Category Archives: medical insurance

M&A Moment: January 2019

The Competition Authority of Kenya recently approved the completion of several corporate merger and acquisition (M&A) deals. They are interesting in that they reveal some revenue and deal value numbers that private companies, acquirers, and equity funds usually don’t make public.  The deals were all approved with exclusions as the transactions between the affected companies  will not affect competition negatively and they met the threshold for exclusion under the “merger threshold guidelines.”

The deals and exclusions include:

Airline/ Oil/Energy/Mining M&A

  • (The Competition Authority of Kenya [CA-K]) .. Excludes the proposed acquisition of 51% of Selenkei Ltd by Frontier Energy as the acquirer assets for the preceding year (2017) was KShs. 225 million while the target’s assets was KShs. 4 million and the combined assets valued at KShs. 222 million meet the threshold for exclusion.
  • Excludes the proposed acquisition of control of Paygo Energy by Novastar Ventures East Africa Fund 1 LP and FPCI Energy Access Venture Fund as the acquirers had no turnover for the preceding year 2017 while the target’s turnover was KShs 2 million
  • Excludes the proposed acquisition of 51% of Cedate by Frontier Energy as the acquirer assets for the preceding year 2017 was KShs. 225 million while the target’s assets was KShs. 355 million and the combined assets valued at KShs. 580 million meet the threshold for exclusion.
  • CA-K approved the proposed acquisition of the entire issued share capital in Iberafrica Power (E. A) by AEP Energy Africa
  • CA-K approved the proposed acquisition of control of Consolidated Infrastructure Group by Fairfax Africa Holdings.
  • edit The CA-K has approved the acquisition of Cemtech Ltd by Simba Cement, which is owned by the Devki Group. Cemtech has limestone and clay deposits and licenses for extraction in West Pokot but has been dormant for a decade. Its shareholders have been looking for a partner (another deal had been mooted in 2013 ) to finance a cement plant, and Simba plan to resuscitate it by acquiring its land, business, intellectual property, records, equipment, goodwill, licenses, stock and third party rights. Simba has an 8% share of the cement market behind Bamburi (33%), Mombasa Cement (16%), East African Portland (15%), Savannah (15%), National (8)and Athi River Mining (13%) (March 2019).

edit: In April 2024, 13 years after ground-breaking under a first investor, and after another owned it for six years before selling it to the Devki Group, a cement plant was officially opened in West Pokot. The Cemtech plant can produce 5 million tons of clinker a year, which is far more than what Devki’s National Cement subsidiary needs – and the rest will sold to other companies or exported in the east Africa region.

Banking and Finance: Finance, Law, & Insurance M&A

  • Excludes the proposed acquisition of 44% of Cellulant Corporation by The Rise Fund Certify, L.P. as the acquirer had a turnover of KShs. 93 million for the preceding year 2017 while target had a turnover of KShs. 752 million and therefore, the combined turnover of KShs. 844 million meets the threshold for exclusion.
  • Excludes the proposed acquisition of 12% of Pezesha Africa with certain controlling rights by Consonance Kuramo Special Opportunities Fund 1 as the acquirer’s turnover for the preceding year 2017 was KShs. 6.2 million while the target’s turnover was KShs. 3.1 million
  • Excludes the proposed acquisition of 100% of Serian Asset Managers by Cytonn Asset Managers as the acquirer had a turnover of KShs. 0.9 million for the preceding year 2017 while target had a turnover of KShs. 1.1 million for the preceding year 2017 and therefore, the combined turnover of KShs. 1.9 million meets the threshold for exclusion.
  • The Competition Authority approved the acquisition of indirect control of Abraaj Investment Management by Actis International. Abraaj controls Star Foods Holdings, which ultimately controls Java House Ltd in Kenya.
  • CA-K approved the proposed purchase and subscription of up to 25% shareholding in Prime Bank by Africinvest Azure SPV

