Monthly Archives: August 2007

(Poor) Defence of MP’s Salaries

In 2003, Transparency International – Kenya published a booklet (PDF here) as a result of a survey they had carried out on Kenyan parliamentarians and the burden of dealing with (paying for) constituents needs – mostly though giving funds

It’s useful to look back on it at a time when the same parliamentarians want to increase their salaries again (because they can and will) the survey consisted of 8th parliament – expenditure of 7 MP’s and questionnaire of about 20 others

The survey was done before Constituency Development Fund (CDF) and the last salary increase (2003) and found that;
– Of their (then) Kshs. 395,000 gross salary, MP’s typically took home less than 50,000
– 2/3 of those surveyed claimed to spend between 200,000 and 300,000 pr month of their salary i.e. ½ to 2/3 – and it’s interesting that for those who TI tracked, they projected that their expenses would exceed their salary & expected income (TI did not pursue this point)
– Reasons for giving funds: to get re-elected got 3X as many responses as to help people. Longevity in parliament is maintained by being generous to constituents
– Ominous point for Kenya, most – over 2/3 of elections are not closely contested i.e. the winner gets double the votes of the loser signifying the importance of being in the right party. This places the burden on party nominations (see ODM-K, NARC, NARC-K, Shirikisho, Ford K….) which are often not observed, and are less free & fair
– TI Kenya defended the MP’s – asking for them to get higher remuneration (to ease the stress and deficits brought on by their constituents requests) and also supported CDF (at that time was only a proposal) But the latter is self defeating because the more the public knows that MP’s have increased their salary, only makes them ask for more from MP’s.

Now today, MP’s have CDF, get funds to set up office in their constituencies, control funds for school bursaries, are off the hook from free primary education (and soon secondary), and have almost doubled their salary from before the survey.

But CDF also helps voters decipher useless MP’s who can no longer lie to them that the government was denying them resources to do A, B, C. CDF reduced ‘problem solving’ but not all since most MP’s giving to their constituents consists of individuals and harambees.

So MP’s will increase their salaries, because they have to – and can.

Pre KQ AGM

For the first time in many years, I’m likely to miss the Kenya Airways (KQ) Annual General meeting to be held later this month – as I sold all my shares earlier this year.

It’s a shame because attending one was inspiration for this site and the company’s AGM’s have been among the most colorful to attend.

From backroom drama played out before the public, to who’s whos’ appealing for votes to join the board – next to activists, to inane questions, KQ has had it all.

KQ has always had a large customer base and so has had to tweak their AGM model each year for improvement – and that has served as a model for all the recent (over-subscribed) IPO companies like Kengen, Scangroup, Eveready and now Kenya Re to emulate.

This year KQ has moved from Bomas of Kenya which seemed to be a natural home for the event with it’s ample parking, large screening area far from venue where KQ would hand out packed lunch boxes and t-shirt at entrance (some shareholders would turn back at that point having achieved their target for the day), large auditorium (where some would eat right away), huge TV screen and even had a second spillover hall for other shareholders if the main hall got full. This year’s will be at Kasarani gym (not stadium)

Anyway in the buildup to the event, what is the company saying?

– It carried 2.6 million passengers last year, but profits were down 15% due to increased competition and reduced aircraft utilization
– Turnover was up in all four geographic segments (Kenya, Africa, Mid East & Asia, Europe), but operating profit down slightly on all four (also they canceled Turkey route last week). 69% growth in Asia, 17% in Africa
– Aeropolitics; They are appealing to the government of Kenya to grant visas denied to West African country nationals – warning that those countries could retaliate in granting KQ routes, or those passengers may choose other more hospitable airline/countries.
– Double taxation: They are also lamenting that they are paying income tax in most African and Asian (except china) countries – while they also have to pay income tax in Kenya (Other airlines were able to force Uganda to stop this taxation last month)
– KQ has 4,154 employees and all jobs will be applied for online from this year
– Buy & hold shareholders: of the company’s 73,000 shareholders, only 23,000 (32%) have immobilized their shares (enabling them to trade).

