fenix International said that they (in partnership with MTN) had developed a solar power set in Uganda, which small businesses could use to charge other batteries and devices for members in a community. It retails for ~$150, and can break even for the owner/investor in about 6 months. They hope to scale up and introduce the device to millions of others in Rwanda and South Africa and are looking for entrepreneurs to distribute the devices.

- The second N&L speaker was from a private equity business in Johannesburg that has a team of over 400 programmers working on customer development & billing application software for the private sector, telecommunications companies, large SA banks, and the Government (SA’s revenue agency). They are seeking to grow into Kenya by finding leads into Kenyans businesses in software development, telecommunications and the government.

- Lindsay of Sanergy talked about the slum residents in Nairobi who don’t have access to sanitation. So her company builds toilets for them, collects sewage, and converts this to fertilizer and energy - making money as an independent power and fertilizer producer. There is great potential in this and she is seeking fertilizer distributors, Kenya government officials (in sanitation & standards) and micro-finance banks and institutions.

- Laila runs a property firm in Nairobi and is the Chairlady of the Kenya Property Developers Association, and focuses on urban development in cities. They have mobilized $25 million to develop middle class properties, and with an IRR of 30% where they have exited - and they are seeking to mobilize $100 million as risk capital and mezzanine finance to develop low costs housing, budget hotels in East Africa, as well as senior private equity professional, to become a partners & board members.

- Arjuna from the Omidyar Network, lives in Silicon Valley and, is looking for people who want to change lives in Africa to bring their ideas forward.

- Ann is working to establish meaningful social games for change and reach young people to work on projects around wealth and prosperity, and she is looking for experienced African in games design, and social innovation projects as well as partners, investors, and interns

- Andy from USAID spoke about the overlap of needs and mutual interest between Africa and America and are they are seeking young people to engage with, and help them craft meaningful, impact-ful programs for Africa and be sounding boards of feedback

- Joseph from Congo, grew up in a refugee camp in Uganda with limited schooling & learning resources, and is now a graduate of the ALA. He, and other refugees, co-founded a youth organization - Coburwas which looks at the common needs of refugees which are common across and now want to expand the education program and help kids finish school. By 2010 85 students, and 15 were competing A level, including 5 girls - the first ever to complete school from the camps. He was need mentors to advise on foundation decisions, and need $13,000 of funds to take 100 kids to high school for the next one . Within 10 minutes, another attendee (Colin Gayle of Bounce Back Media) got on the stage and told Joseph, that a benefactor (Curtis Jackson, a.k.a 50 Cent) had committed to fund the entire $13,000.

- Debbie of Aecom/Stanford Business School focuses on entrepreneurship and innovation in emerging markets, especially on bottom of pyramid, helping people to deal with poverty issues that can scale. They are seeking entrepreneurs (in Africa, Asia, Latin America) who would want assistance from Stanford and are willing to case studies for research

- Swaady from Cote d'Ivoire has set up luxury tea company and is seeking customers, funders, partners.

- Isis from inMobi spoke of the scalable potential for mobile advertising to the 500-600 million phone users in Africa as that will be the main way people access the net. She is seeking talented women to work at the company.

- Nuradin a former Somali refugee now Dutch citizen is the MD of a company that distributes Massey Ferguson tractors in Africa. They plan to set up agriculture learning centers in Africa, on 100 hectare model farms to teach farmers how to use tractors and implements and he is looking for partner dealers in Africa.

- Monica has set up an agro processing company working on alternative foods (non-Maize) for the larger population , and is seeking people to assist in branding, supply chain & distribution strategies.

- Nena of Blackbox noted that there is little research done on young women consumers in Nigeria, no one knows them, or how to market to them. So they want to do a study for women 0-18 what are they doing, needs, gaps in services, and data from this will be used for brands to do product development, governments to provide better service. They are seeking funding for the study, people interested in buying the study, and other who may wish to run similar studies in their own countries.

- Oliver from LGT Capital invest $200,000 - $1 million in expansion business models in education, health, resource management. They have invested in Bridge International an institution that is growing for-profit schools (now 38) in low cost areas in Kenya at a student cost of $4 per month. They are primary investors but are looking for capital from Africa to invest, entrepreneurs with ventures, and partner who can bring expertise to the group.

- George of Angels Finance spoke of a project he's developing in Uganda where people can donate a portion of their phone airtime to charities – and he is seeking mentors, a bank to be the trustee, and developers to put it on phones

- Brian (a co-founder of Seacom who recently stepped down) has founded Black Rhino that invests in infrastructure in Africa. He notes that such developments should have social inclusion, smart financing (governments should not put crippling liabilities on their balance sheet) and smarter (transformational) technology. They are seeking people with experience in social work, and environmental work especially French-speaking ones.

- James of Dahlberg talked about the long history of philanthropy in Africa. They want to identify and celebrate champions of philanthropy across Africa, mapping out high givers of interest, and create platform for collaboration, and acknowledge their efforts.

- Arthur, the deputy prime minister of Zimbabwe, said that despite his background (McKinsey, MIT, Rhodes) he felt lonely as there were no other political leaders present. He urged ALN members to make sacrifices and take a plunge into politics, (become political gangsters) in order to be true continental leaders.

Don’t ignore Politics: This was under-scored by another speaker Tutu Agyare who lamented that while most in the room comfortable with big positions, or making money from foreign corporations, they had to take more risk to build their countries as they could do better jobs than the minister in our countries. Also it was important to take more risk at the young age as you don’t have to be 70 years old to run an African country

ALN Award The inaugural ALN Award was given to James Mwangi, the CEO of Equity Bank. He talked about the large price and sacrifices you have to make - like he did in 1992 when a mutual fund (Equity Building Society) in his village was about to be closed by the Central Bank (CBK)for insolvency (no funds, no trail balance for 3 years and other governance issues) and he was approached to intervene. He did, but the CBK Governor asked him to take over the society’s management as a condition to keep it going, and he foolishly did, going from a top bank job earning Kshs 400,000 to about Kshs 50,000, and with the additional danger of losing his house which he had bought through the society.

He also talked about need to have a belief in something like the society (now bank), not just an interest, to transform it from 2,000 to 7 million customers (more than the number of people who voted in Kenya's presidential elections). Also that, while success is not always celebrated, having a belief enables you to do things like persuading villagers to convert their society savings into investment in the society and they have been paid back to a point that the village Nyagatugu maybe the richest rural village per capita in Africa.

He also mentioned the need to focus on innovation and use it to develop communities & societies. Equity is edging away from branch banking to mobile phones & agency banking model to a point that 40% of their transactions are being done by shop keepers, as well as distribution of relief food funds in Kenya and they sell more policies than all insurance companies in Kenya. Also that next week, they will launch the first free transfer from the diaspora to the continent in partnership with MasterCard.

Talk from a King: The closing Keynote was given by King Kgosi Leruo Molotlegi II of the Royal Bafokeng Nation in South Africa.

Who’s the King? He’s an tax payer, architect, and a trained pilot who’s worked with the SA air force and reads on culture & economies which helps him run a $4.5 billion fund. He said the issues that leaders face are universal, problems are generic and that prosperity is partly about finding the right formula, but mostly its about having the will to act and maintain a vision.

He spoke of the people of Bafokeng migrated to their current homeland around the year 1450. Their then king forged friendship with colonial leaders and noted the interest in their land and decided to obtain title to the land to avoid land grabs. Bafokeng citizens went to work in the Kimberly diamond mines, and portions of the money they earned was saved - and the King got help from a missionary who they asked to buy the land in his name and hold it in trust for the Bafokeng community.

Later in 1925, platinum was discovered under the land that the Bafokeng owned, and despite clashes over land rights with mining companies and the government, courts have sided with the Bafokeng as genuine owners of their land. As such, they have derived income from mineral extraction for 60 - 70 years that has funded many of their expansion plans and brought wealth to the nation.

However they are aware of the resource curse and the challenges it brings such as population influx, crime, unmet expectation, social ills, complacency and corruption – for the nation of 150,000 people (in 29 villages) are something of an island of prosperity ($300 per month average income) in a sea of rural poverty.

The Kingdom has a Plan35, a detailed blueprint for the next quarter century (to 2035) and their portfolio is now 60% in mining, and 40% in property, communication oil gas - though holding firms, enterprises, education, and sports firms that ensure sustainability.

He was asked (and answered questions) about the supreme council of elected leaders who help run the state (are elected, and are now more representative with women and youth among them), welfare programs (dependence on the state), the need to develop entrepreneurship (a big challenge as there has not been an incentive to work for 70 years and some people have the mind-set since everything is given to them) and communal land tenure (which is an obstacle to enabling people to obtain development loans).

State of the network: Acha Leke and Fred Swaniker spoke about ALN whose membership is now a mix of South Africa (25%), US/UK/Europe (17%) Nigeria (17%) Kenya (11%) and other countries but weak in Arab and Francophone Africa. It is also male, 28% female, and dominated by the private sector (heavily finance & consultancy) 89%, and non-profit's are 6%, against a goal of having 30% from the public sector.

In 2012 they will grow in the above areas that are missing, as it is not meant to be a business network, but a leadership one. They will target to have two events a month cross Africa - regional gatherings, from which a lot of where membership tends to spring from - next in Cairo, Dakar, Abidjan, and Luanda. Also they will take a group of ALN leaders to visit China, and, after two years in Addis, Ethiopia, will have next year’s event at a new venue in Accra, Ghana

ALN 2011 Day 2

2011-11-03T00:10:00.001+03:00

Day 2 of ALN brought out the importance of observing trends & change, understanding markets, engaging with partners, appreciating the arts and making tough decisions as leaders

Imagining the Future: Dr. Chris Luebkeman of Over Arup, spoke of trends that will drive the future which were;

1. Change is constant - no matter where you go, the context, or the duration it takes, and it is important to stop and look up every once in a while, and not do things forever without thinking. Think STEEP (social, technological, economic, environmental political) most make decisions based on three of the five

It also matters where you’re standing, as an exercise he concluded showed; While most ALN attendees believed that the driver of the future in Africa were education infrastructure and the influence of china, outsiders views on Africa were that the main issued would be corruption, education infrastructure and water.

Tools he advocated for assessing future trends & decisions are STEEP modeling (social, technological, economic, environmental political), as well as population pyramids which all thinkers should analyze for their countries and your cities.

2. The future is fiction; no one knows what will happen tomorrow. It is a story each one writes, the outline, characters. Visions can become reality. E.g. A former MIT professor had a vision those 15 years ago that you’d grow organs, and this year at the TED conference, a kidney was printed,on the stage.

3. Participation is what shapes the world - so stay active.

Avoiding the Resource Curse: Oxford Economics Prof. Paul Collier, spoke about the opportunities Africa faced in terms of resources and how to avoid resource curse pitfalls.

As much as the continent is known for mineral & resource wealth, it has still been barely searched, and there could be much more to find. However the history of such resources in Africa is sad in that rather than transforming economies, they have been plundered, not saved or reinvested,

He listed five decisions & steps for resources to be handled right

1. In terms of discovery of natural assets (already been done wrong) geological information has to be made public before government's call in the private companies (manage discovery)
2. Have a good taxation system to benefit the society – the history is one of missed revenue, and misaligned contracts so it is important to get the right contracts
3. Involve & manage the locals – avoid Niger delta problem
4. A substantial portion of income should be saved rather than consumed
5. save in what? Africa needs sovereign development funds, not sovereign wealth funds. However Africa does not have much of this capability, and there is a need to build capacity, i.e invest in investing to manage the resource depletion and erratic commodity prices.

There is a natural resource charter document that is a guide for these steps.

China in Africa: China expert Buddy Buruku and journalist Adama Gaye shared their views on the state of China–Africa relations

Buddy talked of the difficult finding consistent data on China's investments in Africa, but that about 3% of global investments were coming to Africa, with the largest recipients being were South Africa, Sudan, Nigeria, Zambia, Algeria, Tanzania, Mauritius, Egypt, Madagascar (no Kenya in the top 10)

China's trade with Africa has been growing exponentially, and their main imports from Africa mineral were fuel and ores. The top importer from China is South Africa (19%), while Angola is the top exporter to China (41%) as well as the largest trade partner in terms of combined exports & imports.

It is also difficult to quantify they type of Chinese aid, as a lot of it is bundled. However it mainly takes the form of concessional loans with China issuing $31 billion worldwide - and Africa getting 22 billion of that. Other (smaller) forms of aid are debt cancellation in-kind aid and grants.

It is also tough to track what is pledged versus delivered in terms of Aid & trade, but that contrary to expectation trade is not just about oil, e.g. Their main focus Zambia is on manufacturing, in SA there was the large finance deal via an investment of $5.5 billion in Stanbic Bank, in Nigeria it is manufacturing and EPZ, while in Mauritius, Tanzania and Ethiopia the investments have been for manufacturing capacity.

She added that Africa should look at china as a resource, and the onus is on Africans to engage with China in a mutually beneficial way - use access to capital, and access to markets. In terms of capital: no other country is providing debt & equity to Africa as much as China, and the $5 billion China Africa Development fund is the continent's largest, seeking out infrastructure and renewable energy projects for which they have extensive capabilities and history.

Adama said that China’s interest in Africa is a transformative force, that may give Africa the chance it many never have for centuries. However this is not a new engagement, and they have prepared for this for decades, and they will engage with Africa as long as there is some gain or disappear (he cited DRC crisis in 2009 when mines were closed)

Adama said African countries can come up with the same (joint venture) demands that western companies got faced when they wanted to go to China, insist on waived tariffs and access to the 1.4 billion population China market, require transfer of know how and technology, but that instead of negotiating as 54 small countries, regional blocks should step forward for that. He also said countries should appreciate & utilize African who were trained in the 195'0s on engagement with China, and their diplomats who worked there.

Making Phones for Africa: Alpesh Patel, the founder & CEO of Mi-Fone, spoke of his company which is making a luxury brand of mass market phone for Africans who earn less than $200 a month.

With 800 million people in Africa, and only 5% have internet access, the phone screen is the most potent real estate in Africa - capable of delivering banking, music, sports, entertainment, email web loyalty, mobile advertising, social media etc.

In just over 3 years, they have revenue of $15 million, have partnerships with 9 GSM carriers in 12 countries, and they have done branded phone like the Mi-Obama phone which sold 10,000 handset in Kenya and Uganda the day he was inaugurated. They have also done Western Union handsets, formed partnerships with local musical artists (like Kenya's Liz Ogumbo) and will soon launch the first Facebook phone in Africa and an application store for mass market consumers

Leadership in Africa: The keynote speech was given by Dr. Donald Kaberuka, President of the African Development Bank (ADB). He talked about the failure of leadership in rich countries to address the financial problems they are facing now which constitute the worst crisis since World War II – with some potential impact on Africa – but having to undertake harsh structural reforms that African countries undertook a few years ago

He said leadership was about making tough decisions – like Helmut Kohl accepting to exchange East Germany's currency at ten times it's value in the interest of reunification, Gorbachev ending communism and Mandela ending apartheid and reconcile SA, and not the kind of leadership that watches the next elections.

In Q&A:
Leaders he admires? He believe in Institutions! So they should be built & strengthened as leaders go bad; but he admires Ellen Johnson Sirleaf

What will it take for ADB to go back to Cote d'Ivoire? He lamented that Kenya, Cote d'Ivoire, Zimbabwe, and Madagascar were all on their way to middle income, but were re-railed by political setbacks. He said they may go back to their CIV headquarters soon, and when the Bank governors decide

Integration for Africa? Economic integration is not new - East Africa had one currency, central bank, airline etc. China is one, Brazil is one, and India which is very diverse in terms of people & religion is one. But many African countries have too small GDP's, while others have some resources. African countries combined have 400 billion dollar in reserves, which more than India, where many countries go to borrow.

Helping Countries Avoid the Oil Curse?. He said Diamond-rich Botswana has shown that it is possible to do this. Oil exporting countries have made mistakes but recently when an African country (he did not name) discovered oil, ADB went to see the President and if they could advise. The ADB is helping countries through a legal support facility to help countries negotiate good contracts, as the bad deals they previously signed became difficult to wiggle out without damaging investor confidence.

Advice for countries?: When he worked in post-conflict Rwanda, he knew they would be aid dependent for a while as tax base was low; still they insisted on some budgetary support for domestic resource (tax) mobilization and it worked. Also it is important to fight corruption to the core, which is not just a moral issue, but a is a break on development. Rwanda did not even create an anti-corruption authority, as they emphasized that the existing institutions be functional, and he also said that leaders should show that they are sacrificing.

Employment in Africa: Chinezi Chijioke of Mckinsey said that while there are more school, more jobs, unemployment has dropped, and discretionary income is up across Africa, 2011 has been one of the most tumultuous years in African history.

So is economic growth lifting all boats? how inclusive has it been? There are frustrations due to:

- Unmet expectations, with more schooling there are higher unemployment (North Africa tertiary education graduates have the highest unemployment)
- The excluded: consumer class has grown, no of household that are exclude not participating has grown
- The vulnerable & the unemployed. While there is 9% unemployment, another 63% are considered vulnerably-employed and the combined figure of 70% is scarily high (Latin America is 30%)

It is therefore important to address:

1. Accelerate creation of jobs: Countries should move from mere economic growth targets to economic growth & job creation strategy; they should try and understand which sectors will catalyze jobs promote entrepreneurship in those sectors. mining and finance sectors don’t create jobs unlike those in retail, hospitality, agriculture, government social services that do.

2. Improve labour supply - Ensure there are people who are job ready (Many companies have trouble filling jobs as candidates are not job ready - have no technical, soft ,experience or schooling).

3. Match those two. E.g. a study found that in Nigeria small enterprise will create job, while in Kenya middle and large enterprises are the engines for jobs

Solar for Africa: Asif Ansari of Suntrough Energy spoke about power generation which is crucial as a world bank study found that a 1% increase in power generation, 3% on GDP. However power infrastructure was a very complex process, combining servicing debt vs. fuel. E.g. a 100MW power plant may cost $100 million to put up and one can get a bank to finance, that but it will cost $1 billion of fuel during the life on the plant. He advocated that sustainability requires the use of some indigenous fuel - anything available locally - biogas, solar water etc. and we cannot be held back by climate change advocates, since Africa did not cause that, and needs energy now.

Africa is one of the wealthiest regions in the world - but the tremendous resource is underutilized so far, noting that 5% of Sahara desert can power the world for 24 hours a day – and solar is half the cost of natural gas (diesel costs 25c, wind 9c, gas 9c, coal 6c , hydro 6c, and Morgan solar 5c)

In terms of funding, multi lateral banks are there, but its takes time to get a loan going, so you should structure something can be financed by private equity such as middle east investors or local sovereign equity.

They use Morgan solar technology and there are also employment opportunities in developing standardized solar hybrid plant 10 - 20mw. you can actually bring them here early and fabricate them in Africa. power plans expectancy of 50 years

Invest in the Arts: Cobhams Asuquo a music producer an the CEO of CAMP (Cobhams Asuquo Music Productions), spoke of challenges in the indigenous arts including the low premium placed in the arts, high infrastructure costs, piracy, pressure to adapt to westernize styles, and little regulatory assistance from bodies to market & sell African arts. he urged more people to invest in the arts in sectors like film distribution, and this was followed by one of the artist on the CAMP label, Bez Idakula who gave some great, Stevie Wonder-ish, performances.

Deputy PM Wows ALN: Few people outside Ethiopia can name another leader besides their Prime Minister, Meles Zenawi. But at a dinner at the historic palace of Emperor, Ato Hailemariam Desalegn, the Deputy Prime Minister and Minister of Foreign Affairs engaged in a Q&A session on various topics put by ALN members. His fast answers included;

- Plans to open up communications sector They are focusing on completing inland national fibre backbone first, and when complete they will now talk to private sector players (who are biased toward urban rather than rural consumers)

- Advice Kenya on Somalia? Kenya tolerated Al Shabab for too long and now has disturbed tourism sector. The movement must be defeated at all costs to help Somalia find some stability after 20 years and Kenya is right by international law of self defense

- Gibe dam impact on Lake Turkana communities: All infrastructure has some impact but this was assessed by internationals standards and found to be minimal. The dam has the support of Kenya and Uganda governments, and the noise about the dam is caused by NGO’s who have politicized the debate. Ethiopia may later sell power to Uganda, Sudan, Kenya and Djibouti .

- Do Funders impose conditions? Domestic saving not enough for all the loans they have sourced funds loans unconditionally from China, South Korea, Turkey, Brazil and India.

- Lessons for other Africa countries? The western model of development for Africa from Bretton woods is dead, so they got examples from Asian tigers and are pursueing development state model where the government intervenes in some sectors cannot. They focus on agricultural and manufacturing and this ensures that Ethiopia has a low gini coefficient (equivalent to Scandinavia) through growing high value crops like Denmark and New Zealand, building capacity building in textiles, and the deployment of 62,000 agricultural extension worker show advise farmers kaizen bench markets seeks out export markets.

