Kenya Insights

Category: Business

  • Rogue Landlord Subject Kileleshwa Residents To High Insecurity On Account Of Being Forced To Pay Rent In Cash

    Rogue Landlord Subject Kileleshwa Residents To High Insecurity On Account Of Being Forced To Pay Rent In Cash

    The property, going by the name Viraj, has about 1,000 units in Kileleshwa and another 1,500 units on Mombasa road. For the Kileleshwa units the average rent is Ksh.70,000 giving a total of Ksh. 70 million cash collections for Kileleshwa alone. Adding up with the ones along Mombasa road, the cash collections could get to Ksh. 200 million monthly.

    There have been reported cases of muggings when tenants go to pay cash. Our team made a visit to to the location of offices where tenants take the cash and established that indeed the alley to the Viraj offices is quite solitary and leads to a dead end. The road is also in a deplorable state with suspicious looking people strolling aimlessly along the stretch. Besides the security issues, tenants had requested that due to covid pandemic, social distancing would have been achieved if they were given an account to be paying to. This fell on deaf ears.

    Tax Evasion

    The other issue however is that cash collection is always a recipe for tax evasion since there is no structured way of accounting for the rent collected. Previous exposePrevious expose by tenants and a number of bloggers however saw KRA take no action. Indeed the Indian owners always brag of how they have the KRA officers on their payroll and that nothing can be done to them.

    A number of units have however been sold by the Viraj owners, but even with this, they treat the owners with contempt. Payment of service charge is done with no improvements being made on the common areas. Units that were previously sold for 17m canfetch only 12m currently because of the poorly managed common areas within the estates. There is no paintworks of the external building and the perimeter wall, poor gardening, poor electrical connections, poor/old drainage, age old water tanks, among others.

    The patriarch Viju Patel has since split the houses to the children and the Kileleshwa units were given to a son by the name Vijay Patel. The son, a well-educated man, is a sharp contrast to his wife who is illiterate and very arrogant. Indeed, the laid back Vijay has left the running of the once sought after estate to the wife named Jyoti.

    Jyoti has turned the once beautiful Viraj Estate  into an eye sore, comparable to the dilapidated County council estates. The money collected is wasted with no meaningful investment to improve the outlook of the estate. The two have run down what the founder Viju Patel, took years to build. So hardworking and dedicated was the partriarch that he recently became the first Kenyan to buy a Tesla model X 75D. Effort to reach Vijay and his wife Jyoti bore no fruit as our phone calls went unanswered.

    Apartments in Kileleshwa estate.

    We only hope that with 100% sale of the units to other owners, there will be restoration of the glory of the once beautiful Viraj Estates as what exists is the extreme bottom of the barrel.

     

  • Fact Check: Does Raila Own Majority Of Gas Companies In Kenya

    Fact Check: Does Raila Own Majority Of Gas Companies In Kenya

    A big debate following the increase of cooking gas prices from the 16pc VAT increase has sparked different angles on conversations. With most Kenyans expressing their disappointment and fury over the inflated prices, the discussion hasn’t missed a political war.

    Coming also at a time when the Deputy President and Raila Odinga exchanging jabs on corruption allegations, fanatics seemingly allied to the DP Ruto have been pushing a narrative that the former Prime Minister owns majority of gas companies with wild allegations that he’s a beneficiary of the price increases.

    https://twitter.com/sammacoha/status/1411969517060857859?s=21

    Now let’s get to the facts and churn out the fictions. East Africa Spectre Ltd the company owned by the Raila family is a Liquefied Petroleum Gas (LPG) Cylinder Manufacturer & Revalidating Company and doesn’t deal in gas manufacturing as perceived. Spectre Manufactures LPG Cylinders for Domestic & Commercial Use for Oil Marketing Companies.

    Even though different from East African Spectre, the liquefied petroleum gas cylinder manufacturer based in Nairobi, Spectre International Ltd is part Raila’s flagship business based in Kisumu but has not been in operation since 2017.

    One of the biggest gas cylinders manufacturers in the region, Spectre according to the company’s portfolio, About 20% Market Share in New LPG Cylinders Manufacture Versus Over 80% of the Revalidation Market Share.

    There’s a likelihood that the gas cylinder you’re using now was made by Spectre and the filling down by the branded company.

    Now, liquefied petroleum gas (LPG) dealers are the ones who does the filling and branding it to your favorite labels that you have in your kitchen.

    LPG market has its owners too, Kenya has approximately 77 licensed LPG dealers but the market is controlled by about 5 key companies and ProGas owned by the Africa Gas And Oil(AGOL) which also owns Proto Energy Limited associated with Mombasa Tycoon Mohammed Jaffer dominating the Kenyan market with about 50pc grip of the market share.

    Others include; Total, K-Gas, AfriGas and all working under Energy and Petroleum Regulatory Authority (EPRA).

    Now with the Finance Act 2019 that reinstated 16% VAT on liquefied petroleum gas (LPG), but delayed the levy for one year to July 1 due to concerns about the cost of living being in place, Kenyans are faced with the harsh reality of tougher times to make a place.

    A temporary reprieve from the Energy Dealers Association who filed a petition at the High Court seeking to freeze implementation of the tax.

    The association says the new tax will make cooking gas unaffordable and force some dealers to close shop on low demand for LPG.

    They are apprehensive that many Kenyans will shy away from using LPG and shift to dirty kerosene and charcoal for cooking.

    The increase in levy would be an added advantage to market dominants and see small firms out of the market if the argument is anything to go by.

    Households are paying at least Sh400 more for the 13-kilogramme cooking gas that is retailing at an average Sh2,650, a price level last seen in March 2015.

  • Ruthless and Merciless Kenya Women Microfinance Bank (KWFT) on Loan defaulters.

    Ruthless and Merciless Kenya Women Microfinance Bank (KWFT) on Loan defaulters.

    The Kenya Women Microfinance Bank, formerly known as Kenya Women Finance Trust, was founded in 1981 to address the financial needs of women.

    Unfortunately, through KWFT, clients have been left poorer than they were before they joined the bank against their (KWFT) vision, “To be the Women Financial Solutions Provider with a Difference.” KWFT, is a top tier Microfinance bank in Kenya with 45 branches out of 47 counties. KWFT boasts to be serving over 800,000 clients across the country with over 2800 dedicated employees.

