Rea Vipingo AGM & EGM

AGM

The 2014 Rea Vipingo AGM took place on April 28, 2015 at Southern Sun Hotel, Westlands Nairobi. It was actually two meetings in one for the company whose shares have been suspended for over a year as different buyout offers were to be resolved by tribunals and courts.

One of the strong bidders was Centum who recently reached a settlement with other company bidders to get land, and that left the original buyout offer by the majority owners – R.E.A Trading with 57% to be the only offer presented to shareholders.

Shareholders to decide on Rea Trading's Kshs 70 plus 15 offer

Shareholders to decide on Rea Trading’s Kshs 70 plus 15 offer

The meeting was somewhat acrimonious. Shareholders wanted to know about their dividend and their possibly exclusion from the company as the Rea Trading had indicated right from their initial bid that they intended to buy out the minority shareholders and delist the company from the Nairobi Securities Exchange.

In the early part of the meeting the shareholders present, numbering about 300, did not want to even approve the financial accounts. They wanted to discuss their lack of dividend and their being cut off from the company, and the board not entertaining better offers. At one point the board Chairman threatened to resort to a poll vote in order to get through the business of the day including approval of accounts, election of directors and auditors.

He said there was no legal way to alter the discussion at the meeting to and declare a dividend – and that discussions on the buyout offer should wait till the EGM meeting. He also said when a takeover is on, directors can’t declare or pay dividends – and that If the offer goes through, the directors will consider a substantial interim dividend to those who remain as shareholders, when the offer closed. He said that when the meeting agenda was prepared and circulated, a settlement had not been reached with Centum (who had since withdrawn their bid).

One shareholder said the company’s retained earnings are being used to buy off shareholders, but the Chairman said the accounts are factual documents for discussion, and did not represent policy decisions . Some shareholders accused him of being dictatorial, but once the poll issue was raised, the meeting settled down and was quickly done.

Two directors were re-elected, and the board remuneration was also approved. That it included a slight increase from Kshs 65,000 to 70,000 per month for all directors, (and 75,000 to 80,000 for the chairman) was not disputed, shows that the minority were now defeated.

EGM

The Extraordinary General Meeting took place five minutes after the AGM ended at which the shareholders approved:

1. Sale of Vipingo Estates to Centum.

2. Sale of land owned by the company at Vipingo to Vipingo Development.

The chairman said the motions had been cleared following proposed settlement, with, and sale of  company land to, Centum. Investment. He said he was not an employee, but also a minority shareholder who had bought the shares at Kshs 10.50 in 1995,and that he had accepted the buyout (at Kshs 70 plus the top up), which was a good deal. He also said before the various offers for the company, from Rea Treading at 40, Bid, and Centum, the market (other NSE investors) had valued the company at Kshs 27 (the share price of the company) – and that Kestrel had found that Kshs 40 was a good price that the board had been ready to recommend at the time.

Other findings

• Kenya’s new capital gains tax (GCT) has caught up with the deal. In answering a question on if CGT would apply to the payout to shareholders, the Chairman said it was possible,  but that CGT had been unsatisfactory introduced and may be clarified in the upcoming budget speech, and probably before the deals and payment are done.

• The Chairman said that one hazard of investing in the country is there are delays which led to CGT. But it also led to the competitive nature of offers that had seen offers to shareholders go from Kshs 40 to Kshs 70.

•On the land, he said Rea had conditionally offered to sell the land to Centum if they get all approvals (from the Competition Authority, and land control boards) and Centum brings the money. The offer was a good price from Centum that will, crucially, allow Vipingo’s sisal production for export business to continue for many more years as Centum will take over small pieces of land over a period of time. The sale price is slightly less than the Kshs 2.1 billion (~$23 million), value, but they still have their machinery, operations, and can harvest sisal for export for many years

• One shareholder was upset by the patterns of major shareholders such as at General Motors, Elliotts Bread, Access Kenya and CMC who when they meet their targets, chase away minority investors, and wondered why the CMA allowed this. The Chairman said Vipingo was going to invest in new (expensive) sectors like energy generation, and the majority shareholders wanted to give minority ones a chance to exit.

• The prospectus offer shows Rea Trading have placed $6.2 million with CBA who would fund the balance of the takeover via a $15 million term loan. Rea have put $4.4 million for the cash top-up. If they get 75% they will move to take over the rest of the shares, and if they get over 90% they will delist the shares.

