Category Archives: kenyamoneyinthepast

KCB 1923 AGM: Optimism amid political disturbances

In May 1923, the East African Standard published a report from a bank AGM.

Mr. Robert Williamson, the deputy chairman of the National Bank of India addressing shareholders at the annual meeting yesterday, made a brief reference to the position in East Africa today and in the course of his remarks, suggested considerable improvement in the prospects for both trade and agriculture.

Mr. Williamson said the export trade of the country was more active and its products such as maize, coffee, and hides had found a ready market. The Uganda cotton crop, although it would not realize the original estimate of about 100,000 bales, would be fairly large and should assist in the off-take of imported goods through the buying power produced from its sale.

“The repeal of the Kenya income tax and revision of customs duty should also improve matters. There are,” he added, “certain political disturbances locally almost inseparable from the growth of a young country with a mixed population such as Kenya has, which we all trust are capable of adjustment. The outlook in this direction is promising as deputations from the districts are coming to London to interview the Secretary of State for the Colonies.”

A dividend for the six months ended December 31st, last at the rate of 20% per annum was agreed to.

More:

The National Bank of India was the top bank in colonial Kenya. It is the oldest bank in the country and is today known as KCB. 

Bank Clerk in the Kenya Colony

In April 1923, the East African Standard, ran an anonymous blog-like column by a bank clerk in the Kenya Colony. He narrates how he wakes up slowly, is brought tea by his servant Juma (which means Friday), then is brought his bath, of which there are two types, before he goes to work.

Excerpts:

“… and then on to the business of the day. Monotonous life? don’t you believe it! I doubt whether a bank clerk’s life is ever really monotonous as some make it.

In Kenya, it certainly is not as our customers are so varied. One minute, a newly-retired colonel of the Indian army, moustache and all. Next, a retired lieutenant commander from the Navy who perhaps goes one further and sports a beaver. Then one of the boys – Navy, Army or Air force for the duration, now farming. Then a lady farmer, charming, even wearing breeches. Government officials and visitors.

In they come, day after day. Monotonous? Never. All as different as chalk from cheese except in two respects; they are all jolly good sorts and they all want overdrafts.

It’s all very well to be light-hearted about it but I am afraid that we often miss the gleam of bitter sadness which lies behind it all. Kenya is a young colony and fortunes cannot be made in a day. There are as many who failed to grasp this. They come out here with family and little else. The wife is still here, the family perhaps has increased but an ominous overdraft and a mortgage form have taken the place of the little ones.”

The day ends with sundowner drinks and an early night, to be repeated all over again.

E.A. Power & Lighting, 1929

The financial results of the East Africa Power & Lighting Company were published in London in July 1930 and reported by the East African Standard in Nairobi later that month.

Excerpts:

  • Revenue from sales for the year after generation costs was £86,891. Other revenue was £1,334 from the meter department.
  • Repairs, maintenance and distribution cost £11,964, salaries were £11,649, while directors fees and head offices expenses were £5,265, leaving a balance on the revenue account of £65,044.
  • The authorized share capital of the company was £700,000 with £570,000 issued, of which £270,000 are (7%) preference shareholders. Capital expenditure of the company was £432,462, with investments of £50,000.
  • The profit carried forward of Shgs 1,334,797 (equivalent to £66,739/17) was allocated as a dividend of Shgs 378,000 to the preference shareholders, depreciation was Shgs 220,000, to the general reserve was Shgs 60,000, re-issue of capital of Shgs 120,000 and a reduction of capital expenditure of Shgs 45,857.
  • This left a balance of Shgs 330,940 out of which a final dividend of 4% (making a total of 7% for the year) would be paid, and the staff provident fund would get Shgs 60,000, while Shgs 30,490 would be carried forward.
  • The company was negotiating with the Government for permission to develop further hydro-electric resources. The Financial Times described the discussions as “progressive” and that a favourable decision would soon be reached to hasten the execution of the work. They were also considering an additional plant in the Mombasa area to meet the increasing demand.
  • The number of consumers in Nairobi in 1929 was 3,084, an increase from 2,292 in 1927, while Mombasa had 1,424 consumers, an increase from 994 in 1927.
  • Owing to his absence from the Colony, Mr. J. Cumming, who joined the board in 1928, resigned his position as a director. The Hon. D. Finch Hatton was re-elected, while Mr. R. G. Vernon of Nairobi was appointed to fill a temporary vacancy on the board.

More:

  • From KPLC: In 1922, two utilities in Nairobi and Mombasa merged under a new company incorporated as the East African Power and Lighting Company (EAP&L).
  • See a more detailed story on the history of the company and a recent one on investing.

CIA Economic Data on Kenya and its President in 1978

Excerpts from a declassified CIA document from August 1978. 

The Economic Intelligence Weekly Review issue, dated 24 August 1978, was published two days after Kenya’s first President Jomo Kenyatta, who had led the country since independence in December 1963, passed away.

The document is meant for US government officials and was done in a format that is useful to them. It has economic indicators, industrial material prices, and contains data from sources like the IMF, and the Economist (their index of 16 food prices). There are also charts on Inflation, unemployment, trade patterns (imports and exports), unemployment rates, interest rates etc. in different countries that are classified by segments such as the Big Seven (US, Japan, West Germany, France, UK, Italy and Canada), other OECD, OPEC (oil-producing nations) and also Communist countries, and other ‘World’ countries.