    KWFT styles itself as an unregulated bank, insurer and acts illegally as a Kangaroo court and a ruthless auctioneer. Unsuspecting poor women are induced to take loans with strange terms and sweet deals which often end in premium tears, depression and poverty. 

    KWFT mercy on assets recovery is none of their business – none of their language eithee. They sweep clean properties of loan defaulters without within a twinkle of an eye and without a blink and are always on time that immediately when 00:01hrs ticks, they’ll be right on your doorstep or homestead to sweep clean any valuable and invaluable assets even if grass is an asset to them. In a gated property, they demolish and carry it along even if it exceeds their aimed value. They’re considered thorough and a no go zone to those considering to acquire loans from them if there’s a possibility of defaulting. 

    They’ve no grace period. No remorse. Inconsiderate. With 80% of the clients in rural settlement, KWFT has deliberately trapped poor souls in rat race.

    Victims of their wrath took to social media in a heated discussion and engagement expressing their experience, displeasures that isolates the bank from other banks on how they handle loan defaulters.

    KWFT asset recovery actions discourages potential customers and as it stands now, interested clients should beware and reconsider other avenues, other banks since KWFT is a no go zone especially during this covid19 period where SMEs, people are struggling in a recovering economy, there’re lots of defaults in loan repayment but KWFT seems not to understand this language.

    Avoid KWFT, if you want avoid drama.

  • Humphrey Kariuki Puts Up His Tax Dispute Ridden Africa Spirits For Sale

    Humphrey Kariuki Puts Up His Tax Dispute Ridden Africa Spirits For Sale

    Following a two-year battle with the courts on allegations of Sh41B tax evasion on his firm, the Janus Continental Group’s boss Humphrey Kariuki has decided to put for sale the scandal ridden Africa Spirits that’s in the middle of the circus with Kenya Revenue Authority(KRA).

    Mr Kariuki and his co-accused denied failing to pay tax of Sh17,782,553,085 to the commissioner of domestic taxes between January and December 2016.

    They are also accused of omitting Sh832,048,543 in Value Added Tax (VAT) for Africa Spirits Limited (ASL), an amount which had been included in the returns, for the period January to December 2016.

    For 2017, Mr Kariuki allegedly failed to remit Sh5,981,840,025 while ASL failed to remit Sh2,188,622,304. For 2018, the directors of Wow Beverages Limited (WBL) and ASL are charged with failing to remit Sh5,673,829,000.

    The run-ins with the authorities has taken toll of the reclusive billionaire who’s now considering selling it.

    Mr. Kariuki, has already received several offers to acquire his brewery Africa Spirits, reportedly, he has already turned down offers from London Distillers and 254 Brewing Company, which he deemed too low.

    He is currently in discussions with Keroche Breweries, a major Kenyan brewery, but is asking but is asking for more money and they have not yet reached an agreement. Kenyatta’s bitter aftertaste.

    In addition to their current negotiations, Keroche’s director Tabitha Karanja and Kariuki have another point in common. They were both in full support of President Uhuru Kenyatta on the campaign trail before being ensnared in his anti-corruption policy.

    In fact, this policy is what led Kariuki to put Africa Spirits up for sale. The common denominator between the Karanja’s and Kariuki is that they have all been attacked by the Kenyatta government despite having financed Kenyatta’s 2013 and 2017 election campaigns. They have become collateral damage in the big anti-corruption campaign organised by Kenyatta, who wanted to show that he was not taking action solely against his perceived political enemies.

    Keroche just like in Kariuki’s case, found themselves in the crossfire where the brewery was accused of Sh14B tax evasion in a case that also attracted political attention with many pointing accusing fingers at Statehouse for not being supportive of local industries. The case is still in court just like tbe Kariuki’s.

  • Keroche’s New Beer Brand Targets High End Consumers

    Keroche’s New Beer Brand Targets High End Consumers

    Naivasha-based Keroche Industries has introduced a new beer brand, eyeing the high-end market dominated by foreign booze.

    The firm launched its latest product dubbed X beer, a sugar-free brand, at its factory on Tuesday in a brief ceremony attended by its leading distributors and retailers.

    Speaking at the unveiling, Keroche CEO Tabitha Karanja said the new beer is a part of the brewer’s deliberate efforts to grow its market share to 20 per cent.

    “The quality of brand X and its richness is unmatched in the present market. It is targeted at the middle and upper-end market,” she said.

    “For years we have relied on imported strong beer. Being local manufacturers, we have chosen to fill this gap and give Kenyans a beer of great taste that makes for an easy enjoyable drinking experience,” she added.

    Keroche, which has grown steadily since it was set up by Tabitha and her husband Joseph Karanja about two decades ago, has a production plant with a capacity to produce 30 different brands.

    Tuesday’s launch came just months after the brewer unveiled Vienna Ice Strong Lager with 10 percent alcohol content in April.

    The new products come amid a financial toll on brewers following government measures to stem the spread of coronavirus by halting the sale of beers in bars and imposing a dusk-to-dawn curfew.

    This has forced firms to increase their online presence and embrace home deliveries to retain their customer base.

    Among popular Keroche products are the Summit Lager and Malt beers, as well as Vienna Ice and Crescent Vodkas.

    Beer X, with an alcohol content of 8.8 per cent, will retail at Sh250 per bottle.

  • Why CMA Faces Investigations

    Why CMA Faces Investigations

    The Capital Markets Authority (CMA) is now staring at parliamentary scrutiny for failing to protect investors, following the proliferation of unregulated and illegal investment funds that have led to loss of investor funds in the country.

    Garissa Township MP Aden Duale has asked the Finance and National Planning Committee to probe the CMA after investors cried foul over unfulfilled promises over the much hyped Cytonn High Yield Solutions (CHYS), offered by Cytonn Investments Limited.

    Cytonn which has for ages marketed the funds as private placements, a closed shop of a few sophisticated investors, limited to 100 investors and didn’t fall under CMA’s radar. However, court filings indicated that Cytonn had raised money from 3,000 investors in breach of regulations that demand funds raised through private placements limits to no more than 100 people.

    The Garissa town legislator also indicated various instances which he claimed was a backslide of the CMA to regulate the capital markets effectively in total disregard of Section 11 of the Capital Markets Act.