Agri-Business, Food & Beverage M&A

  • Excludes the proposed acquisition of 99.9% of  Twiga Foods Limited by Twiga Holdings as the acquirer has no operations in Kenya and therefore had no turnover for the preceding year 2017 while the target’s turnover was KShs. 140 million and the transaction meets the threshold for exclusion.
  • Excludes the proposed acquisition of the business and assets of Anchor Flour Millers Company by Archaic Industries Kenya as the acquirer is a natural person with no business activities and had no turnover or assets for the preceding year 2017 while the target’s turnover was KShs. 97.3 million.
  • Excludes the proposed acquisition of class B ordinary shares in Fertiplant East Africa by Oikocredit, Ecumenical Development Cooperative Society U.A as the acquirer is a natural person and had no turnover or assets for the preceding year 2017 while the target’s assets were valued at KShs. 47.5 million.
  • The Competition Authority approved the proposed acquisition of 100% of Art-Caffe Coffee and Bakery, which has 23 outlets around Nairobi, by Artcaffe Group – which is wholly owned by Emerging Capital Partners (ECP) Fund IV.
  • CA-K approved the proposed acquisition of certain assets and part of the business of Kreative Roses limited by Kongoni River Farm on condition that the target retains 43 of its employees while the acquirer employs the remaining 362 employees for at least one year after the completion of the proposed transaction.
  • edit The biscuit manufacturing and selling business carried on by Golden Biscuits (1985) at L.R. No. 209/4260, Kampala Road, Industrial Area, Nairobi, will be transferred to Trufoods Limited pursuant to the terms of a business and asset transfer agreement entered into between the Transferor and Transferee on 7th February, 2019.

Health and Medical, Pharmaceutical M&A

  • Excludes the proposed acquisition of 32.5% of the shares with certain veto rights in King Medical Supplies by LGT Capital Invest Mauritius PCC Cell E/VP as the acquirer is a newly incorporated company and had no turnover for the preceding year 2017 while the target’s turnover was KShs. 20.9 million.
  • Excludes the proposed acquisition of 32.5% of the shares with certain Veto Rights in City Eye Hospital by LGT Capital Invest Mauritius PCC Cell E/VP as the acquirer is a newly incorporated company and had no turnover for the preceding year 2017 while the target’s turnover was KShs. 62.1 million.
  • Excludes the proposed acquisition of sole control of Hain Lifescience East Africa Kenya by Bruker Daltonik GMBH as the acquirer’s turnover for the preceding year 2017 was KShs. 102 million while the target’s turnover was KShs. 106 million and the combined turnover of KShs. 208 million meets the threshold for exclusion.
  • Excludes the proposed acquisition of the manufacturing and distribution business of Pharmaceutical Manufacturing Company (Kenya) by Shalina Healthcare Kenya as the acquirer’s assets for the preceding year 2017 was KShs. 0.4 million while the target’s value of asset was KShs. 43 million and the combined value of asset of KShs. 44 million meets the threshold for exclusion.
  • Excludes the proposed acquisition of certain assets of Maghreb Pharmacy by Goodlife Pharmacy as the target had a turnover of KShs. 15 million for the preceding year 2016 and therefore, the transaction meets the threshold for exclusion.
  • Excludes the proposed acquisition of 60% shareholding in AK Life Sciences by CSSAF Lifeco Holdings as the acquirer had a turnover of KShs. 377 million for the preceding year 2017 while target had a turnover of KShs. 125 million for the preceding year 2017 and therefore, the combined turnover of KShs. 503 million meets the threshold for exclusion.
  • The competition authority approved the proposed acquisition of the entire share capital in Arysta Lifescience Inc by UPL Corporation.
  • The Competition Authority authorized the proposed investment by Tunza Health Investments in Pyramid Healthcare Ltd.
  • The Competition Authority approved, the acquisition of 100% of the business and assets of Desbro (Kenya) by Brenntang (Holding) B.V. on condition that Brenntang retains the 80 employees of Desbro for a period of one year. Desbro distributes over 600 industrial chemicals to various industries in Kenya, Uganda, Rwanda, Burundi and Ethiopia.

