Monthly Archives: September 2012

Nairobi’s Future Roads

Last month at the opening of the next phase of the Office Park complex,  Engineer Arasa of the Kenya Ministry of Roads gave a talk on the future of roads in Nairobi – whose construction this year will amount to  Kshs. 153 billion (~$1.8 billion) and reach an eventual total spend of Kshs. 2 trillion over the next 15 years. 

 

Kileleshwa road with a cycle path

The biggest one has been the Nairobi-Thika Highway, financed by the African Development Bank but other roads  are the Eastern bypass (connecting Mombasa Rd to Thika Rd)  and the Northern bypass (connecting Thika Rd to the Nakuru Highway)  which are being financed by the Chinese Government. There is also the Southern bypass which is a 28KM dual carriageway road linking Mombasa Road to Kikuyu, that will be constructed at a cost of Kshs. 1.1 billion and is jointly financed by the Kenya and Chinese governments. It will have  3 flyovers (including at community, Thogoto and Dagoretti Roads) and is expected to be complete by July 2015.

There are also the missing link roads in the west of Nairobi, being financed by the Japanese Government that will connect Ngong Rd to James Gichuru, and Gitanga Rd to Waiyaki Way – both though Kileleshwa –  and both are expected to be completed in March 2013. (Note the bulldozers at the Yaya parking now) 

Others include upgrading Langata Rd to dual carriageway at Kshs 2.6 billion (with an underpass at Bomas junction) and, and there are also the Upper Hill Roads being done in two phases (Kshs 2 billion, financed by GoK), starting with the widening of Elgon, Kilimanjaro, Upper Hill, and Bunyala Roads to dual carriageway  by May 2014.

Bomas junction in the future

 

Other planned roads in the future include converting Adams Arcade – Karen – Ngong – Bomas to four lanes (with flyovers at Dagoretti Corner and Karen shopping centre)  – between 2013 – 2016 to be financed by the Chinese Govt at an estimated cost of Kshs 15 billion. Another will convert Outer Ring Rd to dual carriageway (at a cost of Kshs 6 billion, of which 3.5 billion has been sourced from ADB).

Some interesting point in the talk were:

  • Though stats show that 47% of Nairobians walk to work, the Roads Ministry hopes the new roads will address several challenges such as unregulated public transportation, encroachment on road reserves, (past) low investment in roads, inefficient junctions and the already present traffic. They also know that more & better roads may result in more traffic e.g. Thika Road which used to handle 70,000 vehicles per day, will have 100,000 per day by the end of the year.
  • Thika Road will be a toll road.
  • Another missing link road may include a flyover at the City Mortuary junction.

Arranged Corporate Marriages

Some local merger activity of note
 
Barclays of UK and South Africa’s Absa Group are in talks to merge their African operations – but this is not really new as the plan was set in motion six years ago. 
There’s no certainty the talks will lead to any deal, which wouldn’t be completed until 2013, the banks said in a statement. The combination would affect assets in Kenya, Botswana, Zambia, Tanzania and Ghana. 
Barclays, based in London, bought 54 percent of Absa in 2005 for $4.5 billion to expand in emerging markets. Absa dropped its original plan to buy the Barclays assets in 2008 after commodity-driven economic growth in Africa sent their earnings surging, making the businesses too expensive to acquire. Barclays revived the plan in April 2011, aiming to consolidate operations at Absa headquarters in Johannesburg and move other work to Dubai, but Barclays’ listed subsidiaries in Kenya and Botswana will be maintained.
Coca Cola have prepared the Information Memorandum (with D Capital Partners, UK) to persuade local coca cola shareholders to buy into the deal that will see their shareholding in three local bottlers – Mount Kenya Bottlers, Rift Valley Bottlers and Kisii Bottlers merged into a new holding company called Almasi.

Coca Cola dominates the non alcoholic beverage in Kenya with a 78% market share, leaving EABL, Kevian, Del Monte, Excel with 2-4% each. The global giant  has 6 bottling licensing agreements in Kenya with Coastal, Equator, Rift Valley, Mount Kenya, Kisii and Nairobi – which itself was boosted by earlier partnership deals ( with Flamingo Bottlers and East Kenya Bottlers Limited).  The three bottlers each which each sell about 9% of cokes cases, will become Coke’s second largest after Nairobi with about 28% of sales. 