    Over time, investor confidence has been eroded on Kenya’s capital markets, with most investors sharing the sentiments that the Capital Markets watchdog has done little in terms of protecting the retail investors. In recent times however, CMA has taken regulatory action against some of the capital markets illegalities, the most recent being over the Kenol Kobil insider trading.

    In addition, the suspension of Deacons, Kenya Airways, ARM Cement, National Bank and briefly Nairobi Business Venture, Marshals East Africa, Atlas, African Lakes Corporation (Africa Online) and Unilever, all have shaken investor confidence, which CMA is ultimately mandated to protect.

    MP Duale’s Citations Over CMA
    • The 2005 Imperial Bank corporate bond valued at Kes 2.0 billion to bondholders which was issued despite having ongoing financial fraud within the bank.
    • Clearing Chase Bank to issue Kes 4.8 billion worth of bonds in 2005, after which the bank fell into receivership.
    • Nakumatt Holdings Supermarkets Kes 4 billion commercial paper issuance in 2018. (In default)

    Aden Duale, now wants the CMA to disclose the total number of unregulated capital market products in the country including the number of invested persons and the role of the regulator in the proliferation of illegal investment funds.

    Further to this, the legislator also wants the effectiveness and efficiency of the CMA established and the total number of firms penalized in last five years including remedial actions issued by the regulator listed

  • Safaricom’s New ‘Supa’ Mpesa App Issa New Supa systemic risk for the Economy.

    Safaricom’s New ‘Supa’ Mpesa App Issa New Supa systemic risk for the Economy.

    #TheFutureofMoney is obscure if making profit outweighs service delivery.

    While perusing through my twitter timeline, I came across a tweet  that juggled up my mind to think critically, deeply and analytically into the new Mpesa ‘supa’ app that safaricom launched and the motive behind the launch, the risk assesment as the consumer of their service and  in the long run you’ll agree with me that the #TheFutureofMoney they’re aiming at, is obscure for the consumer, the economy at large and it’s all about ‘them’ and not ‘us’.

    One of the my many other conclusive thoughts after my analysis and research is that It’s time Mpesa and Safaricom depart ways to become to independent entities – companies and with different management.

    For years since entry of the telco safaricom into the Kenyan market, it has through its management strategically thrived through and now have monopolised and dominated the market through tremendous innovations which has been massive and thumbs up for their innovations. But marinated with abuse – and to control the monopoly which’s against the laws and regulation of the Communication Authority (CA), CBK- this led to introduction of Mobile money Interoperability promotion which was stamped by CBK in April 2018. Mobile money Interoperability was aimed to promote inclusion.

    First, Mobile money Interoperability is the interaction between mobile money providers for a range of products, primarily money transfer which includes depositing and withdrawing cash either domestically or across geographic regions. And a good simple example is ATMs where a customer can withdraw cash from any VISA branded ATM if one holds a VISA branded card or MasterCard for MasterCard branded cards.

    It’s this interoperability that has made mobile money transfer possible across 3 major telecom providers in Kenya possible, that now one can send money via Safaricom’s mpesa to Airtel money to Telkom Kenya’s T-kash.

    The Central Bank of Kenya (CBK) laid out principles for interoperability, which included cost levels, efficiency, and security.

    Costs:  price for transfer of money across networks would not be higher than those of transferring money within the network, and no interchange fees will be applied. Of which has been breached and isn’t the current status as the cost is higher when carrying out transactions to another network.

    Security: the mobile money operators were tasked to ensure that the interfaces between them were as secure as possible to avoid any losses for both customers and the networks.

    Efficiency:  no undue delay would occur when transferring money across networks. This principle was aimed at ensuring no foul play that eventually frustrates customers into transferring money within the network while discouraging transfers across networks.

    Safaricom is licensed under National Payment Systems (NPS) whose regulations state that the Mobile Network Operators (MNOs) should use payment systems that are capable of being interoperable with other payment systems. A regulation which Safaricom has luckily conserved, hence the Mpesa business app, new Supa Mpesa app launched recently.

    Since the introduction and adaptation of the interoperability system in Kenya, the value addition to the consumers, Kenya’s economy has been great and in equal measure has plunged the economy into massive loss due to failure of market dominance regulation that has favored Safaricom in that it is either Safaricom or Safaricom and when their system fails and stalls for hours and of which has become frequent – you go down into losses with them together.

    Safaricom operating both Network service and Mobile money service whose system seems integrated that when one sinks, both sink together is a risk to the future of Money transfer in Kenya, risk to the economy, risk to the future of interoperability in Kenya and risk to the National security as it solely controls double the annual financial budget of Kenya.

    It’s shouldn’t be a choice for Mpesa and Safaricom network provider to be split into two different companies operated differently, it should happen. And so is Airtel money from Airtel, T-kash from Telkom and Equitel from Equity Bank. This will level the playing field for the game.

    The best interoperable payments platform would be one that includes all players- Banks and Mobile Money Operators (MMOs), this will level the field for all.

    Tanzania is set to launch this merger (TIPS) in July with same aim and its being done through the Central Bank.

    Tanzania Instant Payments System(TIPS) is a national interoperable payments system being developed by the Bank of Tanzania to facilitate real-time payments across all financial service providers in the country thereby enhancing financial inclusion by promoting the use of electronic payments and transactions.

    Tanzanians will be able to send money instantly to people in their mobile contact list without having to go through the need to search for their phone numbers.

    TIPS will operate in such a way that all digital payment systems, including mobile money operators (Airtel Money, Tigo, M-Pesa, HaloPesa, Ezy Pesa and T-Pesa) will be under a single platform so much so that anyone wishing to send money will only require to have the name of the person in his/her contact list before sending.

    Orange and MTN have an interoperable mobile wallet called Mowali. Unfortunately this was never launched here in Kenya when Telkom was under Orange. In favor of Safaricom, CA didn’t green light Mowali despite their bid.

    But in this world which’s a vicious circle, today Safaricom is trying its luck to enter into Ethiopia’s market with the dominance mentality of which Ethiopia’s Prime Minister at first halted their bid in favor of local network providers. If they succeed in their bid, they might not survive for so long if they continue playing the Kenyan cards.

    Communication Authority (CA) who is the regulator has been laying low on Safaricom’s dominance abuse in Kenya and has failed to take action according Monopoly and Dominance regulation which many times and again the teleco provider has exploited.

