Category Archives: county opportunities

Laikipia Infrastructure Bond

Laikipia County includes Nanyuki town which is famous for its views of Mount Kenya and vast farms, several ranches and wildlife conservancies in the semi-arid north of the country.

Under its second governor, Ndiritu Mureithi, the County Government of Laikipia also went the furthest in advancing the country’s first municipal bond. Under the new constitution (adopted in 2010), counties can do this to finance projects, if the national government guarantees the borrowing, with the approval of the county assembly (local parliament)

The Laikipia county govt pursued this route in recognition that it had limited resources to undertake large projects and in the hope that the funds raised from the bond will help to catalyze its economy from the current Kshs 100 billion to Kshs 400 billion per year.

When the county assembly had earlier rejected the bond proposal, more public participation and marketing was done on the infrastructure bond. This was done in places like Nyahururu and Rumuruti with residents asked to identify their priority needs and the feedback ranged from issuance of title deeds, completion of feeder roads, youth centres, public sanitation and upgrade of health facilities.

In May 2022, the Cabinet granted final approval to Laikipia’s application for a Kshs 1.16 billion domestic infrastructure bond at a “market deemed coupon” and which the Senate was told would be a 7-year note at 12% with a bullet payment on maturity. The bond is to go towards capital projects and be paid from normal revenue.

For investors, infrastructure bonds are tax exempt. The minimum investment required is Kshs 50,000 and investors should have a CDS account.

The funds to be raised are designated as Kshs 1.1 billion for smart infrastructure upgrades in ten towns to have street lights, paved walkways and sewerage lines etc. at places like Doldol. Others are the Bemwaki road, Muwarak lighting, and Nanyuki bus park) as well as dam projects at Wangwaci and Ilpolei for Kshs 165 million that are to enhance agricultural production.

A county can borrow 20% of its audited revenue and counties were given the green light to borrow up to Kshs 60 billion and Laikipia was the fourth county to earn a credit rating after Bungoma, Kisumu, and Makueni – all counties that were led by “progressive” governors. Makueni was hailed for its health care system and agro-processing ventures, Kisumu under Professor Anyang’ Nyong’o, father of actress Lupita Nyongo has a long history even before he became governor, while Bungoma was led by one of the country’s leading actuaries – who also lost his election last week for being on the ‘wrong party.’

It is not clear what will happen to the bond with the exit of its champion governor. In a Standard article (paywalled) after the election loss, Ndiritu was praised was raising Laikipia’s on-source revenue, steering county residents to enrol in the National Hospital Insurance Fund (achieving a national NHIF high of 64%) and developing programs for leasing road-building and medical equipment.

Laikipia was assigned BB+(KE); “outlook stable” in February 2021 by Global Credit Rating (GCR). Later, after a review period, was upgraded to BBB-(KE) in April 2022, followed in June 2022 to ‘evolving’ from ‘stable’ due to enhanced revenue collection of Kshs 840 million in the 2021 financial year.

Whether Laikipia’s bond rating and progress will change, with the defeat of the governor, remains to be seen. One financial expert thinks that the new county government will not see the infrastructure bond as feasible to advance any further.

EDIT November 10, 2022. According to an article in the East African Standard, Joshua Irungu who took over as governor of Laikipia in August 2022 has appointed a task force to look at the viability of the bond as “the county government’s projections of revenue growth, prevailing economic realities, the market base lending rates revision as well as the cost of monies involved are making further pursuit of the bond unattractive at the moment. “

Kikao64 opens in Eldoret

This week at Eldoret saw the opening of Kikao64, a unique and modern co-working spaces for local entrepreneurs and businesses that will have a regular series of knowledge sharing and networking events around innovation, startups, art, sports, lectures, and film.

Albert Boreto, the centre Director, said Kikao64, will invite professionals to advise on company registration, tax, legal, accounting and web development services. Kikao64 has 100 desks (80 ‘hot’ and 20 dedicated ones), private offices, private meeting rooms, and good Wi-Fi across a large space of shared workspaces. The desks are available for Shs 750 per day or Shs 4,000 a week or Shs 16,000 per month, and to connect with existing community initiatives, the space has a 50% discount for nonprofits, athletes and startup businesses, while and others who sign on through the end of  April 2021, can get discounts of 25%.

Speaking at the launch of Kikao64,  the Governor of Uasin Gishu County, Jackson Mandago, said his administration was proud to be associated with the Kikao64 shared working space that embraces technology and enables people to work in the new normal of Covid-19. He confessed that he had been thinking of something similar, but the new space was better and well-situated, with good ambience, and he hoped it would become a famous meeting spot in Eldoret as others like Barnegtuny Plaza.