 

Lamu, Kenya and Amu Power – Part II

See Part I of the visit to Lamu with Amu Power

After the morning session with the county officials, we had a chance to visit the planned site of the Amu Power coal plant at Kwasasi, on the mainland. This was my third visit to Lamu in four years, but my first chance to visit the mainland of Lamu County.

The Lamu islands are incredibly beautiful, and once you experience Lamu, you are unlikely to look at Mombasa the same way again. It’s a beautiful place for tourists to visit; boat rides, the endless beaches of Shela, the quaint town with tiny streets, curio shops, friendly residents,  ancient buildings, tasty foods served on roof top restaurants, and a world heritage status conferred on the town.

Also for tourists who come to Lamu, unlike travel to Mombasa where they have to contend with at least an hour of traffic around both Jomo Kenyatta and Moi airports, they can fly to Lamu having skipped the traffic bit by using Wilson airport in Nairobi, while in Lamu, there’s no such thing at traffic – as you land on Manda island, walk 300 meters and get on a boat that can get you to a hotel or villa within ten minutes. But while it’s beautiful for tourists, life is not getting better for residents. The boat rides are expensive, unemployment is high, and education is low, and the land has other challenges.

Mainland jettyTo get to the Kwasasi site, we took a 15-minute boat ride to Mokowe jetty where several taxis were waiting. Mainland Lamu, which borders Somalia about 100 kilometers away, has been in the news over the last two years due to sporadic attacks and incidents, with the most catastrophic being Mpeketoni in June 2014, where 48 people were killed by a terror gang.

The first stop after stepping off the ferry on the mainland was to drive to the local police station to collect some armed policemen that the company had hired for the day. After that it was a long drive over about an hour that covered about 30 kilometers on narrow dry dusty roads. Lamu County is said to have 6 kilometers of tarmac, but this main road on the mainland had none.

Eventually, we got to a Navy base, which also marked the edge of the port area. This was our starting point and we drove along the fence of the navy base, which had a road then away from the fence with satellite tracking devices to pinpoint the coordinates of the corners of the site and this took about two hours to navigate. Amu Power had contracted a landscape architect to produce real life drawings of what the plant would look like in the current environment, and he took several pictures at each corner of the site and strategic points on the road.

Kwasasi 1The site of the plant was a large plain field with sparse bush. This was a shock as I expected to find warehouse sheds, office and residential buildings to mark the edge of a LAPSSET (The Lamu Port Southern Sudan-Ethiopia Transport Corridor) port city. But the place was sparsely populated and devoid of structures or developments.

This was apparently communal land, but there were sticks in the ground to mark boundaries in some places and burnt bushes in other places presumably for cultivation clearing. In some places targeted for LAPSSET projects, speculators in the area have pushed up the price of land five times in the last few years.

Another shock was seeing many women and girls walking along the road with yellow 20-liter drum, full of water. This is an arid area, with few water points and the role of fetching water is one performed by women who walk long distances. We later stopped at one of Amu Power’s CSR projects, which were a series of water tanks at a  central point to which a company lorry delivers water every week for area residents to use. It should not be the business of prospective investors to provide water, but that’s the reality of doing business in many parts of the world, and the water delivery has made life easier, with more to be done.

Hindi water pointAmu Power has plans for the construction of a water desalination plant, which will be the first ever, built in Kenya, and the excess of this will be shared with the local community.

We left just before sunset and asked the taxi driver about the ongoing curfew that was in the area. He said it was still in force, but had been relaxed of late.

After we got back to the Island we had a few more talks to recap the day. Earlier, one of the community leaders has  talked of the challenges Lamu had faced and why it had remained largely unchanged 50 years after independence with issues like  water shortages, transport challenges and lack of roads. He said, while Lamu was poor, there had been resistance to several past attempts to introduce development projects  in the area– including a fertilizer plant, the new port (because it would spoil fishing), and wind power in Shela (because it would spoil the water).

Kwasasi 2The day after the visit, as we prepared to leave and fly back to Nairobi, we started hearing reports of the ongoing attack at the university in Garissa. The full scale of the attack did not become apparent till later in the day.

It is expected that President Uhuru Kenyatta will be in the area in a few weeks to commission the first three berths of the Lamu port that is set to be completed in 2019.

