Category Archives: guest post

Guide to Djibouti

A guest post by @queenofsheeba7

I’ve absolutely and utterly been in love with Djibouti since I was a kid. Granted, it was the name the intrigued me; ever since I was 8 years old. Even as I received the stamp on my passport, I muffled a giggle to myself about the name – nope I still haven’t grown up! Djibouti is a forgotten gem of the Horn, somehow you just never know what you’re going to get when you’re in Djibouti…that’s part of the charm. Stick around this engaging city long enough and you might fall prey to its unexpected charms.

Getting there: It’s fairly easy to get to Djibouti City from Nairobi. However, Kenya Airways and Ethiopian Airlines have recently been fully booked due to the number of humanitarians running to respond to the Yemen crisis (Djibouti is among the countries in the Horn receiving a large number of individuals fleeing Yemen). Flights are between $300-$500. You will be shocked when you arrive just how TINY the Djibouti airport is and what an utter joke it is. You would think because its a joint civilian/military-used airport that it’d be more impressive. Speaking of military, don’t be surprised with all the foreign military personnel prancing around exuding testosterone.

Visas: Kenyans do require a visa into Djibouti, no surprise there. It’s $90 and you are able to receive it on arrival, as I have often done so. Inbound immigration and visa on arrival facilities are slightly chaotic though not too bad.

Getting Around: The easiest and perhaps cheapest way to get around is to hire a car during your stay. Or you could walk around as the city is pretty tiny, just that the heat may get the best of you.

Djibouti’s national language is French, so best to carry your French phrase book. I got by with a mix of French and Somali. If you speak Arabic that is an added bonus. It’s no use speaking in English as they have embraced the French attitude of pretending they don’t speak a word of English! It’s also interesting noticing how Somalis have a collective identity crisis. As they were colonized by the French, they prefer to speak French over Somali – even when other Somalis (from the diaspora or neighboring countries) try to talk to them. It’s just odd as Somalis are known for being proud of their culture and language.

Communications: You can purchase a local sim-card for about $10. You will be required to carry your passport to register for the sim-card. If you are like me and are itching to check your social media feeds/emails as soon as you land, you will sadly be waiting forever to get your hit. Most cafes & hotels do have Wi-Fi but it’s often a hit and miss. Electricity is pretty reliable, didn’t experience any power cuts. Word of advice, carry a converter!

Where to Stay: As in every city, it really depends on how much you are willing to part with. They have the Sheraton, Hilton and Kempinski that I have checked out and they are all reasonable prices – $100-$150 per night. Again, do not be surprised if there are foreign soldiers staying in your hotel. At the Kempinski, it was the norm seeing soldiers decked out in their national uniform smiling and talking to you while you wait for your breakfast.

Budget: It’s not as pricey as people say but still not cheap – $25-$40 per day (excluding car rental). Thanks to foreign military bases, everything is horrendously expensive for what you get. Some good news, is it’s easy to find ATM’s that dispense U.S dollars. Most places you can get away with paying in dollars. The catch with Djiboutian francs (and NO ONE tells you about it) is once you change from dollars to Djiboutian francs you cannot exchange them back. You are forced to use all your francs before you depart as they are completely useless outside Djibouti.

Eating Out: The food is similar to Somalia/Somaliland/Puntland, because they are Somalis after all! However, you will find European/Parisian influenced cafes and restaurants. “The Melting Pot” is my go to place for dinner. Street food and supermarkets allow you to eat for $2 – $4 per meal, while cheap restaurants are $3-$6 per meal. The French hangover in Djibouti means that delicious pastries, croissants, pain au chocolate are in abundance here.

Alcohol is available in the country, but only purchasable from hotels/bars. Most people chew miraa from 4 p.m. and sit around cafes chewing; recently their chats (well at least the ones I’ve tumbled into) have predominantly focused on the Yemen crisis. But one thing I’ve noticed is Djiboutian’s are very diplomatic, and they rarely speak ill about any country. Think of them as Switzerland in the Horn.

Shopping & Sight-Seeing: As Djibouti was colonized by the French, it still holds the French feeling throughout the whole city. If you forget yourself for a moment you could feel you’re wandering down a Parisian street as you chew on your baguette (cheap and delicious by the way!). The architecture flips between European and African as does the cuisine so it truly holds an ambience unlike anything you’ll have experienced before.

