Kutwa Tuesday: death of the cyber café

Once, long ago, I wrote a paper about a business case to put up a cyber café in an airport terminal – for transit passengers to browse there as they waited for the flight to connect. That model is in place today in airports all over the world (not my doing) but its’ time may already have passed with wi-fi zones and wireless laptops whose users don’t need to use cyber cafe facilities anymore.

But even cyber cafes’ that are in town may be under threat.

Until three months ago I’d spend about an hour in a cyber cafe each Saturday and Sunday. I’d go there to my check my-email and then browse quite a bit when I was done.

But all that has stopped as I now check my email and browse for information I need to know instantly – from hotmail, gmail, sports scores, stock prices – using a plain old phone (not bambanet, or blackberry) as the Safaricom EDGE service is available on most of their phones even some of the cheaper ones. I get the information wherever I am and don’t have to visit a cyber cafe unless it’s to print a document or download a PDF report.

Oil slick
The sale of Somken petrol stations to the National Oil Corporation of Kenya (NOCK) has been put on hold ever since the previous NOCK MD resigned from the company. Haggles remain over the high price bid for the stations.

BAT smoke-out
BAT Ghana has voluntarily de-listed from the Ghana Stock Exchange.

Does that portend anything for BAT Kenya one of the blue chip stocks on the Nairobi stock exchange and one of the highest paying dividend stocks? Cigarette smokers have had their smoking freedom curtailed in Nairobi and other urban areas (Nairobi city has less than a half dozen outdoor smoking points) making them clandestine smokers who hide on staircases and bathrooms (but at least most bars retain a smoking section). What impact will that have on sales?

BAT Kenya manufactures cigarettes here and exports a significant amount to other regional countries (who have not curtailed smoking) which should cushion it slightly from the new laws.

Stockbroker still frozen
The statutory management of Francis Thuo stockbrokers (by the Nairobi Stock Exchange) has been extended for another six months.

the pyramids that collapsed
Much has changed in the one year since nyramid schemes were highlighted here. Since then they have come under increasing pressure from the government, SACCO’s and most important the banks who frozen account necessary for their operations (and who probably still hold the schemes ‘missing billions’ that investors are crying for).

The latest collapse was Amity and it was preceded by Sasanet investment co-op (suspended operations), Spell investments (suspended operations), Circuit investments (suspended operations), CLIP (suspended operations), DECI (suspended operations), and the Kenya business community savings & credit society (Kenya akiba) (suspended operations)

Kenya news on Youtube
Some people say they are tired of political news, while others can’t get enough of it. But the Nation Media Group has gone ahead and made their new clips available on Youtube

Pesa point wins
Two yard ago Pesapoint was launched and it began a battle with Kenswitch – another network of banks sharing ATM facilities. But today Pesa Point has signed up most mid-size banks and have a network of almost 200 ATM machines – and last month added corporate banking giant Standard Chartered to their network.

The Press Filter

A glance at the weekend newspapers shows government departments putting up paid advertisements in the newspaper. These include the permanent secretary – Ministry of Finance setting the record straight on the country’s domestic debt position, the permanent secretary of the Ministry of Justice on parliament’s recent amendment to curb powers of the Kenya Anti-Corruption Commission and even the government spokesman (who’s the equivalent of a permanent secretary) on thetribal balance of the government (through an ad placed in all papers including the Nairobi star)

Of course its’ not just the government that has trouble getting their ‘facts’ out before the media – the Kenya land alliance on the Land Bill, former MP Basil Criticos claiming the government ‘grabbed’ his sisal farm, the National Bank of Kenya defending the government in the Criticos land sale etc.

With four major TV stations and a dozen newspapers and radio stations, the amount of stories churned out by the media is endless. But with politics dominating most of the media channels during this election year, it is easy for important facts to be addressed by interested parties – and the only way they can be assured that their story will be transmitted verbatim – no editing, slanting, filtering, or even buried by the media – to the public is by paying for an advertisement themselves – at a cost of about 70,000 shillings (about $1,000)

However, there’s a flip side to this. A media story is supposed to be balanced – and by placing a statement in the papers, they are telling their side of the story without challenge, or argument – and without an opposing view, a paid up statement is just an advertisement.

Election briefs

– The Electoral Commission of Kenya has enabled registered voters to check on the status of their vote eligibility online – just by entering a nation ID number or voter’s card number.