Logistics, Engineering, & Manufacturing M&A

  • Excludes the proposed acquisition of 100% of the shares in JGH Marine A/S and JOHS. Gram-Hanssen A/S by Pitzner Gruppen Holding A/S  as the acquirer has no presence in Kenya and, therefore, had no turnover for the preceding year 2017 while target had a turnover of KShs. 392 million for the preceding year 2017 and therefore, the transaction meets the threshold for exclusion.
  • Excludes the proposed acquisition of the assets and business of Socabelec East Africa by Cockerill East Africa as the acquirer had a turnover of KShs. 193, million for the preceding year 2016 while target had a turnover of KShs. 226 million the preceding year 2016 and therefore, the combined turnover of KShs. 419 million meets the threshold for exclusion.
  • Excludes the proposed acquisition of 55% of  Air Sea Logistics (ASL) by Expolanka Freight PZCO as the acquirer had no turnover for the preceding year 2017 while the target’s turnover for the preceding year 2017 was KShs. 8 million and therefore meets the threshold for exclusion.
  • Excludes the proposed acquisition of the assets of Rich Logistics (K) by Bigcold Kenya as the acquirer is newly incorporated and hence, had no turnover for the preceding year 2017 while the target had a turnover of KShs. 48 million for the preceding year 2017 and therefore, the transaction meets the threshold for exclusion.
  • CA-K approved the proposed acquisition of the stationery and shavers manufacturing, sales and distribution of stationery, lighters and shavers business of Haco Industries Kenya  by BIC East Africa.
  • CA-K approved the proposed acquisition of the Kenyan freight forwarding business and assets of Dodwell & Co (East Africa) and those of Inchcape Shipping Services Kenya by ISS Global Forwarding (Kenya) – which is owned by Investment Corporate of Dubai (ICD). 
  • The Competition Authority approved the proposed acquisition of the assets and business of Blue Nile Wire Products by Blue Nile Rolling Mills.
  • The Competition Authority approved the acquisition of the assets and business of Wild Elegance Fashions by Wild Elegance Africa.
  • The Competition Authority approved the proposed acquisition of 73.6% of Sintel Security Print Solutions by Ramco Plexus. Sintel is involved in the printing and supply of scratch cards, highly secured cheques and custom labels.
  • CA-K approved the proposed acquisition of the business and assets of Office Mart by Sai Office Supplies
  • CA-K approved the proposed acquisition of the business and assets of Lino Stationers by Sai Office Supplies on condition that the acquirer employs not less than 57 out of the 74 employees after the completion of the proposed transaction.

Real Estate, Tourism, & Supermarkets M&A

  • Excludes the proposed acquisition of 40% of Dufry Kenya by Ananta as the acquirer had no turnover for the preceding year 2016 while the target had a turnover of KShs. 269 million for the preceding year 2016 and therefore, the transaction meets the threshold for exclusion.
  • Excludes the proposed joint venture between Scan-Thor Group and Otto International GmbH as the acquirer has no market presence in Kenya and, therefore, had no turnover for the preceding year 2017 while target had a turnover of KShs. 11 million for the preceding year 2017 and therefore, the transaction meets the threshold for exclusion.
  • Excludes the proposed transfer of 100% of Norbu Manda Pwani Ltd to Margot Kiser from the provisions of Part IV of the as the acquirer is a natural person and had no turnover or assets for the preceding year 2017 while the target’s assets were valued at KShs. 47.5 million.
  • Excludes the proposed acquisition of the business and assets of Giraffe Ark Game Lodge by Archaic Industries Kenya as the acquirer is a newly incorporated company and had no turnover for the preceding year 2017 while the target’s turnover was KShs. 51.5 million
  • Excludes the proposed acquisition of the business of Ocean Sports (2006) by Ocean Sports Hotel as the acquirer had no turnover for the preceding year 2016 while the target’s turnover was KSh. 44.6 million.
  • Excludes the proposed acquisition of 34.48% of African Forest Lodges by Earth Friends LLP as the acquirer is a newly incorporated company and has no assets or turnover for the preceding year 2016 while the target’s assets was KShs. 197 million.
  • Excludes the proposed acquisition of the (Furniture, fittings, equipment and Prefabricated building) assets of Me To We Ltd by Bogani Training, excludes the proposed acquisition of the (motor vehicle) assets of Me To We Ltd by Minga Ltd and excludes the proposed acquisition of the assets  (vehicles, beads, stocks) of Me To We Ltd by Araveli For Mamas as the acquirers had no turnover for the preceding year 2016 while the target’s turnover for the preceding year 2016 was KShs. 68 million and therefore, meets the threshold for exclusion.
  • CA-K approved the proposed acquisition of control of Tumaini Self Service by Sokoni Retail Kenya. Tumani operates retail stores in Nairobi, Kisumu and Kajiado.
  • CA-K approved the proposed acquisition of Nova Academics Tatu City Property Ltd by Summit Real Estate Pty
  • The Competition Authority of Kenya approved the proposed acquisition of 100% of Hillcrest Investment Holdings by Education Asia Holdings – which is an investment holding company owned by GEMS Global Schools. Hillcrest operates three learning institutions in Nairobi – Hillcrest Early Years, Hillcrest Preparatory School and Hillcrest Secondary School.

