The IDB Capital Limited will receive a credit line of $30 million (Sh 2.3 billion) from India, negotiated by the Government for lending to investors in the country.

The bank’s managing director, James Ochami, said the bank had also approached several other financial institutions to enable it to lend more to local investors.

“Currently, it is being processed by the Treasury and we are hopeful that by the end of the year we should be able to access the facility,” Mr Ochami said.

Bilateral funds

He added that the bilateral funds were being facilitated by the Bank of India, while IDB would be responsible for on-lending to the investors. One of the conditions is that 70 per cent of the money will be used to purchase goods from India, mostly industrial machinery.

Speaking during a luncheon organised for visiting investors from India at Hilton hotel, Mr Ochami said the bank had restructured and returned to profitability after years of posting losses.

The government owns 58 per cent shares in IDB, with quasi-government institutions and private investors holding the other shares.

Mr Ochami said the company was also negotiating $20 million from Africa Export & Import Bank, and another Sh500 million from the PTA Bank.

Joint ventures

Indian businessmen under the Confederation of Indian Industries who attended the function expressed interest in having joint ventures in the country. They are interested in processing agriculture products, software development, energy, chemical, road construction, steel industries among others.

Confederation of Indian Industries chairman P. Rajendran said the joint ventures will enable technology transfer, which will boost production in the country.

However, he added that negotiations for the credit line had dragged for three years, and urged the government to facilitate faster transfer of the funds.
In other countries like Nigeria, there are established lines of credit with government of India through Exim Bank where individual projects receive credit.
It is important to lobby the government for this to happen here, for it will unlock potential.” he said.

A Kenya investment bank has signed a deal with a financial service group on securities trading.

Imara, a Pan-African group, on Friday partnered with NIC Capital Limited to cooperate in the fields of corporate advisory and securities trading.

The collaboration will also extend to investment research, an area of strength for Imara Group which has a large base of international investors and therefore receives constant updates on developments and opportunities within Sub-Saharan markets.

NIC Bank Group Managing Director, James Macharia, welcomed the cooperation as a significant development that would give NIC Capital clients a window of investment opportunities in a wide spectrum of African markets.

“We are eager to pursue synergies with Imara Group who have a strong reach into numerous markets across Southern, Central and West Africa,” said Mr Macharia.

The agreement comes at time when both parties anticipate growing investor interest in Africa ‘frontier markets’ as investors’ risk appetite revives following the international credit crunch.

Imara Group Chief Executive Mark Tunmer said: “Imara is positioned internationally and across Africa as a financial services group that is close to developments in all key sub-Saharan markets. For some time, we have been looking to strengthen our position in East Africa; Kenya specifically."

NIC Capital has been involved in various investment banking projects in construction, health care and industrials sectors including the recently concluded Centum Investment buyout of a 22.6 percent stake in Carbacid, a local carbon dioxide gas maker.

The Higher Education Loans Board will advance loans to students studying in universities outside Kenya but within East Africa beginning this year.

Higher Education Minister, Sally Kosgey announced the move on Friday. "The financial support that has been available only to students in local universities will be extended to Kenyan students in universities in East Africa," she said.

In a statement read on her behalf by Assistant Minister for Higher Education, Asman Kamama, she said plans are underway to allocate more funds to the Loans Board.

Self-sponsored

The loans, which had been available only for students, admitted to public universities through the Joint Admissions Board (Jab) was extended last year to self sponsored and private university students.

According to Kosgey, the move enabled more Kenyans to access higher education.

"Increased financial support for loans, bursaries and scholarships to university students has ensured a steady increase in the number of Kenyans with university qualifications including bachelors, masters and doctorate degrees," the minister said.

Following the success, the ministry has extended the loans to students in East Africa, said the minister.

Students enrolled in universities in Uganda, Tanzania, Rwanda and Burundi would benefit from the money to be offered by Helb.

A multimedia centre to train youth in information technology and entrepreneurship will be launched in Kisumu in July.

The centre, under the Victoria Institute of Science of Technology (VIST), will be equipped with low-cost high-speed Internet, an e-library, video and audio equipment to give technologically disadvantaged youth the skills they require to create jobs. It will be at KCA University Kisumu Campus.

Last week, the two institutions signed an agreement in Nairobi.

VIST is the brainchild of Prof Calestous Juma, a Kenyan academic of International Development at Harvard University.

About 200 computers and other electronic equipment have already been shipped to VIST.

Cutting edge

VIST Chairman Martin Oduor Otieno, who is also the Kenya Commercial Bank Group chief executive, says the centre was meant to help youth acquire cutting-edge skills to create employment.

"Young people are the torchbearers of the world of information and communication technologies and the centre will help them combine scientific knowledge and entrepreneur skills," says Oduor.

He says the center will "bridge the digital divide" because most investments in ICT are based in Nairobi.

He disclosed that volunteer ICT experts from the US will arrive soon.

Japan will spend Sh309 million to construct dams in a bid to control flooding in Nyando District.

Nyando MP Fred Outa said the money would be channeled through the Japan International Cooperation Agency - JICA.

Mr Outa said water stored in the dams would be used for irrigation and domestic purposes.

"The perennial floods have led to crop failure. The dams would give residents a lifeline," said Outa.

He added more than 20,000 people face starvation due to drought.

He added rice farmers would benefit from the irrigation programme. Outa added residents would also diversify from sugarcane and rice farming to food crops such as vegetables, tomatoes, maize and beans.

Area study

He added JICA experts had done a study in the area ahead of the dam construction. "The experts report would outline how many dams would be set up," he added.

The MP told The Standard that the Overseas Development Assistance (ODA) committee members would monitor the projects to ensure accountability.

The MP said President Kibaki, Prime Minister Raila Odinga and Japan Ambassador to Kenya Shigeo Iwatani had confirmed the construction of the dams were among projects Japan was funding.

The Government will spend Sh4.2 billion to rehabilitate Hola and Bura irrigation schemes in Tana River to boost food security.

The programme will be implemented under the National Stimulus Project on food production under irrigation.

Ministries of Water, Agriculture, Youth and Northern Kenya Development will oversee it.

The Hola and Bura schemes have an irrigation potential of 8,750 and 13,750 acres, respectively while developed land is only 1,200 and 5,000 acres.

The rehabilitation will be jointly funded by the Government, Kuwait, the Organisation of Oil Producing Countries and the Arab Bank for Economic Development for Africa.

Reconstruction of the scheme, which collapsed in 1989, has begun.

During an inspection of the works yesterday, Water Minister Charity Ngilu regretted Kenya suffered food insecurity while its agricultural potential was under exploited.

She said the situation was made grim by prolonged drought.

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Jubilee signs Sh30bn risk deal

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http://www.nation.co.ke/image/view/-/639070/highRes/94248/-/maxw/600/-/jbf5kp/-/tumbo.jpg Jubilee Insurance general manager, Patrick Tumbo (left) and Africa Trade Insurance acting chief executive officer, Stewart Kinloch while addressing the press on August 13, 2009. Photo/FILE
By MWANIKI WAHOMEPosted Thursday, August 13 2009 at 15:07

An insurance company has signed a Sh30 billion agreement to underwrite political risks for its clients in the country.

The agreement between Jubilee Insurance and African Trade Industry Agency will see its customers covered for losses incurred in political activity.

Jubilee Insurance general manager, Mr Patrick Tumbo who signed the agreement said they had discovered a gap in their products following the 2008 election crisis, which left many businesses ruined.

The political violence, terrorism and sabotage protection that the two companies will offer allows their customers in Kenya, Uganda, Tanzania, Mauritius, Burundi and Rwanda to be protected against damage to their property or businesses that result from politically induced risks.

Speaking at Laico Regency, Mr Tumbo said the product will benefit its clients who were spread in many sectors adding that it would enable them negotiate better financing terms with banks at a time when the funding was drying up.

He said some banks had started shying from funding projects with implementation period beyond five years due to political risks.

ATI’s acting chief executive officer, Stewart Kinlock said the inability of the local insurance companies to underwrite losses incurred during the political violence estimated to run into billions nudged them to develop the product.

“When we step into the picture we are offering peace of mind to both local and foreign investors. Essentially, we are saying you don’t have to worry, we assume political risks in Africa and you focus on building your investment.” he said.

He said ATI provided re-insurance to the market jointly with local and international partners like Africa Re, the East Africa Reinsurance Company and Lloyds of London.

“This partnership enabled ATI to create a unique product that local insurers can access and then pass on to their customers alongside their existing policies such as motor vehicle and property damage.” Mr Kinlock said.

Political risks were not taken seriously until violence broke out following the 2007 disputed presidential elections which left many businesses destroyed.

Some of the businesses were offered ex-gratia payments by the insurers since the covers they had not factored political risks.

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The Government and Italy will put more than 20,000 acres of land under irrigation along the Sabaki river in Malindi District.

Regional Development Minister Fred Gumo, also announced a hydropower project would be installed at Mwache in Kinango District.

Mr Gumo spoke when he inspected projects run by the Coast Development Authority and the Italian Government in Malindi, yesterday.

He regretted most development authorities had failed to meet their targets in the last decade due to lack of funds and financial impropriety.

Among the projects he inspected is the Malindi District Hospital X-ray wing, which has been dormant for two years.

Others were Ngomeni primary and secondary schools, under construction at a cost of Sh27 million.

The Westlands MP noted the Sabaki River had enough water to support irrigation. This, he said, would ensure food security.

"The river has the capacity to provide food for more than a million people if its waters are put under irrigation," he said.

http://www.businessdailyafrica.com/image/view/-/639446/highRes/94395/-/maxw/600/-/elepxuz/-/Kisumu-town-clerk.jpg Benjamin Orwa, Kisumu Town Clerk
By Cosmas Butunyi (email the author (javascript:void(0);))






Social facilities in Kisumu are about to enjoy a facelift courtesy of a planned Sh4 billion investment from the French Development Agency (AFD).

The funds will be invested in housing, development of infrastructure and construction of markets and schools in the city. It will be implemented by the Kisumu Municipal Council.

The deputy director of AFD, Olivier Belefosse, said that the city’s slums would also be upgraded under the Kisumu Urban Project.

The ministry of housing estimates that slums take up 150 acres of Kisumu municipality. A third of the city’s population, an estimated 200,000 people, reside in these informal settlements.

According to the town’s principal water service provider, it faces a major challenge connecting these unplanned settlements to the main water distribution network. As a result, slum dwellers pay more for their water than other Kisumu residents.

Mr Belefosse said that the city’s waste management system would also be improved and its capacity enhanced with this funding. The city will get a new waste water plant.

At present, waste water from Kisumu is handled by the Kisat treatment plant and Nyalenda lagoon, both of which are only partly functional.

Kisumu Town Clerk, Benjamin Orwa, said that the town’s social facilities are overstretched and the project would augment the council’s efforts to provide adequate services.

Local ownership
Mr Orwa said it would help narrow the gap between residents’ expectations and the service they received from the council. A team of officials from AFD led by its deputy director visited Kisumu this week to observe preparations for the project.

The team held talks with the local authority on other possible areas of cooperation, such as administration and the welfare of children and people living with disability.

Mr Belefosse said that an agreement would be signed in September between his organisation, the finance ministry and the Kisumu Municipal Council, paving way for the project’s implementation. A seminar is planned in the same month to sensitise residents of Kisumu on the planned investment.

According to Kisumu Mayor Sam Okello, this is one of the terms of reference from the AFD and is intended to inculcate local ownership of the project.
“Projects have to be people-based. There is no point in constructing markets that people will not use,” he said.

Mr Okello said that the project includes a component to improve the revenue collection system and general management at the Kisumu Municipal Council.

Twelve other social amenity improvement projects including schools, dispensaries and markets are already ongoing in Kisumu under the Kenya Slum Upgrading Project (KENSUP), a joint initiative of the government and UN-Habitat.

The KENSUP project kicked off early in 2004 to improve the social and physical infrastructure in informal settlements within Kisumu, Nairobi, Mavoko and Mombasa.

Another Sh4 billion water project jointly funded by AFD and the government is already ongoing in Kisumu. Its goal is to eliminate water shortage in the city that sits on the shores of the world’s second largest fresh water lake.

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Major players in China’s tea industry are looking into possibilities of partnering with Kenya’s small-scale farmers to grow high yielding tea varieties to meet rising demand.

Chinese Tea Culture Association Director Herman Cheng said his organisation would conduct studies on suitable climatic conditions where tea is grown, including South Africa.

In an interview with The Standard on Saturday at Hong Kong Convention and Exhibition Centre breakfast meeting for exhibitors, Mr Cheng said the move is driven by the need for land to grow tea.

He said demand for land in China was high owing to the rising population, which stands at 1.3 billion.

"We believe partnering with small-scale farmers from Kenya and Africa is the only way to go," he added.

He said Chinese tea culture has a long history and encouraged researchers to carry out studies on the importance of tea as a medicinal plant.

The trade fair dubbed Hong Kong International Tea Fair, which has attracted 250 exhibitors from 17 countries and regions, including major tea producing countries, was sponsored by Hong Kong Trade Development Council (HKTDC). "We want to help small-scale farmers have a better life out of the tea industry by empowering them with good crop husbandry that will lead to better returns," he said.

Exchange programmes

He said Kenya and China have cordial relationships through exchange programmes not only in trade but in culture.

HKTDC Assistant Executive Director Raymond Yip said Hong Kong has positioned itself as a major trading hub in Asia and the world owing to its free port, free flow of information and capital.

"As a culinary paradise, Hong Kong is ideally placed to provide the necessary platform in growth areas such as tea and food," he dded.

Mr Yip said Hong Kong hosted the tea fair to facilitate global trade, build Hong Kong as the major trading hub of Asia and encourage tea culture.

During the three-day trade fair, Mrs Sicily Kariuki, Tea Board of Kenya managing director presented a public lecture on the strengths and development of tea auction in Mombasa.

Kenya Ports Authority (KPA) has made a profit of Sh5.3 billion in the financial year ending June.

Managing Director James Mulewa said it was the first time KPA had made such a profit since inception three decades ago.