He said many people wanted to start businesses and two main problems they faced were office space and internet and these had been solved by Kikao64 for about Shs 2,000. He appreciated the need for fast internet for as, while trying to promote the government’s AGPO (Access to Government Procurement Opportunities), some young business people had been previously knocked out from opportunities as they were not able to completely upload procurement documents due to poor connectivity.

The site was an old run-down place building before its founders embark on renovating it with a unique design into a conducive place for people in the Eldoret area. The transformation process was delayed for a year by Covid-19 and the redesign added on safety aspects like spacing between desks and hand wash stations.

Kikao64 also has a garden that can host events, meeting rooms private phone booths, a small library with new, business and bestselling books, a coffee shop, and private parking. It is open from 8 a.m. to 7 p.m. between Monday to Friday, and from 9 a.m. to 6 p.m. on weekends and holidays.

Coca-Cola partners for business recovery in Kenya

Coca-Cola has launched a program to assist traders to quickly recover, and safely reopen their businesses, following months of disruption from Covid-19.

The company will avail Kshs 125 million as part of a Coca-Cola system small business recovery campaign to assist 18,000 businesses, along with its partners including Absa Bank Kenya, Amref Health Africa and the Women Enterprise Fund. This will be through initiatives such as loans, personal protective equipment, sanitation facilities, soda cases, gardening furniture (for outdoor dining) and training to help them reopen safely between October 2020 and March 2021.

Coca-Cola has 300,000 traders in the country, and through its data, has noted the disruptions on these small businesses, 40% of which are at risk of closure even after the government relaxed lockdown restrictions in September 2020. This is partly from expired stocks and slow sales pick up in places like downtown Nairobi.

Absa will provide unsecured business loans of up to Kshs 10 million, for working capital, and up to Kshs 50 million for Local Purchase order (LPO) and inventory discounting. As the financing business partner in this campaign, the bank, through trade data, is quickly able to score the business creditworthiness, and extend financing, to suppliers and retailers in the Coca-Cola ecosystem, without having to scour their financial statements.

Coca-Cola has also extended a grant of $175,000 (~Kshs 20 million) to Amref to support 4,000 micro-outlets, such as eateries and leisure places, in Laikipia, Nairobi and Mombasa counties, to carry out occupational safety changes & training and reopen safely in their communities. Also, for participating businesses in Laikipia, the County Government has offered further support to traders there through credits to offset some business loans as part of a Kshs 123 million Laikipia economic stimulus package.

Kenya’s Sportpesa joins the world of Formula One sponsorship

Today in Canada, sports betting company Sportpesa was unveiled as the title sponsor of the Racing Point Formula One team in its latest international sponsorship venture.

Others sponsors of the team are Bombardier, JCB, BWT and team officials also announced there was room for more sponsors to push the team forward to better performances on track during the season that begins in March 2019 in Australia. The team’s drivers said their realistic aim for the year was for fourth place in the constructor’s championship (i.e. behind the perennial top three teams – Mercedes, Ferrari, Red Bull), to get some podium finishes, and perhaps even a race win.

Racing point is the former Force India team that ran into financial difficulties during the 2018 season. The Force India team had its best performances in 2016 and 2017 when it finished fourth in the formula one standings.

This also ends an unfortunate joke era when the newly-elected governor for Machakos, Alfred Mutua, unveiled his dream for a formula one track in his county, back in 2013.

The RaceFans site which broke the story last month reported that SportPesa is understood to be paying $8 million (i.e. ~Kshs 800 million) for its first year followed by $10 million in 2020 and a further $12 million if they remain for 2021.

Mara Triangle reports on running the Masai Mara

Earlier in December came some news reports of 26 elephant deaths that had happened in recent months in the Masai Mara area. This came a few months after a national uproar in Kenya over the deaths of 11 rhinos from a wildlife translocation program gone wrong.

The source of the stories on the elephant deaths was a report from the Mara Elephant Project (MEP), but the organization has since retracted the sensational claims.

That said, there’s a great ongoing series of reports on the management or the running of the Masai Mara game reserve by Mara Triangle. Written and archived monthly, the Mara Triangle reports give great insight into activities in the Mara, on topics like revenue collection, security updates (including poaching numbers), staff changes, rainfall, number of visitors, special arrivals, scientific research being done in the Mara, filming in the park and also on wildlife deaths.