Telecommunications, Media & Publishing M&A

  • Excludes the proposed acquisition of 39% of the shareholding in the Star Publication by Avandale Investments and 10% of the shareholding by Adil Arshed Khawaja as the acquirer had no turnover for the financial year ending 30th June 2017 while the target’s turnover was KShs. 679 million.
  • Excludes the proposed acquisition of Mobile Web (trading as Hivisasa) by Novastar Ventures Easy Africa Fund 1 L.P.  as the acquirer had no turnover for the preceding year 2017 while target had a turnover of KShs. 14 million or the preceding year 2017 and therefore, the transaction meets the threshold for exclusion.

Other M&A

  • Excludes the proposed acquisition of Dc Xiang Kenya Company by Lin Bingwei from the provisions of Part IV of the Act as the acquirer is a natural person with no business activities and had no turnover or assets for the preceding year 2017 while the target is a newly incorporated company and had no turnover or assets;
  • Excludes the proposed acquisition of 100% of the shares in Kesar Investments by Dipak Lakshman Halai and Ramesh Kurji Visram as the acquirer are individuals and had no turnover for the preceding year 2016 while the target’s assets was KES 0.07 million
  • CA-K approved the proposed acquisition of Zelepak Africa by PPG  Holdings

CA-K, as a regulator, has not yet reported on two mega deals; the proposed bank merger between CBA and NIC and the buyout of Kenol by Rubis that will lead to a delisting of the company. edit: Later in January 2019, the Competition Authority approved the Rubis-Kenol deal along with a few other deals. 

Also, see some other deals approved six years ago.

$1 = Kshs 101

Individual Pension Schemes – Zamara Vuna AGM

Members of the Vuna pension scheme by Zamara met at their annual general meeting (AGM) in Nairobi this week to get updates of the previous year during which the fund grew by 10% to Kshs 2.37 billion. It was a year in which they rebranded from Alexander Forbes Kenya and one in which, the Nairobi Securities Exchange, which had its last good year in 2013 (when it was up 44%), managed to rebound in 2017 to 28% after dipping in the years in-between.

Zamara’s Vuna takes the view that saving for retirement is not a priority among many Kenyans who are juggling many financial requirements every day – so they have designed products for people to save what they can, when they want – people such as the self-employed, small business owners, individuals, overseas workers, and those  who work in organizations that don’t have formal retirement pensions plans. They also accept lump sum contributions and M-Pesa payments.

Vuna has over 5,000 individuals and 180 small companies as members and they give different options for savers according to their risk tolerance, for them to be pooled in the conservative, moderate or aggressive investor portfolios and members can switch their investor profiles once a year. They added an online portal for members to track their contributions and an app that helps members do projections about their retirement savings. This year they are adding a new group life assurance scheme.

They updated members on changes to their schemes, tax rule and answered questions  such as on how to deal with employers who don’t remit deductions and how they decided on making payments to families  of members who have not updated their beneficiary list-  and they cited a study that showed a higher proportion of women do not list their husbands as their beneficiaries, compared to husbands who list their wives. The meeting ended with an advisory caution to members that the only person you’re 100% sure will take care of an “older you” is a “younger you”. 

Kenya Income Tax Cuts, Increases, and Other changes 2018

The Kenya government, through the National Treasury, is proposing some long overdue changes to the country’s income tax laws, which are contained in a draft bill that will be submitted to Parliament.