The port, crude oil pipeline, the coal plant in Lamu and Lamu-Garissa-Isiolo Road will raise the profile of Lamu and thus the government’s investments to enhance the security profile of the area. The fringe benefits of this infrastructure will be to open up the Eastern and Northern part of Kenya to development and settlement, the way that the British railway did over 100 years ago between Mombasa and Kisumu.

Clearly, not only is change coming to Lamu, change has to come to Lamu. The LAPSSET projects and the coal plant are about 30 kilometers from Lamu town and the picturesque islands that most people in Lamu are familiar; that’s about the distance from Mombasa island to Diani beach and its possible that the two will coexist and mutually benefit like the South coast neighbours.

Lamu, Kenya and Amu Power: Part I

Earlier this month, I took a trip to the Lamu county at an invitation from the Gulf Energy side of Amu Power, and Gulf are the leading a project that will see the construction of a coal power plant that will generate 980 MW for Kenya.

This is part of an ambitious project by the government to invest in and diversify its future energy generation capacity, from one that’s relied for years on hydropower dams and more recently to diesel, geothermal and wind power sources.

The coal plant to be built by Amu Power is one of several large projects planned by the government for Lamu, and the team from Amu Power has been meeting with various stakeholders over the last few months including sessions with residents of the area, coastal governors, other politicians, and elders.

Amu Power at Lamu meet This one, at the American Centre in Lamu town, saw the Amu Power team meet with their community partners, and local county staff, led by the Lamu county commissioner, district officers and area chiefs, and DO’s. They form a vital link being the government administrators in the community, heading security and intelligence teams, and it was to explain what the company would be doing over the next 3 years.

The 980 MW Coal Plant in Lamu is being built for Kenya’s Ministry of Energy and Petroleum on a build, own, operate and transfer basis for 20 to 25 years. But already, there has been some controversy by some NGO groups who have started a campaign in communities and on social media to stall or discredit the project. By having such sessions with the area leaders, Amu Power were hoping to avoid a repeat of issues such as in Kinangop where residents have delayed a wind power project.

Sanjay Gandhi, a consultant working for Amu Power, explained that coal plants of years past are not built anymore and there is new technology that mitigates the old environmental challenges that come from coal. He noted that all projects have effects on the community, but with good mitigation measures these can be alleviated. The Amu Power plant will be built by Chinese contractors, but to standards set by American institutions. Also the Amu Power offices will be on site and they will live and supervise the plant with full teams of staff for the next 25 years. Sanjay speech Lamu

Sanjay explained that Kenya needs the electricity and that peak demand has gone up from 899 MW in 2005 to 1,470 MW in 2014, with Lamu town itself still powered by diesel generators. KPLC is adding 200,000 customers every year, and it is expected that peak demand for electricity will reach 5,359 MW by 2017.

Coal is also the cheapest form of energy at 7.5 US cents (Kshs 6.30 per unit) compared to geothermal at 9 C, and solar and wind power 12 C /kwh (Kshs 8 per kilowatt-hour). He said coal is the most cost-effective way of generating industrial power, and once you turn it on, the plant will be able to run for 8 months without turning off. Kenya’s ability to add new hydro dams is diminishing and renewable energy sources like wind and solar power are not consistent enough for industries to run.

The government’s only investment will be a through commitment to buy electricity 981.5 MW of electricity at Kshs 6.3 per unit and the Amu Power plant will be built  to handle different types of, whether from Kitui county (where coal has been found), or imported from South Africa, Mozambique, or Indonesia.

Amu Power is planning to complete the plant through 21 months of day and night work; this is  after 7 months were lost in court following the government decision to award them the project. They will build on 870 acres of land that the company will lease from Kenya Ports Authority who are buying land from residents in the area, and while actual boundaries have not all been determined, people have been buying and speculating on land value appreciation in and around the site.

They have identified a Chinese contractor to do the work, and the company wants 1,000 local youth to go to the National Youth Service (NYS) for 6 month training to be ready for work in October. They have started with Pate area and plan to find 100 people in each of the 10 Lamu wards to be trained and employed as masons, brick layers, welders, fitters, riggers, electricians – and if the contractor can’t find local people, they will get others from outside the area.

