Category Archives: France

Societe Generale and Absa partner to grow across Africa

Societe Generale (SocGen) of France and Absa have entered two deals; one for a Pan-African wholesale banking partnership and another for the sale of selected SocGen’s businesses in South Africa to Absa. 

SocGen bills itself as the number one bank in French-speaking Sub-Saharan Africa with a presence in 19 countries, mainly in Western and Northern Africa, while Absa is in 12 countries mainly in Southern and Eastern Africa, as a rebrand of Barclays across Africa.

The partnership will be a non-exclusive one that will allow the banks to sell each other’s products and services. It will also extend to providing dedicated services to Chinese multinational businesses, leveraging on SocGen’s presence in China.

The second agreement relates to the sale by SocGen of its custody, trustee and derivatives clearing services in South Africa to Absa and will result in the transfer of clients, employees, and IT services. The deal enables Absa to re-enter the custody and trustee business. It does not include SocGen’s securities lending services which will end in March 2019 leaving SocGen in South Africa to operate corporate and investment banking.

Barclays is the fourth largest bank in Kenya while Societe General has a Kenya Representative Office in Nairobi. SocGen’s digital banking journey includes ventures in mortgages, insurance technology, and auto leasing. Another is  YUP, a mobile money wallet launched in 2017 after acquiring a stake in TagPay, that is now in four African countries and has 300,000 clients.

Renault Trucks launch in East Africa with CMC

In Nairobi this week, Renault Trucks launched a new Range K line as part of an ambitious plan to expand in Eastern Africa. The Range K is a versatile, rugged truck that is designed for local owners engaged in a variety of sectors such as long-distance haulage to neighbouring countries and consumer goods delivery, or rugged conditions like mining and construction operations.

Renault Trucks are part of the Volvo Group and are completely separate from the Renault car company. In Kenya, Renault Trucks are exclusively distributed by the CMC Group, which was acquired by Majid Al Futtaim Auto in 2014. Renault Trucks sold 55,000 of their award-winning line of trucks in 2018. They lead in Franco-phone (Northern, Western, and Central) Africa, and their plans to expand further in Eastern and Southern Africa, led to a partnership deal with CMC, under Majid Al Futtaim Auto.

CMC Group, which is now in 3 countries (Kenya, Uganda, Tanzania), plans to grow to 10 countries – including Mauritius, Mozambique, Rwanda, Burundi Zambia, Zimbabwe Malawi over the next few years and the global brand of Renault Trucks will be part of that push. CMC Group will sell K440 (Range K) series and C440 Renault Truck model.

The Range K’s are fitted with robust chassis and heavy-duty robotized gearbox, which make them easier for their drivers. The trucks all have Optidrive Xtrem, described as the best gearbox in the market, which is a clutch-less manual gearbox. Drivers have an adjustable steering wheel with controls similar to a private car and there is a 7-inch screen for them to view all vehicle settings during operations.

The Range K trucks are designed can carry up to 13 tons per axle and they have heavy-duty “fifth wheels'” that can pull trailers of over 33 tons in this region with a range of over 1,000 kilometers on a single diesel tank. The trucks have load sensors and low range gears for use on project work like street sweeping, tarmac laying and water-spraying. They have electronic parking brakes and hill-start aids that prevent roll-back, and with drum brakes on all wheels that can go for up to 750,000 kilometres without needing change.

The K440 trucks have high ground clearance with engine under-guards and are designed to manoeuvre in tight spaces and climb out of hilly places like construction sites without damaging the underbelly of the trucks. The vehicle design encompasses steel protection of parts that are sensitive like headlights and license plates, so they are not damaged at rough worksites. For companies, there is also a large front advertising area above the radiator grilles, which itself easily opens to allow for drivers to do quick maintenance checks.

