Category Archives: kenya elections

Kenya’s Money in the Past: TJRC

From reading the introduction to a new book (available on Amazon) by Ronald C. Slye,  a Commissioner with the defunct Kenya Truth, Justice, and Reconciliation Commission, he narrates how the Commission evolved and troubles it encountered as it sought to carry out  investigations, through to completing its report and handing it over to Kenya’s President. These included accusations again their Commission Chairman and delays to the release of their report so it did not clash with the 2012-13 Kenya electioneering period as well as demands that some clauses be deleted from the final report.

The foreword of the book written by Reverend Desmond Tutu is also available and he gives some more background to the Commission and Slye’s writing. Tutu writes that the Kenya Government did not support the report, and printed as few of them as possible and Parliament has not debated the TJRC report.

In a chapter, available online, Slye explains how he came to join the Commission and some to the things he went through. He thanks his university, the Seattle University School of Law,  for making the complete TJRC report, in sectors and versions, available online on its website as well as also hosting supporting documents that he researched as the basis for his book.

In terms of finance and budgets, there were allegations against that the commission was a waster of public funds and Slye has dedicated a separate page called “Financial Scandals” that contains documents and correspondence on the financial affairs of the Commission. .. includes the letters written by the Commission to the relevant Parliamentary Committee’s requesting an investigation into the handling of the Commission’s finances by the Ministry of Justice. It also includes the only document the Commission received from the Ministry of Justice in response to our inquiry concerning how our monies were being spent.

Excerpts from the documents;

  • The Commission, while independent, never really had control of its monies which was stipulated in the TJRC act; that was done by the (Justice) Ministry. The Ministry also communicated that the Commission would have no control of funds until much later.
  • Some trips Commissioners made e.g to hear facts at the Kenya Coast were paid for out of their pockets but were never reimbursed. Nor did they get reimbursed for some medical expenses, some local travel which were done out-of-pocket, as well as for moving expenses of foreign Commissioners.
  • Money was spent on their behalf for activities which the Commissioners were not aware of e.g. Kshs 16 million to host a “council of elders.”

TJRC financial report from the Justice Ministry

  • In October 2009,  the Ministry sent three different sets of papers to JTRC purporting to give a breakdown of usage of their funds and Slye writes that it included bulk payment for Ministry of Justice retreats and bulk payments for unidentified casual workers when the Commission had just a CEO and two consultants
  • In December 2009, the TJRC submitted a two-year budget request for Kshs 2.06 billion. It also submitted a supplementary request for Kshs 631 million. When no answer was received, it wrote, in January 2010, requesting for a lower amount Kshs 480 million. In March 2010, the Ministry wrote that, of this request, they had been allocated Kshs 30 million in the budget for the rest of the fiscal year. The Commissioners soldiered on and decided to pursue alternative means of funding.
  • The page also contains a press release the Commissioner put out that stated:  “The TJRC would like to emphasise the need for financial independence and to restate that at no time has the TJRC had control over any finances. The Ministry, which has seconded one of its finance officers to the Commission, controls all and every aspect of our budget.”

In July 2011 the Commission was accused of corruption through media reports. Slye writes that internal investigations concluded there was no foundation. In their first year (2009-10), their budget was controlled by the Ministry and they had no control of finances till their second financial year. They lacked financial independence, they had to seek Ministry approval of all activities (delayed processes), and had no authority to approve /disapprove expenditure incurred by the Ministry on behalf of TJRC with no knowledge the ministry expenditure beforehand and they were not given a true account of expenditure in the first year. 

During their second year (2010-11), they ran low on funds and had to seek advances from the Treasury for 44 million and 80 million from the Ministry of Justice. They requested supplementary funding which never came which allowed hearing in Mount Elgon, Upper Eastern and North Eastern. Eventually, 650 million of the 1.2 billion was released. There were recurrent delays, payments came in tranches, they had to seek loans, and were only able to visit two provinces and hold public hearings.