They estimate that the plant will need 2,000 employees on a full-time basis during construction, and 3,000 at peak. Thereafter, there will also be 500 permanent jobs for 25 years, and while early managers will be Chinese, there will be a requirement for each foreigner to have a Kenyan understudy throughout. There are opportunities for the local community to prepare and provide all that is necessary for these workers, such as housing and food in addition to supplying building materials for the construction. Lamu chiefs

After the talk, there was question and answer session in which local chiefs raised various points of concern including – plans for local fishermen who rely on fish catches for they livelihood, need to re-forest the area, need for completion of school classrooms, need for sea wall rebuilding in some places, a need to train youth in small business skills, the lack of bursaries for school kids, as well as the challenge of combating drugs and alcohol, which were mentioned in the Lamu county development plan. They also raised the issue of controversial payments for land ownership that has happened in some areas of the planned Lamu port.

The county commissioner spoke and appealed to chiefs to look at security in their areas, and talk to people, as ultimately, all Lamu people will benefit from the new Lamu projects. He noted chiefs have a lot of influence and can combat propaganda, as people still believe what a chief says and this has a big impact on communities. He asked the chiefs to look out for issues that concern him including ensuring that no one invades other people’s land, especially with violence, that they curb burning of bushes to eliminate historical land barriers, watch out for illegal cutting of forest trees and ensure that there are no more night weddings / night discos – as they had to put an end to the practice of school girls being married off.

JamboJet Turboprops

@FlyJamboJet recently introduced some Bombardier Q400’s planes (leased from DAC Aviation) as they also increased routes to the coast (Lamu, Malindi, Ukunda) and other increased daily frequencies. What’s changed now from the Boeing 737’s they started with? JamboJet Q400

  • Better views. When you take off on a Western Kenya (Kisumu or Eldoret) flight in the morning, and if you are seated on the right side of the plane, you get an nice view of the clear snows of Mt. Kilimanjaro, and when the plane banks left to turn, 30 seconds you have the snows of Mt. Kenya. Spectacular! I hope MutuaMatheka @Gitts @Asayf or someone else at @igkenya can try and capture that scene and get both mountains in one picture or short video.  The flight is also lower and slightly slower than the 737 so you get better views form the planes e.g. clearly see the slopes of the Rift Valley, the Mau Forest, and different lakes (Nakuru, Naivasha), as you can easily trace familiar landmarks like the long stretch between Salgaa and Menengai, and see the turnoff as the plane makes a slight turn over Njoro.
  • The journeys are  slightly longer by about fifteen minutes, so there’s now more time to take one of the snacks – which you still have to pay for, but now you’ll have time to enjoy them
  • The overhead luggage racks in the cabin are not as generous as a 737 so more luggage has to be checked to go under the plane. You may opt not to check it in (and not pay extra to JamboJet), but at the plane door, you’ll have to slide it up a ramp at the rear of the plane and collect it on arrival.
  • There also seems to be more legroom in the Q400 than the 737’s, but for very tall people, the aisle may be better than window seat in the 2 X 2 layout  as the lower curve of the cabin means, has a floor seat beam which means you have an uneven floor.
  • For short trips lights – same day, or 2,3 days – take advantage of the daily parking from Kenya Airports that costs Kshs 700 per day at JKIA  - so you can drive to the airport and get you car back the next day for about 1,000, halving the back and forth cost of an airport taxi that is usually 1,500 one way. JamboJet also have shuttles in some towns like Eldoret that cost a fraction of individual taxi rates.

Strathmore Masters 2015

Strathmore University had a cocktail event to introduce their 2015 Masters Program.

Some of the interesting programs include masters of applied philosophy & ethics, masters in public policy management and masters in healthcare management. They also have three new masters maths programs (biomaths – that can be  applied in healthcare, financial maths – that can be applied in NSE/capital markets, and a masters statistical sciences).

Strathmore also has executive programs  to short courses tailored for professionals like  business owners/managers, construction project managers, digital advertisers (a partnership with Google) and an upcoming summit for women executive leaders to prepare more of them to take up seats on company boards.

At the event, Joseph Sevilla said all masters classes in his program (masters at iLab are in information security and mobile telecommunications) are taught by PhD’s as they won’t compromise on that – though it meant they had to use distance learning as some lecturers could not be found in Kenya.

The Strathmore Business School was opened in 2005 so this is their 10th anniversary.