IMG_8262The African market/quarter is just south of the European quarter in the city center. This is an intense lively/chaotic with a market in full swing. Like most Arab countries, markets open from sunset, so get ready to do all shopping late in the evening.

Every Thursday, the ladies go to the market from 9 p.m. & buy themselves new diraacs (Somali attire) to wear the following week. So if you really want to experience the market in full swing, go on a Thursday night. It reminds me of Mombasa in the sense that it’s very safe to walk around late at night in the bustling markets. (Perhaps it has to do with the presence of foreign military in the city)

Biggest surprise of the country: Nearly EVERYTHING in Djibouti is imported. This is great because you will find all your French foods/cosmetics in the local supermarkets. But the fact they don’t even grow anything is odd, I mean the vegetables are all imported from Ethiopia! Also, Djibouti works 6 days a week. That’s to make up for the short working hours they have (9 a.m.- 2 p.m.) due to the heat. When I was last there in September it was 38 degrees and they kept assuring me that this was cool for Djibouti. The Djiboutian Permanent Secretary for the  Ministry of Justice even bragged that Djibouti had the highest temperature ever recorded.

Unga AGM 2014

The 2014 annual general meeting (AGM) of Unga Ltd. shareholders took place at KICC in Nairobi on December 2  2014. The meeting started on time, and with good attendance, and the set-up was different with the ‘speaker’ (primarily the Chairperson) using a lectern as opposed to answering questions while seated.

Some highlights:

  • Maize milling is not very profitable due to tax evading competition at the county level and has been brought back in-house to control the consistency of quality and supply. Also, Unga has implemented new Route-to-Market strategies and is opening up stores/warehouses that sell exclusively Unga products to overcome distribution problems in some areas.
  • Unga wants to become a ‘nutrition company’ versus remaining a miller. Therefore Unga has ventured into selling cereals e.g. beans, green grams, etc packaged under ‘Amana’ to attract high-end shoppers.
  • Unga got shareholder approval to buy 52% of Ennsvalley Bakery which retails its products through high-end outlets e.g. Nakumatt. Unga’s board (CEO spoke on this) feels Unga can revamp the firm to expand rapidly with a larger product range. The purchase of 52% in Ennsvalley is being financed by the proceeds from the sale of its 51% stake in Bullpak (for Kshs. 335M) and additional cash from internal operations. Unga will also loan additional funds to Ennsvalley at 15%.
  • There were interesting (& relevant) questions including the feeling that the sale of Bullpak was ‘cheap’ given the profitability of Bullpak. Some shareholders questioned the high purchase price multiples of Ennsvalley given the low sale price multiple of Bullpak. (Bullpak was a cash cow vs the cash hog Ennsvalley will be for a few years). Also, one of the Unga directors had to declare his interest in Ennsvalley though the extent of his family’s ownership wasn’t stated.
  • There was a discussion on GMOs and the MD said that, by seeing world trends, it is just a matter of time before the Government of Kenya has little choice but to approve GMO cereals especially if the region suffers extended drought conditions.
  • SWAG? No more bales of flour to be given to shareholders as the cost is too high on a per shareholder basis. This decision was made in earlier years and will remain so in the future.

 

When to hire a smart accountant

 A question I often get, is when should I hire hire an accountant to manage the books of my small or growing company? This should provide some answers. Reposted with permission from the author..article first appeared in the Nation.

Accountants help out in the growth of your business. They handle more than just tax and payroll. This question has become all too familiar. “When should I consider hiring an accountant?” It depends on your immediate needs. Out of your needs, you will either get a full-time accountant, part-time one or contract one.

A good reason for hiring an accountant however is to create a business plan, form a company, apply for loan, during tax audit or simply in order to delegate some duties. However, since we have a number of rogue ones out there, recruit your accountant carefully.

Here are some moments when an accountant would be a smart hire.