Peeling back Almasi
The boards of the three have approved it and now have to sell the deal to their shareholders as a potential value addition through increased revenue and cost savings of Kshs 2.5 billion ($29 million) derived from  lower management costs (single management, single board of directors) shared purchasing, and the IM noted none of the three can afford to invest in new bottling line, or plastic packing lines for soda, juices and water
Mt Kenya has 2011 sales of about $29 million, Rift Valley $21 million and Kisii $18 million, with Mt. Kenya and Rift both having after tax profits of ~$1.3 million. A nominal shareholding of 20,000 (1,000 shares of par 20)  in each, will be worth Kshs 80,000 (11,400 new shares) for Kisii Bottler shareholders, Kshs 526,000 (75,000 shares) for Mount Kenya Bottler and Kshs 112,000 (16,000 shares) for Rift Valley Bottler shareholders. The IM also dangles a carrot that, Almasi could one day be a listed company.
Haco boost?  – Tiger Brands which own 51% of Kenya’s Haco are now buying 63% of Dangote Flour Mills in Nigeria. Will Haco get a boost in the food business, exporting to Nigeria?
Kenol  Reassures – Kenol made a surprising (to many)  half year loss  due to foreign exchange hedging contracts. They subsequently issued a statement of reassurance that a planned majority sale to  Puma Energy was sill on, with the due diligence process yet to be completed. Unfortunately, it is likely that, once the deal is done, Puma will also buy out the other minority shareholders and de-list the company – which is a shame, as it was one of the most pro-active companies in shareholder communications

Guide to Stellenbosch

A guest post by @AmkaKenya after a visit to Stellenbosch – a town in South Africa famous for wealth, education, and wines.
 Getting There: It cost about 8,900 Rand (~Kshs 90,000) to Cape Town on South African Airways (SAA). Ethiopia Air is about half the cost, but one would have to take a much longer trip. SAA was really lovely and the airports in SA are nice.  I only had hand luggage, but if you check in baggage, you have to collect and check it in again at Johannesburg, before continuing to Cape Town.
You also have to get a visa from the South African High Commission in Nairobi ahead of your trip and it’s quite fast, with the visa being free for tourists staying less than 30 days. 
Getting Around:  A friend collected me from the airport and the drive to Stellenbosch took about 40 minutes. It seems like everyone had a car in Stellenbosch, I didn’t see any buses and I hear the taxis are quite expensive. I felt secure during the day, but all houses have alarms and secured gates at night.

Communications:  I tried not to use my Safaricom roaming, as it was expensive to call and receive calls. Text messages were Kshs 10/- and I accidentally drained Kshs. 1,000 of credit because I switched my data on!

Where to Stay  I stayed at a GORGEOUS hotel based in a vineyard – Spier.  I think the average room there was about $250 per night B&B. Not sure about the others.

Food & Drink Stellenbosch is wine country and friends gather to drink several bottles of wine almost every night.  This is accompanied with billtong (cured meat) and possibly a brai (barbeque) when weather permits.  They talk about the weather and traveling out of Stellenbosch! There is also a large student population who are very intelligent and fun to talk to about current affairs, politics and social change.

Shopping & Sight Seeing: I didn’t get enough time to explore, but there’s are lots of lovely (if a little pricey) little artisan shops with unique gifts and knick knacks on Church Street and Andringa Street. One gift shop called Big Blue was very cool with lots of funny and not too expensive gifts like ZUMA Presidential Shower Gel.  (Eventually), I took home wine and billtong for most people. 

Getting around costs about $25 per day and  you can get by with English, but Afrikaans is also commonly heard. I didn’t meet many black people, so didn’t hear much Zulu.
Local legends: The town was founded in 1679 by the Governor of the Cape Colony, Simon van der Stel, who named it after himself – Stellenbosch means “(van der) Stel’s Bush”.  Also a few famous rugby and cricket players are from there.

Biggest surprise  It was so cold!

Author with Zapiro, the famous cartoonist
Odd Points:  On the surface, Stellenbosch is a rich town – people drink lots of wine, eat good billtong and enjoy fine cheeses.  On the weekend, they go to farmers markets, smile a lot, and have “brais” (BBQs) with friends.  However, there is an interesting racial tension, dimension, as I assume there is all over South Africa.  The Black Economic Empowerment (BEE)  policy is  a contentious method of “leveling the playing field”. A black banker told me that, without BEE, he would never have the job he has in Stellenbosch. He admitted that since BEE, life has been great for him, but probably not much different for the lower class black South Africans that it was supposed to target.  There was a young white couple I spoke to, and they expressed a surprisingly hostile attitude towards BEE; The young man came from a wealthy family that owns several vineyards and he claimed some of the farms had been “snatched” (back?) from his family and given to black people who had no idea how to farm sustainably.  He claimed many of the farms are being ruined because black people, with no experience, are running them.
Note: Zapiro, is the famous cartoonist who coined the controversial Zuma shower-head cartoons.

Idea Exchange: AppStars, Crowdsourcing, Maker Faire, Manuscripts

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The winners of the 2012 Africa Awards will be announced in October 2012, in Accra, Ghana. 
Also read about the young winners of the Anzisha Prize for young African entrepreneurs between the ages of 16 to 22.
Crowdsourced Journalism Awards for Africa deadline has passed, but it will be interesting to see the outcome of the big picture journalism contest  that had a prize grant a 15,000 Euros to be shared by three winners. The project is backed by Internews Europe and funded by the International Press Institute and – ..the goal is to strengthen African journalists’ capacities through training in the use of crowdsourced journalism techniques which aim to leverage citizen participation and increase the representation of local voices and perspectives through both traditional and new media channels.
Forbes Africa Ad Awards deadline is 14 September.
 