Kenya Bank Rankings 2014 Part I

Ranked by assets (and placing in 2013)

1 (1) KCB [Assets of Kshs 376 billion ($4.21 billion), and profits of Kshs 22.36 billion ($250 million)]
2 (3) Cooperative
3 (2) Equity
4 (5) Barclays
5 (4) Standard Chartered
6 (7) Commercial Bank of Africa
7 (6) CFC Stanbic
8 (8) Diamond Trust
9 (10) Investment & Mortgages
10 (9) NIC [Assets of Kshs. 137 billion ($1.53 billion), and profits of Kshs 6.08 billion ($70 million)]

11 (11) National Bank
12 (12) Chase
13 (13) Citibank
14 (14) Bank of Africa
15 (15) Baroda
16 (18) Family
17 (17) Houisng Finance
18 (19) Imperial
19 (16) Prime
20 (20) Ecobank
21 (21) India
* Kenya Women Finance Trust
22 (22) Guaranty Trust
23 (23) ABC
24 (25) Gulf African
25 (28) Victoria
26 (26) Development Bank of Kenya
27 (28) Equatorial
28 (32) Fidelity
29 (30) K-Rep
30 (33) First Community
31 (29) Giro
32 (24) Consolidated
33 (31) Guardian
34 (39) Jamii Bora
35 (34) Habib AG Zurich
36 (37) Paramount
37 (35) Transnational
38 (36) Habib
39 (38) Credit
40 (40) Oriental
41 (41) Middle East
42 (42) UBA
43 (43) Dubai [Assets of Kshs 3.50 billion ($39.1 million)]

Guide to Bukavu

A guest post by @abbyqoey

Getting There: We did not take a direct flight to Bukavu. We flew with Kenya Airways to Kigali (Rwanda) then took a taxi to Rusizi the border town between Rwanda and DRC (South Kivu).

On Arrival: The Kigali International Airport is pretty fast and efficient. As an East African citizen, I did not have to pay any taxes or get visa to go through Rwanda. However, for non-East Africans you have to make a visa application online otherwise even the authorities from the point of origin (Nairobi) won’t let you fly to Rwanda (it happened to my Canadian colleague and he missed his flight from Nairobi to Kigali. They also do not allow visa payments at the airport – which differs from the information on their website)

The taxi ride takes about 5 hours one way, and it’s a scenic route through the forest on a really good road. The border crossing was not too hectic. It took about 10 minutes on the Rwandan side and about 15 minutes on the DRC side. People have to be wary of the moneychangers on the Rwandan side. The guy at the border office warned me that they sometimes give people fake currency and it’s safer to just stick to the legit bureaus.

Getting Around: We has a personal driver to take us round and this was mostly because we were working in a village that was about 1.5 hours out of Bukavu city. I did notice that locals took either small saloon cars or what appeared to be 14-seater vans to get round the city. These vehicles were mostly in a sorry state, but there were quite a number of taxis in a much better state. We took one once at night and it turned out okay. Out in the village we saw quite a few lorries transporting cargo and people, and we were told this is a popular form of public transport out there.

The locals speak French and Swahili. The Swahili dialect was quite different to what we speak in Kenya. Some people do speak English but they are few and so we had a local translator helping us for our time there. Our host client hired the driver and translator for us.

During the day we felt pretty secure walking around. We would sometimes walk around 7:00 pm to a restaurant near our hotel but we were a bit antsy doing it as we had been warned about doing so at a security briefing given by our host client. We also had to make sure we were out of the field by 3:00 pm so as to get to Bukavu by 5:00 pm. We noticed the streets emptied out really early in the night (compared to Nairobi).

Staying in Touch: We were able to use our personal mobile phones. We got new phones and local SIM cards too. We chose Tigo as our carrier, over other available carriers like Airtel, Orange and Vodacom. But sometimes we had problems making local and international calls via the network. Our friends and family also reported having problems while trying to call us from Nairobi. That said, the quality of calls when they worked was good.

We also had access to Wi-Fi at the hotel we stayed at, at some places we frequented for dinner and also at the office we sometimes worked out from.

Where to Stay: We paid $60 USD per night for B&B at the Horizon Hotel, which was for a simple standard room. The lights kept going off a lot of the times and most places in the city seemed to have generators.

We didn’t use any credit cards. We ‘d use both the USD and Congolese Franc. You can pay for something in USD and get the change back in Francs, dollars or both. On average I spent about $22 per day, usually on food.

Eating Out: There was a lot of plantain and different types of fish in the local hotel we frequented. There was also cassava, sweet potatoes, yams, rice, ugali, pork and a kind of eggplant stew. Lunch was always buffet style so I couldn’t really tell what was the staple dish. Also, mayonnaise was served with meals at almost all the hotels.