The bill has new clauses that affect transfer pricing, new extractive (oil & gas) industries, phase out of turnover tax, and an apparent tax cuts. It comes after other recent changes to the tax code. Kenya also has an ongoing waiver and amnesty program for income tax and assets held outside Kenya to be declared and repatriated to the Kenya Revenue Authority (KRA)  by June 30.

Leading accounting and audit firms such as KPMG, PWC, and Deloitte have looked deep into the clauses, and these are some of their findings: 

KPMG:

  • Companies are to produce and maintain transfer pricing documentation and policies in place for the year of income.
  • The withholding tax threshold of Kshs 24,000 had been deleted.
  • Payments to non-resident petroleum contractors will be 20% (up rom the current 12.5%)
  • Developers who build over 400 houses to pay taxes of 15% on gains.
  • Micro-finance institutions (MFI’s) interest will be exempt from withholding tax.
  • Sports clubs & associations will get taxed on entrance fees and subscriptions.
  • Farms, warehouses or doing consultancy work for more than 91 days in a year are now considered permanent establishments. KPMG comment – This will require non-resident persons doing business in Kenya to re-think their operational models.
  • A listed company will pay 25% taxes for five years if 40% of its shares are floated.  KPMG  comment – this will reduce the impact of taxation as an incentive to list.

Deloitte:

  • Income tax rate of 35% on more than Kshs 750,000 (~$7,500) per month
  • Non-residents’ who receive their pensions in Kenya will pay a tax of 10% on transfers (up from 5%) 
  • A higher corporate tax of 35% for large companies with taxable income over Kshs 500 million (~$5 million).
  • Real-estate capital gains tax of 20% (up from the current 5%). Deloitte comment – Though the increment is quite steep, it enhances equity considering that CGT is regarded as a tax on wealth.
  • Equality: Each person in a marriage is now required to file their own tax returns: no more cases of wives having their incomes filed under husband’s income tax returns.  
  • Mining & Oil: Losses can be carried forward for a maximum of 14 years (There is no current cap)
  • EPZ holiday removed: Now EPZ’s will pay 10% tax for the first 10 years, and 15% for the next ten years (other companies pay 30% corporate tax).
  • SACCO’s: Cooperative societies to pay a withholding tax on dividends and bonuses of 10% (up from the current 5%) 
  • Subsidiaries in Kenya to pay 10% tax on dividends remitted to the parent companies.
  • E-commerce: The Treasury Cabinet Secretary will be allowed to introduce taxes on digital platforms.
  • Capital allowances reduced: The 150% allowance for investments outside cities has been removed, those for filming equipment reduced from 100% to 50%, and educational institutions from 50% to 10%.
  • Small businesses, that are licensed by counties, will pay a presumptive tax of 15% of the business permit fee. Deloitte comment – (this) replace the turnover tax, currently at the rate of 3% of a person’s turnover (KRA has faced challenges collecting) ..  will require collaboration with the county governments. 

PWC

  • All medical insurance paid by employers for employees is now tax-exempt (even for expatriate staff) and age limits for children covered goes up from 21 to 24 years.
  • A withholding tax of 5% will be levied on payments to foreign insurance companies. PWC comment – this is aimed at promoting local insurance companies.
  • Income tax exemptions that have been dropped include income of the Export-Import Bank of the USA (relates to Kenya Airways?). Also on the income of stockbrokers from trading in listed shares. PWC comment – this may have a negative impact on the growth of the capital markets in Kenya;
  • 20% withholding tax on payment to non-Kenyan companies for horticultural exports. 
  • 20% withholding tax on payment of air-tickets to non-resident agents. PWC comment – may lead to increase in airline ticket prices in Kenya which may affect competitiveness of local airlines.

They also looked at other recent tax adjustments which PWC notes will mainly alleviate the government from paying VAT refunds.