"KPA made a record of Sh5.3 billion profit in the financial year ending last June, which is a major limp in comparison with Sh1.4 billion realised in the 2007/2008 financial year," said Mulewa.

He said KPA earned Sh18.373 billion in the year under review.

"The revenue earned is Sh18,373 million for the last financial year compared to Sh13,890 million the previous year," Mulewa said.

He said expenditure in the past financial year went up from Sh12,437 million to Sh13,228.

Mulewa, who has been in the office for a year, after taking over from Abdallah Mwaruwa, attributed the improved revenue to stringent internal financial controls.

Automation System

"The commendable performance is attributed to a number of factors among them stringent financial control, teamwork and improved collection because of the Kindinini Waterfront Automation System," he said.

He said introduction of a 24-hour work system at the port had also contributed to improved earnings.

Mulewa said a 40 per cent salary increase for unionisable workers had boosted employee morale.

Meanwhile, crews of two Egyptian fishing vessels have escaped from Somali pirates after overpowering their captors and killing two of them.

The kidnappers had held the 34 fishermen hostage since hijacking the Momtaz 1 and Samara Ahmed in April. Gunmen from the failed Horn of Africa state have made tens of millions of dollars in ransoms from attacks in the strategic Gulf of Aden.

An associate of the pirates told Reuters the Egyptians escaped on Thursday after seizing his colleagues’ weapons.

Two pirates were killed in a shoot-out, several were captured and one was rescued after being stabbed and thrown into the sea.

CFC Stanbic has partnered with M-pesa, Safaricom’s money transfer service, joining a growing list of companies using the mobile technology platform.

This service will enable the bank send money by M-pesa on behalf of its customers.

"We constantly endeavour to meet client requirements and changing market trends through innovative solutions," said Mr Robert Masinde, the bank’s head of transaction banking.

Using the bulk payments option, CFC Stanbic will be able to process volume payments on behalf of customers.

Safaricom’s bulk payment service targets organisations, which do promotional payments, field staff disbursements, salary disbursements and dividend payments among others.

CFC Stanbic joins a long list of firms that have field-based staff and using Safaricom’s mobile phone platform.

Account Balance

The bank’s customers will be required to send a list of beneficiaries’ names and phone numbers, indicating the amount to be paid.

The bank will then transfer the cash to these individuals M-pesa account.

Customers can hold a maximum balance of Sh50, 000.

Withdrawals can be transacted at any of the more than 10,000 M-pesa agents countrywide, including the Pesa Point ATMs.

Safaricom’s bulk payment platform is ideal for clients who need a quick way to send funds.

Initially, the product for the retail segment, M-pesa has expanded to offer corporate solutions, including payment of bills.

The Government is proposing new legislation, which will bar foreign investors from selling shares immediately after initial public offerings (IPOs).

Planning Minister Wycliffe Oparanya said such laws would protect local investors from capital losses, which result from falling share prices.

"We should have a safeguard where foreign investors should trade up to a particular period before they are allowed to dispose their shares," Mr Oparanya said Friday.

Oparanya said foreign investors should be locked in for at least six months before they are allowed to offload shares to enable the market to stabilise.

Supply and demand

"This would allow the market to stabilise at a particular level, mainly due to the forces of supply and demand," he said.

Oparanya said lessons from the Safaricom IPO had shown the need to protect local investors who invest their hard earned cash in listed companies.

Safaricom IPO, which was priced at Sh5 per share, rose to a high of Sh7.50 during the listing day on June 9, last year, but eventually dropped by 44 per cent to Sh2.80 a year later as foreign investors liquidated their investments in emerging markets.

Many investors, who borrowed from commercial banks to buy Safaricom shares burnt their fingers and were left grappling in financial distress.

The minister was speaking during the launch of the Kenya Association of Stock Brokers and Investment Banks (Kasib) investor education programme.

While lauding the initiative as ‘good’ for the market, Oparanya also told brokers to address governance issues that have triggered the collapse of three brokerage firms.

"It is important that you observe ethics when it comes to the capital markets," he said.

Code of conduct

In June, Kasib launched a code of conduct, which will guide players in the capital markets.

He said the Government has come up with regulations to strengthen the market and instill ethics and professionalism.

Oparanya said the stock market was critical to the Government, as an avenue of mobilising the much- needed resources to fund implementation of projects identified under the Vision2030 programme.

He told stockbrokers and investment bankers to open their outlets away from Nairobi to rural areas to reduce travelling costs incurred by investors.

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Tea farmers are set to benefit from a revolutionary technology that improves efficiency and transfer of data at tea buying centres.

The electronic weighing machines, which are so far on trial in three factories, has been well received by farmers who have for long complained that figures at buying centres were being tampered with by collection clerks.

In many factories, only full kilos and half kilos were being entered at buying centres, and any other grammes above this were not recorded.

The weight was being recorded by hand, which would then be transferred manually to records at the factories.

But now, following the acquisition of the machines, all this is being done at the tea-buying centre.

The set comprises of three gadgets: A weighing machine, a Personal Digital Assistant (PDA) and a small printer.

All these are wireless and use bluetooth technology and are paired to each other.

Once the measurement is taken, the PDA receives the weight wirelessly from the weighing machine. The farmer gives his or her number, which is entred into the PDA. The clerk further entres the name of the buying centre, the mode of transporting the leaves to the factory and if by truck, the name of the driver.

This information is relayed to the printer wirelessly, which prints a receipt for the farmer.

Once the process is through, all this data is sent through a GSM network provided by Safaricom to the factory. It is received there by a server and automatically entered into the records.

"I’m happy now because in the past, so much of my work was going to waste," beamed Mr Nderitu Thuita, a farmer affiliated to Gathuthi Tea Factory in Nyeri. "In the past, we were wondering who benefits from all those kilos that were never recorded."

The system is in use in Mununga Tea Factory in Kirinyaga and Nyankoba Tea Factory in Kisii.

Bogus growers

Kisii farmers contacted by The Standard on Sunday say collection clerks ‘steal’ from them and later sell the leaf quantity unaccounted for to bogus growers, who are registered with KTDA, but have no tea farms.

And if they doubt the clerk’s word about the weight, the official threatens not to buy their leaf again and that is why they have kept delivering. They say the clerks are so arrogant that some growers, out of frustration, have either abandoned farming or resorted to hawking their crop to brokers.

Zone Six Regional Manager Willis Odhiambo expresses confidence that the introduction of new system will end falsification of green leaf weight.

"The claims of farmers being shortchanged should not arise any more. It is not the clerk to read," Odhiambo explains, in an interview at his office in Kisii.

Odhiambo, who is in charge of 12 factories in the zone, says the new technology has been piloted at Nyankoba Tea Factory for a year and found operational.

Mr Mokaya Ogero, a farmer contracted to Nyankoba Tea Factory and a committee member of Rikenye Tea Buying Centre, says the initiative is a success story. They now take a shorter time to buy and deliver the crop.

However, the introduction of the system has received mixed reception in Murang’a District.

Farmers affiliated to Kiru Tea Factory have welcomed the move while others protest, saying KTDA did not explain how the machine works.

Stories by Patrick Muthangani, Robert Nyasato and Boniface Gikandi

Efforts to ease traffic congestion in Nairobi could be hampered by emerging differences between the City Council of Nairobi and the Ministry of Metropolitan Development.

City Hall says it is in charge of construction, repair or any other project that involves city roads.

It has therefore dismissed the ministry’s plans to ease congestion.

The ‘this is our turf’ statement came a few days after the Metropolitan Minister Njeru Githae launched an ambitious strategic plan to decongest city roads and improve parking.

The new plan is scheduled to be ready in a fortnight. Tenders are already advertised and questions are being raised over the apparent usurping of the council’s roles by the ministry.

According to the plan, the two-year-old ministry intends to convert major streets to unidirectional flow, remove on-street parking, introduce new bus routes and passenger drop off points and harmonise bus and taxi fares.

The ministry also plans to keep off private vehicles and allow only public service vehicles with large passenger capacity.

Major streets earmarked for conversion into one way are Moi Avenue, Tom Mboya, Kirinyaga Road, River Road, Harambee Avenue, Muindi Mbingu, and Koinange Street.

But Town Clerk Philip Kisia says the council has no plan to convert the proposed streets into one-ways.

"This is because of implications in junction improvement and traffic circulation requirements," he says.

Kisia says only part of Kaunda, Banda and Biashara streets have been converted into one-way streets.

But Metropolitan Minister Njeru Githae says the plans are still on. He says tenders for the work have been prepared.

The ministry plans to abolish street parking, expand pedestrian walkways and remove loading and unloading zones on Moi Avenue, Tom Mboya, Kirinyaga Road, River Road, Harambee Avenue, Muindi Mbingu and Koinange Street.

Kisia says all efforts towards solving the traffic problem are laudable. He notes that various statues give the council power to play a leading role in management of traffic in the city.

"The Local Government Act, CAP 265, Section 182, stipulates that the City Council has the mandate of controlling and vesting of all public streets within its jurisdiction.

Other Plans

Outside Nairobi, various roads are under construction through Government and donor funding.

The European Union plans to support regional road links such as the Northern Corridor rehabilitation Phase II that covers Timboroa –Eldoret – Webuye – Malaba.

The European Commission will support the construction of the Merille – Marsabit road and link it to Nairobi.

A Chinese company is already expanding Mombasa Road from Jomo Kenyatta International Airport and repairing Uhuru Highway, Forest, and Limuru roads leading to the United Nations complex.

Construction of the Nairobi–Thika road into a superhighway has started. The project is expected to cost Sh18.5 billion.

The stretch from Gilgil-Nakuru, part of the Great Rift Valley, is being constructed. The 96km section from Naivasha is funded by the European Union and the Government and will cost Sh6.1billion.

The Kibwezi – Isiolo road, Narok – Isebania road that is a link to Southern Sudan, are key projects proposed by Finance Minister in this year’s budget. Others include the Isiolo-Modagashe-Garissa-Wajir road at a cost of Sh1.2 billion.

The Government at the beginning of March launched the multi-billion shilling (Kibwezi-Mwingi-Maua) road that would, when completed, connect Mombasa to Moyale. Last month, President Kibaki launched Sh6.8 billion road projects in Nyanza.

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Kenya took a significant step towards freeing itself from donor dependency and erratic rain-fed agriculture.
She shifted her energies to reviving stalled irrigation programmes and declaring total war on depletion of water catchment areas as — all around the nation — the ugly and devastating effect of current food, water and energy crises bit harder.
Today President Kibaki, who on Monday launched the Sh2 billion National Economic Stimulus Programme on food in Hola, will lead Kenya’s cry to the world for Sh24 billion emergency food aid to avert human and animal deaths.
If it pulls through and should the new programmes hold unlike the glamorous ones before, Kenya would have unleashed its own agrarian revolution — as well a modest green revolution going beyond Mau Forest pending evictions.
http://www.standardmedia.co.ke/images/tuesday/nh180809_06.jpgPresident Kibaki, Prime Minister Raila Odinga, VP Kalonzo Musyoka and other leaders admire the fish catch during a tour of Hola Irrigation scheme in Tana River District, on Monday. Photo: Maarufu Mohamed/Standard]
President Kibaki directed the Ministries of Agriculture, Forestry, Environment, Finance and Internal Security to immediately take action to stop the destruction of the country’s forest cover to end Kenya’s decline into hunger and food insecurity.
Most importantly, these will include revival of key irrigation schemes, securing the country’s forests and wetlands and reforestation to make the country food secure.
Speaking during the launch of the stimulus programme the President said human invasion and wanton destruction of forests had worsened the food crisis in the country.
He also said planting of eucalyptus trees, and interference with river basins had led to the drying up of many of the rivers that watered livestock and kept irrigation projects alive, thus worsening the situation.
Long-term vision
The ambitious plan is to increase the land area under irrigation from the current 120,000 hectares to 400,000 hectares — using available water resources, but with a long-term vision to achieve the full potential of 1.3 million hectares.
The plan will call for increased investment in water storage, and will also require the State to secure Kenya’s key water towers in Mau Forest Complex and the Aberdares, a thorny political matter.
The directive also implies Kibaki and Prime Minister Raila Odinga have closed ranks on removing squatters from Mau and other water towers.
Indeed, Kibaki declared the coalition had agreed to work together.
"As Kenyans can see, the programme we are launching today is part of an overall strategy of ensuring food security for Kenya within five years through irrigated agriculture," said Kibaki.
"We are determined to ensure Kenya becomes a food surplus nation. With the experience the country has gone through in the last three years, it is time for Kenyans to end their state of denial and accept that climate change is here with us," he said.
The stimulus programme seeks to inspire ‘scientific’ and ‘modern’ agriculture, and increase employment opportunities in production, processing and marketing of maize and rice produce. This will reduce dependence on huge food imports that squander valuable foreign exchange.
An additional 40,000 hectares would be irrigated to produce 370,000 bags of maize and 600,000 bags of rice by February next year.
While launching the Hola Irrigation Scheme at Hola Stadium, Kibaki promised other similar schemes, among them Tana Delta, Perkerra, Mwea, Ahero, West Kano, and Bunyala would also be put under maize and rice crops by October.
Since their initiation — before a number of them collapsed or shrunk in production capacity — Mwea had been famous for its paddy rice.
Tana Delta River irrigation schemes were known for the production of seed cotton, Perkerra for onions and chillies, and Ahero (within the Nyando River watershed) for production of rice and sugarcane.
Bunyala scheme, within Nzoia River watershed was known for paddy rice while West and South West Kano (Lake Victoria watershed) was renown for paddy rice and sugar cane.
Raila said the solution to consistent food shortage lay in irrigation and announced that the Government would buy livestock, which are succumbing to drought to minimise losses to farmers at uniform prices.
Livestock production
Vice-President Kalonzo Musyoka said the Government would build more dams along River Tana to expand irrigation.
"We need to expand irrigation to cover the whole country instead of depending on rain-fed agriculture," said Kalonzo.
Finance Minister Uhuru Kenyatta said the Government would soon distribute Sh20 billion within one year as an economic stimulant factored in the last budget.
The funds would cover construction of markets, Jua kali shades, schools and health centres in constituencies. "I want to assure Kenyans that it is possible to make this funds available within a year," Uhuru said.
The Hola project is to be undertaken by 900 farmers and the National Youth Service. The Sh500 million project would put 2,800 acres under crop production.
Agriculture Minister William Ruto said the total area under irrigation would be expanded over 400,000 hectares in the next five years.
The President said an additional 40,000 hectares would be put under irrigation to produce 370,000 bags of maize and 600,000 bags of rice by February next year.