Office of the Auditor General (OAG): 

Meanwhile, the Office of the Auditor General of Kenya mentions the TJRC in some reports:

  • In the report for 2010/2011, reference was made to the Commission’s failure to deduct Pay As You Earn (PAYE) from the salaries of 304 statement takers totalling Kshs.13,077,033. A review of the position during the year under review revealed that no attempt was made to recover the amount.
  • The statement of financial position of the Truth, Justice and Reconciliation Commission (TJRC) lacked opening balances. Further, the statement of management responsibilities was not signed by the officials as required. The whole financial statements were not dated and the necessary supporting documents and schedules including cash books and government ledgers, were not provided for audit review.
  • Although notes to the financial statements were provided, they were poorly numbered and arranged such that it was not easy to follow the financial statements. The financial statements also lacked numbered pages and headings.
  • In the circumstance, the accuracy and completeness of the financial statements could not be ascertained.
  • With regard to truth, justice and reconciliation activities, the Ministry reported to the OAG that it had facilitated the enactment of the Truth, Justice and Reconciliation Act, 2008 and the appointment of the TJRC Commissioners. 

EABL: Beer, Taxes, Innovations, Tanzania.

EABL released their financial results for their 2018 year to June this week. It was a tale of two halves with flat growth in the first half of the year which coincided with Kenya ’s prolonged electioneering period and which affected sales of its products such as Senator lager, an affordable beer brand.  But the second half of the year (January to June 2018) saw a more business-friendly environment and more money in consumers pockets.

EABL ended the year with 5% revenue growth to Kshs 73.5 billion and the star of the show for the company in 2017 was Tanzania which saw 41% growth, mainly driven by Serengeti Lite beer. Also, special innovations that contributed 22% to the results is one of the best performances in the world. At EABL, Tanzania’ grew to account for 11% of revenue while Kenya’s was 73%, and Uganda was at 16%.  Capital expenditure was Kshs 13 billion, up from the 5 billion the year before and Kshs 7.8 billion was due to the Kisumu plant which is expected to be opened later in 2018. While overall profit before tax for EABL was Kshs 11.7 billion, a decline of 12% from the year, the company will pay out the same Kshs 7.50 per share dividend to shareholders.

The EABL managers spoke of innovating to reach the 1 million consumers who attain the legal drinking age (18) every year in Kenya – and investment in existing brands, and rolling out new brands to win over changing customers tastes. They also made some excise tax savings in Uganda by moving some  Tusker and Guinness production there while in Kenya, EABL’s profit was weighed down by a Kshs 2 billion one-off provision for taxes that significantly reduced their final result. They said a stable tax environment would enable the company to generate more taxes for governments without causing consumers to pay more.  

Also that by doing more local production of beer and spirits at Ruaraka in Nairobi, at Tanzania, Uganda and soon at the new line at Kisumu has allowed them to bring global brands into countries and produce and offer them at local prices. In the 2019 financial year, they will commercialise the Kisumu brewery which will also benefit 15,000 farmers and generate over 100,000 direct and indirect jobs in the production and distribution chain of Senator beer from Kisumu.

Post Election Economic Forecasts in East Africa

Kenya goes for a repeat presidential election on October 26. The country conducted general elections on August 8, but the Supreme Court invalidated the presidential election in which the electoral commission (IEBC) had declared incumbent President Uhuru Kenyatta as the winner, and instead ordered a fresh election be done within sixty days.

August also saw two other major elections in Africa; On August 4, Rwandans re-elected President Paul Kagame as he was the choice of 99% of the nearly seven million voters. Meanwhile, in Angola, elections were held on August 23. President Jose dos Santos was not in the running as he was stepping down and they were won by João Lourenço, the Minister of Defense and Vice-President his party.

Elsewhere: Togo is to have a referendum on a bill that limits the term of the President; also a bill has been introduced in Uganda’s parliament to remove a 75-year age limit for the President (Yoweri Museveni is 73 now), and Liberia is to have an election on October 10 that will usher in a new President after Ellen Johnson-Sirleaf, who in 2005 became Africa’s first elected female leader,

The Institute of Chartered Accountants in England and Wales (ICAEW) published a report they did with advisory firm Oxford Economic on Africa economic insights for Q3 of 2017.

some excerpts

Kenya: The leaders who take office in Kenya after the October 26 presidential poll will need to reign in expenditure to improve the economy’s prospects according to ICAEW.

Old Pic from the State House FB page

The report states that the new government will need to take a number of steps to revive the economy following the October 26th vote. A start would be to rethink the regulatory cap on commercial interest rates, which has starved small and medium enterprises of funding. Reining in expenditure, in order to ensure government debt does not get out of hand, would improve the economy’s future prospects. Furthermore, the newly elected government will need to lead the charge against corruption.

