Monthly Archives: November 2005

CDF Tales & ATM wars

CDF tales
In bar talk over the weekend, I had a chat a disillusioned member of one constituency development fund (CDF) committee who lamented the woes of his mis-managed committee. He’s a reluctant member who wants to make a positive difference, but it costs 5,000 shillings for him to travel to his rural area for a committee meeting where he will receive a 1,000 shilling sitting allowance. The MP (& CDF Chairman) has said not to worry, because there’s enough ‘float’ in the process to make it worth his time.

Certain MP’s have hailed CDF as the greatest act parliament has ever passed. The 2003 Act seeks to proportionally channel government funds (2.5% of annual government revenue) to each constituency, by-passing the central government (president and ministerial budget allocations) and financing rural projects directly. MP’s are now demigods who in addition to CDF funds,also control AIDS funds, bursary kitty, and roads kitty and have also been awarded more funds to set up rural offices.

There are two problems I see with CDF (i) The composition of the afore-mentioned CDF committee which can have 12 to 15 members comprising (elected MP, two councillors, one district officer, two reps of religious organization, two men, two women, one youth rep, one nominee from active NGO) (ii) CDF projects are to be audited and reported upon by the over-worked office of the Controller and Auditor-General.

I’d like to see audits of CDF done by private sector accountants and auditors who are much more qualified and who efficiently audit thousands of small companies even at constituency level around the country each year. Same with wealth declarations – it is better to have existing, certified accountants scrutinise the wealth returns of public officers instead of creating a whole new commission (Ethics & Integrity). The private sector would do a much better job.

At the CDF web site launch, the CDF management committee asked Transparency International not to secretly audit CDF projects without involving MP’s and at the same time indicated that they would work with the Kenya Anti-Corruption Commission to combat corruption and misappropriation of CDF funds.

Certain MP’s have performed excellent development jobs with CDF funds including Peter Kenneth (NARC – Gatanga) and Billow Kerrow (KANU – Mandera Central). But not the MP who was the subject of our conversation and who may easily siphon over 100 million shillings from his constituents by the end of his term (he doesn’t expect to stand for re-election).

IT snafu? The Controversial MP profiles are back online at the Parliamentary site.

ATM wars
Pesa Point has signed up three banks so far; Diamond Trust, Fina and NIC (Move) and now has a total of 47 live ATM’s with a goal to set up 120 by year end. They compete directly Kenswitch, but are both still dwarfed by Co-op, KCB, Stanchart, and Barclays ATM networks.
– Equity Bank announced that they will launch 10 ATM’s on Kimathi Street (in front of Nation Centre) this month.
– The number of ATM’s is getting comical, and they are taking up much needed space in some shopping areas. So the new Nakumatt Junction has set up an ATM area with three different ATM machines side by side (Stanchart, NIC and KCB)
– Pesa Point stand-alone ATM’s look like old style telephone booths but inside resemble potty toilets, with their plastic casing and bright colours.
– KCB has waived joining fees for its credit cards till the end of the year.

Web briefs

  • Award-winning Qatar Airways begins flights to Nairobi today.
  • Vodacom (SA) could soon be bidding to buy out Vodafone’s (its parent company) 40% share of Safaricom Kenya.
  • Is Kenya bartering wildlife to Thailand to win a seat on the UN Security Council?
  • The Economist ranked Kenya Airways ranked as one of three viable African airlines alongside Ethiopian Airlines and South African Airways. Also while African airlines are fighting each other they are likely to be sidelined by foreign mega-airliners.
  • The Japanese are buying & selling stocks in record numbers using their mobile phones.

Opportunity Friday

Rights issue
CFC has announced the calendar for their rights issue through which the Bank hopes to raise 744 million shillings by issuing 12 million new shares at 62 shillings (a discount of about 16% on the current market price). Each shareholder (of record on November 2) has the right to 1 new share for 12 currently held. Significant dates are;
– 16 November rights start trading
– 30 Nov last day of trading
– 9 December last payment date
– 16 Dec Results announced and register updated
– 21 Dec 21 new shares start trading

Who wants to be a millionaire?
Mobile operator Safaricom has launched a new contest that will reward 1 lucky subscriber with one million shillingseach week day over the next month. You qualify for the daily draw each time you top up a phone account by one hundred shillings. I’m down 1 today, 29 to go.

Bank consultancy
A Risk management consultancy opportunity has been advertised by PTA Bank, and the deadline is November 30.