Google  RISE (Roots in Science and Engineering) Awards are now open. They promote and support education initiatives in two key areas: Science, Technology, Engineering, Mathematics (STEM) and Computer Science (CS) and will award grants of $5,000 – $25,000 to organizations working with primary and secondary school students in these fields around the world.

Deadline is September 30.
#Kenya365 Instagram Project collects interesting photos on daily life in Kenya. Simply tag your instagram shots from Kenya with #kenya365 and it ends on August 31, 2013.

 The Kenya Film Festivalis a celebration of film in Kenya and the deadline for entries to the seventh edition of the festival is September 17.
 The Kwani? Manuscript Project is a literary prize for African writing and they are seeking unpublished fiction manuscripts from African writers across the continent and in the Diaspora. The top 3 manuscripts will be awarded cash prizes of Kshs 300,000 (~$3,500) for 1st place, and Kshs 150,000 and  Kshs 75,000 for 2nd and 3rd place. Kwani? will also publish the manuscripts and market the authors globally. Deadline is 17 September. 
Kwani? also has a Majuu offer to Kenya’s who live or have been in the diaspora (huko Majuu) and will pay people for photos, party flyers, job applications, tickets, recipes and other mementos of their time in the diaspora. Deadline is September 23
Make Faire Africa apply now to exhibit creative inventions, designs & fabrications at the 2012 edition in Lagos in November.
ONE The 2012 ONE Africa Award has a $100,000 prize that rewards innovation and initiatives in line with the millennium development goals. Deadline is September 23.

Orange African Social Venture is aimed at young entrepreneurs and start-ups across Africa that promote social development through ICT. Three winners will receive prizes of between 10,000 and 25,000 euros and the deadline for applications is September 30 
Safaricom, in conjunction with Vodafone, has the Safaricom Appstar challenge with a grand prize for Kenya of  Kshs 1,000,000 (~$11,800) , and a runner up prize of Kshs 500,000, and will also reward one winner from each of the six categories of games & entertainment, agriculture, health, education, utilities and financial inclusion with a Kshs 100,000 prize. The winner and runner up will also travel to South Africa to take part in the Vodafone round of the challenge, competing against winners from Tanzania, Qatar, Egypt, South Africa, and Lesotho.
The deadline is November 2, and during that time people will be able to build new apps whether in Java, Symbian, Blackberry, or Android, but apps that already appear in other stores are not eligible. Safaricom will also be launching an app store in Kenya next month in developers will own the intellectual property to their apps and there will be a revenue sharing model that favours the developers.

EDIT

Apply for the Amazon Web Services start up challenge in categories of big data & high performance computing, gaming, consumer, and business – with grand prizes of $50,000. Deadline is November 9. 

Green Card:  The US DV-2014 (diversity visa) Program runs from October 2, to November 3, 2012.
 

The 2013  Innovation Prize for Africa – has three prizes totaling $150,000 for African innovations in any of  these categories – Agriculture/agribusiness, 2 Environment/Energy/Water, Health/Wellbeing, ICT and Manufacturing/Service industries. The first prize is $100,000 and $25,000 for the second with an additional special prize for a social impact innovation of $25,000.  Entries close on 31 October 2012.

Schwab Foundation Social Entrepreneur of the Year 2013. Deadline is 31 October. 
SOMA Kenya Nominations are open for the Kenya Social Media Awards.    

TED Global 2013 is now accepting applications.

The Unreasonable Institute is now accepting applications for the year 2013 and they seeking world-changing entrepreneurs – for who they will help scale their impact through mentorship, funding, and networking opportunities.

East Africa Property Expo

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This weekend, there is an East Africa Property Expo at the Sarit Centre in Nairobi – and what was interesting to see the presentation of several of properties being developed at the Kenya Coast for investors to sign up. Some noted, include:

The African Collection introducing fractional ownership with 1 and 2 bedroom houses in Malindi at Kshs 12.7 million (~$150,000) and Kshs 17.7 million respectively is now 60% sold.
Cowrie Shell  Beach apartments  in Bamburi are expected to be completed in November 2012 
Golden Sand Resort from Elegant Properties will have  1, 2,3  bedroom apartments, hotel and shopping mall in Diani Beach. 
 Milele Luxury Apartments is a development by the Presbyterian foundation (PCEA) near Haller Park, Bamburi, and it has fully furnished apartments including 2 bedroom ones for  sale at Kshs 21 million (~$247,000) 
Ocean 7 developer drawing
Ocean7Kenya is a massive Miami-style development in Mtwapa by the Sun N Sand Group and 3 bedroom apartments are on sale for Kshs 30 million ($352,000).
  
Willow Creek Ranches  are selling 5, 25, 50, and 100 acre land parcels at Kshs 90,000 (~$1,060) per acre for development. The property has  18KM of River Galana running through and other developments like an airstrip and University property nearby.
For more Mombasa and coast area property listings, check out MySpacePropertiesKenya.
The next edition of the expo will be held in Kigali, Rwanda.