UFAA: Snooze and Lose Your Investments: Part III

Kenya’s Unclaimed Financial Assets Authority (UFAA) is reminding companies that there is a  deadline of November 1 to surrender all unclaimed financial assets to the authority, and that failure to remit them will attract a penalty of 1% above prime rate per month per annum.

Earlier, there was a report that as at August 8.73 billion worth of assets had been surrounded, but that the UFAA was having difficulty finding the owners. 

An asset will be declared unclaimed where one or more of the following requirements are met:

  • The records of the holder do not reflect the identity of the person entitled to the assets;
  • The holder has not previously paid or delivered the assets to the apparent owner or other person entitled to the assets;
  • The last known address of the apparent owner is in a country that does not provide by law for passage of property to the State where there is no owner or is not applicable to the assets and the holder is a permanent resident in Kenya.

Some unclaimed assets include items left in safe deposit boxes (after two years), unclaimed salary (after one year), ownership interest, dividends (3 years) and deposits after utilities (like Kenya Power after 2 years). Some unclaimed assets are created by red tape by stubborn custodians who have made it difficult for people or companies to rightfully claim their own assets.

 

Bungoma Integrated Industrial Project

The Bungoma Integrated Industrial Project (BIIP) blueprint plan by the Stevenson Group of Washington DC has appeared as a full-page advertisement in the Kenyan newspapers inviting local firms to indicate interest in participating in a mega-project that encompasses affordable housing, agribusiness, industry, dams, airports etc.

 The BIIP will be done with all the counties along the 286 kilometers of River Nzoia. The 1.5 million population Bungoma county is mainly a farming area but is also known for being the home of the Panpaper Mills, an industrial plant at Webuye town that has been rehabilitated several times by successive governments.

The BIIP projects will be implemented by Shelter Solutions, but the request is too broad, and perhaps needs to be broken to different sectors. It requires firms who should all have experience handling projects of $100 million to apply by a deadline of November 1 in writing.

Future of Financial Services in Africa and the Middle East

Technology will continue to offer great opportunities for millions of unbanked people including groups of women, Muslims and governments in Africa, Middle East and South Asia (MEASA) and new companies who design financial services in these space.

These are the findings from a report by the Economist Intelligence Unit that was sponsored by the Dubai International Finance Centre which highlights that:

  • Findings Gaps in financial services present an opportunity for financial companies—both traditional and non- traditional players.
  • Overcoming a strong preference for cash in the MEASA region will be imperative to move towards a cashless economy
  • Blockchain has the potential to change the financial architecture in MEASA, particularly for banking.
  • New business models are being developed to reach the “missing middle” of retail investors and medium-sized businesses.
  • In Islamic finance, the approach is shifting from “sharia-compliant” to “sharia-based”
  • Governments and regulators have a crucial mandate to drive financial innovation.

It notes that there is a prevalence to use cash in the three continents (to receive wages, pay school fees and for utilities etc.) and that current regulations which require the use of ID cards are a barrier for women who need ID cards and other documents to receive these services.

The 3 billion people on the three continents will be a source of demand and supply for better financial services, and governments have a role, regulators should balance prudence with innovation, and financial service providers should collaborate for everyone to benefit.

There are opportunities for wealth and private equity funds and individuals (through crowd-funding) to support the growth of new players to take on financial sectors such as insurance, whose levels of penetration can be increased through the mobile phone as has been seen for banking and Islamic financing, by promoting sharia-based products, more than ‘sharia-compliant’ ones. Technology has the ability to address financial exclusion and scale services to millions while reducing costs and creating new revenue models; this can be through smart data to improve credit scoring models and the use of bitcoin to replace money transfers (with banks and currency conversions to international dollars).

Base Titanium – Kenya’s Flagship Mine

Base Titanium was recently made a Kenya Vision 2030 Flagship Project for the mining sector and continue to share updates as part of their commitment under the Extractive Industries Transparency Initiative (EITI).

For the financial year which ended in  June 2017, they had sales of $215 million, and a net profit of $21 million, compared to a loss of net loss of $20 million the year before. They reduced net debt by $76 million during the year, then reduced it further by $12 million to stand at $87 million at the end of the September 2017 quarter. Base Titanium are still owed $21 million in VAT tax refunds and all payments are still done to the national government though Kenya’s new mining law (currently in limbo) calls for separate payments to be made to the county government and the community. They are also still paying royalties at the rate of 2.5% while accruing another 2.5% in anticipation of the government changing this to 5%.

Base Titanium now moves into a second phase of production of the Kwale mineral sands project, investing $30 million in a more intense process of increased mining capacity, as they aim to maintain production of 450,000 of ilmenite, 88,000 tons of rutile and 33,000 tones of zircon a year even as they also target to retain their safety performance record which saw no lost time injuries in the last quarter. 