Beer is mostly in one-litre bottles and goes for around $5. A double tot of rum, whisky and other spirits is an upward of $10 and a red wine carafe was about $20.

Shopping & Sightseeing There is an area that has a lot of colorful Congolese fabric. My colleague got some for his aunt and friend.

Gorilla trekking is something I would recommend for those who are fit. This is because it entails about an hour’s drive out of the city and then walking through a hilly forest to get to where the gorillas chill J in the Kahuzi-Biega park area

You can also chose to take a ferry ride to Goma in North Kivu and go see some volcano. We heard it’s awesome but we couldn’t manage the logistics given the limited time we had. (You need to book for an excursion online, go across Lake Kivu to Goma, get a vehicle to get you to Mt. Nyiragongo which you then scale and then spend a night at the top – as it’s best to view the volcano at night).

Odd Points: The country uses two currencies, the US dollar and the Congolese Franc. The Franc notes were quite old, like really old and tattered. The Congolese would happily trade in these notes but if you gave someone a dollar with even the slightest of rips or dent they wouldn’t take it. They’d tell you stuff like, “This is not money here.”

Solomonic Blue Dress Courts

A few weeks ago there was an odd debate by thousands of people in many countries over what color a certain dress was – “White and Gold?” , or “Black and Blue?”.

While the dress debate rages on, there are similar debates are going on in the Kenyan judicial system. If you attend a Kenyan court, and hear lawyers for two sides argue, they will say polar opposites of each other. E.g a bank lawyer will say that Person A has defaulted on a Kshs 10 million loan and they want to sell his/her house. In reply, the lawyer for Person A will deny that he knows the bank, or took a loan from the bank, and that there is a fraudulent attempt to sell his house.

confusion-over-exact-colour-dress-appearing-picture-tumbler-has-triggered-frenziedOr in the case of the Tatu City, you have two groups of directors saying totally different things. One side calls the others fraudsters who have never put a cent in what is a billion shilling project, while the other  side says that foreigners want to deprive them of a rightful stake.

The truth is usually somewhere in between in these cases, but why do antagonists, through their lawyers and affidavits retreat to polar opposite sides ahead of court? This forces a judge to  wade through months or years of volumes of evidence and documents in order to arrive at at a Solomonic decision that may reflect the reality, or a sense of fairness. Not the truth.  In these drawn out cases sides are given injunctions and orders that prolong, and make the ultimate decision, needlessly more expensive.

Could a lot of cases be settled faster, and less time lost in the courts? There’s no need for Solomon in every case.

 

Jijini finance comparisons

Jijini Markets is a new site I stumbled on that compares Kenya financial products.

Jijini Markets screenshot

Jijini Markets screenshot

The rates are quite good and up to date E.g. just compared the ones for 3-month fixed deposits at various banks. Here’s hoping they expand their product range into other areas like telephone rates, credit cards, mortgages and enable loan rate comparisons at different banks using APR.

 

 

M-Pesa across Borders

Today brought an announcement that Safaricom’s M-Pesa customers in Kenya would now be able to send and receive payments with mobile money customers of Vodacom in Tanzania – enabling true cross border payments to take place between mobile companies in the two countries.

A sample transaction today shows how it works:

Assumptions

  • The (mean) Central bank rate today was 1 Kshs = TZS 20.17
  • M-pesa transfer cost in Kenya for Kshs 100 to 500 is Kshs 11 to a registered customer versus Kshs 44 to an unregistered customer.
  • Initial theory that the charged would be for unregistered were proved to be wrong in an experiment

Sending Mpesa from Kenya to Tanzania

  • Sent Kshs 300
  • Charge Kshs 11 (about 4%)
  • Exchange rate 20.17Kenya Tanzania Mpesa
  • Recipient got Tzs 5,757

Sending Mpesa from Tanzania to Kenya

  • Sent Tzs 5,000
  • Charge (assume 4%) Tzs 200
  • Exchange rate 20.17
  • Recipient gets Kshs 236

The transactions takes a few minutes to effect, but they actually work and it seems, for now, that there’s very little margin being made on the exchange rate, while the remittance / transaction charges are in line with in-country transactions.

This comes a few weeks after Tanzania enabled cross network mobile payments, which were endorsed by their main mobile money companies – Tigo (Milicom), Airtel, Zantel and Vodacom.