He also said that African leaders should be drawn from productive private sectors (not rent seekers interested only in wealth accumulation from land taxes government contracts and corruption who are disruptive elements)

- Plan to join East Africa community? He hinted that another country was not comfortable with an 80 million population country joining, but will start as observer member before going for full membership. Regional integrations is the way to do – under Nepad, south Africa pioneer transport integration and Ethiopia will do power integration as a start with Gibe.

ALN 2011 Day 1

2011-10-31T23:17:00.002+03:00

Day 1 of the Africa Leadership Network's (ALN) Annual Gathering on Addis Ababa, Ethiopia, was spent reconnecting the network - making new friends, learning about Ethiopia's investment & agricultural potential, and learning about the arts & corporate succession

Investment opportunities in Ethiopia: The country with 85 million is larger in size than Spain and France combined. Zemedeneh Negatu of Ernst & Young explained that it is the fifth largest economy in Africa (behind south Africa, Nigeria Angola, Sudan), and as one of the fastest growing economies (with an annual target of 11%) it is poised to, by 2025, be the third largest behind Nigeria which will be tops, and mature South Africa.

This is due, in part, to the large young population (now 85 million, but projected to reach 120M in the next decade), and the potential there as Ethiopia is one of the least urbanized, and they have a target to electrify 75% of the country in next decade – following the path that the Chinese and Indians followed.

Sectors with large potential for growth include agriculture (a lot of Indians and Chinese are investing here after the Government allocated 3.6 million hectares of arable land for foreign investors (size of Belgium) – but he qualified that, adding that while this was about 5% of arable land in Ethiopia, NGO's had latched on to that as a land grabbing

Others were manufacturing (Ethiopia’s average manufacturing wage is $80 compared to $430 per month in china and there is a lathe industrial park being set up outside Addis to capitalize), infrastructure ( $155 billion), mining, oil & tourism.
A big source of funds are Asia (China, India), then Middle East, then Europe and then US and he mentioned two large beer deals had been recently signed by Diageo and Heineken. The Ethiopian diaspora investing but not substantially, yet.

Later the head of Omega Farms, a returnee from the Diaspora, spoke about the potential of Ethiopia's agricultural sector where there is good availability of fertile land that can produce year round, and a variety of climates in the country, that meant that every conceivable green food could be grown. But he also spoke about the current paradox of her & other African countries that grow fruit, but buy juices packed in Dubai or of knowing that some foods are exported from Ethiopia to Europe, only to be re-packed and re-exported to west Africa.

- The future is bright with at a time when the air boundaries are reducing with Ethiopian Airlines able to reach the Middle East, Europe and most COMESA markets with short flights (They recently ordered 777 freighters that can carry 90 tons or fly non stop to Beijing), or 12 – 18 days by sea to most world markets. There are also opportunities to produce flowers, fruits, nuts, and seeds for exports and local markets (next to Mexico, Ethiopia is one of the largest growers and consumers of corn and chili)

- Incentives available to agricultural investors include tax holidays of 2-7 years, lease based land acquisition (up front costs are low), duty free importation of agricultural capital goods (100% tax free) and up to 70% development bank project financing.

Mo & Me: In the afternoon Salim Amin previewed his award–winning movie Mo & Me about life with his father, the late photo-journalist Mohammed Amin. It was poignant because it was in Ethiopia where Mo Amin's powerful footage brought him his greatest fame, but it was also where he lost one of his arms (and the film we learn that this probably affected his later career), and he made his final flight from here as he died when an Ethiopian Airlines flight was hijacked and crashed into the Indian Ocean.

Salim Amin was an only child who worked, reluctantly, with his father and after Mo’s death, he inherited the company, which he runs to this day. Salim spoke quite a but about this and you have to admire that he has kept the company going for 15 and used Mo’s film to introduce a new worldwide audience to his late, distant, Dad.

Perhaps, as an only child he had that obligation, but time has played into his hands as the content that his dad accumulated (3 million photos and 20,000 hours of video over 30 years) is a massive archive that may have immense value once he completes the challenge to digitize, caption, archive and re-produce it in meaningful ways, perhaps in the educations sector.

((Sadly, for me, another large company I was familiar with is facing the auctioneers hammer less than two years after the death of the family patriarch & founder.)).

Guide to Mauritius

2011-10-25T22:12:00.002+03:00

A guest post by @kkaaria after a visit to the land of the Dodo & bargains, and where good life & driving habits are the norm!

Getting There Air Mauritius offers the best rates for direct flights from Nairobi’s JKIA, but double check as prices vary during the year. It can cost as low as Kshs 85,000 during off peak and as high as Ksh125,000 (now ~$~1,250) in peak seasons. The weather in Mauritius with no extreme changes in temperature coupled with its vibrant offshore business sector makes it (depending on your vacation or business interests)- a year round destination. The Air Mauritius flight from Kenya is a once -a-week flight that fills up quite fast so you’re advised to book in time.

Sir Seewoosagur Ramgoolam (SSR) Airport is quite hassle-free as a recent agreement between the Kenyan and Mauritian government ensures that Kenyans do not require a Visa to visit Mauritius. While there are no unexpected taxes, you will need your yellow fever card. Also, life is pretty good in Mauritius which means they aren’t all that crazy about strangers infiltrating their haven so be prepared for more thorough procedure than at most Sub Saharan Africa countries. They might ask to see your accommodation reservation and return ticket so print & keep them close to show at immigration if asked

Business & Infrastructure: Mauritius is a pretty small Island of about 1.2 million citizens and it will take a little over an hour to cross from one end of the country to the other. Hotel airport transfers will cost you about $90 for one-hour drive. If you have not arranged for hotel transfers, taxis are available at the airport. There is always room to bargain but make sufficient allowance for you taxi trip.

Money: Change your money before travel. I could not find Mauritius Rupees (MRU) in time in Kenya so consider either transacting in dollars once you get there or travelling with another major currency (Euro, pound) currency and changing it once you get there (The Rand is also widely accepted).. The exchange rate was $1= ~MRU 28/29 which translates into circa 1MRU= Ksh 3.5. Most major banks are present in Mauritius so with a Visa card you should be able to get money (dispensed in Rupees).

Accommodation: Mauritius has some of the world’s finest hotels and resorts, golf retreats and spas . Hotels fill up very fast and tend to be a bit pricey compared to Kenya. ‘Cheap’ accommodation here will cost you at least $100 half board, while the bigger resorts (4/5 star) will cost upwards of $350 per person for half board. Depending on your reason for visiting and your schedule, you might want to look into all-inclusive packages that cover all meals and unlimited supply on selected drinks( alcoholic and non- alcoholic) as this saves you considerably on cost.

Electricity: - is very reliable in Mauritius, and you will notice that in the major towns, most houses are fitted with solar panels. There are no power outs in Mauritius (I'm looking at you KPLC). And a family of 5 (from my asking around) pays an average of Rs 1500 per month for power. They use 220/240 volts AC. Plugs vary from two round pins to three square pins Kenya-style but take an all-purpose adaptor just in case.

Communications - Get a local line if you are not roaming - those who were roaming (from Kenya) came back to ridiculous bills *muaha*.

- Orange and EmTel are the two networks in Mauritius. I got an orange line for 100 rupees, which comes with Rs86 of airtime. You can buy reasonably priced data bundles after that.

- Most hotels come with Wi-Fi as part of the package so make sure your package includes Wi-Fi. I didn’t see any cybercafés primarily but they don’t appear to be a vibrant feature compared to Nairobi. Note that, hotel phone calls can drive your bill pretty high. A 5 minute phone call will cost you about Rs800….which is ridiculous. International text messages cost RS0.60 and you can buy airtime in denominations of Rs50, Rs100 etc.

Getting Around: The transport system is quite efficient in Mauritius albeit pricey. There is no overcrowding in public transport, buses run on time, stop only at designated spots (I'm looking at you Citi Hoppa), drivers are very disciplined & courteous and observe traffic lights even at 5 A.M when they are the only car on the roads and you are running late for your flight! So you will need to check your Kenyan road issues at JKIA and pick them up when you return!

Most locals get around by bus, personal means, motorbikes or taxi. There is little traffic, every town/city has a bus service and pensioners (over 60 years) and school kids ride for free. Quite a number of folks drive around or ride motorbikes (Riders and passengers must wear helmets too). They drive on the left, give way to the right just like Kenya so it’s easy to rent a car and drive around for more flexibility and to cut costs.

There are lots of minivans shuttling tourists around. Since the minivans double as personal transport, it might be easier to get a good bargain compared to the regular taxis although prices tend to be in the same range. As always, and while Mauritius is pretty safe, be careful about what transportation you choose. Designated taxis are always recommended and you will find plenty of these outside hotels and at Taxi ranks. As of September, gas prices were for circa RS 49/litre or ~ $1.75/L.

Food & Drink: The staple food is ‘Farata’; a pan-fried flat bread served with various spicy curries. Food in Mauritius is as varied as it’s ethnic mix, derived from a population that is 60% Hindu 22% Christian 1% Franco Mauritians 3% Chinese and 13% Muslim.
Expect lots of spices, curries, chutneys, mutton, chicken, vegetables and of course seafood. Make sure you try the millionaires salad made from palm hearts. Yummy! Smoked marlin is another must try.

The main Mauritian local beer Phoenix is widely available in supermarkets, and also has lemon flavored variant. A 330ml bottle goes for about RS 25 and a 500ml bottle goes for about Rs40. The same bottle will cost you about Rs350 and up in a 4/5 star establishment. Another (less popular) brand is Blue Marlin.

Mauritius grows a lot of sugarcane and makes some good industrial and agricultural rums in their distilleries so DO try Mauritian Rum as well. They have a wide assortment of really good rums (rum cocktails/rum desserts are delish) as well as some local grape juice wines.

Depending on where you eat food can cost as little as Rs50. A single course meal at big hotels will go from Rs 450 and up. Cocktails at the larger hotels will cost upwards of Rs400 and beers upwards of Rs 300. A bottle of water in the supermarket costs Rs20-30 so budget accordingly depending on what you are up to.

Getting Around English is the official language, but Creole (derived from French) is used by everybody, and French is the most commonly spoken language. However, you will get by with English. Their major paper; ‘L’express’ contains a small English section with the major news of the day and ‘News on Sunday’ is a full English edition newspaper every Sunday. Others are Le Defi and Le Mauricien.

Mauritians are nice and friendly. In conversations, they will want to know about you, where you come from etc. and in turn they will freely volunteer any information you seek. They are also very up to date with their current affairs so a quick chat with the waiters, drivers and staff will give you a balanced opinion of ‘the news’ everyday. They receive a lot of tourists from South Africa so they tend to assume that every black person is from SA…and it can get a bit vexing! Through no deliberate effort on my part (I swear), they were willing to talk very openly about HIV/AIDS and not minding as I furiously jotted down statistics on my phone. Nice ☺

Transportation: A 4km distance journey on a bus will cost Rs 22 (Ksh70-80) while the same distance using a taxi will cost anything from Rs400 (Ksh 1500) and up. A full day car rental cost Rs3000, with an extra Rs1000 per day for a driver, and the car rental company will ask for your driving license and ID.

Mauritius is very secure, very friendly. You should be quite safe there but as usual, take the necessary precautions. Most hotels come with safes where you can keep your valuables and travel documents so make use of those.

Shopping & Sight-Seeing There’s plenty to see in Mauritius. While their beaches are littered with Coral; making it quite unpleasant to fully enjoy the beautiful blue waters and low tides, there are plenty of places to visit.

7 Colored earths, Chamarel

These include the famous 7 Colored Earths in Chamarel, Blue Penny Museum, Chinatown (yes), Sugar Factory Museum, Botanical gardens/Pampalemousses, Balaclava ruins, Shivala, Grand Basin, Rochester falls, Back river Gorge etc. Do have someone experienced take you around and make use of guidebooks to get the best out of it.

Make sure you take the Catamaran cruise to Ile aux Cerfs Island. The Cerf is a small island perfect for swimming, snorkeling and parasailing. It has a white sandy beach and bluest water I have ever seen my entire life. Plan with your guide so you get a chance to swim with dolphins in the ocean! It’s exhilarating!

Finally, watch a Sega dance in the evening. (a Mauritian dance with colorful flowing skirts to beautiful music by very attractive to marginally attractive ladies☺)

Depending on what you get up to, there is no limit to how much you can spend in Mauritius. It is a beautiful place to shop so heavy shoppers might spend more, and you might shop till you drop in Mauritius. There are tons of shopping malls in Port Louis (the capital) Curepipe, Grand Baie etc. If you want a good bargain, make sure to stop by the Grand Baie Bazaar where it is easier to bargain.

There are plenty of famous brand names at duty free prices in the malls if you’re into that stuff but the smaller markets also offer amazing stuff and souvenirs at great prices (again, Bargain!).

Grand Baie Bazaar

Plus there’s lots of Chinese and Indian stuff. You will get plenty of cashmere, rum, spicy teas, pearls, diamonds, hand woven silk & wool etc. for what I found to be truly decent prices after bargaining for about two hours . Also when getting souvenirs, get some Dodo bird inspired items - Dodo snow balls, Dodo fridge magnets, Dodo key holders etc. to bring back as gifts (The Dodo is a now extinct not very clever-ergo extinct- bird that once inhabited Mauritius).

Surprises in the country?: - Bargaining Again, things like car rental could be less if you can bargain harder with Mauritians who despite the free education insist that they need the money to pay for their children’s private schooling or after school tuition. I do drive a hard bargain but they were a tough nut to crack. Good luck with that.
- This is not Coke Country, but Pepsi. You will find Coca-Cola in some areas, but when you ask for a Rum & Coke that means Rum-Pepsi and when you ask for a Sprite, be ready to receive a 7Up.
- Also, dare I add, the suspender clad Mauritius policemen are very hot!! And speaking of policemen, littering in Mauritius will earn you an instant fine of Rs 1000.
- I am used to hotels serving ladies first then men second. I *think* I observed male waiters serving men first then women, while female waiters serve women first then men. I stand corrected but that is the norm at Le Meridien and a couple of other places I visited.

Summary: Mauritius is a lovely place. The weather is fantastic, not as humid as the Kenyan Coast. But their beaches are awash with Coral which puts Kenya way ahead on the beach experience; however Mauritius makes up for that with incredible service and security - a thing Kenyan establishments and staff at the Coast could learn from. So make time to visit Mauritius!

Real Estate Moment: Expo II, Land Bills, Timeshares

2011-10-20T17:52:00.003+03:00

US$1 is ~ Kshs 100
A second homes took place in Nairobi over the weekend, and this came less than six months after the first in April. It seems unusual to have two expos in one year, but here's a recap of some of the housing, appliance, banks, and other companies at the expo.

Banks: There were the usual mortgage providers there including Housing Finance (whose Treasure account comes with up to 50% discount at KWS parks and 10% at Jolly Roger, Village market, Gertrude hospital) who offer finance of up to 90% at a variable mortgage rate of 14% loan.

Other banks offering up to 90% included Standard Chartered and National Bank. NBK and Barclays both give loans of up to 20 years for individuals (NBK at 13%, BBK at 14%). A recent entrant in the mortgage sector is Family Bank who also launched m-kodi, which is a way for tenants & property owners to make and process rent payments by mobile phone. CBA and Family Bank also give mortgages of up to 25 years, and for Kenyans in the diaspora, Family will give mortgages of up to 15 years for 90% property finance.

Properties Nairobi - Le Mac was introduced at the earlier expo as a 24-storey tower complex with apartments, malls, shops, offices, bank, restaurant, gym on Waiyaki Way and Mark Properties are only selling studio apartments for Kshs. 12.7 million, 1 bedrooms for Kshs. 16 and 2 bedroom apartments for Kshs. 21M
- The gateway 3BR apartments in Kileleshwa for Kshs 14.9M starting in December 2011 with 20% offer, 80% on completion from Bluebell
- Long-standing properties that have featured at a few expo's include Jacaranda Gardens on Thika Road which have 2BR for Kshs 6.6M and 3BR for Kshs 7.6M and another at Phenom Estate IV in Langata (controversially located near Wilson airport), and Sidai Village with 3BR maisonettes costing Kshs 6.5M from Chigwell Holdings

Nairobi Outskirts- Athi View on Syokimau cost Kshs. 4.8 to 9.2M are just off Mombasa Rd. (by SJR Properties), Skyline Apts,which are 3BR off Airport North Rd that cost Kshs 5.8M, and Twiga Hills in Ongata Rongai which are 3BR apts. for Kshs 6M (also have 2BR ones). Also in Kitengela, there are 1/8 acre plots from Optiven that range from Kshs 0.5M (Silver gardens) to Kshs 0.98M (Imani gardens) with immediate financing from Equity Bank.

Coast: The Baobab Development Group has been pushing fractional ownership of an upcoming property in Malindi as luxury apartments at a 'affordable' cost of Kshs 2.5 million (time share properties are new in Kenya). Also Sunset Paradise apartments (700M from Serena Beach) are selling 2BR for Kshs. 7M ($80k), and the 3 BR and 4BR are in two sizes with the larger of each costing Kshs. 10.2M ($140k) and Kshs. 11.9M ($160k) respectively.

Gated properties: News ones included Iluluwe golf estate development in Athi River, now offering an 1/8 acre is Kshs 0.95M and 1/4 acre at Kshs 1.8M and Longonot Gate which will be at the foot of Mt. Longonot and now have 200 1/2 acre plots going for Kshs 3.5 million (later 4M). Buyers will also become members of a Kingdom golf club in the gated resort city at Longonot.

Interiors, Finishes, Appliances: There was also companies like Mabati for roofing choices, Flamingo for floor tiles Solaris for water heaters, Chloride Exide for solar water systems and power backups

Elsewhere: Knight Frank, at the expo or in the newspapers, had Windsor Green in the Mbuya suburb of Kampala for sale starting from $76,800 upwards and they and are also offering 7 acres near Wilson Airport, Nairobi for Kshs 100 million.

Land Ownership: The Government of Kenya's Ministry of Lands has published draft land bills for public discussion. Matters of interest include spousal rights, pastoralist rights, partitioning, appeals processes, use of land, and notes that the land registrar shall make information in the register accessible to the public by electronic means, among many other changes.

Kenya Airways 2011 AGM

2011-10-17T14:01:00.001+03:00

Having not been to an AGM in 2011, I decided to take an hour-long peek at the Kenya Airways (KQ) one as a shareholder and for sentimental reasons, including the love of aviation, because a KQ AGM was the inspiration for this blog.

There's not been much change over the years: KQ, which has over 70,000 shareholders, has been generous with SWAG to shareholders over the years and this has ensured that they always have some good attendance (they also provide free transport from town to the Bomas venue of the AGM) - however this also means that their meetings are long and drawn out, with lot's of time wasting (Chami), and inane questions (@ChrisKaranja 90% of all questions are related to umbrellas and food)

Some notable points

Investments: Regarding their Precision Air investment, (It's now in the middle of an IPO) a shareholder noted KQ which owns 49% of Precision, posted a loss of Kshs. 188 million for the year to March 2011 on their investment - and looking at the Precision March 2011 ones, their pre-tax Kshs. 250 million profit was halved by forex loan revaluation adjustment of Kshs. 125 million (so the current shareholders in Precision swallowed the loss before the IPO). On their dormant investments, the KQ Chairman said one of them would be revived soon (Probably Flamingo Air, or one of two cargo companies)

- The March 31 annual dividend will be paid on 16 November...

Board- Amb. Denis Afande was retiring as a director, but there were no fireworks as in previous years - as this time, the board has settled on his replacement. Amb Denis Awori, a former Kenya rugby official and ambassador to Japan, and currently Chairman of Toyota Kenya was introduced by the KQ Chairman. He spoke briefly on his passion for the airline; he studied aeronautical engineering, was a trainee at East African Airlines (EAA was the precursor to KQ) and as ambassador to Japan participated in promoting the airline as it featured heavily in tourism promotions that were run.

Rights Issue: The Chairman spoke about their need to acquire more aircraft and pay for them including 10 Embraer 190 aircraft. The airline settled with Boeing in April on the delayed 787 aircraft (some of which were to replace Boeing 767) and the first one that was expected in October 2010, will now arrive in fourth quarter of 2013 when they anticipate loads will have increased significantly.

KQ are getting permission from shareholders (and closing the books) so they could go to the Capital Markets authorities in Kenya (& Uganda & Tanzania) but they were yet to determine the size or price. One shareholder (Mr. Karanja) cautioned that it was potentially dilutive (4X), came at a bad time (share price is low - a market price of 26 compared to NAV of 50 per share) and that a convertible bond or cheap overseas loans were better options. (FC) Karanja agreed with this, adding that they had not yet set the date, price, and structure, except that the funding plan would be a mix of debt and equity and that the new shares would create capacity for when the board decided the time was right. The KQ Chairman noted that both the principal shareholders - Government of Kenya and KLM supported the increase in capital and rights issue.