  • Say you need to write down some financial projections, a business plan or the usual business finance management and reporting. An accountant can help you use an accounting software to generate reports.
  • The earlier you hire one, the better. This way, you benefit from sound financial knowledge. It saves you a lot of money and helps you mitigate risks associated with poor financial management.
  • An accountant can also advise you on the best legal structure for your business. For example, it is a fact that you will have business liabilities. When you operate as a sole trader, you could be held personally liable for business deals whereas in a limited liability company, the burden of the enterprise is limited to its assets.
  • SME accounting can easily become complex when you do it yourself, and can get overwhelming since you are stretched across many control points. An accountant can help you fix your cashflow by computing key business metrics that help you ensure that the outfit is on track. Say ratio of salaries and other employee payments to total revenue, cashflow analysis, your gross margins and net margins. These are reports that help you understand your business’ financial standing at a glance. It is even better if you are using an accounting software that is online as this can allow even an external accountant to review your financial records for regular reporting. These kind of reports help you monitor the pulse of your business. With the reports, an accountant is able to offer input on how to improve your business model, pricing or even inventory.
  • Generally, you need an accountant to prepare and file tax returns. Although we have software that simplifies this, it is always safe to get a seasoned hand to deal with the taxman. A good accountant should help you complete and file all legal and compliance company returns, prepare regular annual statements of accounts, handle your payroll, ensure all individual taxes and payments are recorded and bank reconciliation is done monthly. A good accountant will help you meet tax obligations. If external auditors are coming, your accountant should ensure that all necessary reports are ready.
  • You might need an accountant when applying for a loan, overdraft or securing a fresh investment. An accountant will help you develop the financial statements your bank will need. Your accountant can help you know if the loan interest, terms and conditions are favourable.

Overall, at some point, you will need to hire an accountant, so recruit wisely!

@DorcasMuthoni is the founder of OpenWorld. 

Agriculture not only improves Food Security but creates Wealth for Africans

An open letter to African Union Heads of State by Kanayo F. Nwanze, President of the United Nations rural development agency, the International Fund for Agricultural Development (IFAD)
Judging from the daily outpouring of commentary, opinions and reports, you would think that there were two African continents. One of them is the new land of opportunity, with seven of the world’s 10 fastest growing economies, offering limitless possibilities to investors. There is, however, this other image: a starving and hopeless continent, hungry and poor, corrupt and prey to foreign exploiters.
As Africans, we are tired of caricatures. But we are also tired of waiting. Waiting to be led toward the one Africa we all want: the Africa that can and should be. We know the real Africa, filled with possibilities, dignity and opportunities, able to face its challenges and solve them from within. Never has the time been more right for us to finally realize our full potential. It is within our grasp.
As a scientist, I am always interested in facts. Africa is a land rich in resources, which has enjoyed some of the highest economic growth rates on the planet. It is home to 200 million people between the ages of 15 and 24. And it has seen foreign direct investment triple over the past decade.
As the head of an institution whose business is investing in rural people, I know that you also need vision and imagination. At the International Fund for Agricultural Development we have banked on the poorest, most marginalized people in the world, and over and over again these investments have paid off. For people, for communities, for societies. And more than half of the people we invest in are Africans.
More than 10 years have passed since the Maputo Declaration, in which you, as African leaders, committed to allocating at least 10% of national budgets to agriculture and rural development – key sectors in the drive to cut poverty, build inclusive growth and strengthen food security and nutrition.
Today, just seven countries have fulfilled the Maputo commitment consistently, while some others have made steps in the right direction. Ten years is a long time to wait. In less time I have seen projects turn desert into farmland.
In just a few days in Malabo at the 23rd African Union Summit, I will join those of you, African leaders, who will gather to discuss this year’s focus of agriculture and food security. This is my call: Don’t just promise development, deliver it, make it happen now. Make real, concrete progress toward investment that reaches all Africans. Investments that prioritize rural people.
Our biggest resource is our people. To squander this is worse than wasteful. If we don’t act now, by 2030 Africa will account for 80% of the world’s poor. Is this the legacy that we want to leave for future generations?
The AU declared 2014 as the year of Agriculture and Food Security. And this is the year we look beyond the deadline of the Millennium Development Goals to a post-2015 world with new goals and targets to reach. I hope that this means that we will be dedicating ourselves fully to making agriculture a priority. GDP growth due to agriculture has been estimated to be five times more effective in reducing poverty than growth in any other sector, and in sub-Saharan Africa, up to 11 times. Ironically, it is countries that lack lucrative extractive industries and that have had to invest in agriculture who have found out what is now an open secret: agriculture not only improves food security but creates wealth. Small family farmers in some parts of our continent contribute as much as 80% of food production. Investing in poor rural people is both good economics and good ethics.
A full 60% of our people depend wholly or partly on agriculture for their livelihoods, and the vast majority of them live below the poverty line. It’s not pity and handouts that they need. It’s access to markets and finance, land tenure security, knowledge and technology, and policies that favour small farms and make it easier for them to do business. A thriving small farm sector helps rural areas retain the young people who would otherwise be driven to migrate to overcrowded cities where they face an uncertain future. Investing in agriculture reinforces not only food security, but security in general.
In an Africa where 20 states are classified as fragile and 28 countries need food assistance, the need for a real rural transformation backed by investment and not just words is critical – I have often said that declarations don’t feed people.
Investments must be focused on smallholder family farms. Small farms make up 80% of all farms in sub-Saharan Africa. And contrary to conventional wisdom, small farms are often more productive than large farms. For example, China’s 200 million small farms cover only 10% of the world’s agricultural land but produce 20% of the world’s food. The average African farm, however, is performing at only about 40% of its potential. Simple technologies – such as improved seeds, irrigation and fertilizer – could triple productivity, triggering transformational growth in the agricultural sector. It is estimated that irrigation alone could increase output by up to 50% in Africa.  Rural areas also need the right investments in infrastructure – roads, energy, storage facilities, social and financial services – and enabling policies backed by appropriate governance structures that ensure inclusiveness.
If we look at the countries that have met the Maputo commitment, we see that investing in agriculture works. Given that agriculture has become lucrative for private investors, and about 60% of the planet’s available uncultivated agricultural land is in Africa, there is no mystery why we hear about so-called ‘land grabs’. Opportunity draws foreign investors. There is nothing wrong with foreign investment. But it has to be managed, to the benefit of all.
What is a mystery is why, with such a vast potential and a young population just waiting for a reason to seize it, our African leaders do not announce that they will redouble their efforts to drive an inclusive rural transformation, with concrete commitments, that will make Maputo a reality. I hope that after the Malabo meeting, that will be a mystery no longer.
African economies have grown impressively. But it is time to stop focussing on GDP figures and instead focus on people. The majority of our people are engaged in agriculture, and the neglect of that sector must stop if we really want to realize the healthy, peaceful and food secure Africa that we know can be. It is not a dream; it is a responsibility.