Rwanda: President Kagame’s re-election is expected to result in the continuation of business-friendly policies to boost entrepreneurship.

Tanzania: The operating environment in Tanzania is becoming increasingly complicated due to President Magafuli’s economic nationalism.

Ethiopia has lifted a state of emergency that was in place for 10 months, and there is a risk that social unrest may keep disrupting the state led development that has produced the country’s economic boom. Still, real GDP growth is forecast to come in at the very impressive rate of 7.1% in 2017.

Nigeria, & Angola: The two big oil producers, Nigeria and Angola, have continued to deal with the effects of a much lower oil price: foreign reserves are hard to come by, which complicates the operating environment for all firms, especially those that need imports. In both countries inflation is falling but still high, interest rates remain high and the governments have been cautious with their spending, meaning government expenditures have not contributed to the economy.

Ghana: Ghana’s continued participation in the International Monetary Fund (IMF) Extended Credit Facility (ECF) programme has been characterised by significant uncertainty ever since the New Patriotic Party (NPP) took the reins by defeating the National Democratic Congress (NDC) in the 2016 elections. Real GDP growth is expected to exceed 6% in 2017, driven by higher oil output and a recovery in consumer demand. International reserves also received a healthy boost due to robust foreign appetite for longer dated government securities. Finally, authorities have made significant progress with the implementation of the banking system roadmap. There are several reasons, to think that the operating environment is set to improve.

Ivory Coast, Ivory Coast is experiencing similar problems as a consequence of a fall in cocoa prices, and political risk sporadically takes the form of mutinies by soldiers, but its economy is still set to grow by 6.9% in 2017.

South Africa: South Africa continues to hold back growth in Southern Africa, although the regional giant has emerged from recession with positive quarterly GDP growth in Q2.

Senegal: Senegal is forecast to boast comparable output growth (6.8%) – thanks mostly to infrastructure spending undertaken as part of the Plan Emerging Senegal (PSE).

Zambia is forecast to show real GDP growth of 3.3% thanks to improved performances in the agriculture and industrial sectors.

The ever-stable Botswana and Mauritius are expected to record stable growth of 4.1% and 3.8%, respectively. The smaller economies in the region continue to feel the effects of a severe drought last year, and South Africa’s weak economy.

Governor and County Transition 2017

In July the Cabinet Secretary for Devolution and Planning gazetted rules for governor transition. Governors came into office in 2013, and this month, most of them stood for re-election as incumbents, for a second (and final) year term

Sonko in transition from Nairobi Senator to Governor.

About half of the 47 county governors in Kenya will be going home after losing in the August 8 elections and will be handing over power to new county governors.

The rules called for:

  • All the counties (were to) form Assumption of Office of the Governor Committee(s) – these were largely made up of central government and county officials as well as with nominees from the incoming governor, once they have been declared the winners
  • The committees are to facilitate handing over ceremonies, security of new governor, and communication and facilitation of a smooth transition. 
  • New governors are to be sworn in by a High Court Judge ten days after the declaration of results. The outgoing governor should be present to hand over symbols of power (but their absence shall not hinder the process).
  • EDIT Where the outgoing governor is re-elected for a second term and upon signing the certificate of inauguration, the presiding Judge or the Deputy Registrar as the case may be shall hand over to the Governor any of the county symbols.
  • The County Commissioner shall ensure the provision of adequate security during the conduct of the swearing-in ceremony.
  • The committee shall within 30 days of swearing in provide a report on the:
    • County Assets (offices, houses, schools, cars, computers, software investment, debtors etc. – their status and ownership documents)
    • County liabilities (amounts & status of loans, legal liabilities)
    • County bank accounts (reconciled balances)
    • County Staff and county agencies
    • Ongoing/multi-year projects and donor funded projects
    • Pending litigation – by the county/against the county, and issues with other government agencies.
    • Sources of county government funding for the last 4 years and projections for 2017/18.

Prepare for 2007

The Electoral Commission of Kenya (ECK) is conducting a voter registration in preparation for the constitutional referendum. Unfortunately (for most of you who read this site), Kenyans in the Diaspora have not been considered. Still you can ask the ECK why at eck@nbnet.co.ke. Or you can take an early summer holiday, as the deadline to register is May 30th.