    In 2015 when new laws to regulate the competitive market were put in place, the guilty victim Safaricom’s then CEO Late Bob Collymore argued that the laws were meant to punish success and ever since, seems these laws got CA officials maybe into the telco provider’s payroll to remain maim.

    The regulations proposed that the authority would have the power to declare any entity that holds more than 50% of the market dominant. Of which Safaricom then owned 67.3% and 70% currently.

    Consumers ought to be the beneficiaries in as guaranteed under Article 46 of the Constitution, which states that:

    “Consumers have the right:

    a) to goods and services of reasonable quality

    b) To the protection of their health, safety and economic interests.”

    So, the solution is simple. Let’s have KIPS (Kenya Instant Payment System). All payments transactions cleared and settled by the Central Bank of Kenya on one platform to tame Safaricom’s dominance, to increase efficiency to protect consumers right to reasonable quality and protection of consumers safety and economic interest of which is to uproot poverty.

    A language that irritates  Safaricom Plc. It doesn’t want to listen to financial inclusion, equal economic growth for all.

    #TheFutureofMoney in Kenya with financial inclusion, equal economic growth is only through KIPS, leveled playing field and worthy men of Integrity in CA.

    Consistent system failures of Safaricom plunges the economy into losses and poverty.

    There’s no need for double tragedies of both network failure and money transfer failure at ago as it’s been experienced on several occasions in the country when the solution is a wide open visible light at the end of the tunnel.

  • COVID-19 Has Drastically Impacted The Air Charter

    COVID-19 Has Drastically Impacted The Air Charter

    Regional airline, Bluebird Aviation has today said Air Charter business travel has been drastically impacted by the Covid-19 Pandemic as many customers opt to work from home and most business transactions moved online.

    Air Charter simply means, ‘Air Taxi’ where an airline takes you to a destination, waits for you to transact your business and then flies you back.

    Bluebird Aviation General Manager, Captain Hussein Mohammed said because of people working from home, the business segment has been affected in terms of those dedicated charter airlines.

    “This Business segment has been drastically affected by virtue of the fact that you can transact business in a zoom meeting and electronically you can now transact business. So technology has evolved to an extent where you are able to transact business without having to go to a physical destination like Singapore or London,”said Captain Mohammed.

    He added, “Assuming Air Charter business was say 70 per cent pre-COVID times, Charters are now down about 20 to 30 per cent.”

    Bluebird Charter Planes.

    Medical Charter has also reduced drastically, since most patients being transferred from point A to point B are COVID-19 positive.

    “No airline wants to expose their staff, both cockpit and cabin crew to COVID. Most airlines want to first know the medical status of the passenger before they start evacuation. Most of these cases are referred to airlines that are specially equipped for medical evacuation,” said Captain Mohamed.

    However, commercial airlines business travel has been enhanced to a little extent by the virtue of the fact that those who can afford it and want to fly, there is sufficient social distancing and more room in the business class.

  • 748 Air Services Reports 80pc Booking Ahead Of The WRC Safari Rally 2021 Set For This Weekend

    748 Air Services Reports 80pc Booking Ahead Of The WRC Safari Rally 2021 Set For This Weekend

    Renowned aviation company, 748 Air Services has today reported an 80 per cent booking on its passenger flights ahead of the mega return of World Racing Championship (WRC) Safari Rally in Kenya this Weekend.

    748 Air Service Managing Director, Moses Mwangi saidthe high passenger traffic is not only attributed to the peak season but also the competitive air fares that 748 Air Services is offering and the anticipated World Racing Championship (WRC) Safari Rally expected to take place from the 24th to the 27th June 2021,in Naivasha.

    “We have seen an amazing increase in our flight bookings in all the routes in just one month since our launch in Kisumu, Mombasa and Diani. We are projecting that the flight bookings will continue to increase and we will be able to hit and retain more than 80 per cent,” said Mr. Mwangi.

    Fly 748 has been recording increased passenger bookings over the weekends. A strong indicator of the rising interest in weekend leisure travel among domestic tourists.

    “Our goal is to enable all Kenyans to be able to fly at very affordable market rates. This is a competitive edge that we are utilizing to sustain high bookings,” said Ahmed Jibril, 748 Air Services Chairman.

    Last week, President Uhuru Kenyatta said that Kenya is adequately prepared to welcome back the WRC Safari Rally slated for this weekend after 19 years.

    “The preparations have been intense and I want to thank all agencies, our private sector, and rally enthusiasts who have given time and effort to ensure that this event takes place,” Said President Uhuru Kenyatta in a statement to newsrooms.

    The Safari Rally is projected to inject Sh. 6 Billion into the country’s economy. The WRC returns to Africa for the first time since 2002. The event which is not only going to pool enthusiasts locally, has already seen international guests streaming in the country in what is definitely going to boost the hospitality industry that has been dented by the pandemic.

  • 748 Air Services‘ Nairobi-Kisumu Flights To Continue Uninterrupted

    748 Air Services‘ Nairobi-Kisumu Flights To Continue Uninterrupted

    Renowned aviation company, 748 Air Services has today said its daily flights from Nairobi to Kisumu will continue as scheduled.

    748 Air Service Managing Director, Moses Mwangi said new containment measures put by the government to manage a spike in COVID-19 infection rates within the country’s Lake Basin region will not affect the airline’s operations.

    “Following the latest government review on COVID-19 containment measures in 13 counties within the Lake Basin region following a spike in the infection rate in the area, We would like to notify you that the lock down does not affect our Daily Flights to Kisumu,” said Mr. Mwangi.

    Health Cabinet Secretary Mutahi Kagwe said on Thursday, the dusk-to-dawn curfew shall begin at 7pm and end at 4am in the counties of Busia, Vihiga, Kisii, Nyamira, Kakamega, Kericho, Bomet, Bungoma, Trans-Nzoia, Kisumu, Siaya, Homa-Bay and Migori effective Friday, June 18, 2021 until further notice.

    748 Air Services aircraft.

    The CS said the 13 counties have been declared a COVID-19 hotspot zone after registering a positivity rate of 21 per cent against a national average of 9 per cent over the last 14 days.

    “We will continue to operate as scheduled whilst adhering to COVID-19 containment measures on board all our flights. No meals or water will be served during the containment period,” said 748 Air Services Chairman, Mr. Ahmed Jibril.