Guide to Douala

2011-10-12T11:14:00.000+03:00

A guest post
Note: A Kenya shillings converts to ~ CFA 5 (closer to 4.5)

Getting there: Kenya Airways flies three times a week to Douala and to Yaoundé. The Nairobi-Douala trip has a 45 minutes stopover in Bangui (CAR). Speaking of which, Titus Naikuni should have the staff on this route training the rest of KQ staff on the other KQ routes as they were really, really good.
Kenyan citizens need a visa to get into Cameroon. You have to make arrangements with your host for a visa before you get there. The visa application fee is 5,000 CFA (approx. 1 USD= 450 CFA).

Some tips:
• Ask your host to mail you the approved visa form by mail if possible. A scanned copy works, but the officials will require the original at the airport.
• Have with you two copies of the photo page of your passport as the visa processing officials at the airport (in Douala) will ask you to make photocopies of this for your visa processing.
• The visa itself costs CFA 50,000 (approx. $100) for a single entry visa that is valid for up to 30 days.
• You must have a Yellow Fever card. If you don’t, they will re-vaccinate you. The Santé desk had a number of poor unfortunates who didn’t have their cards who had to get jabbed again.
• You will need CFA 10,000 for exit visa / stamp duty to leave Cameroon. Note that there is no visible information on the exit visa fee (not in the visa application, or the immigration desk, or in the airport). To be fair, it is visibly posted next to the desk where you pay this stamp duty, which is at the EXIT gate. So, please reserve CFA 10,000 for exit stamp duty.

Douala Airport

Getting Around: For the intrepid, there are many boda bodas (called “okadas”) that will take you pretty much wherever you want as there are no restrictions on where the boda bodas are allowed to go. A quick scan showed matatus, but these were few and far between in Douala. More common are cabs, which will be painted yellow to show their PSV status.

Also, there's the unfortunately blatant, shameless shakedowns of the PSVs by cops. The driver slows down at the traffic checkpoint, the tout jumps out and gives the cops money and runs back to the car, then the driver then moves on.

Cameroon is super green and lush. If land were a woman, Cameroon would be this woman. Seriously beautiful. The roads, at least the ones from Douala to Limbe & Buea, were smooth, with no worries. Do check out the rubber and palm oil trees especially if you've never seen one and only read about them in Geography class or in the works of West African writers in English literature.

Business & Infrastructure: Money: You need to get dollars, and the airport has many hawkers selling and buying dollars, but you’ll get a better rate in the forex bureaus in town. Also, Cameroon restricts the amount of Cameroonian Francs (CFA) that you can leave with so make sure you change these back to dollars in town as the airport rates are quite awful. The hotel rates are even worse (e.g. 1USD:CFA425 in the hotels as opposed to 1:485 in the forex bureaus). To the best of my knowledge there is also no forex bureau in Nairobi that will change the CFAs into Kenyan shillings, so you’re stuck with CFAs if you don’t do this in-country. Standard Chartered and EcoBank have a presence in Cameroon but the StanChart ATMs dispense money only to StanChart Cameroon cardholders.

Electricity: They use 220 volts and you need a two pin circular plug for your electrical equipment. This is easy to get in Nairobi ( I got mine at Technophile Kenya)

Accommodation: Within Douala, hotel accommodation ranges from the CFA 20,000 slightly seedy and not quite clean variety to the CFA 130,000 Hotel Akwa Palace and the Ibis Hotel in Douala for a more up-market stay. However Hotel Akwa Palace has the nerve to charge you for breakfast (CFA 10,700 at their lousy 1USD: 425 CFA exchange rate) despite charging about $300 per night for a single room.

Weather: Douala in September/ October is hot, humid and thus hellish. It’s perhaps like going to a sauna in the coast while wearing a woolen three-piece suit, stockings and a wig. This weather will make you more irritable than a black mamba (it would make the Dalai Lama testy) so just remember when you find yourself losing it over some trivial stuff that it’s the weather. For this reason, you need an air-conditioned hotel room. Please note, you don’t want a room with A/C, you need a room with A/C. A bit out of Douala, I was given the choice of a room with a door lock that didn’t quite work, or a room with A/C. I chose the room with A/C over a functioning lock. Yes. It is that serious.

Food: Seafood in Cameroon is a must-eat. Try the Poisson DG (fish) with dodo (fried plantain). I also predated on the predators of the sea by eating barracuda (Delicious). Also, try the shrimp/ prawns , which Cameroon is famous for (the name Cameroon is derived from "Rio dos Camarões" or River of Shrimp in Portuguese).

Douala daytime

Shopping: Unfortunately, there are no Chantal Biya wigs despite asking everyone I knew where to get them. You can however reproduce this look with 4 strategically placed lace front wigs, one placed about 2 inches below the other!!

Guide to Cairo

2011-10-11T09:46:00.001+03:00

A guest post by @g33kmate who made a recent visit to Cairo, Egypt for the Maker Faire Africa 2011 event.

Getting There: Several airlines fly to Egypt from Nairobi including Egypt Air, and Kenya Airways at a cost of ~Kshs. 70,000 (~$700) for a return ticket, as well as others, that may be cheaper, but not direct such as Gulf carriers and Ethiopian Airlines.

At Cairo Airport, clearing at the airport was pretty fast, there was no hassle; in fact it took less than 15 minutes from disembarking from the plane to being out of the airport.

Getting Around: There are two main types of taxis - those with meters (painted white with checked stripes on the side), and those without (usually painted black with a white line). The taxis with meters are cheaper, costing about 5 Egyptian Pounds (~Kshs. 125) for 4 KM. The ones without meters tend to be more expensive as the drivers decide on the pricing. Other transport options include government buses, as well as hotel taxis, which are very expensive (not the buses), mostly ranging from US$20 (~Kshs. 2000) and prefer to be paid in dollars.

Cairo scene

Cab drivers will try to convince you that the streets are insecure just so you can take their cab service but having walked around, I did not feel any sense of insecurity, apart from the evenings when all you find in the streets are crowds of men, but everything else looked calm, with no incidents.

The local language is Arabic with just a handful of English speakers. Most if not all of the printed press I saw was in Arabic.

Keeping in Touch: For communication, I was able to use my roaming service on both Safaricom and Airtel but ended up getting a local SIM card as it was cheaper to use. With a local provider, Mobinil, local calls cost me 90 Piastre per minute, an equivalent of ~Kshs. 22 and for international costs, there was a day I called Kenya for 4 minutes and spent about 50 pounds which is an equivalent of ~Kshs. 1,100.

As most people use their Blackberrys for internet, there are a few cyber cafes, unlike like the hundreds in the streets of Nairobi.

Where to Stay At the Baron Hotel, which is a really nice hotel that costs $150 per night. There was also Wi-Fi at the hotel.

Shopping & Sight-Seeing: Getting around each day cost about 20 pounds (equivalent of about Kshs 500). The main shopping area is downtown Cairo was at the mosques and the Pyramids and the other site to see besides the Pyramids, was at Alexandria City.

Pyramids & Sphinx

Business & Infrastructure: Electricity is reliable, and it was there every single day with most parts of the city well lit. I hear it’s cheap too and solar is not very popular!

Most of the architecture is very amazing and very old ancient Egyptian. Also, it’s amazing that the tallest building I saw was about ten storeys.

Camel in Cairo

Food & Bars: The Local dish is Koshary, which is a very interesting dish of pasta, rice, macaroni, peas and a few other ingredients mixed and served with tomato, garlic and vinegar sauce. Beer is not very popular especially being a Muslim community but they take bitter tea and smoke cigarettes a whole load! The talk now is about the revolution and the life that is going to come or what is expected after Mubarak.

Koshary meal

Local legends are everyone who was in the revolution!
Shockers: The separation of the sexes. Men are more open to hanging out and working with men, but you hardly find any women in the midst of men. Men hug and kiss on the cheek every so often before and after a conversation and the best they give with women is a handshake. This also applies to the women.

The other big surprise is how friendly everyone is. Egypt is depicted as a very unfriendly country especially as most of them don’t believe they are in Africa, but the people in Egypt are all very nice and welcoming. One word AMAZING!

Reading the Precision Air Tea Leaves

2011-10-10T13:18:00.000+03:00

Precision Air (now PLC with a 126 page prospectus at their site) was incorporated as an LLC in 1991. It flies to all major towns in Tanzania Mwanza, Tabora, Musoma, Shinyanga, Kigoma, Kilimanjaro, Zanzibar, Mtwara, Arusha and Dar es Salaam) and internationally to Kenya, Uganda, South Africa, and Comoros. Kenya Airways (KQ) became a strategic investor in 2003, acquiring a 49% stake.

Air Industry: There are 27 air operators in the country, and Precision is the second national carrier of Tanzania with a 59% market share, followed by Coastal Travel 14%, others with 21% and Air Tanzania with 6% (via TAA stats). It is also the only Tanzania carrier operating scheduled international flights and member of the IATA clearing house (ouch!)

Tanzania is a large country with a service industry that contributes 43% to GDP of the country, and id that has increasing air industry opportunities thanks to mining, tourism, but challenges include a lack of staff. Precision has been a local pioneer in e-ticketing (which cost $1 compared to $10 for paper ones), frequent flyer programs and online check-in.

On Offer: Unlike past cross border listing like Bralirwa (Rwanda), Stanbic (Uganda) and Safaricom & Britak (Kenya) which have been available to nationals of all East African countries, the Precision IPO has only Tanzanian and non-Tanzanian categories for retail and corporate investors (no East African category). 51% of the shares are reserved for Tanzania nationals in the case of an over-subscription, Tanzanians can't buy on behalf of non-Tanzanians, and 3% of the shares are reserved for staff of the airline.

If dividends are paid, they are taxed at 5% for both Tanzanians and Non-Tanzanians (shareholders of unlisted companies are charged 10%). Historically, they have paid dividend of about Kshs. 7 million and shareholders equity tumbled in 2011 thanks to a hedging reserve hit of Kshs. 615 million.

58 million new shares are on sale at a price of ~Kshs 29 (TzS 475 each), with a minimum application amount of 200 shares, then multiples of 100 thereafter. The offer runs from 7th to 28th October with results announced on November 11 and listing at the Dares Salaam exchange on December 8 2011.

The IPO has had some delays such as by a small a lawsuit and (threat of) a winding up petition. However the only material litigation mentioned are two (lightweight ones) of a passenger who lost luggage and sued for about $50,000, and some former employees suing for overtime pay of $150,000 which the Precision lawyers note are unlikely to lead to winding up proceedings.

Valuation: With a re-worked earnings per share of 10, the price advised by NIC Capital works to a historical P/E ratio of 50, which is seen as high (see Transcentury [KE] for a similarly listed share)

Cost of Offer: The IPO will cost about Kshs 64 million including payments to Ernst & Young (transaction advisors - Kshs 5M), Orbit (stockbroking - Kshs 3.5M), Stanbic (Receiving bank- Kshs 3M) and the receiving agents (stockbrokers, branches of CRDB, and Stanbic banks all budgeted at Kshs 37M)

Use of Proceeds: hoping to raise about Kshs 1.7 billions (TzS 27 billion or ~ $16 million) and Kshs 700 million will go to fleet expansion, Kshs 400 million for ATR spare parts and the balance in systems, training, equipment and working capital.

Background on Transaction: Michael Shirima, the Chairman had had 1.37 million and KQ 1.32 million shares each. Their shares were split 50 times giving Michael Shirima had 51% (68m) shares and KQ had 49% (66m) and they will retain those shares, alongside the newly created 58 million shares, but which will reduce their holdings to 35.5% and 34.1% respectively

Early partners in the airline's history include Mtengei Materu, Hillary Ngaleku, The Tanzania Venture Capital Fund and East African Development Bank, but at this stage it's only MS and KQ. The company does not own land but has leases from Kilimanjaro Airports Development Company, Kilimanjaro Native Cooperative Union, Quality Plaza Limited and National Insurance Corporation.

Fleet: Comprises 2 ATR 42-320 (All Owned), 4 ATR 42-500 (2 Owned and 2 Leased) 5, ATR 72-500 (All Owned) and 2 Boeing 733: 2 (Leased). ART 42 (4 in fleet) and ATR 72 (5) use 700 litres per hour, with which they fly almost almost 700,000 and forecast flying about 1 million passenger next year. The 737's are maintained by KQ.

Banking: Their arrangements include Citibank ($127 million) who are financing the purchase of 7 ATR aircraft, Stanbic ($6 million) one aircraft and a KCB $6 million) taking over an EADB loan for hangar construction (at Nyerere International airport). They also have letter of credit and guarantee facilities with Stanbic Tanzania.

Human Resource: Precision has 657 staff, but a SWOT in the Prospectus notes that a weakness of the industry is a shortage of pilots and engineers. The Managing Director, Finance, Information Systems and Commercial directors are Kenyans, seconded from KQ who provide manpower development, and training of Precision staff who are attached to KQ. Also at Precision, 4 pilots have been trained from scratch, 12 technicians have been trained at Toulouse by ATR and 5 senior managers are also enrolled in MBA's at Toulouse.

Ground Handling: 150 were employed after the company got approval in 2009 to do their own ground handling - and hope to employ more if they get permission to do the same for other airlines. They do self-handling at Nyerere International Airport (Dar es Salaam) and Kilimanjaro International Airport (Arusha)

Governance: Precision has a lean board with only one independent director and only one committee (audit & risk) that each meets four times a year. As long as they own 20% KQ must be consulted by Precision and agree on the appointment of Managing Director and Finance Director, entry into alliances, new routes, acquisition & disposal of fleet, any issue that dilutes shares, taking on debt. same for MS who holds 20%. KQ and MS have the right to appoint one director for each 10% they have and replace their directors. The IPO also provides for some rights for a minority shareholder who ends up owing 10% shares in the company.

Investors Vs. Spenders

2011-10-07T10:59:00.000+03:00

A guest post by Wanjiru Kamau of Capital Registrars

As I read and write about personal finance, I try to establish or cultivate an investor habit rather than the spender habit with people. Where do you fall?

First, you should understand the difference between an assets vs. flossets!. An asset creates value, while flossets makes you look like you have money! You know them – they include the latest car/TV set/clothes/expensive phones etc. Like a job interviewee with impeccable dressing and good English (well don’t hire those!), a flosser looks like he/she has money and are attractive to many!

Now, in understanding the difference between an investor and a Spender..

1. Interest: An investor earns interest. A spender pays interest. The Central Bank issues Treasury Bonds and Treasury Bills every so often. You can check their website on the Central Bank of Kenya. While investing in these are for big players with millions to spare and an eye for after tax interest , they are now available for investors with as little as Kshs. 50,000 (~$500)

However, fund managers such as Zimele, and a number of collective investment schemes licensed by the CMA pool funds from many small players and credit interest on accounts every quarter. The spender on the other hand funds his many expenses with loans, and is always paying out interest.

2. Capital Gains vs. Losses: The main aim of an investor is to make money not lose it – and he/she earns capital gains on investments like stocks, land, businesses and other investments. However, a spender quickly loses his capital every day on his flossets e.g. a car’s value, which goes down the minute it leaves the showroom.

3. Type of Phone calls: The investor receives phone calls from people who want to create more value or deals that he may make money in; while the spender receives phone calls from shops or friends that want to sell him/her the latest clothes, phones and other gadgets. While these items are not important, changing your phone every time there is a new model, is not financially healthy unless you your balance sheet allows it.

4. A Savings Culture: The investor saves money to build an emergency fund or capital for business. He knows that little by little, with a discipline, he can build a fund that is large enough to sustain him in case of income loss. In contrast, the spender hardly saves. He always has too little money to save even if he has a good income, as he is always servicing high interest loans or paying for more Flossets that his salesmen friends arranged for him.

5. Insurance policies: A smart investor maintains important insurance policies to avoid losing assets in a fire or to thieves. They have taken the time to understand, the somewhat difficult insurance jargon and marketing practices to subscribe to policies that provide some protection to their businesses and families in the event of some losses. A reckless spender may engage in unwise decision like driving a new car for a night out before arranging insurance.

Where do you fall in the Investor vs. Spender divide?

KFC is here, so what?

2011-09-28T16:11:00.000+03:00

My article on the opening of a new Nairobi KFC restaurant that appears in the current issue of Up, a free magazine on interesting things happening in Nairobi. It was edited by Bikozulu.

What Can We Do?

2011-09-22T16:02:00.000+03:00

Urban Inflation Index: September 2011

2011-09-21T11:59:00.000+03:00

One year after the euphoria of a new constitution, the direction of the economy is uncertain as seen in the weakening Kenya shilling, tangles in implementation of the constitution, and rising food prices. It has been a year of some price controls in the fuel, and possibly in the food sector whose parliamentary price control bill was signed into law last week by the President.

Comparing prices to six months ago and last year. On to the index

Gotten Cheaper: Nothing really.

About the same:

Communication: All Kenya’s mobile phone companies have call rates of about Kshs 3 shillings ($0.03) per minute to call across networks. It is unclear what will happen with call rates, as the smallest company in the market, Yu, launched free daytime phone calls, Airtel Kenya lost a CEO, and Safaricom has indicated that they may raise their call rates, as has happened in Uganda with MTN . The real battle is in data, where prices have not really dropped but companies are offering more speeds for less. The market here is divided between the companies with 3G (Orange & Safaricom) who compete on speed, and those without 3G(Airtel & Yu) who offer cheap internet rates of about Kshs 50 (~$0.5) per day for unlimited use.

Another communication developments that, in a way, lower the cost of business include the launch last week at G-Kenya of GKBO, which encompasses free website creation tool, domain registration, and site hosting for small companies by Google in Kenya.

Utilities: The bill on pre-paid electricity is still at about Kshs 2,000 ($21) per month, and getting about 30 – 35 units per buy via M-Pesa. However that is expected to go up after notice was issued for rates to go up 22% per kwh unit. So what alternatives are there? In a somewhat timely move, Samsung launched the NC215, a solar powered netbook laptop last week. It gives 1 hour of power for every 2 hours of charge in the sun, has a 15-hour battery life, and is able to charge other devices by USB even when it is off.

Also got a gift of a solar phone charger (T2126 Hemera from Hirsch) that works quite well; it takes about 12 hours to charge in the Sun or 2 hours via USB, has a flash light and can charge a variety of phone models.

But when you look at the rapid advances in laptop batteries and cell phone batteries over the lasts decade, you get the feeling that there has been a lag in the pace of solar devices, and that more solar based solutions and advances should be emphasized.

More Expensive

Fuel: A litre of petrol fuel, which is regulated by the Government, now costs 117.75 (~$5.6 per gallon) in Nairobi. Regulated fuel has proven to be more expensive than unregulated fuel, and while this can be attributed to the weaker shilling and fluctuating oil prices, the formula used to arrive at the price remains vague, and the limit on margins (stipulated buying and selling price of petrol, diesel, kerosene in each town) appears to have hurt small oil industry companies, more than large ones. However, among the listed companies, Kenol appears to have weathered the regulatory regime better than Total, by having diverse operations in other countries in East and Central Africa that remain unregulated.

Staple Food: Maize flour, which is used to make Ugali that is eaten by a majority of Kenyans daily. A 2kg bag which cost Kshs. 80 six months ago, and Kshs 65 a year ago, is now Kshs 119, the highest it has been in the short history of this index.

Other food item: Sugar : A 2 kg. Mumias pack which has hovered at about Kshs 200 for the last years, now costs Kshs. 385 (90% more than last year) and . The sugar sector has really gone full circle causing many to questions its relevance, recurring shortages shortage (why all factories close at the same month for maintenance), why sugar is grown in a food producing area and how many items we can consume without having to use sugar as a sweetener e.g. tea without sugar, or use of honey as a substitute.

Foreign Exchange: 1 US$ equals Kshs 95.6 compared (now 96.8) to Kshs 80.8 a year ago (and 83 in June 2011) - a loss of almost 20% in a year. It’s unclear of this has been a concern to the Central Bank which has made other confusing policy moves as related to interest rates at a time of mounting government debt and their laxity has enabled banks to spot and take advantage of an arbitrage opportunities to trade with government money.

Beer/Entertainment: A bottle of Tusker beer is Kshs 180 ($1.9) (at a local pub) a slight increase from compared to Kshs. 170 a year ago. However beer has become out of reach for many poorer Kenyan who have resorted to drinking unsafe local brews, which in some unfortunate cases have resulted in blindness or even death.

Are Kenyan Engineers Capable of Building Thika Road?

2011-09-20T09:37:00.001+03:00

Yesterday’s post at the Thika Road Blog sparked a response from @BridgeMkr

Having grown up in Kenya then gone to the US for college and worked there ever since in bridge design, I would say that the Kenyan education system was more than adequate in preparing me for engineering school and a career as bridge engineer.

Based on that, I would say that the civil engineering graduates from Kenyan Universities have the basic tools to succeed as engineers in this world.