Hotel for sale
The National Social Security Fund is selling a 114 bed hotel formerly known as Polana in downtown (not beach) Mombasa. Submit proposalsto the managing trustee by December 7. More information can be obtained from info@nssfkenya.co.ke

Transportation
For transportation of emergency relief commodities to various districts for a period of one year. Apply to the special programmes ministry in the office of the president by December 13.

jobs

Kenya Commercial Bank
– Database developer
– Hardware systems specialist
– Enterprise solutions specialist
Apply by November 25th to the divisional director, human resources, 48400-00100 Nairobi

Savings & Loan Kenya – a subsidiary of KCB
– manager sales (ESD/SL/05)
– manager marketing (ESD/MK/05)
– corporate credit analyst (ESD/CCA/05)
– advance manager (ESD/AM/05)
Apply by November 25th via KPMG’s executive selection division at esd@kpmg.co.ke .

East African Development Bank
– corporate finance specialist
– internal auditor
Apply by 25 November to the country manager EABB, 47685 Nairobi

UNDP Kenya
Poverty & Environment Advisor. Check www.ke.undp.org for details and apply by November 13.

Commonwealth Secretariat
GIDD (Government & institutional development division) advisors for East & West Africa. Check www.thecommonwealth.org for details and deadline is 9 December.

Deloitte & Touché
– Audit seniors. Apply by 30 November at admin@deloitte.co.ke

Tetra Pak
– financial analyst. Apply by November 22 to the human resource manager, 78340-00507 Nairobi.

Sports
Champions Unite: To create a champions league and super bowl powerhouse. (British soccer team Liverpool FC said it has held discussions with New England Patriots owner Robert Kraft amid speculation that the U.S. tycoon could be poised to buy a stake in the club.)

Declare Your Wealth

It’s that time of the year when a good number of workers, civil servants, government officials, soldiers, university & co-operative officials, among others, have to declare their income, assets & liabilities – or wealth for the year (November to November) by December 31. Major financial transactions over the past year are reduced to fit a four-page form:

  • (page one) name, occupation, marital status, physical address.
  • (page two) list all spouses and children under the age of 18.
  • (page three) list all income (salary, income from rent, investments, kiosk, matatu etc.) and assets (home, car, kiosk, shares, TV.)
  • (page 4 ) list all liabilities and other useful information, and have a witness sign the wealth declaration.

At the end of it all, your life should resemble a proper balance sheet. E.g. if you declare rental income, you should also declare ownership of the house you’re renting. If all one has is salary, the form can be filled in minutes.

The noble exercise stems from the Public Officers’ Ethics Act 2003, which was passed to call weed out corruption in the civil service by having officers declare their how their wealth the public officers ethics act and suspicious declarations could lead to investigation for corruption.

Teething Problems
We got a talk from our company secretary who explained that implementation of the wealth declaration has been poor because:

  • The exercise is enforced by the current public service commission (PSC) which remains toothless.
  • All the PSC can do is collect completed forms and store them – they have no computers, staff, or capacity to analyse the returns.
  • Information can’t be shared with spouses or the Kenya Revenue Authority or spouses who feel that someone is hiding assets or suspected of criminal behaviour.
  • Returns are kept for 30 years, but none of the records are computerised, only stored in some huge warehouse. Plus everyone individual must file a separate return i.e. married couples must each file their own at work, while attaching a copy of their spouses return.
  • Returns of senior officials are sealed and can’t be opened e.g. a minister could have submitted a blank return and no one will ever know or check.
  • PSC collects all returns strictly E.g. if an office has 200 employees, 200 returns must be received by year-end.
  • Or Else: the penalty for not complying with this pointless exercise can be brutal – PSC will immediately notify an employer, that their employee has not filed, and ask that you be struck off the payroll until you comply (which takes a minimum of 3 months to rectify). Otherwise, the maximum penalty can be a million shillings or a year in jail, or both.
  • Even if you’re abroad e.g. working at the Embassy in Russia, you must file a return. Yet PSC will not put the forms online and insists that returns must be on their original forms, not photocopies.

Solutions

  • A new Ethics and Integrity Commission is contained in the proposed new constitution (section 99) which will ensure & investigate compliance with the Act and also make public assets & liabilities of public officials.
  • Failing that, an amendment to the act will be tabled when parliament returns that will make the returns public information as well as other improvements.

Biz news

Merger
It’s not AOL and Yahoo, but the merger of two internet service providers, Wananchi online and ISP Kenya, is big news today. According to Balancing Act Africa, Africa Online, ISPKenya, Wananchi, NairobiNet, Swift Global and Kenya Web account for about 60% of the Kenyan market.

E-Government
An e-Government consulting opportunity for companies to submit proposals on setting up a metro optical fibre network consisting of local area networks (LAN’s) at all ministry headquarters and a wide area network (WAN) to interconnect the LAN’s to enable cross-ministry communications and future e-government applications. Apply for proposal information (fee is 5,000 shillings) at info@kenya.go.ke and final submissions should be made to Head of Public Service by December 7.

Thai Expo
There’s a Thailand expo at Village market this week. No animals are involved.

Anniversary
Today marked the 1st anniversary of CDS – the central depository system of holding & trading of shares on the Nairobi Stock Exchange electronically, signalling the end of the era of paper share certificates in Kenya.