    Air travel continue to offer safest travel during the pandemic according to health expert given the strict guidelines adherence. 748 Air Services, a new entrant in the western route has been getting positive reviews as they battle it out with other players like Jambojet, Safarilink in the route.

  • Details of Kenya’s Sh108bn fresh Eurobond

    Details of Kenya’s Sh108bn fresh Eurobond

    Debt ridden Kenya has once again raised Sh108 billion ($1 billion) in a fresh Eurobond. The bond issued at an interest rate of 6.3% for the 12-year bond is the fourth sovereign debt to be floated by the country under President Uhuru Kenyatta’s administration since 2014.

    The National Treasury reported that the offer that was oversubscribed has attracted bids worth Sh582.7 billion.

    Kenya hit its target of Sh108 billion on Thursday to get the loan whose principal will be paid back in two tranches.

    Dr Haron Sirima, the director general of the country’s debt management office said that he is struggling to reduce borrowing rates and lengthen repayment periods in attempts to ease pressure on the country’s cash flow.

    “We went to the market seeking to raise $1 billion and stuck to the discipline of our target amount despite the over-subscription and competitive pricing,” Sirima said.

    Public debt management office wants to ‘Amortise the bond’ so that the principal is paid in installments rather than one bullet to ease the rolling over of the bond when it will be due.

    Public Debt Management Office director-general DR. Haron Sirima [P/courtesy]
    “We are optimistic that Kenya will successfully execute liability management operations in the next fiscal year in line with the debt strategy of lowering cost and minimizing risks in the public debt portfolio.” he added.

    Dr Sirima also said that the move will spare the country the burden of looking for a huge amount of dollars to pay back the lenders at one go like will be the case in June 2024 when the $2 billion of the 10-year tranche of the infamous Eurobond issued in June 2014 becomes due.

    In 2019, the bond raised $2.1 billion in two tranches of $900 million priced at 7% for a seven-year paper and 8% for a 12-year, $1.2 billion tranche.

    Kenya’s commercial debt is mainly in eurobond and syndicated loans which accounted for close to 26% of external public debt last year.

    A debt review by the IMF has also revealed that the country’s loans from multilateral lenders sky-rocketed from $10.2 billion in 2019 to $13.7 billion in 2020.

     

     

     

     

  • Lobby Group Accuse Mumias Manager Of Colluding With Tycoon Raval To Shortchange Farmers In Takeover

    Lobby Group Accuse Mumias Manager Of Colluding With Tycoon Raval To Shortchange Farmers In Takeover

    Kenyan Association of Sugar and Allied Products (KASAP) reads mischief in plans by Mumias Sugar Company Receiver Manager to lease the troubled miller.

    According to KASAP National Secretary Peter Ondima the bidding process to find a suitable lessee ought to have been advertised and evaluation of all bidders done in an open and transparent manner.

    Ondima accuses the Receiver Manager PVR Rao of keeping the process under thick veil until concerns were raised by among others, sugarcane farmers, local politicians and other stakeholders.

    “It was very telling that while seven bidders chose to remain silent and allow a due process to follow, Mr Raval from nowhere emerged and started to announce how he had amassed wealth and wanted to direct Kshs. 5billion towards the revival of Mumias Sugar,” said Odima.

    Earlier this month, Devki Group chairman Dr Narendra Raval announced the withdrawal from the deal saying it lacked the input of key stakeholders.

    Devki Group is among eight firms which had placed bids to lease the ailing millers according to Mr Rao’s revelations before the Senate, other being Catalysis Group, Premiere JV, Sarrai Group, Kibos Sugar, Third Gate Capital Management, Godavari Enterprises, and Kruman Associates.

    ”We do not know whether Rao and Raval were testing waters to gauge reactions from Kenyans or they were serious but that where anger against Devki started,” added Ondima.

    Last week, the Senate’s Standing Committee of Agriculture had directed that the bidding process to find Mumias Sugar lessee start afresh and everything done transparently.

    Dr Raval however rebuffed claims that the bidding process was flawed, saying, ““The due process was followed and we were shortlisted and agreed in everything but at the time of starting Mumias, politics started.”

    A farmer Boniface Manda said,” had Dr Raval remained silent, nobody would have known that irregularities had been committed behind the scenes that culminated in secret signing of lease agreement without the knowledge of the other seven bidders.”

    KASAP wondered how Devki Group, a firm known for manufacturing steel and cement won the bid to lease Mumias Sugar at the expense of some bidders who are already in the sugar milling business.

    “Despite Raval’s remarks that he had sealed the deal to take over Mumias, Rao came out and said that nobody had already won the tender and the process of searching for one was not yet concluded with,” said Odima.

    Meanwhile sugarcane farmers from Mumias have warned Kakamega Governor Wycliffe Oparanya against forcing Devki lease.

  • Airline Travellers’ Confidence Growing Slowly, Report

    Airline Travellers’ Confidence Growing Slowly, Report

    Regional airline, Bluebird Aviation has expressed optimism of more people flying for leisure and business soon on growing confidence of travellers in Kenya and across the globe.

    Bluebird Aviation General Manager, Captain Hussein Mohammed said travellers’ confidence to be able to fly and the feeling that one’s health is not going to be affected and that they are not fearful of COVID-19 is growing but at a slow pace.

    “That confidence is improving albeit slowly and laboriously, but eventually we will be there,” said Captain Mohammed.

    Bluebird fleet.

    He added, “Initially I had thought that by the end of this year, that improvement would have increased significantly, but with what is going on in places like India, and low vaccination numbers in our country and limited availability and accessibility of vaccines has impacted on the growing confidence to fly again.”

    A report by the African Airlines Association (AFRAA) indicates that African airlines lost $10.21 (about Sh1.1 trillion) in passenger revenue in 2020 when the travel industry was severely impacted by the Covid-19 pandemic.

    According to the report, number of scheduled passengers carried by African airlines fell by 63.7 per cent from 95 million in 2019 to 34.7 million in 2020.

    “It will take about the end of 2022 for most travellers to regain the confidence to fly again and when a larger population would have gotten at least the first dose of the vaccines.” said Captain Mohammed.

    Kenya prioritized the vaccination plan to most vulnerable groups. So far, a total of 1,113,158 people had been vaccinated by Sunday among them 986,881 who have received their while 126,277 have received their second dose.