Parks in far-flung areas that have over the years registered dismal tourist arrivals due to accommodation deficiency are among those earmarked for the construction of such facilities.
They include Mwea National Park, Mt Elgon National Park, Saiwa Swamp National Park and Hell’s Gate National Park. Despite owning unique attractions, these parks are some of the least visited parks in the country mainly because they lack reasonable accommodation facilities. Construction of eco-lodges is expected to attract a considerable number of visitor traffic to these areas. http://www.standardmedia.co.ke/images/thursday/travel250609_01.jpgGiraffes are among the wildlife at Hell’s Gate.

Before any construction is certified, all the necessary environmental impact assessments must be done in line with the tenets of eco-tourism. This is very important to ensure delicate ecological balance is maintained. Some of the targeted parks like Hell’s Gate and Saiwa Swamp are very small and if care is not taken, the ecological balance in their fragile ecosystems will be upset. If this happens, then the initial noble aim of the project will be lost.
Given the grandiose landscapes and awesome views in some of these parks, it is important that the location of these eco-lodges blend well with the landscapes to avoid them sticking out conspicuously like sore thumbs. For instance, it will be unsightly for a gigantic structure to be set on top of the beautiful cliffs of Hell’s Gate National Park as it will interrupt the magnificent view. Thus, any lodge developed in these parks should not be allowed to deface the beautiful sceneries.
Scarce accommodation
In addition, the size of the parks must be taken into consideration. Hell’s Gate, for instance, may not necessarily need such an eco-facility. To begin with, it is very small and, already, a sizeable chunk of it has been swallowed by the Olkaria Geothermal project. Putting up an eco-lodge will only congest the park more. Hell’s Gate is an exceptional flora and fauna site. It is suitable for quiet retreats and tranquil nights enjoyed under canvas.
This atmosphere is extremely attractive to nature lovers. It would be a lot better if those wishing to spend a night in the park use the three campsites available. In any case, there are a variety of accommodation options on the nearby shores of Lake Naivasha, ranging from the low-budget camps to the most luxurious lodges and hotels.
Saiwa Swamp National Park, too, is also very small. In fact, it is the smallest national park in Kenya. Situated on a wetland, it is home to the rare and endangered marsh antelope called Sitatunga. This is where it is protected. The construction of an eco-lodge would only make sense if its immediate goal is to attract more tourists to the western parts of Kenya.http://www.standardmedia.co.ke/images/thursday/travel250609_02.jpgTassia Lodge is one the eco-lodges. Eco-friendly facilities try as much as possible to retain the natural habitat
Eco facilities
Apart from a campsite at the main gate and the nearby Sirikwa Tented Lodge, there is no notable accommodation facility around Saiwa Park. Anyone seeking alternative facility must drive back to Kitale town over 20 kilometres away.
Mwea National Park is also on a wetland. Its main visitors include researchers studying and following the migratory avian species. Few tourists visit this park, which lacks meaningful accommodation. Visitors are thus forced to source for private camping facilities outside the camp.
Fortunately, the Kenya Wildlife Service has allocated two locations inside this park for construction of eco-facilities. Local investors are encouraged go full throttle and invest in this venture.
As for Mt Elgon National Park, which is home to the second highest peak in Kenya, its importance as a water tower for Lake Victoria and River Nile, including its varied habitats, cannot be under-estimated. In 2003, Unesco declared this park a Biosphere Reserve. Kenya Wildlife Service branded it recently and it is hoped influx by tourists will increase soon.
The KWS-run Kapkuro Bandas and the Mt Elgon Lodge are the only available accommodation facilities in the park. They, however, do not have the capacity to cater for the requirements of increasing numbers of tourists expected. The construction of eco-facilities is, therefore, a welcome venture. http://www.standardmedia.co.ke/images/thursday/travel250609_03.jpgA campsite at Hell’s Gate National Park. Photos: Courtesy]

In conjunction with the Ministry of Tourism, the Government is investing in alternative tourist circuits with the aim of reducing pressure on the conventional ones. The project hopes to also open up the rest of the country to discerning tourists. With this kind of exposure, the resultant influx of both local and foreign tourists will mean a corresponding increase in bed capacity in the national parks in the respective circuits to cater for the accommodation needs of the tourists.
Host community
In line with the principles of eco-tourism, it will be in order for Kenyans to be granted first priority in developing these sites. It would be unfair if foreigners are awarded tenders for the construction of these facilities at the expense of deserving and able Kenyans. Already, various eco-facilities that exist in the country, especially in the Laikipia region, are owned or managed by foreigners. Giving Kenyans the opportunity to construct and run eco-lodges will create a sense of ownership for the parks since they automatically become partners in the collective task of environmental conservation.
Further, the issue of pricing should be approached with caution. The current prices in the few existing eco-lodges are prohibitive, especially to local tourists, and this can be attributed to the fact that when they were put up, their main target was foreign tourists.
Managing an eco-lodge is expensive because, besides the normal operational costs, a certain percentage of the revenue must be channelled to the host community. Nonetheless, this is not a good enough reason to lock out citizens by charging high prices. At the same time, costs can be reduced if staff members are employed directly from the host community.http://www.standardmedia.co.ke/images/thursday/travel250609_04.jpgPlatforms for viewing wildlile at Saiwa Swamp National Park.

Finally, the issue of security, especially for tourists is paramount. The Government, KWS and all other stakeholders in the tourism industry must pool together resources to ensure that these destinations are safe for everyone to visit.

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http://www.nation.co.ke/image/view/-/641722/highRes/95510/-/maxw/600/-/vvnon1/-/NSE.jpg The Nairobi Stock Exchange has launched a complaints handling unit aimed at speedy resolution of investor concerns, queries and easy access to information. Photo/FILE
By NATION ReporterPosted Tuesday, August 18 2009 at 15:14

The Nairobi Stock Exchange (NSE) has, in collaboration with other market players, launched a complaints handling unit aimed at speedy resolution of investor concerns, queries and easy access to information.

The unit will be based at the bourse’s offices at Nation Centre, Nairobi. It becomes the first concerted move to centralise handling of complains in the stock market.

The Capital Markets Authority, Central Depository and Settlement Corporation (CDSC) and Kenya Association of Stock Brokers and Investment Banks (KASIB) support the initiative.

The complaints handling unit will operate as a one-stop point of reference for investors to lodge the concerns, track their progress and receive the required information.

“I am confident that the complaints handling unit will be an effective way of resolving investors’ problems and a good way of nurturing good relations between ourselves and the general public,” said NSE chairman Edward Njoroge during the launch.

Other than making a physical visits to the unit, investors can also file complaints via the internet and mobile phones.

The information collated by the outfit will be made public as a way of enhancing transparency while acting as a deterrent to market players with bad intentions. “The initiative is one among many meant to restore investor confidence,” said Mr Njoroge.

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Alfred Mutua should take his rocks back.employ youths by planting trees not throwing rocks and calling it ''beauty''. Im smelling a fishy contract to supply those stones which he is trying to justify as a beautification project. Its so ugly it hurts the eye.

Alfred Mutua should take his rocks back.employ youths by planting trees not throwing rocks and calling it ''beauty''. Im smelling a fishy contract to supply those stones which he is trying to justify as a beautification project. Its so ugly it hurts the eye.

^^also wondering, green trees, flowers, and stones which one is good to the eyes?:lol::lol:

http://www.businessdailyafrica.com/image/view/-/619574/highRes/86009/-/maxw/600/-/qehah0/-/Road-china.jpg The road project joining Isiolo town and Ethiopia is being funded by AfDB. /Reuters
By Githua Kihara (email the author (javascript:void(0);))
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Posted Thursday, August 20 2009 at 00:00


Construction of the second transport corridor connecting the planned Lamu port to Southern Sudan and Ethiopia will provide an opportunity to open up the remote and dry Northern parts of Kenya, experts say.

The rail and road link from Lamu to Addis Ababa in Ethiopia and another to Juba in Southern Sudan will pass through the northern parts of the country, which is resource rich but unexploited, according to the inter ministerial committee on the second transport corridor lead advisor, Dr Mutule Kilonzo.

From Lamu, the corridor will pass through Hola, Bura to Garissa. Hola and Bura are agriculturally rich with potential for rice and cotton production.

The government has already launched a Sh2 billion irrigation project to boost food production in Hola.

There are plenty of deposits of cement around Wajir and titanium in the west of Lamu.

Another route from Garissa will head to Mwingi and Matuu where there are rich deposits of coal and iron ore.

“This channel will provide an easy access to the mines for shipment through Lamu port,” said Dr Mutule.

The third branch from Garissa will proceed to Isiolo, which will also be made a resort city and a free economic zone. Isiolo will be an intersection point for three corridor routes. The first route will proceed to Moyale at the Kenya- Ethiopian border.

Ethiopia is already developing the route having completed a feasibility study on the railway line connecting Addis Ababa to Moyale.

The second route from Isiolo will proceed to Nairobi where the new corridor will be linked to the existing Northern Corridor and a final route will proceed to Lokichoggio at the Kenya- Southern Sudan border.

Lamu and Mombasa will be connected by a railway line and the two ports will compliment each other.

Mombasa port is currently serving Uganda, Rwanda, Burundi and the DRC only.
The government of Southern Sudan will construct its part of the corridor link to the Kenya border near Lokichoggio. The feasibility study for the entire project is expected to be ready by February next year and the detailed designs for the project two months later.

There is already an existing port at a naval base in Lamu, which is currently used by Kenya Navy vessels.

BPO company nominated for top Europe prize

http://www.businessdailyafrica.com/image/view/-/642588/highRes/95734/-/maxw/600/-/fx20q8z/-/kencall.jpg Kencall has been nominated for a prestigious award, providing a welcome boost to the local BPO sector. /Liz Muthoni




Business Process Outsourcing (BPO) company, Kencall, has been nominated for the non-European Call Centre of the Year Award giving a boost to the country’s global image in this nascent sector.

The firm clinched the award last year, beating participants from India and South Africa. Having local providers recognised and awarded offers the country an opportunity to them as flagship BPO centres when marketing the country.

Nascent industry
Although still at a nascent stage in Kenya, the sector promises job creation opportunities and the nomination comes at a time when the local BPO industry has been undergoing significant challenges ranging from limited access to high Internet bandwidth for use in their operations to weak marketing of their product and service offerings across the globe.

The CCF European Call Centre Awards recognise industry best practice in 20 different categories ranging from Best Use of Technology and Best Multimedia Strategy to the European Call Centre of the Year and CCF Industry Champion awards. Last year’s winners included organisations such as beCogent, British Gas, Capita, Homeserve and Lloyds TSB.

“Winning the award has completely boosted our self confidence, given us that extra bounce in our step and raised the roof on just how high we believe we can soar. It’s simply great. We are ready to go” said Kencall CEO Nick Nesbitt.

Other than boosting the country’s image and profile, the awards ceremony provides ample opportunity for networking as it brings business leaders from all over the world.

It is a forum that enables global business leaders meet the players in different fields and locations to gain an understanding of the nature and quality their operations. This year’s awards ceremony will be held on September 22, 2009 at the Hilton Birmingham Metropole in the UK.

The nominations are made by a CCF European Call Centre Awards judges’ panel.

KenCall has a prestigious and rapidly growing client base within East Africa and a proven track record of success which it is now leveraging as a platform to compete globally and further penetrate the UK outsourcing market.

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A surge in foreign telecoms companies investment is expected after the government relaxed the rule on local ownership. The move is anticipated to inspire investor confidence.

The cap on 80 per cent local ownership is being altered to allow foreign firms to set up operations without a Kenyan partner but be provided with a three year grace period to seek for one.

Telecommunication rules require that a cell phone firm operating here should have at least a 5th of its shares held by a Kenyan.

This comes almost three days after it was reported that businessman Naushad Merali had sold 15 per cent of the 20 per cent stake he held in Zain Kenya, leaving Kuwaiti-based Zain Group with 95 per cent shareholding.

Get license

The Communications Commission of Kenya is said to have relaxed the rule that will enable operators with 100 per cent foreign shareholding to be licensed.

The local ownership requirement is said to be one of the major challenges to new investments. It, for instance, took longer than necessary to license Essar Telkom, then Econet Wireless as local partners were unable to raise the required equity.

The government’s bid to get a second national operator was also characterised by controversy after foreign investors failed to secure local partners with necessary funding.

K-Rep Bank has unveiled a multi-million shilling water supply financing initiative aimed at developing a market-based alternative for funding in the sector.

The programme, known as Maji ni Maisha, blends a market-based credit model with subsidies.

K-Rep managing director Kimanthi Mutua said the bank has committed Sh110 million for 21 schemes in Kiambu, Thika, Kajiado, Makueni and Machakos in the pilot phase.

Out of this commitment Sh71 million has been disbursed to 11 water schemes, where the communities are now enjoying access to clean, piped and metered water.

“Given the success of the pilot phase, K-Rep Bank is now expanding the credit to other areas in Kenya with an allocation of additional funding of Sh250 million,” said Mr Mutua.

The initiative is aimed at having far-reaching benefits to Kenyans through a model that provides finance to community groups who are both in need of water and are eligible for the funding.

The programme comes at a time when the country is facing a major water crisis.

The project was initially piloted in collaboration with Athi Water Services Board and the World Bank’s Water and Sanitation Programme under Global Partnership on Output Based Aid which has been providing co-finance since 2007.

Tea farmers should expect a higher second payment for their crop, an agency has promised.

Kenya Tea Development Agency said that although production for the 2008-2009 crop year that ended in June was depressed, earnings will be higher compared to last year’s.

“The crop production was down by 24 per cent but the surplus earnings will be higher than last year’s,” the agency’s head of factory operations Alfred Njagi told the Nation on Wednesday.