Base Titanium will also shift to a different field (South Dune) at Kwale in two years when the current field (Central Dune) is exhausted and which they have commenced rehabilitating the depleted areas with vegetation. 

They are also waiting to commence more exploration in Tanzania, in December, and in Kenya, in 2018. In Tanzania, where they hold 5 prospecting licenses, they await availability of drilling rigs while in Kenya they await completion of a report by a new mineral rights board for the Cabinet Secretary for Mining to approve further exploration in Kwale. 

Base Titanium has also spent $10 million ( – about Kshs 1 billion) on the community development projects. These include educational support that has seen 1,000 get scholarships in Kwale, while in agriculture, they are working with the national and the Kwale county government to assist over 900 local farmers and groups grow crops like potato, sorghum, and even cotton that is exported to Bangladesh for garment-making.

Startup Battlefield Africa by Techcrunch and Facebook

The Techcrunch Startup Battlefield Africa, supported by Facebook, was won by Lori, a logistics platform being developed to simplify the movement of cargo in Kenya.

At the TechCrunch event in Nairobi, 15 startup companies pitched and demonstrated their concepts in between chat sessions on the unique business climate of Africa that featured other seasoned entrepreneurs, advisors, and funders, with moderation by Facebook and TechCrunch staff.

The competing companies were drawn from sectors like finance (WeCashUpAbacus), data collection (Form+Delivery Science), logistics (Lori Systems), sales (Sellio,  SynCommerce), entertainment (Big5 Games, Tango TV, Gazkar from Lomay), health – ConnectMed,  education (M-Shule, Dot Learn), recruitment – Talent2Africa and agri-business – AgroCenta.

Lori won the day and walked away with $25,000 and an all-expense paid trip for two to compete in  TechCrunch’s flagship event: Disrupt SF 2018

Winners will join TechCrunch’s Startup Battlefield Alumni Network. Alumni have collectively raised nearly $7 billion and produced nearly 100 exits and IPOs to date.

Some excerpts from the day:

  • Brands are creating collections and Michele, Beyonce, Rihanna are wearing African brands – that’s opportunity @KISUAonline #TCBattlefield
  • Most lucrative buyers for @agrocenta are big companies such as breweries, animal feed, soya oil #TCBattlefield
  • Logistics is a $500B market for innovations that eliminate middle-men and make food supply and demand efficient – @agrocenta #TCBattlefield
  • 80% of farmers don’t have access to direct markets and logistic inefficiencies lead for 25% of food being wasted – @agrocenta #TCBattlefield
  • Black Africans in tech are not getting a lot of the money coming into tech – @africatechie #TCBattlefield
  • I’m in Silicon Valley; I may be on a board, but I’m not at the birthday party or talks for the next round – @africatechie #TCBattlefield
  • @big5games builds localized data-optimized easy-to-play games on sports, farming, stocks with partners like Kwese & telcos – #TCBattlefield
  • If you arrange for 20 cargo trucks between Nakuru to Eldoret, 15 will commit, 5 agree on price, but 2 will show up – Lori #TCBattlefield
  • A typical lorry takes 3 days to load its cargo, to make a 12-hour journey, then another 3 days to unload – Lori #TCBattlefield
  • Products cost more in Kenya as the logistics chain is broken; trucks are empty or idle 93% of the time – Lori #TCBattlefield
  • Today @AbacusKe launches Kenya’s first automated investment service – using algorithms to personalize advice – @TheMacharia #TCBattlefield
  • @AbacusKe aims to be Africa’s e-trade; local & foreign investors can make stock debt property & unlisted buys – @TheMacharia #TCBattlefield
  • @wecashup does 1M transactions per month of ~10 euros and partners with banks so they don’t need a license for every country #TCBattlefield
  • @wecashup 2.0 integrates payments whether cash, mobile money, cards, crypto-currencies in 42 countries, and own 6 patents #TCBattlefield
  • You can build a $50M business serving a Lagos neighbourhood; but there’s a daily swing between risk & uncertianity – @EghosaO #TCBattlefield
  • Local investors say – don’t tell me about 10-yr plans when I can bring a container from China and make more money – @EghosaO #TCBattlefield
  • Africa is about iceberg micro-economies; see below the surface – biggest opportunity is organising offline markets – @EghosaO #TCBattlefield
  • Saying Nigeria has 180m people or Africa has 1.2 billion brings wow – but you should think at city levels – @EghosaO #TCBattlefield
  • Our challenges include raisng capital and dealing with regulators & muscled players (non-market forces) – @oviosu #TCBattlefield
  • Nigeria is the biggest market in Africa. River State is bigger than most African countries – @oviosu #TCBattlefield