  • Milk, maize, bread, bottled water, will all cost more after moving from “0%” VAT to “exempt” VAT as importers will pass on non-recoverable VAT to consumers.
  • Same for LPG gas, some medicines and agricultural pest control inputs.
  • Making housing affordable. PWC comment – the Government is also proposing a stamp duty exemption for the purchase of a house by a first time home owner under an affordable housing scheme
  • Betting/Gambling: For winnings, a 20% tax will be deducted at source i.e the betting company) on any prizes (this is up from the current 5%)

Other Clauses in the Income Tax bill

  • Parent companies are to file country-by-country reports with KRA within 12 months of year-end.
  • No capital gains tax is due on land if it is compulsorily acquired by the government.
  • No capital gains on listed securities.  
  • While there is a new 35% tax for the rich, the income tax bill appears to lower taxes for the low-income.  e.g. someone earning Kshs 40,000 (~$400) per month, who pays 5,932 in tax per month now after personal relief, will have a lower tax burden.  Income tax bands are expanded in the 10% range (now up to 13,000 from the previous 10,000) and there is also a higher relief of Kshs 1,408 versus the current 1,162) and the resulting net tax for the person will now be Kshs 5,009 for the month – a 15% income tax cut?.  
  • Tax rate of 15% for five years for local vehicle assemblers. This can be extended by another 5 years if the company achieves 50% local content value in the vehicles.  
  • Taxes waived on the income of disabled persons, amateur sports associations, and NGO’s (relief, poverty, religion, distress) whose regional headquarters are located in Kenya.  

Finally, other stakeholders are invited to review the proposed changes to the 103-page income tax bill and submit comments via email to ITReview2017_at_treasury.go.ke by May 24.

Fintech Companies to Watch and Influencers in 2018

Companies: Last November, KPMG and H2 Ventures released a report listing their fourth annual fintech innovators (‘Fintech100’)  comprising 50 established companies and 50 emerging companies to watch in Fintech.  The companies are innovation across sector like banking, payments, remittances, spending, artificial intelligence, data management, and insurance.
They noted that China continues to dominate the fintech landscape, with 5 of the top 10 companies on the list. Digital or new banks in the list include Solaris Bank, Nu Bank, and Atom Bank.
Some notable companies on the list;
  • ZhongAn (online property insurance)
  • Stripe (frictionless financial transactions)
  • OurCrowd provides an equity crowdfunding platform for accredited investors to access and invest in Israeli companies)
  • Circle (free international remittance via email)
  • Xapo allows users to utilize their bitcoins while Xapo safely stores them)
  • Future Finance (gives students loans of 2,000 to 40,000 pound,  within 24 hours that can be paid over 5 years)
  • Coinbase (enables digital currency transactions)
  • AfterPay Touch (from Australia gives online shopping users an option to spread purchases across four equal installments)
  • Robinhood (free stock trading of US stock and ETF’s)
  • Alan (Europe’s  first digital health insurance company)
  • Bud (enables users to combine bank accounts and get personalised insights from a single source)
  • Capital Float (from India provides collateral-free working capital loans to small businesses within 3 days)
  • Cuvva (provides short-term,  flexible car insurance to consumer groups, including taxi- drivers that range from 1 hour to 28 days)
  • Flutterwave (from Nigeria, is in over 36 African countries, enables individuals and businesses to accept online and offline payments)
  • GrassRoots Bima (from Kenya matches customers with micro-insurance products – known as WazInsure)
  • KredX (from India matches SMEs seeking working capital with investors looking for above-average yield on short-term investments)
  • Leveris (banking platform for digital retail banks)
  • Riby (Nigeria cooperatives enabler)
  • Sensibill (allows bank customers to get their receipts in a few different ways)
  • SoCash (addresses cash logistics issues for banks)
  • Token (an API banking platform)
  • Valiant Finance (an online broking platform for SME’s) 
Influencers: Also, Jay Palter has a list of 195 fintech influencers for the year 2018; have only heard of a few – Brett King (who visited and spoke in Nairobi in January 2017), Yann Ranchere, Elon Musk and Vinod Khosla, but will check out the rest.
EDIT
 
Also,  the new CB Insights report on fintech observations and trends to watch in 2018 cites:
  • No billion-dollar fintech M&A in 2017
  • Chinese firms drove fintech IPOs in 2017
  • Europe saw record for fintech investing in 2017, as Asia and the US saw fintech funding recede
  • Amazon gets more aggressive in fintech — outside of the US, but Amazon’s US efforts are a far cry from Tencent and Ant Financial’s global fintech forays in China
  • The largest deals in 2017 went to companies providing insurance…
  • Startups are allowing Chinese investors to access overseas securities and In 2017, Ant Financial’s Yu’e Bao became the largest money market fund in the world
  • Banks forgo partnering in favor of fighting fintech with fintech 

Reading the Nairobi Hospital tea leaves

What does a read of The Nairobi Hospital, which is probably the top hospital in East Africa, tell us about the state of medical investments here? The Nairobi Hospital (NH) was founded in 1954, and it, alongside Aga Khan Hospital,  is where top leaders, politicians from Kenya and the East Africa region are treated. It is also where middle-class Kenyans, tourists, and anyone with private medical insurance is treated or operated on.