Why Unit Trusts are better than Bank Savings Accounts

A guest post by @smartyannette 


We all desire to save and/or invest at some point in our lives but we fail to accumulate the little extra we have or we lack adequate financial know how to do so. Obviously, we are more likely to save if we have an investment goal and that’s why I think Unit trusts are a much better deal compared to saving accounts in banks.

Unit trusts are professionally managed collective investment schemes where investors pool their money. The accumulated funds are then invested in a portfolio of assets (stocks, bonds, bills, etc.) and the individual investors gain in proportion of their investment, if the value of the underlying assets increases.

Common Unit trusts are Money Market funds that invests in short term securities like Treasury bills, Equity funds that invest in a variety of stocks, Bond funds for bonds and finally Balanced funds that combines all these asset classes. The money market funds are considered low-risk and tend to have lower minimum balances. The others are mainly long term investment options. Gains from Unit Trusts range from about 8% to 16% per annum based on level of risk. In comparison, Commercial banks offer about 4% per annum and only fixed deposit accounts compete favorably, with some over 10%.

You should probably choose Unit Trusts over savings accounts because the former offer better rates of return. Also, If you desire to invest in the securities market, but want to avoid the risk of investing in one company then you may consider Unit trusts as a safer and more stable option. Unit trusts also enable one to invest in a variety of securities at once and get periodic interest unlike some banks that only award interest at year end. 

Investment Banks are specialized unlike commercial banks and you are more likely to easily access financial information and advice as well as brokerage services from the former. The recently-ended Capital Markets Authority open day expo in Nairobi showcased a variety of firms that offer their customers the option to invest in Unit Trusts.  They Include Old Mutual, Genghis Capital, Stanbic Investments, Dyer and Blair investment bank, Britam, Apex Capital, Apollo and CIC. The minimum balances are as low as Kshs. 500 at Genghis Capital and Kshs. 100,000 (~$1,200) for some of the other firms.

Most firms give a capital guarantee, meaning that the principal you put in is secure, but it is always safe to check. Management fees and initial fees also vary depending on the type of fund, and while some companies charge it based on the interest earned, others may charge it on principal. Some firms also allow you to access your money upon request via MPesa while others require you to wait for 3 business days for payments to clear. In comparison, money in a savings account is only an ATM visit away so chances of misspending are high.