Mr Njagi who declined to provide the specific amount of the second payment popularly known as bonus since he is not allowed to do so, said the tea board will be meeting on September 1 to determine the payment rate for each factory.

This is good news for the small-scale tea sub-sector which has been undergoing a turbulent period that saw some growers in Central Province uproot their bushes replacing them with more profitable crops.

The main drawbacks have been drought, frost, leaf hawking in some factories west of Rift Valley and high energy costs, labour and inputs like fertiliser.

Co-op Bank profit up 16 per cent

http://www.nation.co.ke/image/view/-/642266/highRes/95570/-/maxw/600/-/tmyyjl/-/PIX1.jpg Co-operative Bank of Kenya managing director Gideon Muriuki during an investor briefing on Wednesday when presenting its financial results for the first six months of this year. Photo/LIZ MUTHONI
By JUSTUS ONDARIPosted Wednesday, August 19 2009 at 22:30
In Summary


Earnings top Sh1.96bn owing to its fairly diversified loan portfolio





Co-operative Bank of Kenya has bucked industry trend to record a 16 per cent growth in pre-tax profit for the first six months of this year.




The bank’s earnings increased from Sh1.67 billion for the period ending June 30 to Sh1.95 billion recorded over the same time in 2008.

With loans and advances to customers growing to Sh56.7 billion up from Sh43.4 billion given out last year, the bank recorded a 25 per cent increase in interest income to Sh3.1 billion this year.

“The environment we are operating in is challenging but I expect us to do even better in the second half. I project that we will record at least Sh4.5 billion in our full year pre-tax profit,” the bank’s chief executive officer, Mr Gideon Muriuki, told an investor briefing at a Nairobi hotel on Wednesday.

Co-op Bank recorded a Sh3.4 billion pre-tax profit in 2008.

Although non-interest income declined by Sh200 million to Sh2 billion this year, Mr Muriuki said they are banking on increased transaction earnings in the second half of the year.

To boost the earnings, they intend to open an additional 20 branches before the end of the year to bring their network to a total of 83 branches while exploring ways of boosting their core banking system to enhance efficiency.

The bank has enlisted the services of a consultant who will advise on whether to upgrade its 10-year old system or install a new one.

A fairly diversified loan portfolio and stringent cost management strategy were key to this year’s performance as it is shielding the bank from the ravages of both the post-election violence and ensuing economic slowdown that have hit the financial sector.

The cost-management restricted operating expenses to a growth of 6 per cent to Sh3.21 billion. Diversification ensured that Co-op Bank was not overly exposed to problems that hit agriculture and small businesses after the violence and the economic downturn.

This is because, despite being largely owned by the co-operative movement, the bank’s loan portfolio consists of Sacco banking (mainly check off based) at 21 per cent, agribusiness, 2 per cent, and small and medium enterprises at 9 per cent.

It is strong in corporate banking at 24 per cent and personal banking, which is mainly check-off based, at 44 per cent.

Standard Chartered Bank has lowered the cost of borrowing personal loans by 3.75 per cent.

The move comes in the wake of Central Bank of Kenya governor Njuguna Ndung’u’s contention that commercial banks are fuelling loan defaults by charging borrowers high interest rates.

Prof Ndung’u has been calling on banks to reduce their rates to stimulate the economy after CBK cut the Central Bank Rate (CBR) and Cash Reserve Ratio (CRR) expecting commercial banks to transfer the same benefits to consumers.

Retail products

Mr Bhartesh Shah, StanChart’s head of retail products, said the bank hopes its move will open access to credit to people who wish to borrow but are otherwise restricted by the cost of credit.

He added that the new rate represents the lowest interest rate for personal loans offered by any major bank in Kenya.

“Our customers can use this lower rate to consolidate their various loans at the lowest repayment rates in the market. We remain open for business and will continue to weigh the opportunities depending on the response from our customers to chart a longer-term pricing strategy,” said Mr Shah.

While most banks remain skeptical about the potential opportunity to attract more business and minimise the risk of defaults, Standard Chartered customers can now borrow up to a maximum of Sh3 million at 16 per cent per annum.

Fastest loan

They will be able to enjoy free loan transfers from other banks, fastest loan processing and pay up to 60 months at Standard Chartered Bank.

As the industry reels from loan defaults largely attributed to the lending spree many banks undertook last year and the cost of credit, StanChart has kept its non-performing loans portfolio low.

In the first half of this year, the bank’s total non-performing loans stood at 3.6 per cent compared to 4.4 per cent for the same period in 2008.

Sugarcane farmers have a reason to smile after the Kenya Sugar Board increased funds meant to be lent to them through Agricultural Financial Co-operation, to Sh1 billion.

The sugar development fund chairman at sugar board, Mr Billy Wanjala, disclosed that the sugar regulatory agency had approved Sh500 million to add onto a similar amount that had earlier been released.

“Our gesture is meant to encourage farmers to become self-reliant in sugarcane production because they can access loans from the institution without being subjected to difficult borrowing conditions,” said Mr Wanjala.

However, he added that most farmers are reluctant to borrow loans, despite KSB efforts to ensure many growers profit from the programme. “We are surprised that most farmers are not going for the funds that would enable them acquire farming machines and make sugarcane farming cost effective,” he said.

Earlier, some farmers who spoke to the Nation in Mumias, complained that the Agricultural Financial Co-operation Kakamega branch had denied them the funds claiming “we had not met the requirements.”

But Mr Wanjala said the terms of borrowing and repayment of the loans had been simplified for the growers “because we are simply ploughing back what we get from them.”

Meanwhile, sugar board has starated sensitising and educating farmers in all sugarcane growing areas on ways of cutting down on the rising farming expenses.

More than 7,000 farmers in Teso and Busia districts have been recruited to start growing chilli for export to Europe. An agreement has been signed with Mace Foods Ltd, a company based in Germany and whose local regional office is in Eldoret.

The project director, Alphonce Emodo, said the farmers had been contracted in 70 blocs of 100 people each.

Mr Emodo said they had already set up buying centres in all the 70 blocs with farmers to be paid in cash as soon as they deliver their produce at Sh100 per kilogramme and a further bonus of Sh6.

He said they had also entered into an agreement of financing all farmers through KCB, which will advance financing to the farmers, with the chilly planted acting as collateral .

The director added that more incentives for bloc farmers will be rolled out within a month to acquire tractors to facilitate better production per acreage and to address issues of production of other crops.

Mr Emodo said the company will also supply seeds in sachets to farmers, adding that one acre of chilly will require four sachets with a yield of Sh200,000 if proper methods were used.

Kenya’s small-and-medium enterprises are among 500 companies in Africa expected to benefit from $170 million financing from GroFin, in a five-year plan.

GroFin, a multi-national SME finance and development company, offers a combination of risk capital and business development assistance to viable enterprises.

The fund invests between $100,000 to $1 million in SMEs in various sectors of the economy ranging from manufacturing to retail and services. These firms often struggle to grow because of lack of access to capital and business development assistance, and as a result, Africa misses out on a significant engine of economic growth.

GroFin invests in Nigeria, Ghana, Rwanda, Kenya, Tanzania, Uganda and South Africa through GroFin’s in-country investment teams.

“This is a clear demonstration of the high level of interest investors have for smaller investments in Africa that deliver both quantifiable investment and development returns,” said Jurie Willemse, MD of GroFin.

“The fund comes at an opportune moment in Kenya when the government is focusing its efforts on improving the business climate in the country, specifically offering SMEs opportunities that were previously not available to them. It will support SMEs to successfully tap into such opportunities,” Mr Kenneth Onyando, general manager for GroFin Kenya said.

Michel Jacquier, chairman of Fisea said, “We are confident that through the fund sustainable SMEs will develop on a scale never seen before in Africa.”

Standard Chartered Bank has reduced the cost of borrowing on personal loans by 3.5 per cent.

The move follows efforts by Central Bank of Kenya (CBK) to stimulate the economy after reduced the Central Bank Rate (CBR) by four times and reduced the Cash Reserve Ratio (CRR), expecting commercial banks to transfer the same benefits to the customer.

Mr Bhartesh Shah, the bank’s head of retail products said that bank was optimistic that the move will open access to credit to people who wished to borrow but were restricted by the cost of credit.

The rate of 16 per cent represents the lowest rate for personal loans offered by any major bank in Kenya. "As a bank, we are always looking for ways to fulfill our customer needs. Our customers can also use this lower rate to consolidate loans at the lowest repayment rates," said Shah yesterday in a statement.

Shah said the bank would remain open for business and would continue to weigh opportunities depending on the response from its customers and chart a longer-term pricing strategy.

While most banks remain sceptical about the opportunity to attract more business and minimise the risk of defaults, Standard Chartered customers can borrow up to a maximum of Sh3 million at 16 per cent per annum, enjoy free loan transfers from other banks, fastest loan processing and pay up to 60 months at Standard Chartered Bank.

Toyota Tusho Corporation, which fully owns Toyota East Africa, has announced plans to invest millions of shillings in geothermal and wind power generating plants.

Toyota East Africa chairman Dennis Awori on Friday said that although the company is known for manufacturing motor vehicles, it plans the ratio of its automotive business to non-automotive to be 50:50 by 2015.

He told reporters in Nairobi that the power shortage facing the country called for both the government and private organisations to offer solutions. “We expect to be making substantial investment within a few months,” Mr Awori said.

“As for the amount, I will not be able to disclosure but given that we are talking about Toyota Tusho Corporation, a $67 billion turnover company, this will be a sizeable investment.”

The company plans to invest in geothermal, wind power and biofuel production. It will also invest in coffee and nuts production, Mr Awori said.

Toyota said the 2009 Total Motorshow will be held from August 28 and 30 at Jockey Club, Nairobi. “This offers visitors an opportunity to see and compare makes and models, providers and industry players at one place,” said Toyota East Africa managing director Tomonori Umehara.

The first African horticulture conference on challenges and opportunities the sector faces, will be held in Nairobi at the end of August.

Over 300 delegates from all over the world are expected to attend the four-day All Africa Horticulture Congress that kicks off on August 31 at Safari Park Hotel.

“The congress will be a major forum for exchange of information on promoting horticultural development in Africa and strengthening the voice of the continent in international forums,” Kenya Agricultural Research Institute director Ephraim Mukisira said on Friday.

Exhibitions and field visits aimed at bringing together both the public and private organisations involved in horticulture will feature during the meeting.

“The congress will address the critical role that horticulture plays in the advancement of the livelihood of people of Africa through various themes,” Dr Mukisira told reporters at Kari headquarters.

Toyota Tusho Corporation, which fully owns Toyota East Africa, has announced plans to invest millions of shillings in geothermal and wind power generating plants.

Toyota East Africa chairman Dennis Awori on Friday said that although the company is known for manufacturing motor vehicles, it plans the ratio of its automotive business to non-automotive to be 50:50 by 2015.

He told reporters in Nairobi that the power shortage facing the country called for both the government and private organisations to offer solutions. “We expect to be making substantial investment within a few months,” Mr Awori said.

“As for the amount, I will not be able to disclosure but given that we are talking about Toyota Tusho Corporation, a $67 billion turnover company, this will be a sizeable investment.”

The company plans to invest in geothermal, wind power and biofuel production. It will also invest in coffee and nuts production, Mr Awori said.

Toyota said the 2009 Total Motorshow will be held from August 28 and 30 at Jockey Club, Nairobi. “This offers visitors an opportunity to see and compare makes and models, providers and industry players at one place,” said Toyota East Africa managing director Tomonori Umehara.

^^hope it should be big investment which employs many people

The Government has set aside Sh115 million for the relocation of beach operators.

The Ministry of Tourism raised Sh95 million and the Tourism Trust Fund (TTF) gave Sh25 million for the beach management programme, Tourism Minister Najib Balala said.

Speaking in Mombasa after he issued a Sh5 million cheque to rehabilitate the only theatre in the region, Little Theatre Club, the minister said the money would be used to construct premises for the operators.

"We want to do something good for the operators and urge them not to be incited by individuals who have vested interests," he said.

About10,000 beach operators would benefit from the project, which starts next month and runs through March. Some stakeholders have opposed the relocation, claiming they would lose business since tourists may not visit the new site.

It had also been claimed makeshift businesses along the beaches posed a security threat to tourists. The minister said a cultural centre modelled on Bomas of Kenya will be built in Mombasa.

Cultural facilities

"We want to ensure that despite selling their wares to the tourists, the beach operators also have an extra advantage for more guests due to the presence of other cultural facilities," he said.

He said a similar facility was almost complete in Magarini and another will be built in Kogelo by the TTF.

The Acting chairperson of TTF, Ms Lucy Kambuni, said they were seeking funds to start new projects and ensure diversity of tourism products in the country.

The theatre boasts a coat belonging to Portuguese explorer Vasco Da Gama and a military sword belonging to Captain Morton, among other artefacts. The theatre was gazetted to keep off grabbers and requires Sh35 million renovations.

Meanwhile, Muslim faithful in Kisumu yesterday thronged various mosques to perform ‘Taraweh’ prayers to mark the beginning of the Holy Month of Ramadhan.

"We are very happy that this time round there has been no controversy in the start of the fast. We hope none will crop up in the course of Ramadhan," said Mr Abdul Qadir Omar a faithful at the Railway Mosque.

One year after opening doors in the country, Islamic banks are now sitting pretty and cutting a niche for their products and services.

Two Islamic banks — First Community Bank and Gulf African Bank — launched operations last year, joining a host of conventional banks, which offer interest-free banking services, among them Barclays and National Bank of Kenya.

The two institutions are rapidly expanding across the country to tap mainly the muslim community estimated to be about 10 million, and other potential customers.

But some financial analysts have expressed doubt on the viability of Islamic banking model because interest forms is the main source of income for most banks.

Islamic banks are not allowed under Shariah law to lend money on interest because it is considered to be exploitative, but conventional banks rake in billions of shillings in interest income.

"Islamic banking is about providing useful goods and services to the society and not trading money as conventional banks do," says Mr Najmul Hassan Gulf African Bank chief executive officer. However, judging by their performance, Islamic banks in Kenya appear to be proving pessimists wrong and are gaining influence and credibility in the financial market. First Coummunity Bank (FCB), for instance, has recorded impressive results in its first half of the year at a time when some banks recorded reduced profitability due to a tough business environment.