I read a comment that Kenyan universities are preparing students for 1980’s style construction – and if that is true, then I would say that is a good thing. If one clearly understands how to design structures built in the 1980’s then they understand the basics of design and construction.

There are buildings and bridges built in the 1900’s that are still standing. Over the years, the basics in design & construction have remained the same, with the difference being how well/accurately we calculate the design loads, and how well we design the structure to withstand these loads, the safety factors we apply to them, and the materials we use to construct them. If one understands the basic principles, then the next step of understanding modern design factors, codes, and materials is very simple.

I would rather have an engineer that can design a bridge using the old code by hand, than one who can only design the bridge using modern software packages, (and who does not know how the program comes up with the solution).

China has over a billion people therefore they will have way more engineering graduates. The way forward for Kenya and Africa, is to continue to produce civil engineers who clearly understand the basics in design and construction. Some of these graduates can then go to universities aboard to get their masters and post-graduate degrees, and who can later transfer this additional knowledge back to Kenya and Africa. The graduates that remain in Kenya upon graduation should go work under the direction of more qualified engineers, who can give them guidance on how to design various basic structures at first, with the complexity of the structure increasing as their career progresses. In engineering, like most things, experience, with the ability to learn, counts the most. Those graduates that went abroad, on return to Kenya can start out designing more complex structures based on the experience gained, but should still work under the guidance of more experienced engineers.

It may surprise a few people but today in the US, there is a debate raging on whether a master’s degree in civil engineering should be the minimum qualification for someone to be a registered civil engineer. It is felt that the current undergraduate programs are not adequate, especially if the pay for civil engineers is to go up.

In order for Kenyan and African engineers and companies to compete for, and design, major construction projects like the Thika Road Project, there needs to be a requirement that Kenyan and African engineers and companies be involved in the design and construction of these projects. This can be done by requiring some portions of the project to be designed and constructed by local engineers.

Another requirement, which would add to the cost of projects, but would ensure the transfer of knowledge, is to have independent designs done by local engineers. This means, having Chinese /European/American design firms design the complex structures but at the same time have local engineers and companies independently produce designs of the same complex structure. The local firm’s designs can then the compared to those produced by the foreign firm. Another problem with design & construction in Kenya and Africa is having adequate QA/QC procedures in place to ensure that structures are designed correctly and constructed according to the engineers design using the specified materials.

Through this process, current local deficiencies (if any) would be revealed, and at the same time the local firms would learn how things are done differently by foreign engineers/firms. This design exercise cost is very small, compared to the actual construction costs and I have been involved in projects where two independent designs have been produced.

Tatu City & Vision 2030

2011-09-15T23:28:00.000+03:00

Tatu City was endorsed as a Kenya Vision 2030 project and an event was held in Nairobi to celebrate the signing and also clear up some misconceptions about the project.

The Future is Urban Mugo Kibati said urbanization is the future, the world over, and it will happen without proper planning, Vimal Shah said that while Kenya is currently about 30% urbanized, by 2030 Kenya (which is just 212 months away), this will have risen to an urbanized population of about 75% urbanized. Are they going to stay in poorly planned cities or better articulated developments?

What is it? Dr. Gituro Wainaina, who is one of the Vision 2030 secretariat directors said that the message must get out that Tatu is not a gated community, it is where you work or where you sleep. Lter it was mentioned that it was a brand new city, that will complement, not replace Nairobi, and at completion will be worth $5 billion - the single biggest FDI injection. It looks new and different form other projects (every toilet in Tatu City will flush with recycled water. Every roof should harvest rainwater!) and the Ruiru Council has embraced the project, are building capacity to manage with Tatu and are are going to reap the benefits of the project, which might lead other municipalities and counties to do that.

Vision 2030 is not about Government Projects: Mugo Kibati said that Vision 2030 is not about government projects and they envision that the majority of projects will be by private investmentors or government partnerships with the private sector. He said that the Government is only meant to be a facilitator that provides incentives - adding that with Tatu on one hand and the government’s planned technology city in Konza on the other, he is watching the race to see which will complete theirs faster – the public sector or the private sector?

Nairobi needs 10 Tatu Cities: Tatu will do create 3,000 houses a year in a country that has an annual housing shortage of 35,000 to 40,000 per year. Nyagah said that Nairobi needs another 10 Tatu’s to barely satisfy the demand, and that they welcomed other mega housing developments that have been inspired such as Migaa, Thika Greens, and on other towns like Eldoret (Sergoit)

Is Tatu is Destroying Farmland? At a time when the country can't feed itself adequately, this has been partly attributed to the use of land has been attributed to land use Mugo Kibati said that current 60% farmers in Kenya, are feeding about 80% of the citizens. In future, the government would have to make some harsh decisions about denoting land as agrarian, commercial, residential etc. (in a Land Use Masterplan). Having a 70% urban population in 2030 will still leave 30% in rural areas which is still high. The current subdivision of arable land is un-sustainable, and the government has to get more people out of farms and find them employment in other sectors; this will leave arable farming to farmers, who will mechanize, and invest in agro business; i.e. Farming should be done by professionals, as it is in developed countries like the US that are able more than feed their countries and export surplus with less than 5% of thir population being farmers.

M-Tatu Mortgage?: Nyagah challenged James Mwangi, the absent chairman of vision 2030 (who's also the Equity bank CEO), to create to create a mortgage, where someone can be repay a daily amount e.g. kshs 500 per day and buy a house and name it M-Tatu.

2011-09-12T08:24:00.000+03:00

The Total Motor show took place this last weekend in Nairobi (Friday 9th to Sunday, September 11, 2011). It was interesting as usual, but this time it was at KICC unlike the last one that was at the Ngong Racecourse. With the weaker shilling, and higher petrol prices, there was a noted change in some vehicle prices and more companies offering more efficient vehicle management solutions.

Some notable moments:

Companies like CMC (Ford, jaguar, Volkswagen) and Toyota did not display prices, but it was a shock to hear that a Toyota Corolla 1.8, cost Kshs 3.3M ($36,000) which is about three times the price people pay for used import models.

Public Service Vehicles: Companies like General Motors have their Isuzu's ready to ride on the Government’s plans for larger PSV vehicles and they had a pimped out matatu – the NPR that costs Kshs 4M ($43,000), and an Isuzu FRR model (Used by many Citi Hoppa’s operators and which costs Kshs 5.8M ($63,000) and an 62- seat bus that was Kshs 9.4M

Trucks: These were a plenty, but the the truck king of the road is the Mercedes Actros; new models of these can be bought via D.T. Dobie at a cost of €93,500 (~Kshs 12.2 million) and each order is customized to the buyer’s requirements before it is built. The popular Mitsubishi FH215 is Kshs. 5.1M

Luxury: Head to head in the luxury department were BMW (from Simba Colt) and perennial market leader Mercedes (from DT Dobie) who had a range of cars, priced with and without duty/tax (an option for diplomat’s, Government and NGO buyers). BMW had the X3 at €60,000 )Kshs 7.8M) while Mercedes had the ML350 for €110,000 (kshs 14.3M). BMW had the 3-series for €47,000 (~Kshs. 6.1M) while the C200 Mercedes was €60,000 (or €34,000 duty free), and BMW also had the 5-series on show for €60,000 while Mercedes had the E200 for €78,000 (~Kshs 10.1M) or duty free for €48,000 (~Kshs 6.25M)

Pick-Up/SUV: DT Dobie has the Nissan NP 200, launched at the 2009 motor show at Kshs 1.2 million, but which now costs Kshs 1.87 million and CMC had a new Volkswagen pickup that was not priced. Mitsubishi had an L200 double cab at Kshs 4.1 million, an update of the popular Pajero at Kshs 6.5 million, while Mahindra had pickups ranging between Kshs 2.4 - 2.9 million.

With rising fuel prices, fuel saving solutions on offer include Stoic (touting to save up to 40% on fuel prices) and Fuel max (sold by Kiprin Enterprises - and enticing with savings of up to 50%). Other energy savers were Solar powered lanterns called Total Sola from sponsor Total. Better driving solutions were offered by Glen Edmunds driving school for defensive driving while Scania had one for long distance truck drivers that are purported to save 6 litres per 100 kilometers driven (from the current average of 40 litres over 100 kilometers) and which also brings better tyre and break wear

Other: Toyota also sell Yamaha motor bikes including a 106CC model which comes with a free helmet, reflect jacket, registration and one year warranty (or 6,000 km)

Car Tracking : Companies included Rivercross tracking (who also install a fuel fuel monitor that warns when truck drivers may be selling diesel from their trucks) as were other companies like Retriever, and Cyber Trace.

Online Classifieds: Car buyers and sellers had cheki and dealfish (which is free for buyers & sellers)

Banks: Banks in the auto finance sector were represented at the show including NIC, KCB, Equity, Imperial, Co-Op, Chase and CFCStanbic. Co-op have PSV financing (aimed at Sacco’s) and school bus financing (unique application requirement are board of governor approval and minutes, and ID, fees structure of school.

Apprentice: A motor show surprise was a twitter conversation with @karuoro and @mediamk on the prevalence of former D.T. Dobie mechanics who are specialists in Mercedes.

- @bankelele: I know about 3 garages run by ex-DT Dobie mechs (it's like a badge of honour)
- @mediamk: those mechs are amazing, I wish this was the case across different industries (as) apprenticeship is a good way to grow an industry.
- @karuoro: "The industry leader is obliged to be a net supplier of talent to the industry" - Linus Gitahi (@LGTwits) ...I think quite a number are licensees

The D T Dobie apprenticeship mechanic program is open to all Kenyans, male & female, who are less than 22 years and obtained KCSE C+ in English physics and mathematics. Though subsidized it will cost Kshs 50,000 ($550)per year for three years after which staff will be bonded for 3 years. They also accept self sponsored applicants who will pay Kshs 140,000, and the application deadline is 30 April 2012.

NSE Goes Android

2011-08-30T19:14:00.001+03:00

The Nairobi Stock Exchange now has a free Android app. Developed by Verviant, it is rather basic (download page), but show's the the equity day’s prices changes, and summary of some announcements. Still, it's a good start, and should be a work in process, and maybe investors will be able to track their portfolio's (still empty) and drill down to read more comprehensive announcements, and bond prices too.

Nairobi Stock Exchange Android app

The Exchange probably needs to address the issue of large PDf statement that companies fax in their announcements and which the NSE scans to their site - and replace these with some basic documents that they can upload to the main and mobile site.

Another NSE geared app is the Rich app (from the Nokia Ovi Store), that is however designed for the Nokia E-7.

Education Moment: Is Our Children Learning?

2011-08-27T21:42:00.001+03:00

The post is based on random thoughts on education in Kenya spurred by events like the Loreto Msongari bus accident, to talks with school administrators, observing universities take over libraries and nursery schools to expand their class sizes, reading blogs, and getting lots of press releases some of which touch on the education sector in Kenya .

Who will build schools?: With the cost of real estate going up in Nairobi (Kshs 100 million [$1.1 million] for an acre in some parts) it is getting harder to imagine how more schools can be built to cater for the young growing population.
Former Nairobi nursery school, now a university campus

Schools like Makini (profiled in this story in the Business Daily ) have grown from having 8 students to over 1,000 after many years of hard work and success, that they now have eleven (11) streams of primary school pupils. Also, due to demand for places, some nursery schools have long waiting lists, and advise parents to register/book places for prospective students , before the children are even born.

Value in education is found in other places, like the recent Hillcrest settlement, which concluded a decade-long running bank receivership by way of new investments by a venture capital fund and a private school chain (Rose of Sharon) who will continue to run and expand the school.

What about old schools?: This post by Rookie Manager further points out the waste of resources that parents throw by enrolling their children in newer private and expensive private schools and wonder if by channeling the same funds towards rehabilitating old existing public schools would go a lot further. These old schools have the advantage of being located in established neighbourhoods and have ample space for various educational pursuits

What about new parts of the city? Nairobi is growing driven by private sector housing developments, notably in the Kitengela and Southern parts of the City, but this s not being matched in terms of education.

One touted solution comes from the Bridge International Academies who offer a low cost school model designed to quickly roll out in low-income areas and offer quality education at a cost of about $4 per month for each child. However a blog post was written that offered s contrarian assessment about the system and this elicited a comment in response and explanation of the program from the co-founder.

The anticipated demand for schools has also become point of controversy in China with a investment fund that plans to build 1,000 schools in Africa.

In terms of Curriculum & research, G33kdiary has a post on the current hunger situation in Kenya and she notes that Kenya’s food security is unlikely to improve as long as schools don’t teach agriculture and emphasize & promote farming livelihoods, while White African had another on the lack of Africa ICT research

Recent Financial incentives: recent ones of note include:

- South Sudan is offering to pay loans for her nationals in the USA provided they have completed their education (bachelor’s degree, master’s degree or PhD.) and are willing to return home to work (The pilot program is called the South Sudan Student Loan Forgiveness Program - SSSLFP)
- Eagle Africa (former AIG Insurance) recently launched a low cost insurance plan to protect kids from road accidents playground incidents – the entire time an
insured student is in the hands of the institution including travel to and from the school
- Having adequate savings to fund education is one constant constraint, and financial funds like British American (who just had a 60% subscription in their IPO) is one of them; Britak offer education savings plans - called Super E plus, Elimu Bora, and Invest Plus, which all offer a variety of savings, insurance, and investments.

Use of technology: Encyclopedia’s for schools was the theme of a recent talk by a visiting Wikimedia team at the iHUb. They covered the need to spread knowledge to the offline population – such as to remote schools with few textbooks (but perhaps a computer), and offered a solution in the form of a single DVD from Wikimedia can hold over 1 million articles, as well as a free software tool called Kiwix which enables the articles to be read offline to teach students in remote distant parts
Wikimedia in education
- iPads and Kindles : E-readers will change the way the developing world reads is an argument put forward in this post based on observations from Ghana, to Kilgoris. However a follow up report notes that Kindle rule changes from Amazon mean that content cannot be loaded across multiple devices at one time and each kindle has to be tethered to its own account - both of which limit its potential as a mass education tool.

The absurd: The above post title comes from an infamous Bush-ism or slip of the tongue by former American president George W. Bush.

And finally, in the news today, is a Kenyan Member of Parliament who is about to lose his seat – because a one of the allegations leveled was that the MP could not articulate himself in English and Kiswahili and may have falsified his language proficiency exam results.

Dividends Payments across East Africa

2011-08-18T22:03:00.002+03:00

Having bought shares in recent East African IPO's (Uganda: Stanbic Bank and Rwanda: Bralirwa Brewers), there appears to be some progress in addressing one of long standing problems of buying such shares - and this is the bank charges associated with receiving and having to process dividend cheques that are paid in currencies that are fractionally weaker than the Kenya shilling

With Stanbic, the Kenyan arm of the African bank has shown little interest in facilitating this even though a significant number of Stanbic Uganda’s 25,000 shareholders are Kenyan. In fact, the staff pension funds of Kenya Airways and Central Bank are listed among the top 10 shareholders of the bank.

At Bralirwa, the dividends are issued by KCB Rwanda and via a late message, KCB Kenya state they are paying/cashing the cheques up to RWF50K (~Kshs 8,000) across the counter. ( If higher the cheques will be sent for to Rwanda).

While the next step should be for East Africans to receive cross-border dividend payments by mobile money such as mpesa dividends this is only available to Kenyan shareholders. For now, the facilitation of affordable across-the-counter dividends, and other cross border trade & investment payment options is something that banks, not just KCB, with a regional footprint like Equity, Stanbic, Diamond Trust, and NIC should also take up.

EDIT: New communications from the banks show new options for Kenyans who have invested shares across East Africa as follows:

Bralirwa: Any cheques of less than RWF 50,000 (~Kshs 7,750) can be cashed at the counter of any KCB Kenya branch at a fee of RWF 200 (Kshs 31) on production of an ID or a passport

Stanbic Uganda: no certificates will be issued for the 1:1 bonus, and no physical annual reports will be mailed. But shareholders can now elect to receive dividends by electronic funds transfer, or mobile money (airtel money or m-pesa) after confirming their details at Comprite (Uganda) Registrars whose Nairobi office is at Marakwet House, Elgeyo Marakwet Road.

Award Season: Graduates, Mashujaa, Networks, Nature

2011-08-12T06:38:00.001+03:00

African Union Kwame Nkrumah Scientific awards. D/L 15 September.

Arthur B. Schultz Foundation grants aimed at non-profit groups involved in women’s empowerment and disabled mobility solutions.

Changemakers.Org Details here on awards for citizen media ($5,000) and health, excellence, opportunities, other.

DStv: Eutelsat Star Awards are open to 14-19 year-old students in 42 countries to write an essay or design a poster on satellite technology and how it can assist further development of their communities, country or the African continent. D/L 26 August.

Infodev: Piloting virtual incubation seeks organizations in East Africa ad. D/L is August 15

National Museums of Kenya: For design of a Mashujaa national monument. D/L is 9 September and prizes are of Kshs. 300,000, 200k and 100k.

Orange: African Social Venture with prizes for digital projects in e-health, mobile banking, digital /mobile applications for education or agriculture that address needs of the ‘bottom of pyramid’. 3 winners will receive financial grants (25K€, 15K€, 10K€) and a 6-month mentoring program. D/L September 15

Pan-African Awards for Entrepreneurship in Education. Details here and has prizes of $10,000, $5K and $2K.. D/L is 10 October.

Standard Bank / Stanbic: graduate management program - D/L is August 15.

UN Awards for Young Innovators (aged 18 – 25) and digital innovators (non profits). D/L is September 15

Western Union is on the hunt to find the most globally networked individual. It is open to anyone with a facebook account and the site also lists some entering remittance figures for the 200 countries where Western Union is represented.

WWF KENYA / NETFUND Nature Challenge Africa from the Worldwide Fund for Nature (WWF) Kenya and the National Environmental Trust Fund (NETFUND) is a green business competition for entrepreneurs and targets businesses engaged in conservation, biodiversity and livelihood programs, that are seeking finance in the range of US$10,000 - 1 million.

EDIT

More found at Savvy Kenya blog

Tandaa Digital Content Grant: The Tandaa Local Digital Content Grant is a grant to support ICT in Kenya. It is like seed funding for companies entering new media and ICT. In particular, the grant seeks to support products and services developed for the Internet and mobile phone. D/L 22 August

Nokia Create For Millions App Competition: Submit your best Series 40 Java or web apps in Nokia’s ‘Create for Millions’ contest to win your share of cash and prizes, worth 1 million euros. D/L September 1

Shares Portfolio August 2011

2011-08-10T18:07:00.001+03:00

Comparing changes to three months ago and since then, investor confidence has dipped following rising food & fuel prices, power rationing and a sliding shilling.

The Stable

Barclays Bank ↓
Bralirwa Breweries (Rwanda) ↑
British-American Investments (Britak) ↔
Diamond Trust Bank ↓
East African Breweries (EABL) ↓
Kenya Airways ↓
Kenya Commercial Bank (KCB) ↓
Kenya Oil Company (Kenol) ↑
Scangroup ↓
Stanbic (Uganda) ↓
Uchumi Supermarkets ↓

Review: The Portfolio is down 5% in the last three months while the NSE 20 Share Index is down 12%
- Best performer: Bralirwa 33% (this Q), then Kenol 22%
- Worst performer: Uchumi -39%, Diamond Trust -26%
- In: Britak, Safaricom
- Out: None
- Increase: None
- Decrease: None

Other:
Splits: Barclays
Bonus: Diamond Trust , Scangroup, and Stanbic Uganda
Dividend: KCB, Diamond Trust, Bralirwa, Kenol Scangroup, Stanbic
Events:
- Uchumi re-listed after five years of suspension.
- Took on the new IPO from Britak IPO (results on August 23), but passed on other new listings from Transcentury and Bank of Kigali. Meanwhile there are no privatizations on the table from the Government of Kenya
- NSE companies are making efforts to clean up their shareholder registers, with a view to applying dividends that have been unclaimed for several years to their reserves, otherwise they will have to be surrendered to the Government

Data: The NSE has stopped sharing free price lists, which now makes it harder to access daily market data. Meanwhile the CDSC has stepped up with investor awareness, and you now get a SMS notification of trades (shares sold/bought)

The Future of the Post Office?

2011-08-05T17:37:00.001+03:00

I’ve had many recent trips to the post office, tracing lost dusty packages, new keys, dividend cheques and other mail which 85% of which are bills & statements, and 10% are marketing materials & junk. Very rarely do you get a personal letter in the mail, and that's usually around Christmas.

The post offices are run by teams of (mostly) older workers, who are well trained, dedicated, and honest in their work. However they work in a rigid bureaucratic environment and that means that almost every process has to be cross-checked & triple check, with signatures to be obtained by several people seated a few feet apart.

When Equity Bank released their half year results last week, their CEO James Mwangi spoke about the bank having reached the maximum productivity that could be attained from physical bank branches. They were now shifting to a whole-hearted embrace of agency banking model, which they had initiated in Kenya and sold to the Central Bank.