Appeal for writers
Any reader here, going for the event can please send in a report? Here are other (2005, 2006) KQ AGM reports to prepare with.

Other happenings

– Free newspapers: According to the NYPost, the New York Times is going to end its Times Select (subscription only) model for it’s star columnists/Op-Ed pages. And when you combine that with Rupert Murdoch’s plan to make WSJ site free, what does that portend for other subscription based online newspapers and sites?

Saving our roads: The government is cracking down to
remove overloaded lorries from the roads by reducing axle sizes from four to three (or requiring the last axles on a trailer to also be a steering one). The move will effectively limit cargo capacity to fewer than 30 tones, down from the current situation where some trailers with 4-axles have been carrying up to 60 tons of the road. Good start to get road survival back on on track. But this automatically forces fleet owners to double their fleet size (and increases traffic on the roads)

Broke law : The Nation had a great story this week about lawyers quitting private practice to take up jobs with the government or corporate sector. Meanwhile a prominent law partnership has broken up

Jobs
– Cartoonists at the Nation. Apply to quickdraw@nation.co.ke
– KCB: relationship managers – asset finance, relationship managers – SME’s. Apply by 24/8 to recruitment@kcb.co.ke.

Urban inflation index

August 07 – changes from 6 months ago

– Litre of fuel Kshs. 80.79 ~ $1.21 (up 8.75%)
– Maize meal (2 kg. Unga) 50 shillings (no change)
– Sugar (2 kg. Mumias pack) 150 shillings (no change)
– Tusker beer: 100 shillings at local (no change)
– Safaricom promotion: Then: was Saasa – with 8 shillings per minute calls during off peak hour. Now is new shape of Safaricom including a new Super Tariffic tariff which has calls 38% cheaper and SMS 30% cheaper than the previous Tariffic tariff
– US Dollar exchange rate: Kshs. 66.50 (5% weaker against the shilling)
– Plastics items are not being tracked, but milk and bread have gone up since the budget speech read in June.

Personal expenses
I tried using various online services to track expenses, but eventually fell back to Microsoft Excel and built a tracker that fit my needs. For July 2007;

– Rent 30% (high, but it’s safe and close to town)
– Charity 14% (one time event)
– Electronics 11% (new phone, but do I say)
– Fuel 8% (lower than expected, but my daily commute is short)
– Drinks 6% (Rather low, so should not feel guilty)
– Relatives 6% (unavoidable, non recurring expense)
– Investments 5% (should be higher, but there’s nothing promising till end of August)
– Dining 5%
– Parking 4% (take that Mr. Mayor)
– Newspaper 2% (rather high)
– Gift 2% (for every time I visit someone’s’ house)
– Utilities 2% (electricity & water)
– Communications 2% (mostly Safaricom)
– Groceries 2%
– Personal 1%

sports
– I love the new G TV advertisement which compares the three English premiership soccer packages
Get 3 games a month for 0 shillings i.e. Nation TV (NTV)
Get 6 games a month for $70 ~ i.e. DSTV
Or 32 games a month for Kshs 2,750 (i.e. GTV)
but this weekend, Supersport will show opening matches of the big four teams Liverpool, Arsenal, Chelsea, and Manchester Utd
-With all the fallout from the Hungarian Grand Prix, it should be pointed out (to non-F1 fans) that Hamilton started the fracas on Saturday when he deliberately ignored a direct order from Ron Dennis (team Boss) to let Alonso past on the track during the early stages of qualifying three.

Tech Tuesday

SABC – Highway Africa Awards 2007 for Innovative use of new media technology in Africa. Awards are given in three categories: 1) Individual/Student, 2) Non-profit and 3) Corporate.
– Individual and Non-profit category: communications which find innovative ways to overcome the limitations of the existing African infrastructure.
– Corporate category: creative adaptation of global technologies in an African media context.
– Other criteria (which apply to both categories)is the use of new media to benefit press freedom in Africa and encourage social empowerment in African communities. Also the functionality of websites/blogs/wikis is an absolute must, interactive features, design and use of mobile technology in an innovative way is encouraged.Entries to be submitted online or via fax by 20/8

Digital Village Concept opportunities
(i) Own manage digital village center/kiosk (there will be one in each constituency). Applicant’s must have experience in running cyber cafe, computer lab and already have electricity, steady clients, premises and qualified staff. Details here and deadline is 20/8
(ii) Supply products/services such as hardware/software, loans/finance, stationery, furniture, and supplies. Details here and deadline is 20/8.