Asset base

The bank’s deposits grew by more than 24 per cent from Sh2 billion in December last year to Sh2.6 billion in June, while total asset base saw an eight per cent growth from Sh3.1 billion to Sh3.4 billion. Gulf African Bank (GAB) is yet to publish half-year results. FCB has opened more than ten branches across the country and planning to open more in the coming months.

Gulf African Bank has also opened 10 branches, in major towns, as well as muslim-dominated regions - Coast and North Eastern provinces.

Some muslim customers are switching from conventional banks to abide by the requirements of their faith. Many others are new depositors who were previously unbanked. The two banks have at least 40,000 customers and billions of shillings under their watch.

The institutions are set to cast their nets wider in the region, where there are large populations of muslims, a fact that will boost their bottom lines. Kenya is the only country in Eastern Africa where interest-free islamic banks operate.

"We are negotiating with authorities in neigbouring countries and soon we will open branches in Uganda, Tanzania and other countries in the region," said FCB CEO Nathif Adam in a recent interview.

According to Nathif, who strived for decades to introduce interest-free financing in Kenya, Islamic banking is shedding the initial perception that it is only meant for Muslims and is attracting a large following from non-muslim Kenyans.

He cites the banks’ strict policy of not investing clients’ money in businesses linked with alcohol, pornography, gambling and tobacco as a competitive advantage. "We are filling a gap in the market because conventional banks do not seem to be providing services for morally-sensitive clients concerned about where their money is invested," he says.

heavy weights

The banks are also benefiting from cash flowing from the Middle East that is being channeled to investment projects in the country.

Business heavy weights in the Gulf countries, flush with cash are eyeing African countries as lucrative investment zones and most of this cash is handled by these institutions. Globally, Islamic banks and financial institutions are seeing a rapid rise in their profiles and profitability, especially after the financial meltdown that shook confidence in interest-based banks in Western countries. Islamic finance has become one of the fastest growing niche markets in international finance.

Islamic banks were largely immune to the crisis because ideological foundations discourage investments based on excessive speculations or debt trading. This fact has attracted endorsement from the Vatican when Pope Benedict XVI criticised Western banks for causing the global financial crisis by excessive greed and speculation.

The profile of Islamic banks in Kenya is set to receive a further boost when they up trading in the money market. Early this year, GAB invested Sh500 millio n in the Government’s Sh18billion infrastructure bond, while FCB was recently licensed to operate an Islamic investment bank and insurance subsidiary.

FCB is also handling billions of shillings belonging to Youth Enterprise Development Fund (YEDF), set up by the Government to lend to Kenyan youth. The bank was selected to advance interest-free loans to muslim youth who were previously locked out from the financing.

Among major project financed by FCB include, a modern residential housing development in Nairobi and a fleet of cars to one of the Kenya’s largest driving schools.

Last year, it was reported that the Islamic banks had posted millions of shillings of losses but analysts said initial start-up investment cannot be considered as losses since they stand to be recouped.

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A Sh6 million project to save farmers from losing livestock in arid and semi arid areas has been launched.

The pilot project now being implemented in Isiolo funded and run by Cordaid and Veterinary Science Frontier (VSF) in collaboration with the Ministry of Livestock will cushion farmers from loss as a result of persistent droughts.

Speaking during the inauguration of the project in Merti, Livestock Development Minister Mohamed Kuti said the project would buy more than 1,900 goats and 300 cattle that cannot be bought by Kenya Meat Commission (KMC).

He said the move would reduce animal deaths by half, noting over 100,000 animals had died either on the fields or during transportation to the KMC in the past few weeks.

"Our figures show 524,000 households are affected and three million beef cattle are at risk of dying," Mr Kuti told The Standard.

Local District Veterinary Officer Geoffrey Kinuthia, who is heading the project, said the destocking and slaughtering exercise would help farmers have money in exchange of their animals instead of watching them die.

He said after slaughtering the animals, the meat is given out to the community as relief food.

Sea farms have been introduced in the South Coast and the venture could earn local farmers Sh40 million a year.

Kenya Marine and Fisheries Research Institute (KMFRI) is developing commercial seaweed farming to boost the incomes of residents following a decline in fish stocks.

KMFRI Programme Co-ordinator Betty Nyonje said 300 farmers could be placed under the initial seaweed-farming project.

According to Dr Nyonje, seaweed extracts such as carragenean and agar are used as thickeners and homogenisers in pharmaceutical, food and cosmetic industries.

"Seaweed farming has been identified as a good prospect for social and economic development of coastal areas. It is aimed at diversifying livelihood opportunities for poor fishing communities whose source of income have been seriously put at risk by diminished capture fisheries," said Nyonje.

The first model farm has been developed at Kibuyuni, a seaside village with 1,500 people. Other sites are Mkwiro in Wasini Island with 1,000 people, Funzi with 1,000 inhabitants and Gazi with 15,000 residents.

Nyonje said the first nursery has been developed in Kibuyuni while other seeds would be brought from nearby Zanzibar where such farms were established 20 years ago.

liberalised market

The seedlings are tied with strings on the seabed and harvesting is done in six weeks. A ready buyer, Zanque Aqua Farms of Zanzibar is working with the local farmers but the seaweed market could be liberalised once fully developed, say the researchers. It is mainly exported to America where the demand has increased.

Seaweed farming is an economic opportunity to many coastal communities.

"A model farm has 15,000 seedlings for all three farming techniques. Each crop is harvested in six weeks," explained Nyonje. From each model farm, one metric tonne of dry seaweeds is harvested after every six weeks, making eight to 10 harvests a year. A metric tone of produce at current market rates costs Sh12,000.

Two strains of the seaweed known as Kappaphycus alvarezi (cottonii) and Euchuma denticulatum (spinosum) are available at the south Coast.

Nyonje explained that they would map out more suitable sites to grow the seaweed including the North Coast.

S Nyonje said Madagascar has also started seaweed farming.

Nairobi Stock Exchange (NSE) investors have every reason to smile when real estate is listed at the bourse.

This follows reports that the Capital Markets Authority is at an advanced stage with plans to list the first real estate investment trust, popularly known as Reit in financial jargon .

"We are formulating rules to guide how retail investors will be able to trade in quoted REITs at the bourse," said Ms Stella Kilonzo, the chief executive of the CMA in a recent interview.

A source at the CMA said following the announcement of rules guiding the formulation of collective investment vehicles — the launch of the first Reits would follow soon.

"The announcement of the first Reits will be done soon," said the source who requested anonymity citing a confidentiality agreement with CMA.

Reits provide an avenue through which investors can pool resources to develop or trade in properties with returns shared equitably after a specified trading period.

Dealers at the Nairobi Stock Exchange floor get ready for Real Estate Investment Trusts to be listed at the bourse, to allow trade in property. Photo: file

Reits are traded at stock markets in the form of shares, helping liquidity as property can be sold at the exchange in whole or bits, once they are floated.

With the listing of the first Reits, individuals with property will have the option of offloading such property into the market and trade with it at the bourse.

Once a Reit is listed at NSE, anybody can buy and sell their shares to trade in real estate business while creating a pool of resources that can be used to develop the property market and address the current shortages in the residential, commercial and industrial housing.

Such a listing will also allow small-scale investors wishing to trade in real estate to have a chance to trade in the shares of such a Reits — effectively owning and trading in real estate by buying the quoted shares of any Reits listed at the bourse.

Earning returns

Real estate investment experts say that the development is bound to address liquidity crunch, which property owners find themselves in after putting all their money into developing a property, whereas sometimes takes time to make recoup investments or begin earning returns.

Mr Paul Sigsworth, the managing director of ICEA Asset Management said that the timing was appropriate because Nairobi has been generating interest on the global property scene due to its unique poison as the launch pad to the East African economies.

"The recent publication of the rules to allow pension funds to invest in property earning funds, Reits and other collective investment schemes without necessarily being listed at the bourse is a welcome one," said Sisgworth.

The first Reits listing — widely anticipated before the end of the year — will increase activity at the bourse as individuals and companies, including the National Social Security Fund (NSSF) and insurance companies, which hold so much property will have an avenue to dispose of huge properties which they were otherwise constrained to.

"Such a listing would increase the level of development as private developers can easily access tied up capital in properties whenever they sense an investment opportunity elsewhere," said Prof Johnstone Kiamba the chair of the Kenya Institute of Planners.

The world over, Reits have been used as the avenues to spur real estate development particularly in mobilising funds to address residential housing projects. Best remembered is Darin Gunesekera, an expert in low cost housing development from Colombo, Malaysia, who employed an almost similar model to increase affordable housing in his home country and eliminate slums.

"Kenya can use Reits to collect capital from the stock market to eradicate slums and provide decent housing," said Gunesekera at a past conference.

Investment outlook

Since the debate on REITs came a fore, a number of firms have shown interest, citing immense opportunity that the listing of the first Reits portends for the real estate sectors.

Among the big names that have shown interest in the concept include Rutleys — the investment arm of KnightFrank — an international property company.

Last year the firm launched a Sh13 billion property fund in response to what it termed a "good property investment outlook" for the country and the East African region.

The firm, however, had to list its shares in Johannesburg and London stock exchanges, leaving out NSE after it failed to find a suitable local REIT partner coupled with specific guidelines on the operations of such investment trusts in the country

Another local property company with US ties Bora Capital was also keen to venture into the market using REITs.

"As soon as the regulations have been put in the market by CMA, we would be more than willing to take up the opportunities that such a development brings along," said Mr Joe Macharia, chief executive of Bora Capital.

Advance plans to launch a Reits follow the successful completion of a study on the best model to apply when introducing the first Reits.

Reits, however, have their downside for a country like Kenya. Analysts say that enough caution should be put in place to ensure that the correct valuations of buildings are reflected in the Reits.

If an overvalued property is listed in a Reits, the level of return from such shares would be minimal as the property does not reflect the true market trends.

There has also been concern on the need of a solid statistics base on the trends on the level of returns for property in the country as the real estate business is highly varied and could be misleading to some investors.

ALS Dash 8 has launched services between Kisumu and Nairobi, bringing to four the number of airlines operating that route.

The airline will fly in and out of the lakeside town to Wilson Airport in the mornings and evenings daily.

Each flight has capacity to carry 37 passengers. Yesterday, the schedule flights Manager Muhamed Taher hinted at the possible addition of more flights if the market proves suitable. "If we establish that the route is viable, we may introduce midday flights to enhance our domestic services," said Mr Taher.

MPs Olago Aluoch (Kisumu West), Shakeel Shabir (Kisumu East) and Kisumu Airport Manager Joseph Okumu attended the launch.

Taher said the ALS Dash 8 flight was developed in the late 1970s due to increased market demand for a new generation 30-to 40-seater commuter airline.

Kenya Airways, Fly 540 and Jetlink have been the only airlines plying the route. They all fly passengers directly to Jomo Kenyatta International Airport. Yesterday, Olago appealed to the Government to reduce taxes levied on air tickets.

exorbitant fares

He said many people avoid using airlines because of the exorbitant fares caused in large measure by high taxation. "Air transport is no longer a luxury as many people use it for business. We want the Government to reduce taxes," he said.

For instance, the Government taxes between Sh2,000 to Sh3,000 on air fares, capitalising on the willingness of travellers to pay more for better passenger experience and faster travel.

If a passenger pays Sh4,200 for fare, the tax is Sh2,000, almost double the ticket cost.

Olago called on the Government to review the taxes downwards, to promote air transport and boost domestic tourism.

The airline launched the flight at a time when the Kisumu airport runway had been shortened during ongoing rehabilitation and expansion.

A Government appointed taskforce looking into ways of financing healthcare is considering reviving the stalled National Social Health Insurance Scheme (NSHIS).

The news comes as fears over the cost of medical care in the country escalates with some private hospitals and medical specialists working in cahoots to over-charge patients.

"The plan has a good chance of succeeding. There is immense political will and support from ministers of Medical services and Public health," says Dr Edward Rukwaro, a member of the taskforce and regional general manager, AAR Healthcare.

The NHIS is one of the two healthcare financing options the taskforce is reviewing.

The other being the tax-based health insurance plan whose implementation, it is argued would weigh down on the already overtaxed Kenyans.

"The most famous is the social health insurance scheme," says Rukwaro.

Rukwaro says the scheme, which has now been structured through research, is receiving renewed interest from the Government, private sector representatives and development partners who had earlier been opposed to it.

The taskforce comprises of ministries of Finance, Health and Planning, National Hospital Insurance Fund (NHIF), Kenya Private Sector Association (KEPSA), insurers, private hospitals, Non-Governmental Organiaations (GTZ and AMREF), Development partners (USAID and World Bank) and the faith based organisations (Christian Health Association of Kenya).

The development partners are assisting mainly in capacity building and research.

"The scheme has been scientifically prepared through research and Kenyans are now ready for it," Rukwaro told The Financial Journal .

The research entailed determining the cost of the social health insurance scheme and the medical services to be covered.

The preliminary attempts on the mode of its implementation will start before June next year.

"We are hoping the first steps will start before June next year," he says.

Rukwaro says the financing strategy being adopted is well researched and borrows from the global practices and success in developed countries.

"This is a huge project that is likely to take time to be implemented. Therefore adequate expertise and resources need to be clearly set aside for the long haul. It will also require patience from the potential beneficiaries since it will take time for its effects to trickle and be felt by all Kenyans across the board," he says.

Rukwaro says it will also require some reasonable upgrade of service delivery infrastructure to be able to provide equal standards throughout the country.

The taskforce was formed in 2006 to find a lasting solution to increasing costs of healthcare in the country, an important pre-requisite to the achievement of Vision 2030.

An attempt by the then Health Minister Charity Ngilu to introduce a compulsory health insurance scheme hit a dead end after President Kibaki declined to assent to the Bill passed in 2004.

Kibaki referred it back to Parliament, explaining what should be done to the Bill to make it acceptable to all.

While MPs approved it in record time because of its implications - that it would endear them to voters - private medical service providers and employers opposed it, saying it was unworkable and that the Government should instead allocate more money to the health sector.

