You can stop bragging or flashing your gold credit card now as you settle the bill at your favourite restaurant. Looking at this card comparison chart from Visa, it is now clear that having a gold card is getting lower in the hierarchy of cards to aim for after Infinite, Platinum and then Gold, that’s just above a Classic card . This was made clear when NIC launched platinum cards some months ago and the extensive benefits of the new card were listed..including some that were previously attached to gold.
The big change is airport lounge access which Priority Pass attach to Platinum cards, but not to gold cards – and it seems gold cards no longer entitle owners to use airport lounges e.g. at Nairobi or Kigali, but reader, @smandavia says gold is still good at Mombasa airport.
Still it could also be following a global trend where the best that airports have to offer are reserved for passengers flying on first or business class, and those with enough accumulated miles - regardless of what credit card they have. Curiously, Airtel Africa premier customers also get access to airport lounges with Priority Pass.
This post is inspired by a conversation with Henry who uses his platform Enchanted Lanscapes to try and connect uniquely Kenyan tourist attractions, but which don’t fall in the traditional beach & safari package that the country is famous for. Enchanted Landscapes highlights sites like the Koitalel arap Samoei Mausoleum, Wagalla Massacre Site, Kenyatta Cave (where Kenya’s first president once lived), the Jade Sea of the El Molo, the Shimoni Slave Caves, the Stone of Luanda Magere and Koobi Fora where Homo Habilis was discovered.
Our discussion was about the type of hotels found around the towns near such sites. How does one find these hotels, what do they cost, and what are the features they should have?
There are many new hotels in Kenya, with some billed as ’4 star’ ones under construction in Mandera and Machakos, while towns like Eldoret seem to have a new hotel every year from a marathon winner’s investments. There’s demand for these, as all the hotels in some of these towns get filled to capacity when there are events like motor rallies, rugby, church crusades or large weddings.
In the last year, Kenya Orchards share price has gone from Kshs 4.75 to Kshs 175, a 3,500% gain via small trading volumes of about 1,000 per day (The company has 12.8 million shares issued).
There seems to news driving these gallant share gains which have only been slowed by the 10% daily share price change limits. Their 2013 Financial results (PDF summary) show revenue of Kshs 47 million (~$540,000) up from Kshs 29 million, and a pre-tax profit of Kshs 966,022 (~$11,450) up from 757,201 the year. The company has assets of Kshs 58 million, of which 56 million is debt and 2 million is equity, with Kshs 55 million of accumulated losses.
In past years, the NSE has seen similar mystery gains from CitiTrust, ICDCI (now Centum) and EA Cables.
A guest post by @Wanjiku
Two months ago, Erik Hersman wrote a nice post on his blog about Kazi ya mkono. To the educated folks, “kazi ya mkono” is for those who didn’t go to school and were relegated to manual labour or just assisting and to the folks doing it, its a way of earning a living.
Over time, the term “kazi ya mkono” has evolved to mean the people who are not afraid to get their hands dirty and, given the proliferation of universities and colleges, having a degree doesn’t mean anything, and you still get to do kazi ya mkono.
But for the sake of this article, let us use the meaning as “digging the trenches, getting our hands dirty and just getting stuff done”. I am that person who always has a business going, whether selling biscuits and bread in high school or operating the corner milk shop in the neighbourhood – I am the side-hustle person.
Since Erik’s piece came out, I have been thinking about my mistakes and lessons in the process of growing a tech company. Staffing is probably the biggest challenge a growing company faces, along with capital. Investing in an area like tech infrastructure is challenging. You get the most skilled and the mediocre claiming ability to do the same job.
The lessons relate to bringing together a team, that will help achieve the dream.
1. Earning your credibility: One of the guys we hired in the early days, told me that he wanted to work for a company with directors. I wondered what he meant because the company is limited ergo, must have at least two directors.
What the guy meant was that he wanted to work for a big company with a name or a board of directors – I presume more than two. You guessed it right, a month later, the guy gave me a day’s notice when Wananchi Group came calling. (and that was of course after I had paid him his salary )
That statement stuck with me over the years because the guy went to work on the same salary or maybe slightly higher, but he had chosen to go because Wananchi had the name. That I couldn’t argue with although I wanted to ask if Richard Bell would tuck him to bed in the evening, after his board meeting or serve him dinner. But I reserved my comments.
You can imagine the conversation a few months ago, when we discovered the guy was let go from Wananchi and was working at another company but with basic pay. I actually called him to say that we still have the same directors but could give him a job. Well, that was just talk.