Threat to ISP’s: Safaricom has applied for a 3G license to offer broadband wireless through their extensive base station network to subscribers.

Congratulations to TED Global Fellow Paul Kukubo who has been appointed as chief executive of the Kenya ICT Board

New stockbroker

Finally a new stockbroker is going to be invited to join the lucrative club that is the Nairobi Stock Exchange. The number of shareholders has gone up approximately ten times from pre-Kengen IPO, but the number of stockbrokers, through which investors must trade their shares has been stuck at 18 all that time (currently 17 since Francis Thuo was suspended earlier this year).

It’s only one seat to access this Kshs. 4 billion a year industry, but that can only improve the current situation. Who should win? Ideally a bank or financial institution with an extensive branch network. CFC bank – the only bank that’s also a stockbroker has the widest reach nationwide when compared to several one office stockbrokers in Nairobi

Application details here and only firms that can qualify as a stockbroker or investment bank are eligible. The Application fee is Kshs 50,000 ($700) to the NSE, and 2,500 to the Capital Markets Authority. Applications should also include a company profile and statement of financial support/bank guarantee for the bid amount which is reported to have a reserve price of Kshs 150 million ($2 million). D/L of 13/8 is just over a week away.

Other News & Follow up’s

– KTN reported that the housing Finance deal (buy in by Equity) could be in jeopardy owing to a burden of borrower lawsuits that could be a major liability for the bank since the introduction of in duplum rules to the banking sector. (One plaintiff won a major case against the bank last month)

– I & M: Two European development finance institutions take up a 12% stake in I&M – Kenya’s 11th largest bank

– NIC shareholders will this month be asked to vote on right issue and bonus share – in addition to modifying the company laws to expand the bank beyond Kenya, enter insurance, custodial, and investment banking, and allow unclaimed dividends by to be reinvested by the Bank until a shareholder shows up to claim them

– Welcome to the Kenya, land of milk & honey: The Safaricom IPO honey pot has attracted interest from BNP Paribas, Citicorp, Credit Suisse, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and other banking, financial and legal giants

– Next week’s East African reports on a proposed merger in the cement industry between Bamburi and East African Portland Cement companies.

– As expected parliament, without a legitimate quorum, passed the media bill

– Weak laws and evasion are robbin Kenya of tax money.

Opportunities

– Borrow up to Kshs 1,000,000 at 0% interest from Halaal Credit, but eligible only to Kenyan Sunni Muslims.

– Diaspora conference; a conference dubbed Incorporating the Preparatory Kenya Diaspora Home-Coming Forum will take place at KICC on 14-16 August, 2007. some issues will be exploring investment opportunities in Kenya, debate the Diaspora bill 2007 , building partnerships between European and African private and public sector stakeholders, SME and Diaspora sectors be mainstreamed into vision 2030, and proposal that an annual Kenya Diaspora Homecoming week be held every August of each year. Details can be got from info@kenyadiaspora.go.ke

– Design a logo and come up with a motto for the Kenya Investment Authority :

some jobs

– AON: retail broking manager, senior business development executive (health). Apply to HR@aon.co.ke by 17/8
– Chief executive officer at the export processing zones authority. Apply through manpower associates by 14/8
– KCB: branch managers, business banking managers. Apply to recruitment@kcb.co.ke by 17/8
– Safaricom: Investigator, senior fraud analyst, senior information security officer, senior information systems auditor, and a dozen technical jobs. Apply to
hr@safarciom.co.ke by 10/8
– UAP: Relationship officer, internal risk surveyor, agricultural underwriter. Apply to recruitment@uapkenya.com.