The World Bank joined the fray in opposing the scheme, saying it was unworkable.

While Ms Ngilu put its cost at Sh40 billion, experts hired by her ministry said it would require between Sh70 billion and Sh120 billion.

Employers through the Federation of Kenya Employers argued that the mandatory scheme would increase their costs.

The scheme, they said, would introduce deductions of upto Sh5,000 on every worker's salary to pay for free medical care for all Kenyans.

The then Finance minister David Mwiraria opposed the scheme, saying the Government could not fund it and that crucial questions had not been answered.

Private medical service providers said they could not understand why the scheme was mandatory arguing NHIF should be concerned about the majority of poor Kenyans who were not covered.

But despite the opposition, Ngilu received the support of the United Nations.

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Zain Kenya has introduced three new products to its Zap money transfer service with the aim of benefiting small and medium enterprises as well as corporate clients.

The mobile phone firm has added Zap Distro, Zap Master Pay and Zap Tranzact to its menu in a move that is expected to heighten competition in the cash transfer market.

Zap Distro, a web portal tool, will enable dealers and large chains, which have other agents under their flagship, to manage their accounts.
Monitor deals

“It is envisaged that this tool will assist the distributors to manage better their Zap dealership businesses by enabling them to monitor their daily transactions, check their account balances, allocate and de-allocate money to their agents,” Zain Kenya managing director Rene Meza said on Monday.

Through the system, dealers will also be able to draw funds directly from their bank accounts and store them on their virtual Zap accounts as float for onward allocation to their agents network.

The cash transfer service is said to boast of more than 3,000 agents countrywide.

The Zap Master Pay solution, according to Mr Meza, will ease cash administration process especially for SMEs. This will enable organisations to send funds to up to 1,000 Zap accounts at a time.

“Master Pay is expected to reduce the cost of processing payments via cheque or other methods and also address the risk of transporting cash to and from the bank and internal fraud,” the managing director said.

Needs of players

The third service, Zap Tranzact, is aimed at meeting the needs of players in the service industry such as insurance companies and distributor enterprises as a remittance solution to enhance efficiency of the cash collection process.

Using the solution, organisations will be able to collect funds from their clients spread throughout the country. The money will then be transferred directly to their bank accounts.

Mr Meza also said that an additional interface for merchants has been included on the platform to enable organisations collecting revenues through the Zap service to monitor customer transactions in real-time.
“Our key partners like Kenya Power and Lighting Company and MultiChoice Kenya, who have had huge success in subscription payment services through Zap, can now monitor their transactions online as well as bank reconciliations,” he said.

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The Director of Agriculture, Johnson Irungu, has called on farmers in Ramisi to engage in cane growing following the revival of sugar cane farming in the area.

Speaking during a tour of the Kwale International Sugar Company Limited (Kiscol) farm, Mr Irungu said revival plans could not have come at a better time, when plans to boost the economy are receiving top priority. " Following the Government’s recent move on revival of stalled projects and the launch of Sh2 billion National Economic Stimulus Programme on Food by the Head of State, the Kiscol project is an example of public and private sector commitment towards stimulating the economy," he said.

He added that after the Government cleared a debt left by former owners of Ramisi Sugar Factory, which folded up in April 1988, Kiscol came in 2007, after being appointed by the Government to revive cane growing and milling.

"This project will create jobs for Coast residents and help them alleviate poverty,’’ said Irungu.

Viable project

Agriculture managers drawn from the Kenya Sugar Board (KSB), Mumias, Butali, Nzoia, Muhoroni and the Kenya Sugar Research Foundation (Kesref) accompanied Irungu.

KSB Agriculture Manager, Frederick Kebeney said the project being undertaken by Kiscol is viable.

Agriculture Minister William Ruto launched the seed cane planting at the nursery last month.

Kiscol plans to put up to 70 hectares of land under seed cane nursery, which will eventually see seed cane from 20 hectares given to out grower farmers while the nucleus farm retains seed cane material from the remaining 50 hectares.

Congestion at the Port of Mombasa has eased despite increased cargo arrivals.

When Coast Provincial Commissioner Ernest Munyi led senior government officials on a tour of the facility last week, he confirmed that the use of private container freight stations (CFSs) and the 24-hour port operations had helped ease congestion.

Cargo handled at the port has been rising, but the container population has declined owing to the measures effected to clear a huge backlog.

"We have adopted the container freight stations (CFSs) concept, where most cargo exits the port as soon as it lands to the private-run CFSs," explained Kenya Ports Authority (KPA) Managing Director James Mulewa.

Container handling capacity has been a major challenge at the port, since the current container terminal, initially designed to handle 250,000 twenty foot equivalent units (Teus) handles over 600,000 teus.

According to KPA, container population at the port has been reduced from 14,300 teus ground slots last year to 6,000 containers. "It allows us to plan our operations and to compete with other ports in the world in terms of moves per hour," Mulewa explained.

Rail capacity

Apart from increased cargo handled at the port over the years, a decline in capacity by rail to move goods has been blamed for the poor off-take of cargo.

Rail moves only five per cent of cargo as opposed to the initial 30 per cent leaving, 95 per cent of the port-bound cargo to be moved by roads.

Long-term measures to address cargo congestion at the port include construction of the second container terminal with a capacity to handle 1.2 million teus and the rehabilitation of the rail track to carry more goods.

The Sh16 billion second container terminal is expected to be ready by 2013.

"It is no wonder our roads wear out very fast. We pray that rail improves to handle at least 30 per cent of cargo," said Mulewa. Last year, the port handled 16.4 million tonnes compared to 15.9 million tonnes handled in 2007.

Port officials estimate that the volume of cargo has grown by one million tones despite the global economic recession.

Between January and June this year, the port handled 9.173 million tonnes compared to 8.04 million tonnes handled in the same period last year.

There is optimism the port will handle more cargo this year compared to the previous year, despite many ports around the world registering reduced cargo.

The Cabinet has approved a new tourism development policy.

Tourism Minister Najib Balala said the Cabinet also approved the Tourism Bill that would soon be tabled in Parliament.

The proposed Bill consolidates the various laws regulating the sector, a development that will eliminate bureaucracies that hamper the sector’s growth.

"We hope Parliament will pass the Bill that is crucial for development of tourism," he said.

The policy is expected to provide new direction in the development, management and promotion of the sector, which has been identified as among the key pillars to drive the realisation of Vision 2030.

It contains modalities for the formation of a Tourism Service, the Kenya Tourism Authority and the Tourism Finance Corporation.

The three organisations would be expected to come up with strategies to promote, regulate and mobilise funds for developing the sector.

Balala was speaking when he presented a Sh10 million cheque to the Kenya Tourist Federation for capacity support of its constituent members and enhance the efficiency of its security centre.

Meanwhile hoteliers in North Coast are doing booming business following increased arrival of tourists. Most hotels have more than 70 per cent bed occupancy, an indication that the industry is recovering.

Italian Consulate in Malindi Roberto Macri said charter planes to the town had increased from 16 to 25. Mr Macri said most charter flights were flying directly from Italy to Mombasa.

Data from the Ministry of Tourism indicates that in the recent past about 2,400 to 3,000 tourists were visiting the area on weekly basis.

Kenya is the first country in Africa to launch a website portal giving investors information on types of business licenses, their cost and the agencies to process the documents.

Launching the e-registry, yesterday, Finance Minister Uhuru Kenyatta said the project is part of reforms to eliminate corruption, red tape and reduce the cost of setting up businesses in the country.

"We intend to make Kenya a country with conducive business environment for investors and reduce unnecessary regulatory uncertainties characterised by licensing procedures which take too long," said Mr Kenyatta.

Conducive environment

The launch of the website is one of the initiatives proposed in the last Budget under the Business Regulatory Reform Unit (BRRU) to make the country competitive through the promotion of efficient and conducive business practices.

Among the proposals the ministry is considering include further reduction of the number of licenses an investor is required to obtain before setting up business.

So far, out of 1,325 licenses 315 licenses have been eliminated through the Licensing Repeals and Amendment Acts between 2007 and 2009.

A further 379 licenses have been simplified while 294 were retained in the same form.

Another 337 are currently under scrutiny by the regulatory reform committee appointed by Kenyatta.

The e-registry, which is in its first stage, will upon completion in the next two years, allow investors to directly order, pay and obtain licenses from the comfort of their offices through the Internet.

For licenses which require approval from organisations such as the Capital Markets Authority, the website portal will allow for an interactive application process in which an individual can submit required information online before being issued with the licenses.

"We want to establish a consolidated centre for information for all licence requirements at all stages starting from starting a business to running the same while embracing technology.

Imperial Bank has announced a pre-tax profit of Sh404 million in the first six months of 2009. This represents a 15 per cent increase against Sh350 million in the same period last year. Abdulmalek Janmohamed, the bank’s Managing Director attributed the improved profitability to growth in customer deposits by 26 per cent from Sh9 billion to Sh11.4 billion in the period under review.

"The bank’s modest branch expansion strategy is paying off," said Mr Janmohamed, while announcing the financial statements from the Upper Hill head office. "By targeting middle income groups, Imperial Bank is focused on carving its niche in the market through growth in deposits and quality lending".

Non-performing loans

The bank’s loans and advances to customers grew from Sh7.6 billion in June 2008 to Sh9 billion as at June 2009. This represents an 18 per cent growth in the loan book against a marginal increase in the provision for non-performing loans of six per cent in the same period. Assets grew by 17 per cent to Sh15 billion in June 2009 up from Sh12.9 billion in the same period last year, while non-funded income grew by 16 per cent from Sh246 million to Sh285 million as at June 2009.

"Our customers will soon be able to access their funds through over 300 automated teller machines (ATMs) as Imperial Bank joins the Kenswitch ATM network. This is in addition our partnership with PesaPoint as well as our own ATMs" said Mr. Janmohamed. "By relying on ICT to complement our network of 11 branches, we will increase product distribution and maintain its premium customer service positioning."

Imperial Bank has won the prestigious Financial Reporting (FiRe) Award 5 times. Commenting on this, Mr Janmohamed stated, "our institution is an industry pacesetter in making disclosures.

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Even with minimal rainfall and insufficient arable land, every Kenyan family can still grow vegetables for subsistence, an agricultural expert says.

Through ‘farmless farming,’ says Cyrus Ndiritu, even during times of drought like now, Kenyans can still consume food rich in vitamins and minerals found in vegetables.

Using the approach biennial vegetable crops like kales, carrots, spinach are grown in sacks or plastic containers filled with fertile soil and watered regularly or as need arises.

Dr Ndiritu says a 50kg pack can accommodate up to 20 healthy plants of say kales or spinach.

The plants need about 10 litres of water every four days. The fertility of the soil can be enhanced by adding animal manure to the soil. Kitchen wastewater that is not contaminated with soap can be used.

Kales and spinach

The researcher who is also a retired chief executive of Kenya Agricultural Research Institute says vegetables like kales and spinach grown this way can be ready for harvest in three weeks.

Ndiritu says: Farmless farming is ideal for vegetable production for domestic use in urban areas where fresh produce is costly. It can also help in alleviating famine in dry areas where lack of balanced diet puts victims at the risk of suffering a cocktail of diseases.

Only two weeks ago, it was reported that villagers in Makindu in Machakos District are victims of Pellagra, a disease cause by the deficiency of vitamin B3 (amino acids.) The vitamin helps in digesting fats, carbohydrates and proteins.

Although the best sources of this crucial nutrient are animal products, Ndiritu says, other substitutes are green vegetables, turnips, carrots and and celery.

These can conveniently be grown at your doorstep instead of the flowers. The same can be done in the rural areas when there is drought.

The agricultural specialist was speaking at the launch of a farmless farming project by Karinde Women’s Group in Karen last week.

He urged Karen residents to adopt the method to ease demand of vegetables, especially during this time when many people are staring starvation in the eye.

Standard Group’s half-year revenues grew strongly, on the back of cost cutting measures that have greatly improved efficiency across the company.

According to its unaudited results for the six months ending June 30, 2009, the Group defied a particularly tough operating environment, and a hostile global financial market to maintain its growth momentum, with revenues rising by five per cent to Sh1.3 billion.

The global financial crisis affected the cost of raw materials, especially newsprint, whose prices increased against the same period last year.

Announcing the results yesterday at the new Standard Group Centre on Mombasa road, Deputy Chairman and Strategy Adviser Paul Melly noted that the company’s board opted not to pass on the extra costs to readers in the form of higher prices for the Group’s main titles, in recognition of the hardships Kenyans are facing.

"We are in a period of drought and famine, that has increased the food deficit and is having a negative effect on business," said Melly.

Good Balance Sheet

The company’s balance sheet remains healthy, with total assets rising to Sh2.7 billion, from Sh2.3 billion, and shareholder funds growing to Sh800 million, from Sh565 million.

"We have managed to sustain growth, despite operating in very harsh environment. This shows we have strategies and measures to ensure the company maintains profitability," he added.

Melly also announced that the dream of employees owning a piece of the company will soon be realised, after the Capital Markets Authority approved the Group’s Employee Share Ownership Scheme (ESOP).

"What remains now is for the scheme to be operationalised," said Melly who lauded the contribution of staff to the Group’s amazing growth. The plan will enable employees to buy shares and ultimately have a stake in the company.

"We could not have achieved this growth without the collective and individual effort of each and every member of our staff. Our human resource is our most critical asset," said the Deputy Chairman.

During the period under review, the Group posted a pre-tax profit of Sh119 million, against Sh151 million recorded over the same period last year. The ultramodern Standard Group Centre will see the company make major savings on rent, and gain from the synergies offered by a converged newsroom environment.

Melly, who was accompanied by the Group’s Managing Director Paul Wanyagah, directors and assistant directors in charge of various departments, said plans to launch a radio station are at an advanced stage.

The Group has already bought the necessary transmission equipment, which is in the process of being installed.

"We are sure Kenyans will tune in to the new radio station just like they have been faithful to KTN and The Standard newspaper," noted Melly.

Group Finance Director Sarvjeet Channa noted that up to 60 per cent of investment during the period under review was financed from internally generated funds, thus reducing financing costs for the company.

Over the past three years the company has invested in excess of Sh1.2 billion.