Excerpts from different 2018 monthly reports

Revenue

  • March to May is the most difficult period as in those months, expenditure substantially exceeds revenue. March revenue was Kshs 30 million, and July was Kshs 98 million despite 44% of visitors not paying the Conservancy fee. In August they crossed the $1 million revenue mark for the first time, earning Kshs 109 million. Majority of visitors were from the Narok side which has better game viewing and management.
  • Discussions are ongoing between the Mara Conservancy and Narok County government, for the Mara Conservancy to manage all aspect of the park, through Seiya Ltd, except revenue collection, which is done by KAPS (Kenya Airports Parking Services). For that, they would retain 30% of the revenue.
  • Instances of non-residents, even Chinese tourists, posing as residents to enter the park, are common.
  • There is a high number of non-paying visitors and KAPS was asked to do a reconciliation. It found that in April 56% of visitors to the Triangle did not pay the Conservancy.
  • They have applied to Safaricom for a Paybill number so people can use their M-Pesa to pay the conservancy fee. The Paybill number (863297) has since been activated and they hope to move to a cashless system of collections.
  • Governors Balloons started paying revenue for the first time in seventeen years.
Rains and Roads
  • In 2018, the Mara had its highest rainfall since 2006 causing flooding and heavy damage to roads. The rains in the areas were the highest recorded in sixty years.
  • Heavy rains damaged roads and the management sometimes resorts to closing off some areas of the park. Vehicles crisscrossing off-road, in search of wildlife, only add to the problem. The County Government has directed that it does not want to see any saloon cars, in particular, the Toyota Probox, in the park.

Poaching and Wildlife Deaths

  • They document all wildlife deaths, the causes of these, and if there was a human involvement (versus death from natural causes), especially of elephants and rhinos and the recovery of the tusks and horns from the dead animals.
  • A District Warden from the Kenya Wildlife Service (KWS) collects all recovered ivory after each piece has been recorded and signed for. 
  •  KWS now has a trained prosecutor in Kilgoris and there are discussions on how to fund a training course for non-commissioned officers on wildlife law, preparation of statements and court procedures.
  • Sniffer dogs are an important aspect of park security, tracking poachers and thieves. New dogs are imported from overseas, trained, and extensively traded by vets.
Human-Wildlife Conflict:
  • A study found that the main actors in this are spotted hyaenas (53% of instances), leopards (32%), and then lions (15%).
  • Most households lose an average of 3.5% of their livestock to predators.
  • A compensation system has been developed: a kill is reported, rangers visit the scene to verify, photos are taken, and if approved, payment is done at the end of the month. The Conservancy is then reimbursed by the Angama Foundation.
The World-famous Migration

  • This year, 2018, saw one of the worst migrations in recent years. While newspapers report that Tanzanian authorities started fires to create a barrier for the wildebeest, something that they do every year, this did not, in fact, delay the migration  – but this was a story put out by the tourist industry to explain why safaris they sold on the basis of the migration did not, in fact, feature the migration.

  •  The heavy rain in the Serengeti in Tanzania meant the wildebeest had enough water and grass and did not need to migrate until later. Wildebeest only move from Serengeti to the Mara if they have exhausted water and foliage.  The Mara used to have its own Loita migration, but that doesn’t exist any more as the Loita wildebeest population has crashed.
Bad Manner and Tourism:
  • There are daily complaints about indiscipline and more up-market operators are avoiding the Mara during the high season. A Dutch diplomat refused to pay fine for driving off-road and then blocked a bridge.
  • There is chaos at many crossings, with as many as 300 vehicles present some with people running between them (and some of these images were shared on social media).

  •  It is very difficult to gauge how much the wildebeest are affected by too many vehicles.  The vehicles disrupt the crossing and drive the animals to quieter spots. 
  • Drivers do not obey rules, especially when they think they are not being monitored. On the 23rd (of September) we had nearly 20 vehicles around a leopard sighting .. It is most unfortunate that we can not rely on our resident drivers, (who are well-trained and from top camps) to police themselves. 
  • Campsites are sometimes left in a mess, including two cases by professional safari guides.
Other Masai Mara findings:
  • Visitors in the year included Narok Governor Tunai, Cabinet Secretaries for Tourism (Balala)  and also for Internal Security (Matiangi). Leslie Roach who had donated $200,000 when the Conservancy was started, also visited the Triangle with her family. Also, John Ward visited Serena, a day before the 30th anniversary of his daughter Julie’s death (Apparently Serena was the last place that Julie was confirmed being seen alive). Some MCA’s visited, requesting assistance and David Attenborough also visited the Mara. He is making a film about the loss of biodiversity in his lifetime and his crew also did some filming for a Netflix series on ecological habits that will be shown in August 2019.  
  • The audit for the year to June 2018 was done by  Deloitte who reported that the Triangle had income of Kshs 263 million and a profit of Kshs 10.5 million after expenses of Kshs 252 million.  
  • KAPS removed three members of staff for possible fraud.
  • Some large Flircameras donated by WWF need repair but that organization no longer has funding for the camera project.