Monthly Archives: December 2011

Boeing 787 in Nairobi

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

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Top Kenyan banking stories of 2011

Agency Banking took banking to your neighbourhood as kiosks became a bank – pioneered by Equity Bank, and followed by KCB (Mtaani) and Co-Op (Jirani) – mainly enabling cash deposits and withdrawals. Read more.

Cheque Truncation promised so much in new, more secure cheques, that would take a 1-2 days to clear compared to the current one week (four working days). However the launch was put off by a delay in printing of new cheques at several banks, and when the program rolled out a few months later, cheques resembled the old ones, and still cleared at the same old pace.

Fraud: There was increasing fraud reported as a result of faster, easier, banking through real time gross settlements and mobile banking, and there were more tales of thieves being arrested with dozen’s of skimmed ATM cards –
– so watch your statements every month

Mobile Partnerships: Banks surrendered on making customers use their own platforms for mobile banking, and instead opted to partner with Safaricom’s M-pesa. In 2011, there were 8 banks that account holders could move money from their bank accounts to M-pesa and back – and these included large banks like Barclays, Co-Op, Equity and KCB. Also electronic banking is now dead as a premium products, and many of the same banks now have these as a free addition to their customers, saving them from the expense of having to print and mail statements to customers.

Super Profits: Did banks profit from the Central Bank’s mismanagement of rates leading to weaker exchange rates? The Central Bank Governor said five banks did, but then refused to say who they were. Parliament continued to push and came up with a list, but could not prove the claims that the banks made super profits at the expense of the shilling.

Executive Suites: Management changes at KCB resulted in top managers leaving the bank – and moving to rivals like Family Bank and Jamii Bora where they cut equity based compensation deals based on performance (modeled after the Co-Op one of a few years ago).

Interest Rate Hike: Late in the year, there was an about turn in the monetary policy – to rescue the Kenya shilling that, and this came in the form of cut back in liquidity. From that, banks drastically raised their loan rates e.g. Mortgages at Equity bank went from 14% to 25% and many banks offered new loans at +30%. To stave off defaults, some banks held their existing loan rates steady, but with extensions of loan maturity periods. The Kenya Banker’s Association then proposed other measures (PDF) such as limiting repayment rate hikes, not penalizing early payers and (unlikely) asking banks to absorb costs!

Guide to Lilongwe

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)

EDIT (A second guest post from February 2012)

Getting there: Kenya Airways (KQ) has the most convenient direct flight from Nairobi – outbound in the morning and some days in the evening too. It cost $900+- and a yellow fever certificate is required on arrival, otherwise the immigration process not too much of a hustle.

Hotels: Finally, there is a new hotel in town that’s opened up operated by Chinese.. it’s called the Golden Peacock, with lots of signs in Chinese which I find funny. They still have teething problems and shockingly just serve a Chinese menu… but costs roughly $100 b&b. There is another plush hotel with conference facilities coming up next to the Parliament. This is all great for Lilongwe as before these new hotels, it was a choice between Crossroads which is Indian owned and smelt very Indian and Sun Bird which is a government owned hotel – with the same style, ambience and service as the Block hotels that were government owned in Kenya back in the day.

Dining: They love ‘sima’ which they eat with red kidney beans a lot.. an interesting combination. Also there’s a fish dish called Chambo is meant to be legendary and rice called Kilombero that has superb aroma. This particular rice swells about 3 times its original size so I guess depends on how one likes their rice.

Communications: Both Airtel and Vodacom are accessible though better choice is Airtel as there are no roaming charges. Vodacom via Safaricom too expensive to use in Malawi, and the cost of calls remains high for the country.

Shopping & Sight-Seeing: The Monkey bay area has the most beautiful lake.. very romantic with a number of excellent hotels in the vicinity.

Surprises: – It’s raining and the country is what can be called Maize country. Once you leave the airport, you see maize and you will traverse the country and see tons of maize along the road. These people are lucky to be food secure.
– The fuel crisis still persists thus hoarding of this commodity is rampant, but I still don’t understand it
– These people don’t build palatial homes in the countryside.. They all pretty much live in hut houses which is quite surprising….

Guide to Bamako

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 cost about $1,000 – $1,200.

Getting Around: The airport is small and hence has low traffic. Most people get visas upon arrival at US $40 and a taxi from the airport to the 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 no 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 the streets with small kids, who are twins.

Urban Inflation Index: December 2011

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.