KTN still on top

On KTN, Group Managing Director Paul Wanyagah said it remains the preferred news channel for breaking news and analysis of major events and entertainment programming.

Retained earnings have also grown to Sh403 million, and Melly said newsprint costs are expected to drop in the second half of the year.

Group Operations and Technical Director John Opiyo said the new press had given The Standard a critical edge in terms of quality and flexibility that could be seen in the improved advertising revenues for the newspaper.

Also present were Assistant Director and Group Chief Editor John Bundotich, and Assistant Directors Nelly Matheka (Legal and Human Resources), Lawrence Njiru (Commercial), Sam Mutetei (Print, Sales and Distribution) and Peter Gichui (Creative Services).

The Standard Group includes KTN Baraza Limited and Publishers Distribution Services (PDS).

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CFC Stanbic Bank Ltd has registered marginal growth in the half-year ending June 30, 2009. The bank grew its profit by five per cent from Sh697 million to Sh732 million before tax compared to the same period last year.

Reduced growth

Most banks have registered reduced growth in their profits for the first six months of the year, on the backdrop of slow economic growth.

According to unaudited financial results signed by chairman J.B. Wanjui and managing director M L du Toit, the bank grew its customer deposits from Sh57 billion to Sh59 billion.

The results were approved by the board of directors on August 26, 2009.

Loans and advances more than doubled from Sh1.2 billion to Sh2.5 billion in the period.

The loan loss provision was enhanced from Sh104 million in June, 2008 to Sh295 million in June, 2009.

Total operating costs increased from Sh1 billion to Sh2.3 billion. The staff costs increased from Sh389 million to Sh805 million.

Total non-performing loans and advances stood at Sh3 billion. The earnings per share increased by 51 per cent from Sh2.67 to Sh4.04 in the period. No dividend has been recommended for the period.

The bank’s total asset improved from Sh78 billion to Sh80 billion.

Its financial services arm, CFC Stanbic Financial Services, announced a loss last week, which it attributed to the downturn at the Nairobi Stock Exchange.

The Capital Markets Authority (CMA) has approved KenGen’s information memorandum, giving it a green light to raise Sh15 billion through the public infrastructure bond offer (PIBO).

The power distributor’s managing director, Mr Eddy Njoroge, said he was delighted the organisation had been given the go-ahead to issue the bond. “Plans are on course to bring the bond to the market, in an effort to access funds to finance our capacity expansion programme,” Mr Njoroge said.

He added that the details of the KenGen PIBO, which is expected to give both institutional and retail investors an opportunity to participate, will be unveiled in due course. The MD observed that there is a growing appetite for long-term debt instruments, which the company would like to leverage on to finance investments in additional power generation capacity.

KenGen’s decision to seek funds from the debt capital market is a break from the past, where the company relied heavily on development financial institutions to finance its power generation projects. “The debt capital market gives KenGen an opportunity to raise funds to finance our capital expenditure in a flexible manner, while allowing Kenyans to participate in infrastructural development, through an attractive investment opportunity,” he said.

The investment in additional power generation capacity through the bond, is part of KenGen’s five-year strategy of increasing its capacity by 500 megawatts to stabilise the power situation in Kenya. A third power generating plant at Kipevu, Mombasa, estimated to cost 10 million euros (Sh1.05 billion) is one of the projects expected to benefit from the bond.

National grid

The plant is estimated to generate 120 megawatts of electricity, which will be injected into the national grid to boost electricity supply.“This will enable us continue with our critical role of ensuring that there is additional capacity to cope with the rising demand, anticipated at eight per cent annually.

Investment in additional generation capacity will not only help the country cope with additional demand, but also the power demand associated with the implementation of Vision 2030,” Mr Njoroge added.

The transaction team for the bond comprises: KPMG as the financial advisors, Standard Chartered Bank the lead arranger, and Standard Investment Bank as the lead sponsoring broker.

Other members of the team are: Hamilton Harrison & Mathews as the legal advisors, PWC as the reporting accountants, and Ernst & Young as the auditors. Lowe ScanAd and Ogilvy PR are handling advertising and communications.

The Kenya Planters’ Cooperative Union will adopt a new structure after the review of legal recommendations. Speaking during the farmers’ union AGM held at its headquarters in Dandora, chairman Kimanthi Mutuerandu said the structure to be adopted would seek to enable the union cope with changes in the coffee sector.

KPCU has dual registration under the Companies Act as a limited company and a cooperative under the Cooperatives Act. During last year’s AGM, Cooperative and Marketing minister Joseph Nyaga gave the organisation an ultimatum to convert into a cooperative to benefit from government funding.

Profitability

It is estimated that KPCU requires Sh1 billion to perform at its optimal level and return to profitability. Mr Nyaga said it was not feasible to fund KPCU, which is partly a private company, from public funds. He added that it would also be possible to source for donor funds to resuscitate the once giant farmers’ union after its conversion.

Mr Mutuerandu said if the union dropped its cooperative status, it would effectively become a parastatal with the implication of dissolution of the board followed by another appointed by the government.

“The board has pondered over the matter and is in the process of formulating modalities that will address the issue realistically to avoid disenfranchising the interests of its shareholders,” he said.

Mr Mutuerandu said the structure to be adopted would consider the developments that have taken place in the coffee industry since liberalisation, the enactment of the Coffee Act 2001 and other amendments to the law.

He added that a special general meeting would be convened soon, during which the shareholders will adopt the agreed structure.

A power generation project by Mumias Sugar Company has paid off, earning the firm tax credit and pushing its after-tax profit up by 33 per cent from Sh1.2 billion to Sh1.6 billion.

The tax credit stems from a 150 per cent investment deduction allowance on its co-generation plant. The company has completed a co-generation project that is producing 38 megawatts of electricity, 26 of which it is selling to Kenya Power and Lighting Company.

Burning bagasse

Co-generation is the process of making electricity from burning bagasse, the fibrous residue remaining when sugarcane is crushed to make sugar. Directors have proposed 40 cents a share as first and final dividend. The shareholders register closes on November 6, 2009.

However, the company’s pre-tax profit for the year ended June 2009 dropped 25 per cent from Sh1.5 billion to Sh1.1 billion. Mumias made Sh231 million in pre-tax profit for six months to December 31, 2008 and Sh962 million in the second half of the year.

“This was a significant turnaround, given the challenges faced in the first half of the year,” Mumias chief finance officer, Peter Kebati, told reporters in Nairobi on Friday.

Mr Kebati said a modern packaging plant to increase pre-packed sugar would be ready by the end of September. Sugar fortification by adding nutrients for improved health is being implemented, he added. The company has a capacity to produce up to 22 million litres of ethanol annually from molasses, a by-product of sugar production.

Ethanol plant

“A feasibility study has been completed on the viability of setting up an ethanol plant in Mumias, and ways of implementing the project are being explored,” Mr Kebati said.

Increased interest and use of bio-fuels in the world as a replacement for fossil fuels has been strengthened by the erratic global oil prices. This has made ethanol a profitable product.

Mumias Sugar Company Ltd has recorded a 33 per cent growth in earnings for the six months period ended June 30.

The western Kenya-based sugar miller’s revenues jumped to Sh1.6 billion from Sh1.2 billion in a similar period last year.

This was, however, against a backdrop of industrial unrests, which saw the company’s sugar production fall 13 per cent to 231014 tonnes from 265263 tonnes.

The company processed 2.2 million tonnes of sugar cane against 2.4 million tonnes the previous year. "This was as a result of the unforeseen challenges on the inbound logistics in supply of cane and factory operational challenges," said Mr Peter Kebati, the company’s chief finance officer.

Kebati said problems experienced during the tie-in of the sugar plant with the co-generation power plant in May also led to lost production time and lower than anticipated power generation.

The board of directors proposed a first and final dividend of 20 per cent per ordinary share of Sh2 each (Sh0.40 per share).

Regional trade agreement

Kebati said the Common Market for East and Southern Africa safeguard measures have not had significant impact on the local market this year due to low availability of sugar in the region. He said the main challenge has been unfair trade practices whereby sugar has entered the market through Somalia and the port of Mombasa illegally.

During the period under review the company’s earnings per share climbed 33 per cent to Sh1.05 from Sh0.79. Gross turnover fell marginally by one per cent to Sh14.2 billion from Sh14.3 billion.

During the period the company factored in a tax credit of Sh417 million resulting from the 150 per cent investment deduction on the co-generation projects.

The Government has commissioned an independent inspection and testing company, Geo Chem, to expose oil marketers who import sub-standard fuel products.

The firm, which won an inspection tender advertised by Kenya Bureau of Standards (Kebs) carried out its first assignment on a 70,000 metric tonnes of jet fuel that was discharged at the Kipevu terminal.

Though no official results were released on the exercise watched over by Industrialisation Minister Henry Kosgei, preliminary results showed the jet fuel was substandard and did not contain the required energy.

Briefing the Press, Kosgey said Kebs and the new firm took samples from the ship for testing, an exercise that will be done on all fuel imports.

"We have decided that this fuel at the port must be subjected to testing to determine if it meets the required standards," said Kosgey.

Kebs MD, Kioko Mang’eli said preliminary results showed the jet fuel does not discharge the required energy when burned by jet engines.

"Our work is to ensure standards are met and the customer gets value for their money," explained Dr Mang’eli adding that Kebs lack of involvement in the oil sector has seen imports of substandard fuel products.

The MD said the partnership with Geo Chem would not only ensure that consumers get quality product but also curb under declaration of imports by oil marketers.

Prior to the entry of Geo Chem, oil importers made arrangements with private companies for testing and verifying quantity, a process that was open to manipulation by unscrupulous importers.

Revenue loss

Mang’eli said last year alone, close to 35 per cent of the oil imports could not be accounted for resulting in tax revenue loss.

He is upbeat that the engagement of Geo Chem would save the exchequer the revenue loss.

Rajiv Bahl, Geo Chem Middle East managing Director said his firm was dedicated to serve the Kenyan market citing the investment of Sh269.5 million ($3.5 million) in a lab at its Mombasa office was a demonstration of the firm’s commitment.

"We are renowned as cargo inspectors and surveyors and have proven our expertise in inspection, survey and testing of diverse export, import and locally traded cargo and commodities," said Bahl.

He said Geo Chem boasts of an independent, unbiased and quality driven inspection and testing company.

Mangeli regretted that for many years Kenya has been a dumping place for substandard fuel.

The petroleum industry is undergoing major realignments with players coming up with new strategies to capture a large piece of the market amid depressed margins.

Although KenolKobil, Shell, Total, Chevron (Caltex) and Oillibya are market players, the National Oil Corporation of Kenya (Nock), Hass, Gapco, Galana, Bakri, Engen and Hashi Empex are keen to have a bigger share of the pie in Kenya.

According to Hydrocarbons Management Consultancy, a major realignment is going on in the industry with marketing companies adopting new strategies depending on whether sales of individual firms are growing or decreasing.

Cheapest bargains

The situation is further complicated by independent dealers of service stations owning 30 per cent of retail sites in Kenya buying fuel from marketers without any specific loyalty. Their only driving factor is hunting for the cheapest bargains in town.

Independent marketers who do not own service stations are active in resale and wholesale business. “The market has been an oligopoly of KenolKobil, Shell, Total and Caltex. Oillibya and Nock have been closing the gap with steady market share growth,” said Hydrocarbon’s lead consultant Robert Shisoka.

He said adoption of new strategies has led to paradigm shifts as firms seek to enhance their local and regional market share to fend off dominance of the big three.

Came second

According to data compiled by the Petroleum Institute of East Africa (PIEA), 23.1 per cent of Kenya’s inland petroleum sales was held by KenolKobil between January and June 2009. Shell came second with 18.8 per cent.

Total had 14.8 per cent, Caltex (10.1 per cent), Oillibya (10 per cent), Nock (7.6 per cent), Hass (2.5 per cent), Gapco (2.3 per cent), Galana (1.8 per cent), Bakri (1.5 per cent), Engen (1.5 per cent) and Hashi Empex (1.1 per cent) with the rest held by Oilcom among other marketers.

Nock doubled its share to 7.6 per cent from 3.65 per cent last year while Oillibya rose to 10 per cent from 7.9 per cent in June 2008. The State-owned oil marketer won the tender to supply diesel to emergency power producer Aggreko.

Aggreko’s use of diesel and fuel oil is set to increase because it is required to install more generators in Nairobi and Naivasha to raise power output to the national grid given that hydro-generation has declined due to drought.
Up to 20,000 cubic metres space at Kipevu Oil Storage Facility in Mombasa is reserved monthly for companies with emergency fuel supplies contracts. “It is harvest time for companies that are supplying diesel and fuel oil to thermal power producers. Consumers will pay more money as thermal generation is stepped up,” said Mr Shisoka.

However, he notes different fortunes elsewhere: there are currently no give-aways offered to consumers in petrol stations because marketers have not recovered from the effects of depressed margins and holding expensive stocks.

Local pump prices were forced down due to stiff competition in the market and public pressure in response to the falling international cost which adversely affected margins at a time expensive stocks were held.

Market share

Total Kenya managing director Felix Majekodunmi said the full impact was felt in the first quarter of 2009 with operations continuing to be affected by supply constraints due to insufficient pipeline pumping capacity and erratic production by the Mombasa-based refinery.

Amidst the competition, Nock plans to increase its market share to about 15 per cent by 2013 in line with the State corporation’s strategic plan 2008- 2013 that focuses on growth aimed at market leadership. “This will be achieved through increased presence by adding up to 100 retail stations by 2013 and grow commercial accounts to 5 per cent market share,” said Nock’s managing director Mwendia Nyaga.

He said the State-owned firm intends to service 25 per cent of the total government spend, and achieve 5 per cent market share each for liquefied petroleum gas, bitumen and lubricants. It will also provide alternative fuels, packaging and delivery. The corporation has the task of increasing its market share adding 20 service stations annually.