People want to work for a credible or seemingly big organisation. That is why people get souped-up offices, with furniture that can massage behinds, directors buy big cars and provide this make-believe image in order to attract talent. People seem to buy into this perception big time.
2. Papers don’t always mean anything: Last month, I was very shocked by a smooth-talking guy who had tech certifications from here to Meru. He had everything but I was interested in the practical bit. I asked him like ten times whether he knew the stuff and if I sent him to a client he would be o.k. He answered yes, giving me examples of sites he had deployed and I was impressed by the young man.
Enter the practical bit. The technical lead greeted him with a router and the guy descended on his phone to search. Then he was told that the internet wasn’t needed. The guy sneaked out under the guise of pressing matters. The guy had Cisco certification but he couldn’t even log in.
I have several other cases of guys with certs who have done it but an equally high number that are self-taught or learnt on the job and are very good at it. My new strategy was to start with the practical, then chat about other stuff later.
The best, efficient people are not always the most educated.
3. No one likes to persevere, learn and earn later: This debate has been going on for a while. A person leaves university and immediately wants to earn some big money. They don’t look at it in terms of experience and what they can provide, its all about the big money.
Yes, our higher education teaches us that we can only be managers and bosses and not the people doing the actual stuff. I guess that is why very few people want to stick it out for a few years on minimal pay that rises normally; we are all ready to drive within year one and how will you guarantee that loan?
I was recently eavesdropping on a conversation with two people in accounting. The old timers got their jobs when CPA (K) was the thing. Now, new graduates are coming with the papers and within the first year they wonder why their boss with minimal papers should be taking home that much.
I drew parallels with tech, where new graduates ask the same of a guy who has learnt through experience over the years. How do you answer that, while there is no substitute for experience?
I gave up on trying to show people what comes with patience. I started by working hard to show people that lack of higher education shouldn’t be a barrier to achieving dreams. People didn’t see that far and in the end, my colleague told me to quit “being all motherly”.
Now, I demand performance, if you can’t hack it, try another place where mediocrity is entertained and if you want to go stay at home, it is ok.
4. For the guys who put their head down and work: I know much has been said about salary negotiations and productivity. The last quarter we hired more people and of course we all have to keep the wage bill in check. The salaries are not the highest but we are good and make people comfortable.
But after a month or two, we realised that some of the guys were worth more than they negotiated. These guys had gone out of their way to deliver beyond expectations. The fact that they were on fair or comfortable salaries didn’t impact their productivity.
There are several circumstances that may make people not to get the best deal but once someone has proven their value, it is only fair that you make them feel appreciated. So, within the second month, the salaries were adjusted up, to reflect their (almost) true value.
I am still struggling with the guys who over promise and under deliver. How do you call guys and say, your salary is a scale lower? Yet they negotiated higher? That one I am still figuring out.
5. Rewarding loyal employees: In every company, I am sure there is that one person or people who can give you the history, from the time they all shared one desk. These are the people with institutional memory and probably know the organisation’s DNA.
Pay rises, continuous training and promotions are some of the strategies to retain the people but as companies grow, shareholding becomes a better option.
Conclusions: There no way of saying that these lessons apply to everyone but for Kenyan companies that are bootstrapping, you are likely to face these challenges.
At the same time, don’t think that your passion and drive as a founder can necessarily rub off the people working there. You need extra motivation and money does a great deal of motivation. If you have to go hungry to drive the company, you can do it with your co-founders, but not with the employees, otherwise they will start leaving.
The trick is to sell the dream to the team while at the same time working hard to make the conditions comfortable and making them feel it whenever there is an upturn in fortunes. If the profits get better, find a way to make it felt.
That is what I tell myself
It’s been a year and a half since the last elections, and a year since parties last published financial accounts of their performance. They are now doing the same for the 2013-2014 year and with numbers in from most of the ‘major parties’ - what’s changed and what trends are there to see?
1. Party in the Big Tent: Of the 349 parliamentary seats contested in 2013, the two coalition groups of Jubilee (comprising TNA [which won 89 seats] and URP [75 seats]) and CORD (comprising ODM [96 seats] , Ford K  and Wiper) bagged a majority of the seats in Kenya’s 2013 parliament – and thus keep almost all the funding from the taxpayers Political parties Fund. But since Jubilee and CORD are not coalition, the funds are directed to the member parties. TNA , which did not exist the year before, now lead the political party finance fund list; TNA got Kshs 77 million and URP got Kshs 40 million, trailing ODM that got Kshs 78 million (ODM is slightly up from Kshs 73M in 2013).