Nairobi Hospital room

But treatment at Nairobi Hospital is not cheap; , a few days stay without surgery will cost about Kshs 300,000 (about $3,000) and a night in the intensive care unit (ICU ) is about Kshs 500,000!

Kenyans who have medical conditions have discovered that traveling to India for surgery, medicine, and other complex treatment procedures is a better option, even after one factors in the cost of travel for patient and relatives who oversee the patient.

Anyway, how does the Nairobi Hospital (officially registered as the Kenya Hospital Association) in 2016 compare to a few years earlier with the hospital’s 2009 report?

  • Turnover was Kshs 8.79 billion (~$88 million), up from 8.0 billion in 2015.
  • They had a surplus of Kshs 1.3 billion  ($13 million) up from Kshs 1.06 billion, but below the Kshs 1.4 billion in 2014.
  • Some income items: Pharmacy income was 2.5 billion (a 13% growth on the previous year) and the pharmacy had 60% growth in chemotherapy sales thanks to NHIF package (partnership with NHIF has opened doors to our brothers and sisters who would otherwise have not received world class health services. This has seen a rise in number of patients accessing their preferred health care in our Cancer Center, Renal Unit and Catheterization Laboratory. Laboratory income was Kshs 1.4 billion (they have also implemented o shore reporting from India for CT scan, MRI and mammography). Physiotherapy revenue was Kshs 246 million, and accident and emergency revenue was Kshs 374 million (53% of visits were done in 75 minutes and they plan to reduce the waiting time).
  • Some expense items: The Nairobi Hospital paid salaries of Kshs 2.5 billion (compared to Kshs 2.1 billion in 2015) and they added 276 staff in the year (including 128 nurses), a CEO, Company Secretary, and a Security Manager. Key management compensation dropped from Kshs 130 million to Kshs 93 million (in 2015) – and does that difference correspond to the salary of the outgoing CEO who left to become Kenya’s Cabinet Secretary for Health? They also bought medicine worth Kshs 1.7 billion, paid cleaning costs of Kshs 71M, Oxygen with 41M and paid Kshs 21 million to credit card companies
  • The Nairobi Hospital invested Kshs 2.1 billion in projects such as pharmacy, water storage, parking, nurses accommodation, roads, fencing, and kitchen improvements. They also hired a marketing agency to improve the image and awareness about services at the hospital and participated in news interviews, features, and social media.  
  • Some operational numbers for the hospital: They had 154,760 visits to accident & emergency centre, carried out 685,802 lab tests, handed out 354,296 prescriptions, and did 98,198 radiology procedures. They had 18,386 admissions, had 2,730 births (a 17% decline from the year before), and did 7,990 major operations and 1,975 minor ones. They also an occupancy level of 79%, which was down from 81% on their 299  beds, and they retained their customer satisfaction measure of 89%.  The relocation of their ICU / HDU units temporarily reduced capacity from 356 to 299 beds. 
  • On the finance side, they had cash and equivalents of Kshs 2.7 billion (down from 3.5 billion) but still a very healthy liquidity position. They also had Kshs 399 million at Imperial Bank and had Kshs 280 million of doubtful debts (up from 240 million), and Kshs 24 million in foreign exchange losses from currency fluctuations.  
  • The new Nairobi Hospital CEO wrote that his strategy would revolve around talent, technology, turnaround and territory (new location to enhance service). On the health industry, which contributes 6% to GDP, he wrote that income at the Kenya government’s National Hospital Insurance Fund (NHIF) had more than doubled to Kshs 28.5 billion in 2016 thanks to new rates levied on Kenyan workers and that there were 172,706 health personnel in Kenya in 2016.
 
Website of the Nairobi Hospital.