With agency banking, Equity has been converting small kiosks, cyber cafes (which are dying), pharmacies, garages into mini banks (open you own bank). Equity envisions having 5,000 agents (2,300 are now operational) and also have them sell insurance, airline tickets, and other services.

For Equity they only pay commissions per transactions that agents complete as opposed to the fixed cost of operating their branches with. And for agents, the current agency rules means that they can't be mutually exclusive (like phone dealers and m-pesa agents tied to Safaricom). This means a pharmacy can offer agent banking services for KCB, Equity, even smaller physical reach banks like DBK and Giro.

Mailboxes at Nairobi Post Office

While these new agents have to overcome weaknesses of customer service, training, security (physical & cyber), the post office already has many of these attributes taken care of, plus they have steady foot traffic for letters, and parcels in their well known & guarded premises, and with ample space to expand.

The local post office currently acts as (non banking) agents for the among others; the Kenya Revenue Authority (parcel are opened and tax is assessed has to be paid before release), Old Mutual (mutual fund), Safaricom (airtime), Airtel Money (mobile money transfer, pensions (posta), salaries (for school teachers), and several utilities - DSTV (satellite TV), Nairobi Water, Kenya Power, Kenya Charity sweepstakes (Lotto) etc.

A new addition is acting as bank agents for KCB customers who are depositing or withdrawing cash. And that could be the future of the post office - as a financial supermarket for several banks, financial and utility firms.

Guide to Gaborone

2011-08-01T22:18:00.000+03:00

A guest post by Marvin Tumbo, the CEO of Socialight Media

Getting There: Kenyans don't need visas when flying to Botswana, nor do they need yellow fever vaccinations, which several African countries require. But if you are traveling via Johannesburg, you might be required to get yourself a transit Visa. I have not experienced this, but know of friends from Nigeria who on several occasions, have not been able to fly via Johannesburg because of issues with transit visas.

It costs around US $700 for a return flight to Botswana, and for travel from Nairobi, the ideal flight to take is Kenya Airways, which flies directly to Gaborone 3 times a week. However, there have been occasions when KQ flights to and from Gaborone have been canceled on short notice as was the case when I returning this time.

An alternative route, is to fly via Johannesburg and then take Air Botswana or South African Airways onwards to Gaborone. However, while it is only a 35-minute flight between Johannesburg and Gaborone, a problem may be the connection time as you may have to wait 4 to 6 hours for the connecting flight.

The last time I came to Botswana, the Sir Seretse Khama International Airport was still under construction but now after two months, they are finishing up and most of the Airport is in operation. Currently, there are no shops at the Airport yet, just a restaurant. I had been told that, prior to the upgrade, the Airport had the best perfume shops, which sold world-class perfumes at a fraction of the price – and maybe these will come back.

The airport is not as busy as Oliver Tambo Int'l Airport or JKIA so checking in and out is pretty fast with no hassle at all.

Getting Around: The local money is called Pula and it has the same strength as the South African Rand. The largest denomination here is 200 Pula.

There are many taxis from the Airport and it costs between 60 and 100 pula ($6 to 10) to get to the city. Some of the Hotels usually provide for your transport back to the Airport for free when leaving like Cresta President.

If you have meetings within the city, you can use Taxis, which will cost you between 20 and 40 Pula (less than $5). There are no traffic Jams here so going to and from the Airport and around the city is not a hassle at all. The roads are in great shape and there is a healthy respect for the law here, which means no funny (bad) driving.

Gaborone is a very secure city, and Safety-wise, it is very safe to walk around any time of the day or night. I saw very few police officers for the duration I was there locals will tell you that there are no horror stories like robberies and muggings or worse. You even feel that the place is very safe without being told.

Botswana also has our version of Matatu’s plying various routes. I did not get to use these but compared to the Matatu's in Nairobi, they look more organized and respectful.

Hotels: While there, I stayed at the Cresta President Hotel, which is one of the best Hotels in Botswana. It has good Wi-Fi and is located at the centre of the City, a mere 15 minutes drive from the Airport, and is also within walking distance of every office you will probably need to visit. Similar 3* and 4* hotels cost between $100 and $130 per night

Communications: Orange, MTN, and Mascom are the leading providers in Botswana with Mascom being the largest in terms of subscribers. However, you cannot roam with Safaricom here but can do so with an Orange line, and while phone calls are cheap, they are not as cheap as in Kenya.

Language: The local language is Tswana but everyone speaks English as well so there are no language barriers here. You will hear the word Dumela a lot which is how you greet people in Tswana. – and you also reply by saying ‘Dumela’ as well. The local newspapers are all in English with the most prominent ones being Mmegi and the Botswana Guardian. There is also the Daily News, which is a free newspaper published by the Government.

Sight-seeing & Shopping: If you really want to see what the country has to offer, the Okavango Delta in the Northern part of Botswana is the place to go. Game shooting is allowed here but only for certain animals – (and not) the Big Five which are heavily protected.

If you want to buy anything to take back home, remember there are no shops at the airport yet. Instead try the variety of malls in and around the city as well as craft fairs, which are the equivalent of Maasai Markets in Kenya. These are open everyday but only a few them will be on Sundays.

Food: There are many places where you can eat and for as little as 20 Pula or as much as 95 Pula ($10). To eat local foods, ask to be taken to The Station and there you will find the best local food for just 20 Pula. At high-end restaurants, good local food will cost 60 to 100 Pula (10 to 15 USD with drinks). Make sure you check out Cattle Baron and Beef Baron, and try their specialty which is the Beef Schnitzel or T-bone with baked potatos, papa, Seswaa – the Botswana National Dish. Try out Morogo as well. The local beer is called St Louis and they offer it as a Lager or Export, and the latter has a better kick to it.

On any given day you will spend between $40 and, and on the higher side, $100 having meetings, lunches, dinners and a couple of drinks in the different parts of the City.

Business & Infrastructure: As a business destination, this place looks God-sent. There are no issues with electricity or water for that matter. Registration of a business is pretty straightforward and costs roughly 500 Pula to register and 1,500 Pula for a trading license so in total, this amounts 250 USD.

When you look at your normal day in Nairobi and compare it to here, there are immense business opportunities here. However, all the above is the insight of a local lawyer who will be handling our legal issues here. We are just finishing setting up shop and I can update this later based on experience. Our lawyer also warned us about xenophobia in Botswana though this is not something I have experienced yet. Most of the people I met were really receptive and excited about meeting a Kenyan and talked positively about Kenya and Nairobi.

Shocker One thing to note is that almost all drivers in Botswana respect the law as far as driving is concerned. There are no traffic police here to direct traffic, and if you have been to Nairobi or Lagos or even Kampala, it’s a shock how organized the traffic is. People adhere to road rules even if they are the only ones on the road, and there is no running through red lights even if it is at 2 A.M

Summary: On the face of it, Botswana is a great place as both a tourist and business destination. You will hear and read a couple of corruption cases, but the legal system here will give you investment confidence because of their conviction rate. A friend at the AG's Chambers informed me that regardless of who you are, there is no escaping the law. At the end of the day, my deciding to set up my business there also means I am a convert!

5 ways to protect your NSE shares from irregular sales

2011-07-25T22:24:00.001+03:00

We all hope the days of collapsing stockbrokers at the Nairobi Stock Exchange (NSE) are now a thing at the past. However new share offering such as Britak, Family Bank and Bank of Kigali, and other personal finance initiatives such as the I’m a Cooperator movement are likely to convert some people into first time share buyers. So how does one ensure that their funds are not misused by an errant stockbroker or their employees? Read on

A guest post by Shiroh
While it takes a lot of sweat to save for investments, many investors have found themselves in a tricky situation when unscrupulous dealers engage in irregular sale of their shares. While this practice cannot be tolerated for all involved, it is important that one takes proactive steps to avoid losing your investments. These can include;

1. Subscribing to the Central Depository System Alert Service: The mobile phone has truly revolutionized many industries in Kenya. For a nominal amount of Kshs. 10, one can receive alerts to their mobile phone anytime a transaction is made from their CDSC account. For more details, check the CDSC Kenya website.

2. Freezing activity on CDS Account: Since getting mobile phone may not be possible for people residing abroad, freezing any activity on a CDSC account can be done. These instructions are communicated to the CDSC and activity can only resume at the request of the account holder.

3. Constantly monitoring your activity of your account at your preferred Stockbroker. Many people don’t bother to check the activity of their accounts once they make the investments only to get a shock of their lives when they want to liquidate them. A broker is under obligation to provide investors with a statement of account through which they can monitor the movement of their investments.

4. Developing a personal relationship with a dealer or broker. While some personal relationships work to the detriment of the investor, sometimes having a specific person who can address any enquiries that you have can be a great plus.

5. Finally, you should report any fraudulent sale of shares to the Complaint Handling Unit of the NSE.

Guide to Tunis

2011-07-18T21:05:00.003+03:00

A Guest post

Intro: Despite the changes sweeping across North Africa, business analyst and columnist, Carol Musyoka took some time to visit Tunis and kindly agreed to do a guest post

Getting There: You have limited choices, flying to Tunisia and have to go through the Middle East or through France. Tickets from Nairobi start at about $800 on Emirates, Eqypt Air, or Qatar Air (which I used).

The airport (process) is horrendous as Visas are issued on arrival. Though, my hosts had already pre-arranged for the visa, the officials at the airport were rude and sleepy – and despite arriving at 6 A.M, I only left the airport at 9 A.M. Also, they only accept payment in Tunisian dinars (which no one carries) and you have to be given a pass to walk out of the Arrivals terminal to go to a foreign currency bureau to get it.

Getting Around: Tunis has a very good public transport system in the form of buses. I used a cab once or twice, but it's too hot to walk around since temperatures were in the forties!

Mediterannean from the hill atop Sidi Busaid

Security was good pre-Ben Ali (Abidine Ben Ali was ousted as President in January 2011) and has slightly deteriorated. However I never felt any danger because it was summertime and the streets would be packed past midnight.

Language/Communication: The language you need here to get around is French, not English. I didn't make any calls but used my Safaricom roaming to send text messages for the two days I was there, only to come home and find a bill of approximately Kshs 5,000/- ($60) for two days of texts!

Food & Life: There are different kinds of hotels as Tunis is a big tourist destination. Also an important point to note about African cities these days is that the electricity supply is very reliable.

Main local dishes are couscous and lots of Middle Eastern food. very delicious for the adventurous palate. Beer and alcohol was available and is now available to the locals unlike during Ben Ali’s time when there were restrictions on how much they could buy at the supermarket.. Imported wine costs horrendously as they have a protectionist policy to promote local brands

Much of the street & bar talk at this point is about life post-Ben Ali especially as there's so much freedom now that the secret police have been disbanded.

Ancient City of Carthage

Shopping/Sight-Seeing: The beaches and of course the ancient city of Carthage. There are lots of shopping areas, but I loved Sidi Busaid the most. Tourists buy tons of knick-knacks made from porcelain and camel leather.

Exclusive Sidi Busaid suburb where by-laws require all buildings to be white with blue trimming

Biggest surprise about the country: That it feels like you're in a European country with an Arab population. Also, and even more amazing, was finding that they have black people from the South! One odd sight was that there are tons of men who just hang out at cafes smoking cigarettes and shisha pipes all day.

NSE Moment: Britak, Transcentury, Kigali Bank, Stima SACC0

2011-07-17T09:58:00.000+03:00

This week we were reminded that there's been no IPO at the Nairobi Stock Exchange (NSE) since 2008 (Co-Op Bank) and the events in the last few days were the fulfillment of initiatives that companies like Britak and Transcentury had initiated earlier in the year.

Britak: The British American Investments Company Kenya kicked off their IPO this week. The group had Kshs 9 billion in income, and pre-tax profit of Kshs 2.8 billion in 2010. With group assets of Kshs 25 billion, it is second only to the ICEA at 27 billion.

They are being sold at Kshs 9 with an allocation criteria of 30% East Africa retail, 30% foreign, 37% institutions, 3% employees, agents, and individual policy holders and can be obtained at British American branches, Equity bank , Standard Chartered (and partner Postbank), NIC, CBA banks and stockbrokers.

The minimum for retail investors is 2,000 shares (Kshs 18,000 while for institutions it’s 10,000 shares (Kshs 90,000 or ~$1,000). The IPO is budgeted to cost Kshs 320m ($3.5M) with estimated payments to transaction advisor 24M, sponsoring broker 6M, legal costs 9M, selling commission 87M, CMA 9M, NSE 1.5M, PR 67M, and advertising 90M.

Insurance Opportunities

Of the Kshs 5.9 billion to be raised, 1 billion will be for regional expansion (Tanzania, South Sudan, Rwanda), 1.2 billion will be for Kenyan operations (set up a frontier investment fund, new branches), 2.5 billion for the housing & mortgage sector aimed at affordable housing models, and 750 million will go to pay off a loan at CBA bank that was used to purchase shares in Equity Bank (Britak own 11% of equity and 16% of housing finance banks).

The Britak IPO runs from 12 July to 5 August and they have also reached out to bloggers, with forums and their own blog posts such as this tale of their CEO's initial investment.

However, there are some concerns that with their 45-year history and strong brand name (-pay Kshs 18 million a year to British American), this is a retail magnet IPO and the sale of 650 million shares (30% of the company) is likely to be over-subscribed, and the dividend paid (Kshs 200m in 2010) is likely to be safaricom-ish (small)

The company has also called for the Government to extend current tax incentive for newly listed operating companies to also include holding companies (like Britak)

Transcentury: The investment group which has had a spectacular climb and string of investments, most notably with East African Cables listed their shares at the NSE on July 14.

Their shares had been trading at an OTC exchange and were listed at the NSE at Kshs 50, which worked out to a P/E ratio of 38

RVR Coach

The Group also has a Mauritius convertible bond issued to finance the restructuring of Rift Valley Railways and investment in geothermal and other energy projects, but which also has the potential of diluting investors shareholding by over 1/3. (150 million shares available to bond holders over the next 5 years prices between 40 and 50)

Still, Transcentury has been am inspiration to other investment groups, albeit not as well connected to initiate projects with more risk such as energy real estate, and offshore. The introduction is budgeted at Kshs 20 million (220,000 - CMA 5M, NSE 1M, advisor 8M, stockbroker 4M) and the PDF prospectus is 'protected' so you can't copy sections of it.

Family Bank: Their long dalliance with the NSE is about to be fulfilled as their shareholders will next month approve a listing at the exchange. They will also vote on an ESOP for managers and 1 % transfer of shares of the company to the new CEO. It has since emerged that he is purchasing the shares at a discount as part of his employment package.

Stima SACCO: Away from NSE is Stima SACCO that is in the process of raising funds of about Kshs 500 million ($6 million) . They have advertised in newspapers (even on TV), which may land them in trouble with the CMA, for selling shares to the public without adequate information. At Kshs 100 per share, individuals can buy 200 shares at a minimum (Kshs 20,000).

Kenya Airways: Nothing yet from the airline who were expected to approach shareholders for new funds. The government has allocated funds to invest and defend their 26% stake an the airline which has since signed a deal for new Embraer aircraft to grow their African footprint.

Bank of Kigali: The Bank of Kigali is aiming to raise $62 million from new investors in an IPO that runs from 30 June to 29 July. The Bank control 25-30% of the banking sector in Rwanda; it had profit of 8.6 billion francs ($14 million) in 2010 on assets of 197 billion francs ($324 million) - equivalent to a smaller mid-size Kenyan bank

300 million shares are on offer, and the minimum is 200 shares per person at 125 francs per share ($0.075 or Kshs 18.65). They are open to cross-border investors and the allotment will be to 27% retail East Africans, 2.4% to employees & directors, 15% – East African institutions, 15% to Rwanda institutions and 40% to international investors.

The Rwanda government owns 66% of the bank, and the other 1/3 are owned by the social security fund of Rwanda. 16 billion francs ($27 million) will go to the Government for reduction of its shareholding and 20.8 billion francs ($34 million) will go to the bank to reduce its assets & liabilities maturity gap and grow its loan book and operations (from 33 to 60 branches). This will result in new shareholders owning 45% of the bank, the government 30% and the social security fund with 25%

Other: The IPO prospectus lists
- lawyers acting for the bank, number of cases they have and prospects of loan recoveries
- lawsuits filed against the bank by name (former employees, debtors opposing auction)
- list of subcontractors and related partners such as visa card providers, SMS partners, providers of credit reference and lines of credit etc.
list of properties owned and rented by the bank and rent amounts. Also Rwanda depreciate building over 5 years, after each revaluation

Risks & Exposure - one of the operational risks is scarcity of qualified personnel in Rwanda
- commerce restaurants & hotels account for 46% of the bank portfolio while construction was 29%. Also 11% of loans were to a single group and records of large are available for review to persons who sign non-disclosure agreements
- Kenya is the country's largest trading partner: Rwanda exports 33% to Kenya and imports 16% back.

Staff: - All staff are entitled to bonus and in 2010 this totaled 8% of profit, which that was shared by 441 staff (out of 454), and the average award was $3,200.
- The bank also runs an in-house dispensary and provides full medical cover to staff and 4 dependents
- The oldest director was born in 1960, the youngest in 1977. At senior management, the managing director is the oldest employee at 54, while the head of finance is the youngest at 31.

E-Government Moment: Part I

2011-07-08T18:55:00.000+03:00

Parliamentary Transcripts: This week the, the National Council for Law Reporting - [NCLR, a state corporation charged with publishing the law and judicial opinions of the High court and Court of appeal) in partnership with Google Kenya launched digital versions of the Kenya Parliamentary debates - or Hansards dating back to 1960. These are the official records of debates in Parliament and enables historians, scholars, researchers, students, and citizens to read up on mundane debates and historic moments – such as January 15 2008, when parliament was re-constituted for the election of a speaker and the swearing in of new members, with a lot of unprecedented procedural side-shows

Typical government records registry

The publication of the Hansards on Google books radically changes the ease with which information on parliament is obtained. The Business Daily has an article on the challenges of obtaining Hansards previously. "Until Thursday, they were only available to the public in hard copy at a fee after a visit to Parliament’s library. One also needed to have prior knowledge of the year and month in which that issue was discussed and the edition of the Hansard in which it was recorded."

Now about 2,000 editions of the Hansard comprising 134,000 pages have been converted into 8.5 GB of data on Google books and is indexed and searchable, while still in magazine style & original font of the current Hansards for easy accurate browsing & navigation.

Digital searchable Kenya Hansard on Google books in original font

Government Bible: Also, two months ago, (in April 2011), the same partnership resulted in the publication on Google Books of over 100 years of the Kenya gazette. This is the ‘bible’ of the Government with gems of information such as government appointments, issuance of land title deeds, proposed land use updates, mergers, anti-corruption reports, notices of intent to acquire private land, inheritance of estates of deceased persons, bankruptcy orders, winding up & de-registration of societies and companies, applications mining, broadcasting, aviation, communication licenses etc. The collection has indexed over 190,000 pages of Gazettes from 1899 to 2011.

Summary: While concerns have been raised about the ability of foreign bodies like the World Bank and Google to get access to data, the end product is world class and un-precdented on the continent. In addition the cost for each of these to the tax payer has been marginal - at about Kshs. 2 million ($25,000). There are no restrictions on the use of the content on Google books which can be linked and shared with a single click and will be be available on an API for more adaptations.

Other Constitutional Minefields

2011-07-07T14:05:00.000+03:00

Kenyan parliamentarians were shocked last month when they realized that voted in last August contained a clause that required leaders to pay tax.

What other clauses in the new constitution are going to raise some headaches in the next few months and years?

1. Automatic Citizenship: Dual citizenship is allowed - and a born Kenyan does not lose citizenship by becoming one of another country. Also citizenship can be acquired an orphan who under 8 years, or by marriage to a citizen for 7 years, or by having lived in Kenya for 7 years. The 2009 census revealed an interesting dimension to Kenya citizen origins including the Somali Kenyan and other African numbers.

2. Political Parties are Irrelevant/Term Limits ill end Career Politics: Many members of Parliament have set their sights for 2012 on becoming Governors, but these carry term limits (maximum of two). There are now term limits for the Presidents (& Deputy), county, judiciary and government officers e.g. the Inspector General of police will can serve only one 4-year term (which is not enough time for an ambitious leader to carry out reforms), but oddly, there are no term limits for parliament.

Also, in running for any of these offices, independent candidates can avoid messy, expensive, party elections by running without joining a political party; all it requires is obtaining 1,000 signatures for MP and 2,000 for Senate from their constituents. Political parties have one year to comply with political parties act or be disbanded (and time is almost up)

3 Amnesty for corruption: Parliament is yet to enact creation of an ethics and anti-corruption commission, which should be able to review un-ethical actions such as conflicts of interest actions. However for all the talk about extradition of Anglo Leasing and KPLC cases, suspects can’t be tried for acts that were not offences in Kenya, or under international law. These may include corruption-related crimes, which were legislated - in 2003 (for economic crimes) and 2010 (for money laundering). The it wasn't a crime at the time defence has already been brought up.