  • BIDCO Africa Launches Planet Tangawizi

    BIDCO Africa Launches Planet Tangawizi

    In a show of faith in the Kenyan market, BIDCO Africa continues to lead the Nation’s transformation agenda through a deliberate strategic direction and commitment towards enhancing Happy Healthy Living through innovations in manufacturing.
    BIDCO Africa has today launched Planet Tangawizi, a new Ginger Soda in the Kenyan market.

    The new innovative carbonated soft drink was launched by the Chief Administrative Secretary (CAS), Ministry of Industrialization, Trade and Enterprise Development, Hon. David Osiany when he paid a courtesy call at BIDCO Industrial Park (BIP) in Ruiru – Kiambu County. Flanked by Kenya Bureau of Standards (KEBS) Director of Quality Assurance and Inspection Mr. Bernard Nguyo, Hon. Osiany lauded BIDCO’s continued dedication and trust in Kenyan market by introducing and launching new products even in uncertain times.
    “Our role as Government is to create an enabling environment for investors by listening to their needs and challenges then identifying the relevant areas of support; what BIDCO has done today is a mark of confidence in our economy,” said Osiany.
    In a move to foster relations and collaboration between the public and the private sector, the joint visit by the Ministry and KEBS aimed to identify possible avenues through which the government can support grow the potential of manufacturers as part of the Big 4 Agenda while upscaling the economy.

    During the visit, BIDCO Africa showcased the huge multibillion investment in 4 manufacturing units that have brought to the local and regional scene, world- class systems used in the production of its food and beverage range of products.
    “I have gladly noted the impressive knowledge and skills transfer that has enabled understanding of the sophisticated machines which are at the centre of the company’s operations. As government, we will continue to support industry players to affirm the Big 4 Agenda and play strong in the now opened regional markets such as AfCTA,” said Hon. Osiany.
    Speaking during the plant tour, BIDCO Africa Group Chairman Dr. Vimal Shah noted that the company’s commitment to further invest to help grow the economy is firm. He lauded the government’s support in ensuring ease of doing business to help attract more investors that will position the country’s competitiveness.

    “We continue to put a mark of faith in the potential of our nation; we are glad to host the representatives from government today and with mutual beneficial winning partnerships, there exists a massive potential to boost our economic landscape through industry and public sector engagement,” said Dr. Vimal.

    KEBS Director of Quality Assurance Mr. Bernard Nguyo expressed his satisfaction with BIDCO’s level of compliance and adherence to both local and international standards of quality while setting pace for local players to define the market landscape.
    “We are impressed by the investment that BIDCO has put in place to ensure the consistent production of high-quality products meant for local consumption and export markets. This goes a long way in our mandate to setting high standards of quality as a nation,” said Mr. Nguyo.

    Planet Tangawizi is an additional brand in the Planet range of beverages already available in Kenyan market in three flavours of Soda namely Planet Orange, Planet Passion Pineapple and Planet Mixed Berries plus Planet Aqua water available for wholesome family refreshing consumption.

     

  • Britam Cuts Off Sh852M Ownership In Equity Bank

    Britam Cuts Off Sh852M Ownership In Equity Bank

    Insurance group Britam has sold an additional 20.1 million shares of Equity Group with a market value of Sh852 million, cutting its ownership in the country’s most profitable lender to a new low of 6.77 per cent in the year ended December.

    Britam, which in 2019 held 275.7 million shares of the lender equivalent to a 7.3 per cent stake, has been reducing the concentration of its investment in the institution which often represents more than 10 per cent of its total assets.

    The insurer says it made a loss of Sh134.5 million in the latest trade which came amid the lender’s depressed share price in the bear run that intensified in the wake of the Covid-19 pandemic.

    The insurer has disclosed the latest disposal in its annual report.

    “Fair value loss relating to the disposal of the Equity Group Holdings shares totalled to Sh134.5 million [compared to a gain of Sh332.5 million in 2019],” Britam said.

    “Fair value loss on revaluation of the Equity Group shares totalled to Sh4.2 billion [compared to a gain of Sh5.1 billion] in 2019].”

    Britam has been selling the bank’s shares to diversify its portfolio and also to comply with regulatory guidelines, capping investment in a bank at 10 per cent of an insurer’s total assets.

    “The concentration on equities in general and on specific counters is closely monitored. As at December 31, 2020, the group held shares in Equity Group Holdings Plc amounting to Sh8.6 billion (2019: Sh14.7 billion) or 12 per cent (2019: 10 per cent) of the total assets,” the insurer said.

    Britam has in recent years moved to reduce its exposure to Equity which in 2014 represented 26 per cent of its total assets on the back of the lender’s long-term stock price rally.

    The Insurance Regulatory Authority (IRA) in 2015 published investment guidelines that, for instance, capped an insurer’s investment in a bank at 10 per cent of its total assets.

    The requirement is meant to promote financial stability of an insurer which can be threatened if an oversize investment goes wrong.

    Britam started buying Equity shares in 2004 and holds them directly and through its various insurance subsidiaries.

    A rally in the lender’s share price means Britam will have to keep cutting its stake to tame the concentration risk.

    Losses in its investment portfolio, including the Equity stake, contributed to the insurer’s record net loss of Sh9.1 billion in the year ended December.

    The insurer also suffered investment losses of Sh5.2 billion in its asset management unit Wealth Fund Management Fund LLP.

    The insurer had made a net profit of Sh3.5 billion a year earlier. The loss in the review period saw the company suspend dividend payouts, having made a distribution of Sh630.8 million or Sh0.25 per share the year before.

    The company did not give details of what went wrong at the asset management unit, only saying there was an “asset-liability mismatch” in the fund.

    “The holding company is committed to support the fund to fulfil its obligations as they fall due through management oversight of the fund’s operations and the agreed recovery plan,” Britam said.

    Financial institutions

    It was not immediately clear how much money the fund was managing. The insurer says the wealth management funds mainly invest in deposits with financial institutions.

    Disclosure of the losses at the fund came after the insurer overhauled its executive and board, including the investment committee, giving it an opportunity to look at issues that may have been glossed over in the past.

    The company appointed Zimbabwean Tavaziva Madzinga as its chief executive effective February 1, replacing Benson Wairegi who had been with the insurer for 40 years.