2. Un-Funded small parties: Narc-K gets nothing from the taxpayer compared to almost Kshs 10 Million last year. UDF gets none compared to Kshs 8M last year, and is now mainly dependent on it’s party leader for support. Ford-Kenya also gets nothing from the political parties fund, while Wiper got Kshs 670,000.
3. Being in a Coalition Pays: Wiper’s accounts note that the party received Kshs 11.8 million funding from their coalition partner (assuming ODM ). Oddly, Ford-K, another CORD coalition partner, did not get any and seems totally dependent on its elected leaders - with their Senators and MP’s contributing about Kshs 4.5 million of Ford-K’s Kshs 4.7 million income for the year.
4. Smaller Income & Costs: ODM has income of Kshs 101 million this year (with 78M from taxpayers) compared to Kshs 244 million last year, and URP has Kshs 44 million (40M from taxpayers) compared to Kshs 76 million last year. Last year ODM and TNA made 149M and 114M respectively from election fees, and this year the figures are 0.9M and 2.5M respectively. Expenses are also down this year for all parties compared to 2013 which was an election year - and this year ODM spent Kshs 4 million on campaigns compared to Kshs 132 million last year. On average, parties are spending about 20-25% of what they did last year, except ODM who’s expenses are at a rate almost twice other parties – and this could be due to their leading the push for a referendum vote on the constitution.
5. War Chests: TNA, Wiper, and URP all appear to be building war chests for future operations and elections. As at June 2014, TNA had Kshs 29 million in the bank while both URP and Wiper had about Kshs 15 million – and ODM had 1.6 million.
Note: Political Party seat totals are from Wikipedia.
There’s a lot of talk about removing intra-African trade barriers. But how about barriers for Africans traveling within Africa? If it’s easier to travel, it will be easier for people to cross borders, see & seek opportunities and build trade & business networks. But what stops more of this from happening? Here are 5 angles.
1. Airline costs: Airline travel is quite expensive, even for very short flights like $350 for the one hour Nairobi-Entebbe flight. This is largely due to national taxes, that form more than 50% of the cost of some tickets.
2. Visa restrictions. Nigerian-born Aliko Dangote, who is believed to be the continent’s richest man was recently quoted as saying “I need a visa in almost 38 countries, which means an American has more access into Africa than myself.” Two years ago, tiny Rwanda made a bold move by allowing all African nationals to be issued with visas on arrival in the country, by- passing the embassy application process that is expensive and bureaucratically burdensome to access many countries.
3. Unfriendly Currencies. To travel and trade across Africa, and many parts of the world, the US dollars is crucial, as no African currency gets respect across its borders. You might be able to exchange it in a country that has lower forex restrictions, but at what cost? Looking at the currency spreads in the bank hall today, the differential between buying (Kshs 90) and selling (Kshs 84) the US dollar works out to about 7%, which is also the same for the sterling Pound and the Euro. But for African currencies, such as the South African Rand (bought at 6.69 and sold at 8.93) , it’s a 28% difference, and for the currencies of Tanzania its 54%, Uganda 93% and Rwanda 96%. Somewhere in-between is Asia, with the UAE Dirham at 17%, Indian Rupee at 15%, and Japanese Yen at 16%.
4. Knowledge Gap: There’s still very little knowledge about the greater Africa beyond their borders by African country nationals. I try to follow at least one current affairs, and preferably business-related, African national on twitter, but there are still many countries that I can’t find people to follow, and learn from. The best news source on Africa I’ve found is AfricaLive, the one-hour daily news nightly programs on China’s CCTV Africa channel.
5. Poor Road networks. If it’s tough to fly, it equally to drive across the continent and cross its many borders with varying degrees of red tape. Today, I saw these quotes by @mmnjug on twitter ” DRC is the world’s eleventh biggest country at over 2.3M sq kMs,and an estimated 73M people, but has only 2,250 kilometres of paved road..,In the past two decades, just two people are recorded to have crossed the DRC over land, their journey took 44 harrowing days in 2008.”
An ad in the September 22 Nation newspaper has a statement by the European Union addressed to exporters from the East African Community on changes to the tariff regime starting on October 1 owing to the failure of the two sides to sign an Economic Partnership Agreement (EPA)
There was also an article in the same paper showing that a draft has been agreed to, and that a final EPA may be signed and effected in time, but others say it is too late for this.
The new rates, while still subsidized compared to what other nation suppliers pay to export to the EU, are still a blow considering that some exports will no longer be duty-free.