At the launch, key managers of CMC and Renault Trucks highlighted how operating expenses take up 76% of the ownership cost of a truck for investors – with fuel accounting for 37%, driver costs 23% and repairs for another 16%. Renault configures trucks for each owner in terms of axle ratios, braking and power modes. There is also mandatory driver training to ensure reliable vehicle usage while reducing fuel consumption and maintenance costs with the goal of having the trucks always available and working on the road. The trucks come with an international 12-month warranty and CMC also offers start-and-drive 5-year contracts and personalized maintenance plans in addition to after-sales services and genuine parts at its wide network of distribution centres around East Africa.

CMC Group has entered a partnership that will see Kenya Vehicle Manufacturers assemble Renault Trucks from CKD’s at Thika, and which the French Ambassador said would create 200 skilled jobs in the country.

Also at the launch, Kenya’s Cabinet Secretary at the Ministry of Trade, Industry and Cooperatives, Peter Munya, spoke of the government plans to increase manufacturing’s share of the economy through the formulation of policies and tax incentives that would secure investments by auto manufacturers to set up more assembly plants in Kenya.

Looking to the future, Renault Trucks plan to launch a line of all-electric trucks, from 2019, for Europe, but sadly not for East Africa, yet.

Kenya’s Money in the Past: Bethwell Ogot Footprints on the Sands of Time

My Footprints on the Sands of Time is an autobiography by Professor Bethwell Ogot (wikipedia),  an eminent academic scholar. It is a tale of a young man overcoming incredible hardships, and going through early schooling at Maseno, and later through winning scholarships and prizes, on to excelling at Makerere, St. Andrews (Scotland) and teaching with Carey Francis at Alliance High School. It also touches on his work and roles in the establishment of the University of Nairobi, and Maseno University, and at his travels to present papers and speak at prestigious conferences and other institutions across the world.

Ogot narrates tales on growing up in Luo culture, seeing emerging economic changes e.g. he took a honeymoon trip to Uganda in 1959 traveling on first class from Kisumu to Kampala via Nakuru, a twenty-seven-hour train journey. Later, when his father died on August 30, 1978, this was the day before Kenya’s first president Mzee Jomo Kenyatta was to be buried, and it was a period when the sole broadcaster – the Voice of Kenya refused to publish any other death announcements, newspapers would not publish any other obituaries as a sign of respect to Kenyatta, and coffin-makers were not willing to make any other coffins.

He was close to former schoolmates, who were now in government and its leaders. Ogot was waiting to meet Tom Mboya for lunch at the New Stanley Hotel when Mboya was shot (his death was not unexpected to his friends), and Ogot had an encounter with Mboya’s killer who was fleeing the scene.  He writes of his work to establish and get government and financial support for the Ramogi Institute of Advanced Technology – RIAT and a delicate dance with community leaders including Oginga Odinga who was firmly out of government.

The book has a wealth of information on corporate governance and management from Ogot’s time at regional bodies, parastatals, international organizations, donor-funded ones, universities that were in slow decline and government. He writes of working in research and publishing, and struggling to document and publish African history. Also of his times at the East African Publishing House that published books on political science, history, geography and a modern African library with much opposition from British Publishers who controlled publishing and later from government officials who set out to shut down independent academic stories. They published Okot p’Bitek’s Song of Lawino that some critics considered a terrible poem ahead of its publication but which went on to be celebrated and sell over 25,000 copies.

There are also stories of navigating the East African Legislative Assembly, travels around East Africa, interacting with leaders and observing actions that were either supporting or undermining the East African Community. Uganda’s President Amin spoke of supporting the community even as he launched Uganda Airlines that he said would only do domestic flights in Uganda. There was also the importation of goods for Zambia through Mombasa that undermined the Dar es Salaam port and the Tazara railway, so Tanzania banned Kenyans trucks with excess tonnage from using their highways, and Kenya retaliated by closing its border with Tanzania. Officials in different countries also tried to keep community assets from leaving their borders, and Kenya grounded planes and withheld fuel of East Africa Airways which owed money to Kenya banks in a move designed to hurt vast Tanzania the most.