    The company also replaced Andrew Hollas as chairman on the same day with Mohamed Said Karama on a temporary basis.

    Besides the troubles at the fund, Britam also took a hit from a drop in the value of its listed equities and property investments.

    Britam said that its core insurance business was resilient in the review period.

    “However operating results were better than 2019. Our gross earned premiums (GEP) and fund management fees were up 4.2 per cent to Sh28.8 billion from Sh27.7 billion,” the insurer said.

    “This is attributed to the growth of our insurance revenues especially the international general insurance business which recorded an increase in GEP of 50 per cent, contributing 28 per cent of the group’s GEP and a profit before tax of Sh832 million up from Sh38 million in 2019.”

    Source: BD.

  • Netizens Weigh In On The Elmer Resort Fractional Ownership Concept Pushed By Terryanne Chebet

    Netizens Weigh In On The Elmer Resort Fractional Ownership Concept Pushed By Terryanne Chebet

    Perhaps coming from the past harsh experiences and rush for blinded investments without due diligence, Kenyan middle class have become a hit target for most scammers who eventually perish with their hard earned cash.

    We can’t list all the pyramid schemes that has seen unsuspecting Kenyans lose billions to scammers who sell them ideas that are unbeatable. Real Estate has been a hotspot and many have been duped and counting loses. More often, like in the recent case of Greenhouse scam where millions of clients money was stolen by the directors, the schemers use the mass media and influential personalities to sell their schemes as genuine. All this has been happening undeterred due to rushed decisions without conducting due diligence, not seeking professional investment advice.

    While many conned Kenyans are currently counting loses, and wins as well because not all projects proposed are dubious, more schemes and projects continue to crop up.

    Elmer Resort And Spa in Naivasha has come up with a unique concept where one can hold a share in the hotel line by investing Sh3.3M for a villa. So in plain text, you own the hotel not the whole but just a portion, more of like buying a floor in an apartment.

    The ad which was shared by media personality Terry Anne Chebet on Twitter, has since brought up a discussion about investment security with 90% of comments giving red flags for the concept.

  • CBK Willing To Offer Emergency Cash To Bank That Was Sold As A Shell To Teachers

    CBK Willing To Offer Emergency Cash To Bank That Was Sold As A Shell To Teachers

    The Central Bank of Kenya (CBK) is open to offer emergency cash support to distressed Spire Bank whose core capital and shareholder funds have been wiped out by eight years of back-to-back losses.

    CBK governor Patrick Njoroge said the regulator would grant the teachers-owned bank access to its discounted loan facility if it falls short of cash for its day-to-day operations in the short-term, including meeting customer demand.

    “Any bank that is facing liquidity challenges has at its disposal all sorts of tools [but] of course it also depends on the source of the liquidity challenges,” Dr Njoroge told an online press conference when asked if the financial services regulator was concerned about the liquidity situation at Spire Bank.

    “In case of emergencies — because they cannot adhere to the CRR (cash reserve ratio) — then, of course, there’s emergency window in the context of the CBK. The central bank, after all, is the lender of last resort in some of those extreme cases if indeed it gets to that.”

    The CBK “discount window” facility is traditionally a last resort for distressed banks after exhausting all other avenues, including borrowing from each other.

    Banks can borrow from the regulator through the facility at charges currently at 13 percent.

    Banks are required to hold an adequate amount of liquid assets, such as cash, to manage any potential bank run by clients. If a bank cannot meet these liquidity requirements, it will need to borrow money in the interbank market to cover the shortfall.

    The larger banks have been reluctant to lend to their smaller counterparts since the collapse of the three smaller banks- Dubai Bank, Imperial Bank and Chase Bank — a few years ago, citing heightened risk.

    Spire’s total customer deposits have fallen by 43.9 percent to Sh4.79 billion in December 2020 from Sh8.54 billion in 2016, signaling worsening liquidity situation at the bottom-tier lender.

    The loss-making bank is not able to lend — denying it a key source of revenue —owing to its negative capital position over the last three years, with core capital standing at negative Sh2.63 billion last year from negative Sh1.41 billion in 2019 and negative Sh1.67 billion the year before.

    The bank’s loan book has more than halved to Sh3.83 billion over the review period — 70.84 percent of which were non-performing last December.

    The deteriorating financial health of the bottom-tier lender has prompted lawmakers to institute a probe into events that led to loss of investment by teachers through their giant umbrella union.

    After taking over the reins at the CBK in June 2015, Dr Njoroge shut Dubai Bank, Imperial Bank and Chase Bank between August 2015 and April 2016 because of dire liquidity challenges which saw them struggle to meet client cash demands.

    No bank has collapsed as a result of liquidity challenges since then. Resorting to the CBK, as a last option, may put a bank at risk of a fallout with investors and depositors.

    Source: BD.

  • Nairobi Hospital to fire over 200 workers

    Nairobi Hospital to fire over 200 workers

    Court has given the struggling Nairobi Hospital green light to fire over 200 employees in a move aimed at reducing costs, uprooting under performing staffers and those involved in mega scandals within the facility.

    Justice Nzioki wa Makau dismissed a petition filed by Kenya Union of Domestic, Hotels Educational Institutions Hospitals and Allied Workers (Kudheiha). The judge ruled that it was premature to challenge the hospital’s move given that the letter by the management was only meant to initiate talks between the parties before the restructuring plan.

    “Since courts loath to interfere with the managerial prerogatives, the matters at play are within the purview of the parties to deal under the resolution mechanisms provided for in the CBA and through the conciliatory process at the Ministry of Labour,” Justice Makau ruled.

    KUDHEIHA Secretary- General,  Albert Njeru [p/courtesy]
    Kudheiha had moved to the Employment and Labour court to block the retrenchments arguing that the scheme saying it was targeting its members for a complete removal and not restructuring as purported. The union also complained that the plan was reached without strict adherence to the mandatory procedures set out in the Employment Act.

    Nairobi Hospital is financially limping with bulging operational costs and losses in the wake of an economic slowdown occasioned by the Covid-19 pandemic outbreak.

    But Kudheiha Secretary- General,  Albert Njeru, stated that it was business as usual at what should be the country’s premier healthcare facility except the shortage of beds which is blamed on surge in Covid-19 patients admission.