While some like tea, coffee beans & carnations will remain duty-free, Kenyan exporters will pay subsidized rates of 4.5% on tilapia exports (compared to a normal EU rate of 8%), 2.5% for roast coffee (not 7.5%), 10.9% for mixed vegetables (not 14.4%), and 5% for roses and cut flowers (not 8.5%) between November and May – which includes the crucial Valentine’s Day period when some flower farms can earn half their revenue.
This caps what has been a tough year for Kenya’s exports of tourism, tea and coffee which have all been adversely affected, and now this. The recently released Economic Survey 2014 showed total exports declined by 3% from Kshs 518 billion in 2012 to Kshs 502 billion in 2013 (as per the Devolution Cabinet Secretary).
Kenya will qualify for the preferential (GSP) tariffs, while Rwanda, Burundi, Uganda and Tanzania are currently considered under “least developed countries” and most of their exports to the EU will qualify for a unilateral 0% tariff.
Today saw the formal introduction of giant UK financial services firm Prudential into Kenya. The 166-year old Prudential, which is listed in 4 countries and has $770 billion of assets under management, announced the Kshs 1.4 billion (~$16 million) investment into the country, that commenced with a buyout of 100% of Shield Assurance, a local company
Kenya, is the second African country for Prudential who only deal in life insurance. They are also in Ghana, and their representatives said Kenya was the most developed insurance market in Eastern Africa in terms of regulation and skills.
At the launch, Kenya’s Treasury Cabinet Secretary, H. Rotich, said Africa contributes only 2% of global insurance premiums and that Kenya will need to mobilize more savings (up to 30% of gap) to sustain double-digit economic growth for the country. He said that there’s a link between insurance penetration and economic growth, and that through a new insurance bill in Parliament, Kenya plans to replace the current old laws (e.g. (life insurance capital is currently Kshs 150 million), and enable larger stronger insurance companies with diverse investors that are able to offer products like 30 – 40 year bonds and expand into other countries.
Shield Assurance was hived off the collapsed Blue Shield. It’s relatively tiny, and with Kshs 200 million of liabilities that will be settled by the new buyers.
Kamal Budhabhatti, the CEO of Craft Silicon was the guest at Mobile Monday this evening and spoke about his company and it’s platform – Elma. Craft Silicon build mobile communications tools that talk to core banking systems. They are a financial software company with a view that anywhere that there is a financial exchange (money changing hands), their software can be the enabler and get a piece of the exchange.
Elma is used in 45 countries, is in 4 languages (English French Spanish Arabic) and has 250 customers, including 21 banks in Kenya (I&M, Imperial, NIC, Family, Imperial, Jamii Bora Faulu, Rafiki etc.) who use the white labeled Elma platform. They also do payments for Uchumi, Nakumatt and the Kenya Revenue Authority (all mobile payments)
Kamal said Craft Silicon has the second highest number of transactions after M-Pesa, (with Kshs 12 billion has exchanging hands so far in 2014) and have 6 – 7 million active customers on the platform which also supports people without bank accounts.
Some key features in Elma include:
- Enabling standing orders – transactions that happen every single month such as loan repayments
- Enabling joint accounts: Kamal said they are the first company in the world to enable joint accounts in a mobile banking environment; In a typical scenario, one person would initiate a transaction, and the other person would get a message for them to approve or reject the transaction before it’s processed. This works for married couple, company directors, or even parents & kids (parent approve transaction initiated by kids who may not be old enough to have bank accounts
- Quick transfers: Transactions between customers of the 21 banks connected can be effected without going through a mobile company. Also Elma users can send money to each other’s accounts regardless of where they bank.
- Elma customers can chat with their contacts who are also online on Elma (chat on Elma, not whatsapp)
- Notifications e.g. A essage that a cheque has come for clearing in your bank
- Mobile cheque deposit – takes a take picture of your cheque on phone, and it goes to the clearing house
- NFC enabled.
Opportunities for the Developers/ the Community
- Any bank can have their own corporate chats – and any developer can go sell the white label Elma chat product to a bank and keep all the revenue.
- A developer who build an app using Elma’s API, can get to 6 – 7 million customers regardless of their telco or their bank or phone type. E.g. field data collection is a 3rd party app.
- Also with Elma, there’s no need to write individual apps for different platforms such as for Windows, Apple, Android devices.
- If you write on crafts silicon API, it is free to use even if you’re charging other people or banks, and the developers get to keep 100% of the revenue.
- To download and use Elma, you don’t need a bank account to try out – all one has to do is download it, and top it up once using M-Pesa.