4. Raise Local Taxes to support Counties: There will be 47 County Governments that will receive and share at least 15% of revenue raised by the state. Using the 2011 numbers announced this week, based on tax revenue of Kshs 634. billion ($7.5 billion), the county governments will split Kshs. 95 billion. Counties may collect property, entertainment and other taxes approved. However, while counties like Mombasa, Nairobi, Narok etc., have significant sources of revenue from (permits, tourism), many counties governments are not currently, self sufficient and will have to obtain new revenue streams. County government may take loans if their assemblies approve, but only if the national government guarantees them.

5 Civil Servants can’t own Matatu’s or Kiosks : Corporate governance is set to improve as the number of state directorships is implied and directors can’t be involved in politics (e.g. chair a company and a political party). Also a person who has been removed from a state office for a violation is not eligible for any other and crucially state officers will not be allowed to have other gainful employment - is this a repeal of the (controversial) Ndegwa Rule that allowed civil servants to engage in private business?

6. Land Use Restrictions: There was a story in the newspapers this week about a land grab in the Tana Delta. The new constitution requires that Parliament ratify concessions of land and mining agreements. This effectively puts an end to the practice of Desert states, foreign universities and corporations signing up farmland for their own food production. Parliament will also set other rules on land investment, minimum and maximum land holding, matrimonial sharing and inheritance

Is Wealth a Disadvantage to Health?

2011-07-06T14:25:00.000+03:00

A guest post by Joshua Arimi of Arimi Foods

It is now widely accepted that there are ‘diseases for the rich’ or ‘western diseases’ and ‘diseases for the poor.’ A World health organization’s (WHO) 2011 report published in June 2011 which analysed the top ten killers in the world showed that, the rich are most likely to die from strokes and heart related diseases, while the poor are likely to die from pneumonia and diarrhoea.

Also in June, Kenya’s Daily Nation newspaper published an article derived from the WHO data with a catchy title ‘The rich more likely to die from heart disease’. Does it mean wealth is a disadvantage to health? No! - The ‘real wealthy’ are not the victims of heart diseases but the ‘average rich’.

When health and wealth are put in the same sentence, it is very important to differentiate between those that are in high income, middle income and low income categories. According to WHO report, highest number of those that die from ‘western diseases’ are from medium income countries as opposed to high income countries. This is contrary to the notion that wealth per se is the risk factor for heart diseases.

Out of 1,000 deaths related to strokes and heart related diseases;

• 39 were from high income countries like United Arab Emirates, United Kingdom and United States of America.
• 179 were from middle income countries such as South Africa, Nigeria, Thailand and Tunisia. i.e the number of people from middle class category that will die from ‘western diseases’ is three times higher than that from high income category.
• ‘Kenya together with Zambia, Zimbabwe and Tanzania are on the low income category and the majority will die from pneumonia and diarrhoea’ says the report. Ideally, a high number of the so called ‘the rich’ in the low income countries fall in the middle class category globally. This may explain why the rich among the low income countries have the highest prevalence of ‘western diseases’.

The WHO also found that while the USA is in the high income category, the majority of Americans who succumb to strokes and heart related diseases are the less wealthy. Other University research in the US found that when they compared wealth and prevalence of obesity, hypertension and related diseases, there was an inverse relationship between wealth and these diseases - meaning that less wealthy were more likely to suffer from them than the wealthy.

To understand why the middle income populations are most likely to suffer from stroke and heart related diseases, it is essential to outline the key major and contributing risk factors. Major risk factors are those that have been proven to increase risk of heart disease and these include high blood pressure, high blood cholesterol, diabetes, obesity, overweight, smoking, physical inactivity, heredity and age. Contributing risk factors are those that doctors think can lead to an increased risk of heart disease, but their exact role has not been defined and these include stress and alcohol.

Clearly, the major and contributing factors of heart diseases are results of lifestyles. The poor cannot afford these lifestyles, however, as they say, ‘poverty is not permanent’.

• Low income populations work extra hard to get out of the lower income cadre, while envying lifestyles of the middle income populations.
• As soon as they join the middle income category, they desperately imitate what they perceive as lifestyles of the rich. That is; eating on the go, consume fatty foods, processed foods, ready to eat foods, smoke, have high alcohol consumption, and assume sedentary lifestyles.
• On the other hand, the high income countries have always enjoyed these foods and lifestyles while in the middle income category and they have witnessed first hand the adverse consequences among their populations and peers. The rich countries are cutting on deadly foods such as high saturated fats, processed foods, high alcohol content drinks and sedentary lifestyles. Meanwhile, the emerging economies and the middle class among rich countries are embracing these renegade lifestyles full throttle.

For example, the biggest supermarket in UK and Ireland, Tesco does not stock any solid cooking fat or hydrogenated cooking fats which are associated with high trans and saturated fats. On the other hand, solid cooking fats occupy the biggest shelf space in supermarkets in Kenya. Also beer drinks sold in developing countries have higher alcohol content than their counterparts in developed countries.

‘I have to enjoy life’, ‘I don’t have to live a boring life’, and ‘I have to live like a rich man’. These are common justifications among the middle class when engaging in life shattering lifestyles

It is not true that the rich are most likely to die from heart disease. ‘Out of 13 million people who died from stroke and heart related diseases worldwide in 2008, 1 million were from low income countries, 2 million were from high income countries and 10 million (5X higher) were from middle income countries’ adds the WHO report. And, in the high income countries, it is their low income population that is at the highest risk of heart diseases. In the middle income countries, the majority are at risk. In low income countries, the so called ‘the rich’ are at the highest risk.

Overcoming Risks Posed by Wealth to Health: Many will argue that with wealth you can afford the medication. However, health is not a financial muscle competition and prevention pays dividends than struggling to cure.

Understanding the consequences of different lifestyles brought about by wealth is key to coping well. The majority who move from low to middle income category of wealth are ill-prepared to cope with what wealth throws at them. It is important for governments and other agencies to educate their people on relationship between health and wealth and if possible entrench the course in school curriculum.

Simple lifestyles tips to opt for include cutting salt intake, a adopting regular exercise regime, cutting back on fatty foods (in particular saturated and trans fats), moderating alcohol consumption and balancing between work and social activities.

Guide to Casablanca

2011-06-29T11:40:00.000+03:00

Guest post by MVQ on travel to Casablanca and Rabat in Morocco

Intro: If you decide to do a coastal tour of Morocco, then Casablanca is a good landing place and trains connect most cities so it is pretty easy and economical to travel around.

Some highlights/tips:

Getting there: The major carrier for the country is Royal Air Maroc and typically flights on this carrier are the fastest way into the country. Alternatives can turn what should be a 4 hour flight into a day long journey that can take you on a tour through Europe or the Middle East.

Flying from Nairobi to Casablanca, the choices are Air France (via Paris) for $1,000, EgyptAir (via Cairo) for $1,200, Emirates and Turkish for $1,500 and KLM for $1,800 and KQ/Alitalia via Rome for $3,000

Upon arrival customs is actually pretty seamless and the airport is fairly modern and easy to navigate. From the airport there are two options—a taxi or the train. The train into Casa takes about an hour and costs 35 MAD (~USD 4), while a cab will run you somewhere north of 100 MAD. I took the train and it is a pretty smooth trip—as long as you don’t miss your stop (don’t be afraid to ask people for help.) Depending on which train you are on and where you are going, to get into Casablanca you will get off at Ain Sabaa (for transfer to Casa Port) or Casa Voyageur. The ticket to Rabat is only MAD 5-10 more, and the distance from Casablanca to Rabat takes about an hour to cover by train. There are food carts on the train for all destinations where you can grab food and water so don’t worry too much about getting a snack from the airport.

Cliffs at Rabat beach

Getting around: Casablanca and Rabat are both walkable cities (during the day) but please watch your things and only carry bags that zip (try to minimize what you carry around as pick pocketing is not uncommon.) When traveling long distances there are two cab options, the Mercedes cabs and the colored cabs (blue for Rabat, red for Casa.) I overwhelmingly prefer the colored cabs as they are metered (ask for them to “turn on the counter”,) cheap, and generally safe. One thing—the cab system is, err, “over optimized.” Cab drivers will pick up multiple fares along the way so don’t be alarmed if random people hop into the cab during your ride. This scared me at first but is common practice (and helps keep cab ride costs low.) For ~10 minute rides expect to pay less than MAD 20, for longer rides (~30 minutes) expect to pay MAD 50.

Language/ Communications: The principle languages in Morocco are French and Arabic. You can get by with English but this will be a challenge so get a friend or a phrasebook! Even for just a stay for a couple of days I recommend getting a local SIM card. The card costs MAD 30 (I believe) for 2G and MAD 60 for 3G (this enables you to get online.) There is no registration requirement for SIMs and the whole process of getting a SIM and credit takes less than 2 minutes. Maroc Telcom is the most ubiquitous provider and you can find a shop almost everywhere (train stations, strip malls, markets, etc.)

Lodging: You have the option of Riads and hotels. I didn’t stay in a Riad but as I understand they are very similar to upscale hostels. You will find that many are family run, and some of the best traditional restaurants are in the Riads. As for hotels, most major chains exist. In Casablanca I stayed at the Sheraton, which is walkable to the Casa Port train station (gare), and only three blocks from the Medina/ old city and the central commercial area. In Rabat I stayed at the Royal Tulip. The hotel was great—there is reliable internet, a nice gym that overlooks the Bouregreg river, and it felt very safe.

Fish sandwich vendor in Rabat Medina

Food & Bars: Try your best not to buy food in the hotels. You will pay 10x the cost of buying food outside and there is always a food option nearby. Street food is decent and you can get a fish sandwich in the street for MAD 5-20 ($1-4) depending on where you are. Also, in Casa you can pick up a Beignet for MAD 2-5 (less than $1) In Rabat I recommend Villa Mandarine—they have the most amazing Tagine and (like in most places) you can get great cous cous on Friday nights. In Casa, I would skip the Pizza Huts and KFCs that are ubiquitous and try out a local restaurant near the marina. Rick’s Café is very popular, I didn’t go there but feedback is that it is very expensive and only worthwhile if you are a huge Casablanca (movie) fan.

Rick’s café in Casa

Shopping/Site Seeing: Overall, Rabat is much more exciting than Casablanca! In Rabat I recommend the following:
• Medina: Check out the old city, pick up locally styled outfits and other souvenirs, and get a sense for the buzz of old Rabat. You can spend 1-2 hours exploring the windy streets and checking out stalls. If you decide to buy things always haggle—the starting price is typically 1.5 to 2x what you should actually pay. Never accept the first price!
• Oudayas: Across the street from the Medina, you can walk through the old fort and the iconic white and blue painted walls
• Beaches: Near the Oudayas are several beaches. Bring your bathing suit and enjoy the waves! You can get surfing lessons if you are more of an adventurer or just relax.
• Other destinations in Rabat: Royal palace, Grand mosque, Dar Es Salaam golf course, gardens

Mosquee Hassan II in Casa

In Casablanca be sure to check out their Medina (very different from Rabats!) and the Hassan II Mosquee (when you tell the cab driver, say “moskay” they won’t understand “mosque” and can take you to the wrong place!

Summary: Morocco is a fascinating place and just visiting Rabat and Casablanca certainly doesn’t do it justice! You must get to Marrakech, Fez, Agadir, Oujda, etc. Wherever you go though, get to know the locals (they are generally quite kind and open), try the food (including the street meat!), and enjoy yourself!

Also Morocco in Pink from Digital African

Real Estate Moment: Golf Resorts, REIT's & Collapsing Buildings

2011-06-28T15:07:00.002+03:00

Much has happened since the last real estate post and there is a lot of construction in Nairobi with towering cranes all around in many directions. Here's an update of what's in, and what’s out in the real estate sector.

In
Cheap Cement: In July 2009, a 50kg bag of Bamburi cement at Kshs. 780 (~$10), and today it is about $8 thanks to new entrants in the competitive cement sector.

How to profit from real estate: Is a story by MP Cyrus Jirongo who has a colorful history, but writes about his real estate success and says it was not due to strong political links in the 1990’s.

Golf Estates: The latest is Sergoit Resort in Eldoret town . Others are Green Park, Thika Greens, Tatu and Vipingo Ridge.

Hotels: The East African newspaper has an article this week which notes that there are at least 10 new hotels in Nairobi are planned, which will add about 2,500 rooms to the City.

Luxury Apartments: Most vivid is the English Point Marina apartments in Mombasa that will cost above Kshs. 50 million (~$555,000). They have been running ads in a few newspapers (but some of which need to be put through a spell check)

Investment Groups: The Kenya Finance Minister's Budget speech in early June, proposed recognition to real estate investment trusts (REIT's) as an investment class under the capital markets act. Rules for REIT's include membership must be at least 25 people, no one member shall own more than 12.5%, and dividends will be taxed at 5%.

Universities: University campuses now occupy or own many buildings in Nairobi and other town - and when Standard Chartered Bank moved out of downtown Nairobi earlier this year, their building was sold and is expected to be leased to a University campus.

Social Media: @Kenarchitect (of the Architecture Kenya website) is one interesting person to follow on twitter, and here's a re-cap of observations on real estate happenings from around Nairobi in the last month:

- Watching (Special Programs Minister) Esther Murugi on @citizentvkenya saying that they've given IDPs Kshs 35k ($400) to rebuild their houses. What kind of house can you build with 35k?
- The more we entertain the myth of rural richness, the more we delay in getting the solutions for the city - A case for rural urban migration
- Kenya needs 410 houses daily. I have been supervising 350 houses for the last 2 years. 144 will be ready by Dec. Its a tall order.
- Tena estate sewage crisis, its too serious. NWSC must do something about it.
- Believe it or not, these rental houses in Ruaraka are way cheaper than those mud/paper walled rooms in Kibera. http://twitpic.com/57e9lr
- Bill to Tame Rogue Contractors http://wp.me/pUg5Q-pf
- Who owns Hotel Boulevard? With better decor and good service, they will give Norfolk a run 4 their money. http://twitpic.com/58omyk
- Architecture of Kiambu. 200 by 200 mm columns. Four floors. No slabs. But the building will not collapse....... http://twitpic.com/59ye50
- Containers are quickly gaining popularity as the new form of construction. Lets wait and see what the future has http://twitpic.com/5akxpm
- Would you live in a ten-storey apartment block? Many of these are coming up in Pangani. http://twitpic.com/5awxd3
- Winners Chapel on Mombasa Rd, will be the largest auditorium in Kenya with capacity of 30k. Crowd control?????? http://twitpic.com/5ax3nd I cant stop tweeting about this church set to be Kenya's largest auditorium. Its capacity rivals Nyayo Stadium. http://twitpic.com/5eph3n
- Kenyans rarely ever consult architects. The thinking is that we are expensive consultants. NCC does the approvals and enforcement. But corrupt inspectors use the inspection exercise as a money collecting scheme.....
- There were people between the slabs. Check the other photo, someone being pulled from under a slab. http://twitpic.com/5bj1gr
- Karen is rapidly shifting in2 a half acre neighborhood. Karengata seems to have given up the control fight. http://twitpic.com/5d6ytm
- #ChineseContractor, how do you do these massive retaining using blocks without reinforcement? #NewTechnology. http://twitpic.com/5hlbzk
- Wall clad at Rahimtulla Towers started falling off, they had to remove it all. Ugly spikes remain. #PoorDetails http://twitpic.com/5hmrjs It was a case of poor detailing an fixing by the architect and contractor. The tiles were falling and could have hurt people.
- Swimming in this cantilevered pool at Sankara is like displaying your 'items' to the street below. Would you? http://twitpic.com/5i21q7

Out

A building next to Nakumatt Wendani (via SavvyKenya)

Building Standards: There have been a few building collapses in the last few months, which has been followed by public complaints and Government promises of stern action to be taken including demolition of sub-standard or un-safe buildings. This column in the Standard points to process flaws in the building industry, noting;

It is not a secret the so-called site engineers and contractors shown on site boards planted outside upcoming buildings are mere decoys. The actual ‘contractors’ are some shady and opportunistic characters that promise to cheaply put up the floors required in two months and claim to know their way around City Hall

To get things done, they file different sketch plans and specifications with City Hall, and claim they can compromise on costs and materials without affecting safety and durability. That is why there are no lifts in all five-storey-plus buildings in Eastlands.

Farm land: Farm land is losing out to housing in prime agricultural parts of Central and Rift Valley. However, he's an opportunity from (fellow blogger) MainaT - land for sale- 145 acres, 2 kilometres from Namanga at Ksh100,000 ($1,110) per acre that is suitable for dairy or wheat farming or speculation.

Cinema Halls: Like dry cleaners, repair shops, and cyber cafes, another business whose time seems to be passing is Cinema halls who have been struggling with low attendance and high prices (~Kshs 500) relative to bootleg DVD’s of new movies that cost Kshs 50 (~$0.55). (Read Biko Zulu’s article lamenting the end of cinema going era)

A couple of Nairobi movie halls converted to churches and meeting halls, and Silverbird Theatres went out of business a few months ago, leaving one main movie chain - Fox E.A. However, there are some investors who believe there is still life in movie theatres and the former Silverbird halls are currently being re-opened and screening new movies.

Tax benefits : In reviewing ways to bridge Kenya's budget deficit, there have been quite a few suggestions to re-introducing a capital gains tax in the country, which would also touch on real estate. Right now the state collects a stamp duty based on the value of property (4% for urban, 2% for rural) at the time property is transferred.

Missing the 2011 AGM Season

2011-06-26T07:21:00.000+03:00

May and June are the season for corporate annual general meetings (AGM) , but I’m yet to attend any except from one for a savings & credit society (SACCO).

SACCO’s: are getting more recognition in acknowledgement of their significant deposit holdings and loan portfolios and now have a new regulatory agency to oversee the sector.

In an variation from corporate AGM’s, at a SACCO one members have to first approve the chairperson’s report, supervisory report, accounts and budget before discussions can be held. Also at SACCO AGM’s, the rules allow members on the floor to contribute to a much higher degree, but this also means time has to be spent clarifying (from the by-laws) on exactly what proposals from the floor can be entertained e.g. how much they can vary the the amount that will be paid to the management committee (honoraria).

This year, there was much debate over the last starting time of the AGM and if those members who were late in arriving at the meeting were entitled to payment of an attendance lunch allowance of $25.

Other country perspectives:

Rwanda: In Kigali, Bralirwa held their first AGM - after the company had converted to a public company and had an IPO last year. No writing has come from that meeting, but it is likely to have been quite similar to a Kenyan AGM, seeing as how much Kenyans have contributed to the structure and regulation of the capital markets system in Rwanda.

Also
- Shareholders were expected to approve an increase in capital a few months after the IPO.
- The standard auditor's statement page has an extra clause noting that we (KPMG) have no relationship, interest or debt with the Bralirwa, and …… we comply with ethical requirements (of the) International Federation of Accountants’ Code of Ethics for Professional Accountants, which includes comprehensive independence and other requirements..

India: The Economist wrote about the Reliance AGM - at Reliance company run by India’s richest man. It is remarkably similar to a couple of Kenyan ones - (and was) a ceremony for retail shareholders, with hero worship of an international icon and family that transformed the company to an international conglomerate. It was interesting to note that shareholders apply to speak ahead of time and get approval.

USA: Noted investor and blogger Eric Jackson wrote on the Yahoo AGM . He noted (on AGM’s) that big shareholders stay home and it is mainly those who live nearby, that attend for the free food & coffee. Also that the Q&A is tame with short answers to questions, no big news expected, and the only exciting thing was going to be the board election.

He has been very critical of the board and the current CEO and wrote elsewhere in Forbes on his preferred nominees to be the next Yahoo CEO .

Others twitter comments;
- What a downer! $YHOO “@TechCrunch: Angry Yahoo Shareholder Confronts Bartz And Asks For Her Head (Audio Clip) tcrn.ch/l9hHYJ”
- Terry Semel was let go by the Yahoo board ONE week after it backed him at 2007 shareholder mtg. They now back Bartz.
- $YHOO consensus estimate is it will do $4.55b in 2011. By my estimates, Alibaba Group (incl Alibaba.com, Taobao & Alipay) will beat that
- Here is my first 21CBH article on Jack Ma: http://is.gd/PsTaz4 $YHOO

Urban Inflation Index: June 2011

2011-06-21T14:20:00.000+03:00

Comparing changes to three months ago, last year and June 2009 in an interesting quarter with price swings in food, currencies and fuel.

Less Expensive:

Nothing really that's being measured

About the Same:

Communications: Cell phone rates are still low, and while Safaricom appear to have survived the Airtel-initiated price war, recording a marginal full year profit drop of 12% down to ~$220 million on increased revenue of 12% to ~$1.1 billion, the government is getting anxious about the price wars and impact on mobile companies and tax revenue.