There are detailed write-ups in the CIA weekly review on:

  • The black market in Cuba: Hustling of consumer goods is vibrant, reflecting shortages of consumer goods. Most consumer goods are rationed except a few luxury items like rum and cigarettes. It also notes that aggregate personal incomes in Cuba are up 38% since 1973 and have reached the rank and file of Cuba, with no evidence of appreciable corruption among top-level officials.
  • The USSR has borrowed more than it needs to build a pipeline. It obtained $2.5 billion, which was $1 billion more than required, from the CEMA International Investment Bank (IIB). Five Eastern European countries helped build it, and in exchange, they will receive gas annually, while sales of natural gas to Western Europe are expected to yield $750 million to $1 billion. The IIB borrow funds in European markets and on-lends them to Eastern European countries at rates better than the countries could obtain on their own. Items paid for with the loan funds included equipment bought from West Germany, Italy and France.
  • Concern about Poland debt payment problems despite a shrinking deficit: For a third year, Poland had to borrow $4 billion and could face a financial crunch or debt rescheduling. Cutbacks of available industrial materials have been severe, affecting production, while debt service payments are now double what they were in 1976 – amounting to 60% of Poland’s exports to the West, compared to 37% in 1976. 
  • The USSR is engaging with Iraq and India.
  • On Kenya, it looked at the transition era and economic stakes of the Kenyatta family, whose inner circle controlled key economic posts and had extensive commercial and agricultural investments, and land tracts around the country. 

The CIA found that the substantial economic investments built over 15 years would deter them from unconstitutionally challenging Acting President Daniel arap Moi, even as they predicted that the Moi-Njonjo group’s (Njonjo was Kenya’s Attorney General and a key ally of Moi in the transition phase) efforts to increase the economic pie could cause disenchantment with the Kenyatta clan.

It was expected that economic pressures would cause the government to push for redistribution of the country’s wealth as it also noted that the family is big in two activities – charcoal and ivory whose exports were banned. At the time, Kenya was considering applying to the IMF for assistance with its balance of payments in the coming years as oil prices had risen, key foreign exchange earners like coffee and tea were slumping, and there was a need to modernize the military while Kenya had also lost its top destination market – Tanzania with the collapse of the East African Community.

It is an astonishing amount of economic data, from fourty years ago – so what does the CIA collect today on different countries and economies?

See also this story from the Standard newspaper. 

Kenya’s Money in the Past: Diplomatic Engagement

This week saw the publication of “Kenya’s 50 years of Diplomatic Engagement, from Kenyatta to Kenyatta,” a book on the history of the diplomatic services and foreign policy in Kenya.

Edited by Dr. Kipyego Cheluget, Kenya’s Assistant Secretary General at COMESA, it is a collection of writings by different authors including foreign ambassadors. It is the result of a nine-year journey that came from an idea that came when he was Director of the Foreign Service Institute – to document the history of the diplomacy in Kenya. And he then set out to travel around the county, interviewing and recording former ambassadors and diplomats such Munyua Waiyaki, Njoroge Mungai and even unofficial ones like politician Mark Too. Some of them have since passed away like Bethuel Kiplagat and Phillip Mwanzia, and whose widows were present at the book launch.

The Chief Guest was Former Vice President, Stephen Kalonzo Musyoka who has also served as a Minister for Foreign Affairs and Minister for Education and he said that to upgrade Kenya’s  diplomatic performance, the country should reward career diplomats and have them, not election losers, as Ambassadors, and legislate a 70:30 ratio of professionals over politicians in such posts, a reverse of the current imbalance. The event had panel talks with former ambassadors on topics like peace-building in Ethiopia, Somalia and the East African region, using sports as a tool of diplomacy, combating apartheid, the lost years of engagement with Russia shaped by the Cold War and how the pioneering diplomats worked through trial and error for decades without an official foreign policy.

The MC for the event at Taifa Hall of the University of Nairobi, Nancy Abisai said the only good books is a finished book, and Kenya’s Cabinet Secretary for Education Dr. Amina Mohamed, added that, following a challenge by President Kenyatta, her Ministry was in the process of setting up a unit for the publication of Kenyan memoirs and which would be operational by January 2019. Former Vice President Moody Awori, who at 91 is still an active Chairman of Moran, the publishers of the book, said they were looking for more scripts to turn our more such books.

Excerpts from early sections of the book and launch

  • It has never been right to say that Kenya’s foreign policy is a “wait and see” one. Diplomats were able to negotiate to host a combined World Bank/IMF meeting in 1973 and for UNEP to have its headquarters in a newly independent African country – Ambassador Francis. Muthaura.
  • Njoroge Mungai initiated steps for President (Mzee) Kenyatta to be nominated for the Nobel Peace Prize in 1972 and Singh Bhoi drafted the dossier.
  • Dennis Afande opened the Kenya Embassy in Jeddah, Saudi Arabia in February 1977. He was the only employee there for four months and the only signatory to the Embassy bank account for the period.
  • When Paul Kurgat went to apply for his scholarship visa at the Nairobi Russian embassy, in 1984. he was arrested and questioned about links to Oginga Odinga. He was later to return to Russia as Kenya’s Ambassador in 2010.

The book is available in local bookshops, such as the University of Nairobi one, at a cost of Kshs 1,395 (1,200 + VAT) and a digital version is also available on Amazon for $8 (~Kshs 800).