– Botswana residents living in Kenya have been invited to register to vote at the country’s high commission in Nairobi this month. That’s something Kenyans in the Diaspora can pressure for their local embassies to do for them also in future.

Direct Flights to US?

Delta expands
From African Flyer: Delta Airlines (US) has announced new African destinations including – New York to Nairobi via Dakar (Senegal) four times a week

Kenya Airways has toyed with the idea of flight to Miami oo Atlanta for several years

Compe for KQ
There have been a lot of protects from Ugandan about the high cost of flights to Nairobi (at ungodly hours) to connect to other Kenya Airways (KQ) flights – with tickets costing about $340 for the 300 mile journey. Of course short flights are really lucrative in Africa – and Air Kenya makes a killing with their $100 flights to Masai Mara, other games parks, and holiday destinations.

So along comes an Aga Khan backed airline set to begin on the Entebbe – Nairobi route operating as Air Uganda who will begin flights in November.


one of their new planes

Tax Collection is Unprofitable

KRA shocker: The Kenya Revenue Authority, the organization which has re-written our donor relationship, championed responsibility/awareness of tax paying among citizens, spurred parastatals to start paying dividends back to the government (instead of draining it) and enable the fixing of the economy – is not profitable!

Year end results (June 2006) show the tax collector with income of 4.8 billion and expenditure of 6.0 billion – meaning a deficit of 1.2 billion and that compares to 2005 when they just about broke even with 5.1 billion of both income and expenditure. They also don’t have the title-deed to their headquarters – Times Tower worth 2.5 billion that is still in the name of Central Bank (for whom the tower was built).

Stanbic CFC merger approved:  The Finance Minister has approved the merger between Stanbic and CFC paving the creation of the country’s 4th largest bank (see bank rankings and an earlier comparison of the parties)

The combined, but yet to be named, bank will have assets of over 55 billion shillings ($800 million), deposits of 43 billion, loans of 30 billion and a pre tax profit as at June 2007 of 934 million ($14 million)

Capital markets authority (CMA) approval should be a formality, as they have already been assured that the new bank will remain listed on the NSE.

MP behaving badly: A high-flying MP has grabbed i.e. taken over and fenced the parking lot of a popular Nairobi Sports Pub which he frequents the place – even as he is trying to extract an exorbitant rent from the pub for use of the yard.

Wikileaks: Charterhouse

Charterhouse revealed
Fresh off the Kroll reports, Wikileaks moves on to another Kenyan financial saga – uncovering secrets of Charterhouse Bank.

The bank was placed under statutory management in 2006 after a long battle with the central bank governor, finance minister, amid allegations of money laundering and tax evasion that almost brought down Nakumatt supermarket who banked with them and hosted several Charterhouse branches.

Euro needs more marketing
The US Dollar keeps dipping lower, not just against the shilling, but is all over recording lows against the Euro and now achieving parity with the Canadian dollar (no more cheap buys from Canada).

I feel bad when I travel to another country with my Dollars and they don’t go as far as they used to, or as if I had carried Euros instead.

While the dollar is laid low, there is no other currency stepping up to grab its space. The pound is a colonial relic and the yen is too far & exotic.

The Euro needs to step up and lobby to become the currency of choice for hotels, shops, forex bureaus, Kenya airways, Somali & Sudanese businessmen, companies and most important the Kenya government

Family Bank gets cheques
After applying for a waiver (and getting it), Family Bank finally is now fully-fledged with cheque books for customers and access to the Central Bank clearinghouse. This meshes well with their growth plans – as a recent report found they had the highest new account growth among all banks last year.

IPO savings loan
From Transnational Bank, comes the Fanikisha enabling people to save money and buy IPO shares on the NSE – which TNBL will finance up to 2 ½ times what you have saved. The account is aimed at Kenyans abroad – but my question is with the fractional IPO applications yielded (1/4 or 1/3 of shares paid for) what gain is there in taking a loan for an IPO?

Story con or cover up?
KTN had a story this week about the Tesco supermarkets (local chain – not UK-related) who just ended their Uchumi franchise partnership. KTN said they had seen documents showing that Tesco was insolvent with negative share capital, numerous bounced cheques, rent arrears of many months at its stores, and suppliers reclaiming their merchandise. The story ended there with no follow up in the Standard (KTN sister paper) or any other newspaper. So was it hushed up, or was it a case of more mudslinging in the supermarket wars?