Last week, Kenya’s President seemed to direct for an end to the mobile price wars in Kenya . Also Essar’s Yu Mobile has denied they are considering an exit from the Kenyan market while Safaricom and France Telkom (Orange) are about to sign a tower sharing agreement.

More Reading - The Economist has an interesting article on the India mobile phone market which may explain the vision the direction that Bharti Airtel is taking in Africa.

Other food item: Sugar (2 kg. Mumias pack) is at Kshs 190; a year ago it was 200, and the year before was 175. It will likely stay the same until the COMESA sugar import ceiling ends in 2012.

More Expensive:

Fuel: A Litre of petrol fuel is now Kshs 114.93, which is 26% higher than a year ago and 58% higher than two years ago. The fuel sector is characterized by accusations and allegations every other week about favouritism, manipulation of prices & shipments, corruption, capacity etc. - all while the price continues to rise.

Staple Food: A 2 kg. Unga pack (maize flour), which is used to make Ugali that is eaten by a majority of Kenyans daily today costs Kshs. 130 at Uchumi. This is 83% higher than the 71 of a year ago - and two years ago it was 92, the year before it was 73. The price fluctuations may have some artificial influence by maize farmers holding on to their crop in the hope of a better price from the Government and millers. Shrugging this off, the the Government today waived tax on maize that will be imported between June and December 2011 to avert a food disaster in the country.

Foreign Exchange: 1 US$ equals Kshs. 89.37 compared to 80.6 last year and 77.9, two years ago. It is reported to have not seen such lows since 1994 when Goldenberg scandal exploded and shook the Kenyan economy. However while focus is on the US dollar (which this month exchanges for less than a Canadian dollar) other currencies are also at levels not seen in years - like the Sterling Pound at 146, Euro at 129, and South Africa Rand at 13.

Utilities: Electricity: Many customers of KPLC have been converted to pre paid electricity and the only to get a breakdown of costs is by buying a token at a Kenya Power office. It's much more convenient to re-load or top up electricity by mobile phone payments (M-pesa or Airtel money) and a payment of Kshs. 500 obtains 29 units of electricity - compared to 51 units for the same amount two months ago, - implying that electricity costs 43% more!
Meanwhile the city’s other major utility provider, the Nairobi Water Company also plans to convert some of its customers to a pre-paid billing system to stem illegal connections and improve revenue collection.

Entertainment: A bottle of Tusker beer (at local pub) costs Kshs. 140 ($1.55). However the recommended retail price of a Tusker bottle went up to Kshs. 95 in April (after last being hiked by 38% to Kshs. 90 after the June 2010 budget speech) and beers currently sell for between Kshs. 150 – 220 in most Nairobi pubs.

Old and New Tusker bottle

Tusker was re-launched in new bottle in April, but that rebrand has received mixed reviews with some patrons calling the bottle a Probox after a Toyota station wagon that has a similar boxy shape.

EABL is also in the process of severing ties with SAB Miller a rival South African brewer, after many years of a cease fire & cross ownership - and and they are expected to soon renew their beer battles in both Kenya and Tanzania.

Cheque Truncation Part II

2011-06-04T16:15:00.000+03:00

The deadline of new cheque modernization passed this week, on June 1. Yet many bank customers had not yet received new chequebooks, and many more were not fully versed with the process, which entailed a change of chequebooks.

The Kenya Bankers’ Association (KBA) left the public relations of the process to its’ member banks resulting in low awareness and did not communicate till May 31 with adverts in the newspapers re-assuring customers and the public that the old cheques will be used for an indefinite period. This paled in comparison to the introduction of mobile number portability (MNP), in which the regulator (CCK), service providers, and mainly mobile companies carried numerous advertisements about the transition to the new service. (Mobile companies ran extensive promotions to retain their customers or win over their competitors’ subscribers).

There are still many unresolved questions, even with the extenstion:

- Old chequebooks were issued though the month of May, but customers then had to get the new chequebooks at month end. Who bears the cost of printing books that were about to be phased out?
- Do the new cheques clear faster? e.g. 1-day for Nairobi cheques? Speed is important for payments in the age of M-Pesa. The last statistics from the Central Bank (CBK) showed that in 2008, about 50,000 cheques were being cleared daily. Many suppliers now insist on getting paid by M-Pesa (which takes less than a minute) or by real time gross settlement (RTGS a.k.a corporate m-pesa done by banks - but this also carries a high risk of fraud risk of fraud - at 69% of bank crimes)
- What happens to post-dated cheques? These are used for debt repayments and for motor insurance loans (some banks use these for collateral over up to 10 months)
- There is no apparent difference in the design of the old and new cheques. So what has changed to warrant the exercise?
- Are cheque printers (mainly De la Rue) able to print enough chequebooks for a smooth roll out next time?
- Some banks said that old cheques will still be honoured in-house i.e. if drawn to people who also use the same bank, while others told their customers they would not be honored. KBA should communicate a clear deadline when all banks & customers must switch.

For now, the old and new chequebooks are in circulation, but more information has to be provided to resolve the cheque truncation process.

Guide to Lusaka

2011-06-04T14:26:00.000+03:00

A guest post by @digitalafrican

Getting There: The cost to travel to Zambia is extremely high, and each ticket is around $700-800. Kenya Airways pretty much has a monopoly on travel to Zambia, and the route takes you through Lilongwe, Malawi. Once there, you can get a visa right at the airport with no hassle e.g. $50 for American visitors.

Everything at the airport is pretty straightforward. There aren't any unexpected taxes once you arrive although when you leave there can be a $25 tax that is levied. (though I didn't experience this).

Getting Around: You can use matatu's, private cars and of course walking. Lusaka is pretty small and easy to get around. The cost for a typical taxi is around 100,000 Zambian Kwacha (equivalent to around $20).

Zambia is an incredibly peaceful country. Many people enjoy long walks and jogs around the city. There are some very well built pedestrian walkways and Zambians usually follow the rules of the road so it's is relatively safe.

Communications: Coming from Kenya, Safaricom doesn't seem to work here. However the two most popular services are Airtel and MTN, and it is pretty easy to get a SIM card and the rates are affordable. There are very few Wi-Fi hotspots, while decent cybercafés are rare.

Language: English is the primary language, and most locals speak it fluently.

Business & Infrastructure: - It may be hard to get accustomed to the currency, as you are dealing with thousands of Kwacha. One (US) dollar is around 5,000 Kwacha, so you can imagine trying to buy a soda.

- Hotels : Cost from $100+. Excluding, this you might spend about $40.00 per day out & about.

- Electricity: There is plenty of electricity, and no power cuts in Zambia due to plenty of water flowing through the Kariba Dam and Victoria Falls. The streets are also well lit.

- Opportunities: Zambia is also known for its natural resources such as copper and hydroelectricity so there are huge opportunities there as well. Also, I would say anything within tech and the digital space would be a great investment in the country.

Food & Bars: - One thing to get accustomed to, is the drinking culture, which is a prevalent part of the social culture, and may take some adjusting to depending on where you are from.

- Arcardes and Manda Hill are two popular spots in Zambia. The food is incredible but the service is incredibly slow. Make sure you pack a lot of patience when you come to Zambia.

- Some Local foods to try are Shima (a version of Ugali), fish and green vegetables, while the local Beer is Mosi.

- Football and politics are popular topics of conversation. I would say the biggest legend in Zambia would have to be Kenneth Kaunda (KK), the first president of Zambia. After serving as president for 27 years, KK has left an impression on the country.

Shopping & Sight-Seeing: - In Zambia, the two most popular sightseeing destinations are the Kariba Dam, one of the largest dams in the world and Victoria Falls, which is a beautiful spectacle of natural life. A trip to either is one that you can't miss. Zambia has incredible nature and wildlife areas that are unbelievable; it is not rare to see wildlife while driving through the main highways. We were able to spot many elephants and deer during my time there.

- Wooden crafts and Fabric are very popular gift items. Compared to all the countries I have traveled to in Africa, wooden crafts are Zambia's strong point.

Biggest surprise about the country: I would say that the country seems empty and spacious. There is not a large population and they have preserved a lot of their natural resources

Guide to Lagos

2011-06-02T18:09:00.001+03:00

Guest post by MVQ

Intro: Lagos is not the most tourist-friendly city in the world but it does provide a good taste of West African culture and is a "must see" destination for anyone looking to do pan-African business. As locals will tell you, there aren't many sites to see, there are only a few beaches that are tourist-friendly, and the congestion can be quite overwhelming. But if you can get over that, you are in for a cultural treat, an enviable nightlife, and a peek into one of the most dynamic African markets.

Getting There: I took the KQ flight from Nairobi to Lagos and it was actually quite nice and relaxing. Lagos' airport is a blast from the past, it appeared as if it hadn't been updated in decades and upon entry the only sign of modernity is a large monitor with adverts near customs.

The customs process though was surprisingly efficient. Mine was the only flight to have arrived at the time and there were 5 customs counters, with 3 for non-citizens that moved fairly swiftly. You need to get a Nigerian visa in advance to get through customs (give yourself 2 weeks to get the visa, as you must hand over your passport, pay ~$100 for US/UK, $50 for other countries, and prove that you have a destination in Nigeria.) You will also need a yellow fever card

To my surprise I was able to get through customs in about ten minutes - and based on the reaction of my friends though, this is a rare occurrence. Apparently customs is a major pain and you must pay for expedited service (there is some rumor that the expediters and the customs agents may be in cahoots.)

Despite not wrapping my luggage, it came out in one piece. Later I was warned by frequent travellers that Lagos airport is one of the more risky destinations for "open" luggage, so my advice is to try to get your luggage shrink-wrapped before flying into Lagos.

Getting Around: When I got out of the airport, the cab drivers were quite aggressive, and I ended up riding in to the city with a friend. My advice is to try to get your contact in town to send a car for you to avoid the aggressive cabbies. If you can't get a car, then you should expect to pay 5,000 Naira for the 30 minute to an hour long ride into the city.

When in the city the best way to get around is via a car service or taxi. Try to link with a reliable driver, and for newcomers, Red Cab is generally a pretty safe option. Each cab ride should cost you between 2-3,000 Naira ($13-20) if traveling in the Lekki, VI, Ikoyi, or Yaba areas, and you should clarify the price up front.

Do not walk around by yourself at night and take caution during the day, and look out for the Okadas, ("kamikaze moto taxis") which are the fastest, but most dangerous means of transport around Lagos.

Communications: The best way to communicate is via mobile phone, and you can buy a SIM card for prepaid minutes upon arrival. Most people here have two phones from different carriers as the services are known to go out every now and again. I signed up with MTN and was reasonably happy with it; I plugged it into my Ideos Android phone and used the prepaid airtime for voice, data, and to create a wifi hotspot for my laptop. Other major players are Airtel (Zain), and Etisalat.

Hotels: The hotels in Lagos are very expensive as the mid to high end hotel market is sparse. The Sheraton Four Points, Radisson Blu, Southern Sun, Eko, and Federal Palace are probably the most tourist friendly and range in price from $300 to $600 per night.

Getting Around: The people in Lagos are fairly aggressive, but they all mean very well and are generally quite kind. I found that I received amazing hospitality from friends and colleagues in Lagos. The Nigeria pride is real!

English is the primary language in Lagos, though you do hear Pidgin, Hausa, Yoruba, Ebo, and other languages. The best paper to get while here is "The Punch" – and , though there are about 4 mainstream papers, expect about half the pages to be filled with full page ads and "congratulatory" statements about public officials.

Food & Bars: You must try the local food when in Lagos, and specialities like Fufu, Melon Seed, Okrah Soup, Suya, and Pepper Soup are staples. If you like spicy food then you will love the food in Lagos.

Star beer dominates, and you can get a large bottle for 800 Naira ($5.) I strongly recommend Star over Gulder (the other local favorite), as it has a good taste and is fairly ubiquitous.

Electricity: Be warned - power transmission is very unpredictable in Lagos. Even in the most affluent neighborhoods one power outage a day is not uncommon and some areas will go for weeks without power. After the first two outages you will get used to it - just make sure that your phone, laptop, etc. are always charged up!

Summary: Overall, Lagos is a great experience. The frenzy, the opulence, the fashion, the food, the traffic, the beaches, the hospitality, and the excitement are all palpable. Enjoy your trip!

Award Season: Legatum, Pivot25

2011-05-31T11:59:00.004+03:00

Legatum 2011 Awards: The 2011 series of the Africa Awards for Entrepreneurship was launched today in Nairobi. Kenya has produced more finalists and winners (including Virtual City, Colour Creations, Craft Silicon, AAR Health, Bio Deal Labs) in the short history of the awards, which have grown from 454 entries in 2007 to 2,700 in 2010.

For 2011, entries are open to companies in all African countries and are expecting over 5,000 entries from companies either directly at their AfricaAwards web site, or via nominations and awareness resulting from a press campaign across Africa (including ads on CNN).

The overall winner will get US$100,000 and five others will get $50,000 and to be eligible companies should have turnover of $1 - 15 million, a profitable track record of 2 years, at least 10 employees, not be subsidiaries of other companies, among other rules.

A committee will short-list these down 15 semi-finalists who will be visited and interviewed. 10 finalists will then be selected, and invited to Nairobi to make presentations make presentations as well as participate in a 1-day conference on entrepreneurship called Convergence Africa. The winners will then be announced at a gala dinner in Nairobi on December 8 2011.

Past (runner-up) winner John Waibochi of Virtual City spoke about the impact that the award had on his company. It gave them a reality check and a chance to audit themselves and their position in a competitive market, appreciate the skills and weakness they had as a company, and most important forced them to define their scope and package their story in a 7- minute pitch that has paid dividends in their subsequent participation with in the Africa Enterprise Challenge Fund and Nokia's Growth Economy Venture Challenge where they won $1 million. He added that participation in these awards had been an immeasurable marketing and PR coup for the company and given them access to $2-3 million of very affordable funds to grow.

The AfricaAwards prize is unique in that funds are not given to the company, but instead go out to pay (supplier) for what the winners set out to achieve in their pitches. The funds enabled VirtualCity to invest in non-operational expenditure areas, such as performance management systems, financial systems, and training, that they would not have done out of their cash flow.

The Legatum Institute, the Omidyar Network, Kenya Airways (official airline) and Google are partners for the 2011 Awards which are now open and run till the submission deadline of August 24.

Pivot 25: It’s about two weeks to the Pivot25 event, which still has a few tickets remaining for attendees. They will see twenty five companies competing for five prizes, with the winner in each of the five categories getting a cash prize of US$5,000. Here are the short-listed finalists in the categories of (i) Entertainment, Gaming & Utilities (ii) Business and Enterprise (iii) Government, Agriculture & Education (iv) Health (v) Mobile Payments & Commerce.

Edit

The Kenya Government's National Council of Science & Technology has;

(i) (20) Competitive Research Grants in the fields of geothermal, solar, wind, bio-energy, hydrogen, or fuel cells. Grants will be of Kshs. 15 million (~$175,000) over three years

(ii) 20 Science, Technology, and Innovation grants. These will be for Kshs. 1 million over 1 year for commercialization of prototypes.

(iii) (15) Post-Doctorate Research Grants in Pure & Applied Science, Mathematics, Engineering, and Technology. These will also be for Kshs. 1 million over 2 years.

The deadline is June 28 and application forms will be available at both the
NCST and ministry websites.

Ernst & Young: (E&Y) Entrepreneur Of The Year is open to applicants from Ethiopia, Kenya, Rwanda, Tanzania, Uganda in two categories (i) Master Entrepreneur category(companies that are 5 - 10 years old and have turnover of at least $50 million) and (ii) Emerging Entrepreneur category (companies that are 2 - 3 years old and have annual turnover of at least $5 million). D/L is 15 June 2011.

Google: Android Developer Challenge accepting applications in three categories (i) Entertainment / Media / Games (ii) Social Networking / Communication (iii) Productivity / Tools / Local / Geo. D/L is July 1.

Internews : Innovation Grants for New Media projects that range from $5,000 to $30,000 and open to local NGOs, software companies and/or mobile phone operators, local media outlets and individuals from various regions. D/L 30 June.

Tanzania: Entrepreneur of the Year. D/L is 30 July.

Standard Chartered: consumer banking graduate program for both graduate (those with masters degree) and fast track program (those with undergraduate degree)

FitzGerald prize for young African journalists. Details here . D/L July 31

Nestle Prize is still open till June 30. Last time, Kenya had the second highest number of entries after USA

Medical Investments in East Africa - Part II

2011-05-30T19:45:00.001+03:00

Rising Prices: In November last year, AAR Health sent a casual letter announcing some new medical insurance services they would be offering such as extending the membership age to 80 years, free basic health checks on appointment, out of country cover extended to 90 days, psychiatric benefit increase, a 24 hour help line, and ATM (forced) robbery compensation.

Ambulance in Lamu (picture courtesy of @azthedance)

Their CEO also noted that in the last three years there has been a consistent increase in costs of drugs, medical equipment, hospital charges, and doctor’s fees that after an actuarial review they would marginally adjust the premiums
on an age-band basis is.

However the sticker shock came, this month with a renewal notice letter that was 67% more than last year - shocking given that there were no claims. It has not been clear what caused this and various from AAR include, doctors fees have gone up, the enhanced payments will go towards the new services, the company was hit by several claims last year, they have to pay for their own clinics & ambulances unlike other insurers etc.

But a rival CEO on twitter wrote that increases should not be more than 25% a year, and this is borne out by Government and other insurers statistics that indicate changes & inflation in the sector are about 20% per year.

Money going in to healthcare: A previous post touched on the finances and the Nairobi Hospital surplus and how their financial picture is much healthier some of than its patients.

The medical sector has also attracted a some recent investments including:

- A few days prior to the AAR November letter, a Dutch company - Investment Fund for Health in Africa (IFHA) took up a 20% stake in AAR at a cost of Kshs. 750 million (then about $10 million). From media reports on the deal, IFHA will over the next two years increase its stake to 60% and exit by way of an IPO at the Nairobi Stock Exchange in about 5 years

- TBL Mirror Fund has an investment in Meridian Medical Centres

- In January this year, Resolution Health which had 2010 revenue of Kshs 1.12 billion and income of Kshs. 208 million sold a 25% stake in the company to a German private equity fund Africa Development Corporation (ADC), for KES184m. Resolution, which has 42,000 members, is also eying a stock exchange listing.

- In this week’s East African is a story of a new Aureos Health Fund that is being set up.

Guide to Addis Ababa

2011-05-27T17:56:00.000+03:00

A guest post by @Kahenya who made a recent visit to Addis Ababa, the capital city of Ethiopia on a philanthropic mission. He also says that this blog is blocked from Ethiopia and that 1 birr is equivalent to about 5 Kenya shillings.

Getting There: When I arrived in Ethiopia, it took me about 30 minutes to clear at the airport, and here Kenyan citizens don't need a visa. However a Yellow fever certificates is mandatory and they will quarantine you for not having one.

Getting Around: Normal prices for a taxi can be anything between 100 Birr to 250, but the guesthouse I was staying in sent their shuttle to the airport (to pick me). Most locals use either a matatu (big taxi) or small taxis which act as a matatu, and sometimes they even contract taxis.

I use the matatu (big taxi) and contract taxis as do many locals, and I also hired a car with a driver to take out on the , since it worked out cheaper than a contract taxi and the guy waited on me.

I have never felt unsafe in Addis - whether it's day or night. It's out in the desert where things tend to go wrong. My advice, is don't travel at night outside the city, especially into the desert, as that's time territory.

Language: With English and like about 2 words of Amharic, I am always able to find my way around. There is no local English newspaper but my favourite English magazine there is Whats'out Addis.

Communications: I have an Addis line, and I just plonked in the SIM-card and it worked. Mobile internet works, quite well now, unlike last year where I was barred from it. There are many Wi-fi hotspots, especially in the guest houses, hotels, and coffee shops, and they are usually free. I did not pay for internet this time round, but I believe it varies from .50c to 1 Birr per minute. Making local calls is easy, as are international calls, but I did not check the cost.

Hotel: I stayed in a guest house [La Source Guest House, located on Gabon Street In Meskel Square behind Adot-Tina Hotel] where usually I get a double room for about 400 birr, but this time round, I stayed in the penthouse and it was 600 birr a night. I have been staying in this guesthouse since the day they opened, in the early 2000's, so I get very preferential rates. I am still confused by this place almost 10 years later because though the place is quite clean, and located in a nice place, the price remains very affordable. It has always thrown me off, but as they say, take it with a smile. You can also make booking online, and while I only confirmed my booking 3 hours before takeoff, I found everything ready & in order when I arrived.

Food & Bars: The local dish was injera (which I do not really like) but I had a lot of tibbs, bread, pizza, and (strangely) sandwiches.