The most shocking tales are from his time working at the Museums of Kenya and its spinoff that saw Ogot as the first director of The International Louis Leakey Memorial Institute for African Prehistory – TILLMIAP (see an excerpt). It is a serious indictment of Richard Leakey who regarded TILLMIAP as his personal family fund-raising institution and who, with the support of Charles Njonjo in government and diplomats and donor agencies, warded off transparency and Africanization efforts – and was eventually to hound Ogot out of the institution.

Another tale is of when, as the candidate representing Africa on the executive board of UNESCO, he ran for the Presidency of the General Conference. But what should have been a formality of confirming his position became a long process after a surprise Senegalese candidate emerged to run against him – and France lobbied Francophone countries to only vote for a French-speaking African candidate, rules were changed, documents forged, and additional multiple election steps added before Ogot finally won.

The 500+ page book by Prof. Ogot does not have an index, but it’s worth reading all over again.

Air France resumes Nairobi flights

Air France has resumed flights to Nairobi and will join an expanded joint-venture partnership between KLM and Kenya Airways that was established in 1995.

Flight crew of the inaugural Air France flight

The inaugural flight using a Boeing 787-900 landed on March 26, which was eighteen years to the day when Air France had ended its Nairobi flights. The new flights will be three times a week using a Boing 787 and AF814 will leave Paris-Charles de Gaulle at 20:50 on Wednesdays, Saturdays, and Sundays, arriving in Nairobi at 6:00, the next day and AF815 will leave Nairobi at 08:20 on Mondays, Thursdays, and Sundays and arrive at Paris-Charles de Gaulle at 15:50.

The expanded code-share will see the airlines have a combined three hubs (Amsterdam, Paris, Nairobi) enabling passengers to have seamless connections through booking on any of the three Air France flights (Paris-Nairobi), 14 Kenya Airways flights (7 Amsterdam-Nairobi and 7 Paris-Nairobi) and 7 KLM flights (Amsterdam-Nairobi)

From this summer, the Air France-KLM group comprising Air France, KLM, Transavia, and Joon will serve 51 African destinations on 489 weekly flights as in April 2018, Joon will begin serving Cape Town (South Africa) from Paris-Charles de Gaulle.

Airline Megadeal

As KLM scales down its investment in Kenya Airways, it is involved in another aviation mega-deal.  Air France-KLM is buying a 31% stake in Virgin Atlantic as part of a series of deals that look set to shake up the airline world.

IFC celebrates KLM’s investment in KQ

Excerpts 

  • Delta Air Lines becomes the largest shareholder at 49 percent in Virgin Atlantic and founder Richard Branson cedes control. He will retain a 20% stake through his Virgin Group and the airline will continue to fly under the Virgin brand.
  • Delta Air Lines will take a 10% stake in Air France-KLM with the three airline companies coming together to create a single global joint-venture.
  • China Eastern Airlines will also take a 10% stake in Air France-KLM.
  • Air France-KLM’s investment in Virgin Atlantic will cost around $287 million (£220 million), while the two 10% stake sales are being valued at $981 million (€751 million) each for Delta and China Eastern.

The long-term aim of the deals is to bring the two pre-existing joint ventures—Air France-KLM, Delta and Alitalia, and secondly Delta and Virgin Atlantic—within a single joint-venture. The goal is that all the companies work more closely together, helping them fly more passengers to more destinations at a lower cost (to themselves). Plus, Air France’s balance sheet gets a makeover.

While Virgin has been struggling, as shown by the modest transaction price, it has one very attractive asset: landing slots at London’s crowded Heathrow airport, where passengers tend to pay higher fares

Meanwhile, some tension has been cited in the partnership between KLM and Air France.

  • A clash of national cultures and an inability to understand each other’s languages threatens to make the merged Air France-KLM group of airlines unmanageable, according to a leaked internal company report.
  • French staff in the Franco-Dutch company complain their colleagues from the Netherlands are money-grubbing, while the Dutch regard the Air France staff as aloof, according to the report. Among the petty grievances, there is irritation that a KLM employee working in Paris is charged €10 for lunch in the canteen, while an Air France colleague pays only €4.