Category Archives: Kenyaelection07

Jan 18: From ODM to Icarus

three weeks after the ill-fated elections and three days of mass protests

The disruptions in the workflow have been a nuisance to the country, while the violence is threatening to cut off Central Africa. But how long before President Yoweri Museveni decides to drive eastwards for another road trip  to check out the situation for himself?

If ODM’s goal is to grind the country to a halt, it may take a while. With tax collections significantly down, the pending Safaricom IPO which I thought will be an election winner could turn out to be a (one time) budget lifesaver – expected to yield over 30 billion shillings in Q2 of 2008.

ODM is now specifically targeting companies linked to key government personalities like Citi Hoppa, Brookside and Equity Bank. This sounds far-fetched and could lead to retaliatory attacks (ODM personalities are also business people); it’s also an extension of silent boycotts that people have undertaken on their own. E.g. people who only selling petrol to their kinsmen, while others boycott pubs or have stopped reading the Nation or Standard/KTN because of their perceived political leanings.

While George Bush is trying to revive the US economy through bipartisan tax breaks, but here we have two sides who won’t even sit down with each other. If they don’t, the crisis may soon spin out of control as the race for the presidency assumes historical dimensions

cut & paste: The Central Bank has introduced business continuity guidelines for all banks. However, it seems to be an update of an IT disaster preparedness document that’s a few years old and does not mention any of the words – crowd, riot, security, cash, ATM – and only one mention of ‘police’. In short, it does not address many of the challenges banks have faced.

Insurers with hearts: Some insurance companies like Pan Africa and Heritage (CFC) are making ab exception on a case by case basis to assist business people victimized in the riots. As a rule, insurance companies have no responsibility to cover such acts

Such as Business coping: Ukwala supermarket, which was destroyed in Kisumu, lost all their financial records. They are asking suppliers & partners to provide them with statements, delivery reports, and invoices as at December 31 and not to bank any of their cheques.

But can’t please everyone: like thieves who take advantage of busy police battling rioters, some unscrupulous borrowers are also using the economic shutdown to plead with banks for delayed repayment and favorable revision of loan terms when they haven’t really been affected.

Signal of confidence: On Wednesday, Imara Holdings introduced a new fund targeting the Diaspora willing to invest in east Africa. It’s an open fund with a minimum investment of 6.5 million shillings (~$100,000) and will be sold through Kenya’s ICEA

– Recognize us: Barclays have eaten humble pie for two years, but who would have through that high-street Standard Chartered would open a branch in Eastleigh?

Local Icarus: what happens when you fly too close to the sun

opportunities
– From PSD Blog; nominate a women entrepreneur to the doing business group of the World Bank.

Current open jobs
from the papers this week
– APA Insurance: unit managers, account managers. Apply to recruitement@apainsurance.com
– Safaricom: VAS Propositions Manager, Channel Development Manager, Key Accounts Executive – apply online. But for the position of chief information officer – but apply though PricewaterhouseCoopers executive selection division (ESD).

Kutwa Tuesday: Banking Brief’s (Jan 15)

CFC on hold?
Could the ongoing political crisis be giving Standard Bank of South Africa second thoughts about its approved merger with CFC? A decision by the Reserve Bank in SA to conclude the deal is also overdue.

Dangers of insular banking
Our banking history is littered with the remains of Daima Bank and other indigenous African and Asian banks. Most went down due to malpractices by directors and managers, but also in-lending to close circle or community companies who as a group could be potentially exposed to a singular risk.

The banks also engaged in subtle discriminatory practices like charging outsiders higher rates, frustrating their loan applications or facilities, or making them feel unwelcome – which ultimately proved to be counter productive as locking them out increased the risks that the banks faced by increasing their exposure and dependence on a core group or sector.

Something to Do

1. Donate

Through Mama Mikes and a bloggers for Kenya initiative.

There are also other other initiatives – like Save-A-Life, Kiss FM’s Jaza Lorry, the Nairobi Women’s Hospital, but beware of a revival of some NGO’s and unusual causes

2. Report Violence
Ushaidi.com is a tool for people who witness acts of violence in Kenya in these post-election times. You can report the incident that you have seen, and it will appear on a map-based view for others to see.

(3) Become a better tipper
Or, better yet, start tipping – because in Nairobi, tipping is something that we have left to tourists only.

Kenyans are woefully underpaid especially out security forces (some of whom had not been paid salaries even as they were asked to quell post-election violence) and yet they also guard our houses, million shillings cars, look after our families, serve us meals they can never afford, and never ask for more.

Many of them live in the very areas that relief initiatives are being formulated for – but just because they are not visibly suffering does not mean they don’t need our help. And while many of us are at the mercy of people whose ability to take our money we can’t say NO to (taxman, church, landlord, relatives), we need to spare a moment for those less fortunate who we interact with everyday, who also have lives and families, and are more at risk after working a full day. Yet we dismiss them so quickly, if they ask or dare to look like they are about to ask for help while at work.

So even if it means paying less tax or tithe, or having one less beer in order to spread some wealth around, get to know these people better and tip them well; waiters, maids, taxi drivers, bank clerks, and especially policemen – though how this can be done without being seen as bribing them – is a delicate task to accomplish.

Banking briefs

– Kenya’s leading bank, Barclays, is the first to acknowledge a distressed loans problem resulting from the post-election violence and standoff.

– From IHI blog; tired of bank charges? Consider a shariah account since they won’t incur frivolous charges that build bank profits.