    Nairobi Hospital had written to the Cabinet Secretary for Labour, Simon Chelugui, about their intention to fire a section of their staff as it also admitted that it was overwhelmed by new admission of patients and is incurring losses.

    In May 2020 medical workers union also went to court to challenge the hospital move that forced employees to work overtime in order to cope with the rising numbers of Covid-19 patients.

     

     

     

     

  • Malindi Family Living In Fear Over Bakshuen Land Invasion

    Malindi Family Living In Fear Over Bakshuen Land Invasion

    A family in Malindi is living in fear after a portion of their land was invaded and properties worth millions of shillings were destroyed.

    The famous Bakshweini family has been fighting to wade off squatters in their 360 acre farm prompting them to sell off part of it.

    Several court decisions have been made in their favour but the squatters have continued to invade the land disregarding court orders and rulings.

    Mr. Salim Bakshweini, the family spokesman says that his father bought the contested piece of land in 1955 and the family has been carrying out farming activities on it.

    He adds that the squatter problem started in the 1980s by people he says were employed by his family and some rented portions of the land but turned against them.

    “We used to live peacefully until people we used to rent a section of the farm started claiming ownership and put up permanent houses,” he says.

    The incidents resulted in court cases that have spanned over thirty years starting in 1989.

    The squatters had moved to court to seek an advanced possession but the family was saved by the numerous documented evidences they produced.

    “The squatters were not satisfied with the court decisions all those years and in 2006 they invaded the farm, slashed several animals, burnt buildings and tried to burn me inside my car,” he says.

    After all the court cases the family decided on human grounds to cede 58 acres of land to the squatters and through consultation with the National Land Commission (NLC) and the Kilifi County government, the action was sanctioned but still the squatters continued to invade more land.

    A document from the NLC dated 7th May 2015 indicated that the commission had allowed the ceding of land to squatters to settle the land dispute.

    “The latest search for the parcel confirms that the land belongs to the Bakshuwein family. The family has had dispute with at least six families of squatters with whom have been to court severally,” the document signed by then NLC chairman Mohamed Swazuri states.

    It further stated that the Bakshuwein family had offered to forfeit previous and current court costs to the squatters in addition to allocating them land free of charge.

    “The purpose of this letter is to convey this amicable solution of the squatters for them to vacate the land as per all the three court rulings and encourage squatters to respect private property as provided for in article 40 of the constitution of Kenya and ensure that the dispute comes to an end,” it states.

    The County government of Kilifi also approved the change of use of the agricultural land to residential to settle the six squatter families in a letter dated 6thNovember, 2019 and done by the chief officer lands, energy, housing, physical planning and urban development.

    Mr. Bakshuwein said that the family was granted permission to evict the squatters on a 20 acre piece of land, a move that irked residents who protested and blocked the busy Malindi- Sala Gate road on Saturday.

    He produced documented evidence to show that the land was indeed theirs and waded off any storm.

    The demonstrators invaded a dairy farm of the Bakshuweini’s, burning down a Mosque and stole 138 goats and 10 sheep.

    According to Mr. Mohamed Ahmed who works at the farm, about 300 armed people stormed the farm and started pulling down the fence before burning the Mosque and walking away with the animals.

    Mr. Ahmed added that their security was now at stake and many employees had already left the farm.

    Mr. Samson Charo, another employee at the farm said that he was not sure of his future since the Bakshuweini’s were now selling off the land due to insecurity.

    An employee of the Bakshuwein search at a burnt Mosque in the family dairy farm.

    “We were 25 employees but since the attack on Saturday the rest left and we have only seven remaining. The government should provide security to investors so that our jobs can be secured,” he said.

    Kilifi governor Amason Kingi on his part told journalists that the matter had been brought before him and that several meetings have been done to try and solve the squatter problem in the area.

    He said that the Bashuwein issue was a delicate one that needed involvement of all parties to wipe out suspicions.

    “The matter is still at the discussion level. I have had several meetings with both sides. There was an agreement that everything stops to give way to negotiations until the matter is solved but I was shocked to hear of the demolitions,” he says.

    He added that his government has presented two options to try and solve the matter including giving the squatters part of the land or the government buying the entire land to settle the squatters.

    “We are discussing two proposals at the moment and transparency is key so all parties must get down on the negotiation table,” he adds.

    He also said that his government was exploring ways where the national government will buy the entire piece of land from the Backshuwein family and settle the squatters to end the impasse the same way it was done with the Mazrui and Waitiki lands.

    “The second option is to buy the land in its entirety but we must involve the national government since the process is not simple,” he says.

    The Backshweini’s now want the government to provide them security or buy their land so that they can move on with their lives.

    “Insecurity and interference by politicians pushed us to sell a huge chunk of our land but still we are not safe,” says Said Bakshuwein.

  • Consumers cry over Liquid Telecoms poor internet, customer care

    Consumers cry over Liquid Telecoms poor internet, customer care

    Cable and internet suppliers are a prime example of  companies that enjoy monopolies on their markets in many areas but with poor internet provisions and customer service. Liquid Telecom which should be country’s top internet provider has been giving trashy services to customers who have little choice but to suffer through poor support experiences when they need help.

    This company has been providing terrible services even before it re branded from KDN (Kenya Data Networks) to Liquid Telecom. Dissatisfied customers are left with no option but to look for other alternatives  which is a nightmare in areas only covered by reluctant Liquid Telco.

    One social media user has bursted the company over poor services and a series of lies despite making timely and full payment of his subscription for months without any internet.

    One customer care staff only identified as John has been taking the client on rounds prompting him to travel from upcountry to have his internet fixed but upon arrival at the company headquarters, John lied that he was on leave and other staffers are working from home.

    The bad customer service stories have created PR nightmares for the Liquid Telecom which is now losing a huge share of the market to to new entrants that are keen to avoid similar situations of that usually end up in the limelight.

    In October 2020 another client busted the company for installing him WIMAX to provide 5 mbps but the internet that turned extremely slow after succesful installation to an extent that his kids could not to connect to the online classes and web pages took longer to load.

    .

    He raised his complaints to Liquid Telecommunications Kenya Ltd through their +254205000000 and raised complaints several times but in all cases, the customer support team lied that they were resolving the problem.

    The internet speeds were too low than 5 mbps as agreed in the Contract which the company admitted was on their side but completely ignored solving.