St George Beer (my favourite there) was 35 bob (due to price caps) which made it very difficult to find - in fact, finding beer was a mission! I did not quite interact with strangers this time round, but mostly we talked about May Bread, African politics, Gaddafi some bullshit, girl talk etc.

Shopping & Sight-Seeing: I always go to Merkato, as do many tourists. The leather stuff in Addis is always a plus and as are the imported original Italian Suits (which I don't wear) that are priced that much better than in Nairobi. Most tourists buy local wear, artifacts etc.

Also go to Langano and Awassa to enjoy some lake side action, and Gondar & Lalibella for history. But, ironically, I've never been to any of these places, but my opportunity will come one day.

Business & Infrastructure: - Electricity is not very reliable. There are major blackouts during the day and a lot of people have backup generators if they can afford it. The guest house I stayed at had a generator, so we were not in the dark for more than two minutes which was nice.

Opportunities?: Addis is ripe for construction and infrastructure development. If you can get in on that, or even technology work, then you are in a good place. Local product development that can be exported (I hear) is also a big hit, with the government helping with fulfillment.

Shocker: - Last year, (the economy) was good, and there was a lot of activity, but now it seems to have slowed down. With the price cuts, and shortage of food items, like sugar, cereals, and cooking oil, the economy seemed to have reverted back to the old days.

– But the construction boom is insane, and property prices I noted are quite high. In short, property prices don't match up to the economy.

Cutting the Big Deals

2011-05-26T13:09:00.000+03:00

A guest post by Shiroh.

Many people ask me how to make money especially because I work in an institution that helps people make money. I don’t know the answer, as I have little wealth myself, but I can give a few tips that I have learnt from those who do.

1. Read widely: Most people get information when it is no longer useful. Information is power, so the adage goes. Get information when it is hot. Don’t buy a share when the owners have already issued a good dividend - instead monitor the activities of that particular company for a period of time. Read the financial statements and its notes. The likelihood of making money when the dividend is announced is almost zero. Instead, read about the acquisitions/mergers the company is making. For example, what is the impact of Kenya Airways buying new planes? What is the effect of the international debt that Kengen and Safaricom keep taking periodically, on the company’s future profits? In short, do your research, and stay extremely informed.

Also read personal finance books and blogs. If there is one book I thank the heavens for, it is Rich Dad, Poor Dad. This is the book that introduced me to personal finance. These books are available everywhere, and have a look at them as ignorance is not bliss.

2. Have the money ready: If you are like any other Nairobian, you live from one pay slip to another, or you are on the verge of taking a credit card because the money is no longer enough to last a whole month. When deals come, it is your ability to pay for it, mostly in cash that counts. If you’re considering taking a loan, interest rates are quite high, so the returns will be wiped out.

You have put money away so that when an opportunity strikes, you will be in a position to take advantage of it, so Save! Save! Save! . If you cannot save Kshs. 2,000 ($24) per month, then you are unlikely to be able to Kshs. 20,000. Also consider:

- Joining a SACCO (Savings & Credit Society) if you don’t have the discipline to save.
- Have standing orders with your bank that automatically place money in savings accounts (which are not easily accessible).
- Resist the urge to spend on things you don’t immediately need.

3. Diversify your income: There is always something you can do outside of your job that could give you the extra money. You can read more on this here.

4. Use Professional advice: Many people think they can do everything without professional advice. Get a good lawyer, accountant, and financial advisor to before embarking on major steps. Just like you go to a doctor when you are sick, or a lawyer when you are making deals, also visit a financial advisor if you need to know how to invest.

5. Network: The big deals are made in small smoky bars. This means that you need to align yourself with the right people who know where the deals are. If this means joining your local rotary so that you can get the right introductions, do it. If it means doing more social work, do it. In short, the world is unfair to those who don’t know the rules of the game.

Guide to Asmara

2011-05-24T17:48:00.000+03:00

A guest post on a visit to Asmara, the capital of Eritrea, which turns 20 today. [See Wikipedia Eritrea]

Getting There: From Nairobi, NAS Air flies direct once a week to Asmara. There are alternative, but longer routes such as KQ via Khartoum (connecting with Sudan Air) or through Egypt. NAS Air flies in on Saturday morning and returns in the afternoon, with a round-trip ticket costing ~$700. Also, a visa is required of Kenyans prior to travel.
- Upon arrival in Eritrea, officials will record details of items in your possession such as computers, phones & electronic devices in a declaration form, which will be cross-checked when you fly out.

Money: The local currency is called the Nakfa, which exchanges at about 15 to the US dollar. Though it is illegal for Eritreans to possess forex, there is a black market where the dollar exchanges for about 40 Nakfa.

Getting Around : Asmara is a small town, and people walk around, or take bicycles or buses. They also they use horse drawn carriage for goods. For visitors, taxis are available for and are clearly painted in yellow.
- It is possible to get around speaking English (which is more better understood than in Ethiopia). This is because, while the local languages (e.g. Tigrinya, Tigre) are taught in elementary school years, they switch to English for the latter years. Other languages spoken are Arabic and Italian.
- It is ok to walk around, and while there are no armed police but army is visible.
- For communications, hotels have phones and internet, and there are many cybercafés, though it appears Facebook is blocked. You can also hire a prepaid phone/SIM that costs ~ 1500 Nakfa per week .

Food & Bars: Restaurants have good plentiful meals that are based on Italian cuisine - Spaghetti, pasta, lasagna etc. Meals may be so large, that you may end up eating only once a day, and these cost 200 - 400 Nakfa.
- They drink lots of carbonated water, or Cola. There are local beers, wines, and spirits like Asmara cognac (125 Nakfa) and Asmara champagne (180).
- Coffee is common, though their pot differs from Ethiopian one in that it has no spout. It is sold in 7 different flavours, depending on the number of times it is brewed, and the seventh flavour (brewed 7X) is the lightest /weakest blend.
- They smoke a lot in bars and restaurants, so you may prefer to sit on the outside.
- There is great love for football in the country. Kids kick balls in the streets, and English premier league matches are shown. There is a strong affinity for Arsenal football team because of the high number of African players [regardless that some of them are French] compared to Manchester United, [considered racist for the opposite reason]

Business & Infrastructure: - It is an agricultural economy and they have three planting seasons, cultivating hardy crops like barley and millet, as water scarcity is a big issue in the country. The Government and the UN have built lots of water tanks for harvesting rainwater.
- A Canadian company is mining gold which was recently discovered.
- Roads are broad, but with low traffic levels.
- All land is owned by the state, lease it to improve and no foreigners allowed to own any.
- They hold Eritreans in the Diaspora in high regard, and celebrate their arrival back in the country.
- Potential investment opportunities are in leather and wool.

Sight-seeing: - Asmara, which is hilly and cool, is popular with Sudanese (North) as it is not as hot as Khartoum.
- Sight seeing is on the Eastern escarpment, which has some rocky terrain. Also there is a a steam train, and buses/taxi's to the Red Sea, port of Massawa.
- Weddings are done over a weekend; On Saturday, they dress in traditional outfits and attend the church ceremony, then on Sunday, they dress in western clothes for the reception portion, which are often held at hotels.

Oddities: - The big-brother factor in the country; you can’t take pictures or stand near government buildings, [but you don’t know what is a government building?]. Also you are warned not to talk politics or talk idly to waiters, taxi drivers etc., as they will report to the government!
- There is a distrust of the outside world and hate for Ethiopia, largely as a result of the war fought for independence during which they feel the Ethiopian side committed acts that destroyed family life for a generation. [It is not unusual to find older couples who married recently, or couples in their sixties with very young children]
- Also, other plane passengers ask to you to help carry the load on the aircraft, but decline this...
The above picture and many more, are from this site about Asmara

Kenyan Guide to Accra

2011-05-20T08:45:00.003+03:00

Adapted as a guest post with input from Coldtusker
(Pic via airliners.net)
Getting There: Accra's Kotoka airport is small & dated [but efficient] airport but the corridors can be a challenge o navigate if you have lots of luggage. An interesting feature of the NBO-ACC flights are the traders [mostly women] with HUGE bags/packages [from shopping trips in Dubai or China] who you can't even see while they push their carts. It's like a moving wall of goods! These 'packages' are held together by well-sewn polypropylene [plastic gunias] material. Emirates flies A340, with larger cargo bays while Kenya Airways (KQ) lies much smaller 737-300s. Other planes on the tarmac include Delta & British Airways both which have daily flights.

No visa is needed for Kenyans, but the flights are costly such as Kenya Airways (KQ) which is $1,000 - Ouch!

Getting Around: A taxi trip from Kotoka to town costs about $5-7 but some hotels will provide transport if you let them know in time. The traffic from Kotoka to town even at the worst of times is much better than Peak hours in Nairobi. Taxis are the most common (for visitors) way to get around; they are easy to catch in most places, and unlike Nairobi, these guys drive around 'looking' for customers. The are 'painted' with AMA (Accra Metropolitan Area) zones & numbers and are easy to spot. Plus they honk at you if they think you need a ride. Fares are not fixed but negotiable. So negotiate! The 'quality' of these taxis varies from ramshackle taxis to new ones. Some have windows that don't open while others have AC. Always ask since Accra can get hot & humid. Think Mombasa. Boda bodas are available, as are matatus or buses. It is quite safe to walk around in many areas during the day, but at night, always use taxis.

Money: Cedis [GHc] & Pesewas. US$ = GHc1.5 but some still quote the 'old' Cedi which is 10,000x the 'new' Cedi. You can change money in many places with few restrictions. Always confirm what you will get NET after all fees. There are several forex bureaus all over the place especially Osu.

Hotels: Tend to be pricier than Nairobi. A nice 3-star hotel costs $120-170 for a single room! The pricier ones have WiFi, swimming pool, etc. and include a good breakfast. There are others at cheaper rates of ~$60 in 'busier & noisier' neighbourhoods which look/feel better than our River Road ones.

Communications: Local calls are reasonable now that Airtel [lower per minute calls about US$ 0.06 per minute] is in Ghana, slightly more compared to Kenya. MTN is king, and while there are other options including Tigo, Airtel adverts are everywhere. You can use Airtel Kenya to receive calls at no charge, while SMS to Kenya were cost ~Kshs 5-10, which is very convenient. Local SIM cards used to be easy to get (from street vendors) but are now a hassle, as you have to be registered. Some hotels have WiFi, and there are many cybercafés.

Food & Bars: - The local food varies with region but expect Yams, Cassava, Peanut sauce to be part of any 'local' meal & much more enjoyable compared to eating Italian, Indian, Continental [available anywhere in the world]. There are also lots of Lebanese restaurants as there are a significant number of Lebanese live in Accra.
- Instead of bottled water, water is commonly sold by many vendors & firms in plastic pouches (costing Kshs 5/=). You ask for it as 'pure water,' which is useful for washing hands, or face in the heat.
- Beers: depends on where you go but costs between $1-5, and is widely available - though there is a significant Muslim population there so watch out for Ramadan month. Guinness Breweries (Diageo) is #1 followed by Accra Breweries (SABMiller). Multiple brands of beer.
- In bars, politics & business are common topics. Smoking is allowed indoors so you may prefer to sit outside. There are lots of small or regional political parties similar to Kenya, but since Ghana came out of a civil war less than 2 decades ago, they want 'peaceful' elections [but never say never]. Two-term limits apply but old presidents never fade away! Jerry Rawlings remains popular.
- Football: is HUGE, and as in Kenya, Arsenal & Manchester United fans are everywhere, but Arsenal seem to be the overwhelming favorite. Of course, everyone looks up to the Ghanaian footballers in Europe.

Business & Infrastructure: - There are problems with reliable electricity supply but projects are underway [by the Chinese] including thermal production. Just like Kenya, the hydropower plants face challenges with low water [Akasombo Dam]. Major hotels have diesel generators to alleviate this [good - as the weather is like Mombasa].
- Tema Oil Refinery has same (or worse) problems as Kenya’s KPRL. Ghana Oil is listed on GSE, but majority owned by the Government. Total has a strong position in Ghana.
- Nigerian banks seem to dominate the skyline but the largest bank is Ghana Commercial Bank [GCB] (similar to Kenya Commercial Bank). The bank is listed, with the Government as a major shareholder, and GCB is now going through a massive transformation.
- They have had flyover roads for many years, and there is a wonderful cement/concrete road from Accra to Tema that was built during Nkrumah’s days. It’s a cheap toll road (about Kshs. 20/=) for a distance equivalent to Nairobi-Thika. The drainage systems are much better than Nairobi or Mombasa. Tema is their Thika - an industrial town, but it has a port too.
- Newspapers: There are very many [English] papers but they are poorly written & seem rather sensationalist. Not as good as the Kenyan papers in terms of analysis, etc.
- Business Opportunities? For everyone & everything... if they can compete with China, India, France, UK, etc!

Sight-seeing & Shopping: Oxford St, in Osu, is very popular and has a vibrant nightlife. Seems relatively safe vs Nairobi's CBD. There are other shopping areas but not much to buy that you can't get in Kenya. Shopping in Accra tends to be very pricey since almost everything is imported but buy real [unsweetened] Cocoa as it is grown in Ghana. Daily spend is about $50 per day without hotel.

For sightseeing, there is the Nkrumah Circle/Gardens & such. The Presidential Palace is shaped like an Ashanti Stool of the Asantahene [built/donated by the Chinese?] It is visible from the Road & is an imposing structure which includes many government offices.

Shocker: Ghana imports milk! There is no 'fresh' milk but plenty of Italian & French UHT milk. Milo is also very popular, and is sold in small kiosks as well. Other imports include eggs.

Summary: In some ways Ghana is the Kenya of West Africa but the 'socialism' attitude is still strong so businesses need to beware.

Derivatives in East Africa

2011-05-17T08:59:00.002+03:00

On Monday May 16, Strathmore University invited Eduardo Schwartz a UCLA Professor and world-renowned lecturer, advisor, expert and author to give a talk on derivatives.

Introducing the talk, Strathmore Director Jim McFie talked of the plan for Strathmore to be at the academic forefront for learning on derivatives in Kenya, which they are doing with the Global Board of Trade (GBOT) – and that for Kenya to compete with Mauritius as a financial centre, derivatives markets will have to be established in Kenya.

McFie also mentioned a tendency for Kenyan parent to push their children into pre-formed careers at an early age, which was wrong, as he noted that Prof. Schwartz trained and started working as an engineer, before he branched into financial markets.

Prof. Schwartz was giving his first talk in Africa on the subject and chose to give a Derivatives 101 talk, even as he knew there were investment bankers, and officials from the Treasury and Nairobi Stock Exchange present. He observed that it would be difficult to set up such markets given the economic challenges here, but that ultimately, development of efficient market necessary for economic development

He noted:
- You can have derivative on any variable that can be measured without discussion between the parties - e.g. rainfall, presidential elections, sports.
- Popularity? Interest rate contracts are the biggest (390 trillion) followed by credit default swaps (which had rapid growth from 2006 ), then foreign exchange contracts, commodities and finally equity-linked contracts, in that order.
- In any Wall Street Journal, you get a quick reading of all the major forwards e.g. quotes for the UK pound - 1, 3, and 6 months forward, and futures prices of metal & petroleum (gold, silver), agriculture (wheat corn orange juice, pork bellies, rice) interest rates.
- Some arguments in favor for hedging: Companies can focus on main business and take steps to minimize market risks such as interest rates, by hedging, which also minimizes the probability for financial distress.
- Arguments against /dangers of hedging? Shareholders are well diversified and can make their own decisions, it may increase risk to hedge when competitors do not (Southwest Air), and it is possible to take large positions with very little money (traders can change from hedgers to speculators)
- You can get more reading of alocal perspective on derivatives here

While he was said he was shocked that there no forward market in foreign exchange, in Kenya, there are forward markets for currencies, and for some commodities like flowers and fuel, which are done in private arrangements with partners, buyers, and customers, but mainly through large banks. They are not exchangeable, and there is no capital markets mechanism now for this.

(via airliners.net)

The most memorable one was Kenya Airways fuel hedging which they have employed for a number of years during rising fuel prices, but which resulted in a loss of Kshs 5.6 billion (~72 million) in 2009 (more)

With time there could be a few more to deal with gaps such as the current situation where farmers are hoarding maize harvests to draw the government out into paying more for the crop.

Shares Portfolio May 2011

2011-05-13T21:42:00.001+03:00

Enjoying the fruits of some good 2010 performance in an uncertain 2011

Comparing share performance to three months and a year ago.

The Stable
Barclays Bank
Bralirwa Breweries (Rwanda) ↑
Diamond Trust Bank ↑
East African Breweries (EABL) ↑
Kenya Airways ↓
Kenya Commercial Bank (KCB) ↑
Kenya Oil Company (Kenol) ↓
Scangroup ↔
Stanbic (Uganda) ↑
Uchumi Supermarkets ↔

Review:
- Best performer: Bralirwa 11% (this Q), then East African Breweries 10%
- Worst performer: Kenol (-4%)
- In: Barclays
- Out: Safaricom
- Increase: Kenya Airways
- Decrease: None
- Performance: The Portfolio is down 1% in the last three months while the NSE 20 Share Index is down 7%
- Uchumi, which is out of receivership, has finally got the green light from the CMA to re-list at the Nairobi Stock Exchange, though the date and conditions of re-listing have not been specified.
- Safaricom’s 2010 results which will be released on May 18, are widely expected to show a drop in revenue and profit owing to the price wars in the mobile sector.
- Kenol resumed its battle the Ministry of Energy after a quiet period as motorists grappled with an unexpected shortage of petrol (This inspired an innovative site called Find Fuel . The Kenol AGM was live streamed and can be found on YouTube.

- Stanbic Uganda had reduced profits owing to bad loans combined with staff & IT expense increases.

Events & Outlook:
Looking forward to
- Dividend payments from Diamond Trust, KCB, Scangroup, Stanbic (Uganda), Kenol
- Bonus shares from Diamond Trust (1:5), Scangroup (1:5), and Stanbic Uganda (1:1)
- New share listings: There's been no word yet from Transcentury and Britak. During the quarter, CFC-Stanbic spun off their insurance arm – CFC Insurance which is now listed on the stock exchange, and will soon to be joined at the NSE by CIC Insurance.

- Why list?: The newspapers, this week had advertisements from the Capital Markets Authority (CMA) highlighting tax and other benefits of listing shares or raising capital in Kenya. These include;

Newly listed companies will enjoy reduced corporates taxes if;
(i) They list 20% of their shares, they will pay 27% income tax for the next three (3) years on profits (while other corporates pay 30%).
(ii) List 30% and pay 25% tax for next 5 years on profits.
(iii) List 40% and pay 20% tax for next 5 years on profits.

Tax exemptions;
- A tax amnesty on omitted past income
- Dividend taxes paid to venture capital firms
- Income to employee share option programs (ESOP’s)
- Interest income on long term infrastructure bonds

Also all East African nationals are treated as ‘locals’, not foreign investors in allocation of IPO shares and get (lower) withholding tax on their dividends. These and other tax deductible expenses including payments for credit-rating, listing & issuance costs, and some exemptions from stamp duty, can be found at the CMA site.

Prepaid Electricity in Kenya

2011-05-10T18:52:00.004+03:00

Kenya Power & Lighting Company (KPLC), the national distributor of electricity is converting customers in many parts of the country from post use billing and payment to pre-usage payment.

One KPLC challenge for many years has been revenue collection, but that has changed since signed they signed up banks and supermarkets (some at a cost of ~ Kshs 50 per bill paid) outlets like Uchumi.

Changes

Payment: You can buy electricity tokens from some KPLC offices, but it is easier to pay by mobile money Safaricom's 'M-Pesa' or 'Airtel Money' ~~zap~~. You load money into M-pesa, send it to KPLC, and in about an hour you get a 20 21-digit number that you punch into the meter for an immediate update of electricity credits.

Orientation: None at all! One day you come home and find workmen in the corridor doing a lot of re-wiring (at first I thought the landlord was installing fibre to the block, but it turned out to be KPLC's sub-contractors) and the next day, you come home and find the watchman with a booklet for you to read and study on the pre-pay system! The booklet has been quite useful, but it omitted a process where you have to call KPLC to link your old meter and new meter numbers – in order to activate the new meter.

Cost: None to the customer, and the brochures say cost of usage should be the same, and so far I’m on par at about Kshs 500 ($6) per week.

The meter also has some commands that you can use to check out your usage at any given time (a fluctuating 80W) and usage since installation – 100Kwh in three weeks. What I miss (for tracking inflation is a breakdown of usage, fuel surcharges and other taxes that form anywhere from 1/3 to 1/2 of every bill, and
- [edit] cost of collection which may vary from Airtel to Safaricom) i.e it cost Kshs 20 to pay by M-pesa
- In order to pay by M-pesa, you have to know your Meter No. (so save it in phone)
- The cost of electricity has gone up by ~45% in a month i.e in mid-April a 'unit' of electricity cost Kshs 9.8 and in mid-May its Kshs 14.2.