Paper banks : Is the Nigerian banking model, which Kenya is going to emulate with increased share capital and consolidations, built on sand and bilking shareholders?

Other observations
– China speaks on the Kenyan political crisis blaming the west for imposing democracy on Africa.
– Mobile phone wars continue with Celtel shockingly low rates, while market leader Safaricom won’t compromise and keeps making money
– Hawkers who expected to be evicted from downtown Nairobi, on December 28, now enjoying continuing business with the political uncertainty in the air
– It’s not quite as staggering as Marion Jones or BALCO scandals, but from this month on a whole bunch of expensive, long hitting, golf equipment, widely used in Kenya,(including some Callaway, Titleist and TaylorMade), are now illegal. If caught using them you will be disqualified from a tournament or match event.
– Rapidly growing and expanding Fly540 airline taking a dig at Kenya Airways – with an advertisement that their propeller powered aircraft (ATR72) are more environment friendly than KQ’s jets
– Advertisers taking down the politician billboards that littered the city
– As fuel prices pass the 90 shillings a litre, will some petrol pumps in the country be able to process the sale prices over 100 per litre (3-digits) which are around the corner?
– Where’s the prophetic prophetic Mutahi Ngunyi gone to?

Opportunities

– Kenya Airways: Head Of Marketing & Corporate Communications, In-flight Performance Manager, Load Control Officer, Head Of Is Development (IS) , Systems Administrator, Training Officer – Fares & Ticketing, Qualified Pilots, Multilingual In-Flight Attendant, Customer Service Agent
– Sales positions at KCB. download form here.
– Director of research at the Mo Ibrahim Foundation. D/L is 31/1

Bankers’ post-election assessments

Citigroup (CITI)

  • Limited impact on economy if the political crisis is resolved. It Matters little to the economy who won the election as private sector will continue to drive growth
  • Share sell off at NSE could be a good buying opportunity as economic fundamentals unchanged.
  • President will use police and military to clamp down on protests which themselves will not last more than a few weeks
  • Parliament loyalties will be split by president as MP’s vote with their stomach
  • There’s little the international community can do besides pushing for reforms.
  • Also in the pre-election period, the opposition may have been falsely buoyed by opinion polls which are not sound (& could the same thing have happened to Obama in New Hampshire ?)

Renaissance Capital (RENCAP)

  • Crime wave has emerged under the guise of political riots
  • Government may take all 12 nominated seats in parliament
  • Reemergence of the civil society and NGO’s as source of political pressure and search for solutions.
  • Main threat is if two parties don’t agree so may revise down the 6 – 7% GDP projections.
  • Also prices have not factored in the chaos, so investors should hold off on buying.

Thanks to Silaha for the 2 reports – and who has also blogged some post-election predictions for Kenya

Treasury Officals:– from Business Daily

  • Damage on the economy could cut the projected growth by as much as a half, if not worse as agricultural, financial services and tourism sectors are likely to under perform
  • Treasury could be forced to craft a stimulus economic package to help reconstruct the affected regions and
  • Lower the interest rates in the economy.

Central Bank Governor – from Reuters

  • Kenya can still achieve 8% growth in 2008
  • Disruptions were temporary and will have a major impact on GDP growth
  • Shilling’s depreciation was due to holiday period
  • Safaricom IPO in the first quarter of 2008
  • Interest rates will not change

World Bank
(Hat tip Kumekucha) There’s a controversy brewing of the World Bank’s assessment of the election and resultant crisis

Excerpts;

  • The considered view of the UN is that the ECK announcement of a Kibaki win is correct. More irregularities of consequence on the Odinga side than on the Kibaki side.
  • The process of arriving at the result created a crisis of confidence due to missteps by (a) the ECK chair (who joked about possible rigging during a news conference), (b) the vocal EU observer who was not thorough and precise in analyzing information provided to him (c) the lack of preparation by Kibaki’s party in dealing with a highly media-savvy opposition.
  • Moving forward. One option being explored is getting them to agree to a recount which, by law, has to be done through a petition to Kenya’s High Court. Eminent persons from abroad would monitor this recount. Meanwhile, Kibaki would proceed to form a Cabinet, possibly with some participation by Odinga supporters. It is unclear what would happen if the exercise arrived at a different result from the ECK decision. The gamble is that this would not happen and that even if it did, both sides would have a face-saving way to accept a change in course via-a-vis their supporters

This is not the first time the first time that the land-lord-tenancy arrangement between the President and the World Bank has been put to question – see here and here

Finally, not sure if she’s a banker, but Kenyanentreprenur argues that what Africa needs are development minded dictators since we are not ready for democracy – and I hope we won’t be having this debate in 2012!

My own take is that the people at the Coast, Nyanza, Rift Valley and Western provinces need to start rebuilding their lives and their industries – otherwise they will be left behind. Rioting in your own community is dumb as you destroy businesses that deliver services and create jobs within the community. So pass that message along with any peace & sympathy messages you convey. Also watch NTV’s great Voices of Reason program on Youtube that looks at pre- and post-election issues (more on that later).

Mama Mikes & the World Bank

Money, food, transport have been in short supply in many rural areas affected by the violence. Equally crippling has been the lack of communication capability where there has been no electricity (poles brought down/lines cut) or shops (closed/looted/overpriced) selling mobile phone airtime.

People in urban areas have been sending airtime up-country by the thousands to stranded friends and relatives, while others from overseas (and even within Kenya) have turned to Mamamikes – who apologize for some logistcial delays and problems that may have been experienced in the transfer process.

DC opportunity
World Bank Summer Internship Program; apply online before January 31.