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Essar appoints CEO to oversee refinery upgrade





http://www.businessdailyafrica.com/image/view/-/650856/highRes/98560/-/maxw/600/-/y0a73pz/-/Mombasa-Refinery.jpg Engineers repair a section of the Kenya Petroleum Refineries Limited. The refinery is meant for upgrade at a cost of $400 million (about Sh32 billion) to enable it produce more white oil products such as cooking gas, jet fuel and petrol as opposed to its current state where it does more fuel oil, making it less efficient and profitable.
By Zeddy Ssambu (email the author (javascript:void(0);))



Posted Tuesday, September 1 2009 at 00:00

Essar Oil and Gas has appointed a new chief executive for the Kenya Petroleum Oil Refineries Limited (KPRL), putting fresh urgency to the delayed upgrade of Kenya’s sole refinery.

Business Daily has established that the Indian- based oil giant has tapped Mr Raj Varma from its headquarters in Mumbai to help in the refinery’s turnaround, just a month after Essar completed the purchase of a 50 per cent stake in KPRL from three oil majors: Shell Petroleum Company, Beyond petroleum and Chevron Global Energy.

He takes over from Mr John Mruttu who becomes the chief operating officer after a new shareholder agreement that gave the Indian firm the position of CEO and chief finance officer.

The change in leadership is the clearest signal that Essar is set to stamp its authority in the management of the refinery, which was under the control of the Kenyan government that holds the remaining stake, and executives at the firm reckon it would give urgency to the upgrade plan.

The refinery is meant for upgrade at a cost of $400 million (about Sh32 billion) to enable it produce more white oil products such as cooking gas, jet fuel and petrol as opposed to its current state where it does more fuel oil, making it less efficient and profitable.

Already, the government has so far set aside Sh1.6 billion to help fund the upgrade with the balance expected to come from Essar Oil and commercial lenders.

“The upgrade project is now moving, with a review of the (dated) design premises.

Priorities will crystallise as Essar becomes more familiar,” said a senior executive at the firm who requested not to be named.

Last Friday, the board, at their first meeting since the entry of Essar, approved a number of projects linked to the upgrade.

Besides the upgrade, the board approved the construction of a 24 megawatt power plant to cut its reliance on Kenya Power and Lighting Company, a gas loading facility and injection of Sh160 million in fresh equity for the implementation of smaller projects.

It also approved the hiring of consultants to undertake studies and recommend the best configuration of the refinery and review both costs and viability of the project.

Mr Varma has vast experience in the Indian energy market that spans over 50 years and his posting would help the Indian giant increase its presence in the regional oil market.

On July 30, Essar announced that it would enter Kenya’s downstream petroleum market by acquiring assets belonging to the troubled Triton Petroleum Company that was placed under receivership last December.

Essar Energy is a fully integrated oil & gas company of international scale with strong presence across the hydrocarbon supply chain — from exploration & production to oil retail.

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Millions of Kenyans could soon have a chance to own a decent home if Parliament passes a building code that broadens the range of acceptable construction materials beyond brick and mortar.

A task force appointed by Prime Minister Raila Odinga four months ago to review the building laws, on Tuesday reported that it had completed the work and prepared a draft Planning and Building Bill for tabling before Parliament.

“The outdated laws have resulted in tragedies and have been a major impediment to the delivery of modern housing to millions of urban residents,” said Mr Tirop Kosgey, the Housing permanent secretary, at a conference on quality and affordable housing in Nairobi.

“There must be a paradigm shift in the area of building materials that is centred on material performance instead of materials specification,” he said. Key segments of the current building code have been in existence since 1967.

The new building code is expected to move the building industry away from brick and mortar that some players claimed has made construction a rich man’s business, locking out Kenyans of average means from owning homes.

Though cement will remain a vital component of any construction, locally available materials and latest building technologies could help offer faster and cheaper solutions for housing in the semi-permanent segment.

Among the materials being considered are timber and UN blocks and bricks made from earth across many parts of the country.

The use of eco-friendly materials for roofing such as the traditional grass used for thatching will also be considered.

Currently, houses built from this materials are considered temporal and the approval of local authorities must be sought.

If passed in parliament, it would be a major boost on the housing sector and could slow down the proliferation of slums that has emerged as the best alternative to the lower class on a low supply of housing.

The appetite for housing currently stands at 150,000 units annually but the country can only produce 50,000 units, with most targeting the high-end of the market due to the high returns from this segment.

About 60 per cent, or 1.9 million of the three million Nairobi residents live in slums and informal settlements, according to UN figures.
Building experts reckon that the cost of putting up a house could fall by up to 30 per cent under the proposed code.

“We estimate that it will be possible to get a two bedroom house for Sh900,000, compared to the current average price of Sh1,500,000,” said Mr Sylvester Muthari, the chairman of the Institute of Quantity Surveyors of Kenya.

If the Bill is passed it will be possible to use modern construction technology such as prefabricated boards and interlocking blocks which are cheaper than the preferred brick and mortar.

Compared with conventional masonry, which heavily relies on cement, interlocking blocks save construction time and mortar, a huge benefit to builders because of the high cost of cement.

It is hoped that there will be a reduction in the construction period, hastening the rate at which houses are being completed.

Prefabricated housing is used to do this given that a house is assembled like a jigsaw where entire parts are fitted together.

Builders who have been moving to areas where the construction code is lax will also be hemmed in by the proposed new law.

“Those who have been rushing to Mavoko and Ruiru will also be forced to adhere to strict planning,” Dr Reuben Mutiso, a technical advisor to the committee, said at the same function.

The current building law has 103 statutes but their enforcement depends on different ministries including Housing, Water, Environment and the Local Government, a drawback to investors, especially foreign investors.

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Mumias Sugar Company has increased the price of cane deliveries from Sh2,850 to Sh3,055 per tonne.

The increase comes barely a week after Agriculture minister William Ruto directed sugar millers to start paying sugarcane growers Sh3,500 a tonne.

When contacted on Tuesday, Mumias Sugar Company corporate affairs manager Pamela Lutta remarked:

“We do review our prices every month; it is not news at all.”

Mumias Outgrowers Company chairman Ken Echesa told the press shortly after a meeting between the farmers and the miller’s management that the firm had accepted to increase the price with effect from Tuesday.

Recently, Mr Ruto called on Mumias Sugar Company to begin paying growers Sh3,500 per tonne of cane arguing that the price of the refined product was too high and should be commensurate with that of the raw material.

Market forces

“I’m not just giving this directive for the sake of it; we shall not allow shareholders to continue posting abnormal profits at the expense of the hard-working growers currently reduced to paupers,” asserted the minister.

Ms Lutta said Mumias Sugar would continue reviewing the prices depending on market forces.

“The price has been going up steadily in the last couple of months and we intend to pay farmers well so long as market factors are favourable,” she said.

Bamburi Cement Group, the leading cement producer in East Africa, on Monday announced half-year financial results for the period ending June 30, 2009.
The group posted a 49 per cent increase in profit, raking in Sh4.3 billion compared to Sh2.9 billion the same period last year.
Driven by a strong resurgence of the domestic market and an improved export sales to inland Africa markets, the group’s turnover grew by 41.5 per cent to Sh16.2 billion up from Sh11.5 billion.
Making the announcement on Monday, Group Chairman Richard Kemoli said the strong results demonstrated the company’s resilience and economic significance particularly in the face of economic conditions plagued by global downturn, increased competition and the negative impact of the fluctuating rate of local currencies against major hard currencies.

Internet service provider AccessKenya has posted a 29.5 per cent drop in pre-tax profit for the six months ended June 30.

The company’s profits for the first half of this year went down by Sh37.6 million to Sh89.6 million, compared to Sh127.2 million posted over a similar period last year.

The company attributed the decline to poor performance of its information and technology (IT) support services division.

The ISPs recently acquired IT division — Openview Business Systems — posted a pre-tax loss of Sh12.5 million, while its Internet services division reported a Sh102 million pre-tax profit. "Our IT division did not perform as expected this half year and we have taken a number of steps to address this issue," said Mr Jonathan Somen, Group Managing Director .

"We have just finalised the acquisition of the remaining 30 per cent of the shares in the business, refocused the management, streamlined our product offerings... we expect these actions to yield improvements in the division’s profitability."

Access Kenya has a 70 per cent stake in Openview Business Systems.

The company’s year on year administration expenses went up by Sh100 million to Sh302.18 million from Sh202.21 million last year.

Millions of Kenyans could soon have a chance to own a decent home if Parliament passes a building code that broadens the range of acceptable construction materials beyond brick and mortar.

A task force appointed by Prime Minister Raila Odinga four months ago to review the building laws, on Tuesday reported that it had completed the work and prepared a draft Planning and Building Bill for tabling before Parliament.

“The outdated laws have resulted in tragedies and have been a major impediment to the delivery of modern housing to millions of urban residents,” said Mr Tirop Kosgey, the Housing permanent secretary, at a conference on quality and affordable housing in Nairobi.

“There must be a paradigm shift in the area of building materials that is centred on material performance instead of materials specification,” he said. Key segments of the current building code have been in existence since 1967.

The new building code is expected to move the building industry away from brick and mortar that some players claimed has made construction a rich man’s business, locking out Kenyans of average means from owning homes.

Though cement will remain a vital component of any construction, locally available materials and latest building technologies could help offer faster and cheaper solutions for housing in the semi-permanent segment.

Among the materials being considered are timber and UN blocks and bricks made from earth across many parts of the country.

The use of eco-friendly materials for roofing such as the traditional grass used for thatching will also be considered.

Currently, houses built from this materials are considered temporal and the approval of local authorities must be sought.

If passed in parliament, it would be a major boost on the housing sector and could slow down the proliferation of slums that has emerged as the best alternative to the lower class on a low supply of housing.

The appetite for housing currently stands at 150,000 units annually but the country can only produce 50,000 units, with most targeting the high-end of the market due to the high returns from this segment.

About 60 per cent, or 1.9 million of the three million Nairobi residents live in slums and informal settlements, according to UN figures.
Building experts reckon that the cost of putting up a house could fall by up to 30 per cent under the proposed code.

“We estimate that it will be possible to get a two bedroom house for Sh900,000, compared to the current average price of Sh1,500,000,” said Mr Sylvester Muthari, the chairman of the Institute of Quantity Surveyors of Kenya.

If the Bill is passed it will be possible to use modern construction technology such as prefabricated boards and interlocking blocks which are cheaper than the preferred brick and mortar.

Compared with conventional masonry, which heavily relies on cement, interlocking blocks save construction time and mortar, a huge benefit to builders because of the high cost of cement.

It is hoped that there will be a reduction in the construction period, hastening the rate at which houses are being completed.

Prefabricated housing is used to do this given that a house is assembled like a jigsaw where entire parts are fitted together.

Builders who have been moving to areas where the construction code is lax will also be hemmed in by the proposed new law.

“Those who have been rushing to Mavoko and Ruiru will also be forced to adhere to strict planning,” Dr Reuben Mutiso, a technical advisor to the committee, said at the same function.

The current building law has 103 statutes but their enforcement depends on different ministries including Housing, Water, Environment and the Local Government, a drawback to investors, especially foreign investors.

I like this.:cheers:

Drought could become an insurable risk following the entry into the country of an insurance intermediary dedicated to serving the poor with affordable cover.

Microensure’s weather indexed crop insurance provides protection for poor smallholder farmers against catastrophic drought.

Lending for agriculture in areas prone to drought has been viewed as too high a risk because a few farmers are able to provide any form of collateral.

The micro insurance agency’s crop insurance product is designed to provide compensation to farmers when during a crop growing cycle, rainfall is insufficient to grow and optimise yields.

Not possible

For this model, drought is not measured by what happens on the field but by the amount of rainfall received.

Because it is not possible to take measurements on each individual farm, rainfall levels are taken at local meteorological stations.

Participating farmers within a 20-kilometre radius of a station are assumed to have received the same amount of rainfall and to be affected in a similar manner.

In the case of severe drought, all farmers will receive compensation.

“The mechanism is simple, easy to administer and payouts are automatic so there is need for affected farmers to file a claim or an expensive loss verification procedure,” Microensure chief executive, Richard Leftley told reporters in Nairobi on Wednesday.

He said traditional insurance products tend to fail because they are based on complicated policies not suited to the simpler needs of the poor thus often generating misunderstanding and mistrust.

Citing Malawi where weather indexed crop insurance is available, Mr Leftley said when a loan equivalent to Sh8,000 per acre was given to farmers, their yields increased by between 100 and 250 per cent.
He said that with access to the weather insurance, farmers are able to get loans to buy better seeds and fertiliser.

“Weather insurance can unlock credit and the credit will unlock inputs leading to improved production,” said Mr Leftley.

The company currently operates in Ghana, Uganda, Tanzania, Philippines and India, but with $24.2 million (Sh1.8 billion) grant from Bill and Melinda Gates Foundation it will enter into 11 new countries among them Kenya.

Besides the weather insurance, Microensure also offers credit life, an insurance product that protects the lending institution against the inability of the borrower to repay the loan as a result of death or disability.

It also has healthcare insurance cover for Sh640 a year for a family of four.

Indian telecommunications firm, Essar Group, has assumed majority shareholding in Essar Telecom Kenya after buying out Econet Wireless Kenya.

Essar Telecom Kenya chief executive officer Srinivasa Iyengar, in an exclusive interview with the Daily Nation on Wednesday revealed that they now have an 80 per cent stake giving it more teeth to carry out a countrywide network expansion.

“Previously, we had a 35 per cent stake which was holding us back in accessing funds from lenders. But now we have enough money to see us through our expansion programme,” said Mr Iyengar.

He said that the entire yu network rollout is costing $450 million out of which $200 million is equity through the Essar Group.

“We have already received $50 million funding and the rest will be coming in phases in a five-year plan,” he said.

On Tuesday this week, the company announced that its yu network was now available countrywide.

Mr Iyengar said that in the nine months that they have been in operation, the mobile phone firm been able to net 600,000 subscribers with a target of two million by March next year.

He said the company is in talks for possible takeovers in Uganda and Congo.

“The journey has been long for this brand but with the nationwide reach, we can now compete with the rest of the operators,” he said.

Econet Wireless’s history has been full of ups and downs.

It was for long a byword for delays, lengthy court cases and shareholder disputes that were part of the build-up to its eventual launch last year.

It is understood to have been one of the reasons the company decided not to trade under the Econet brand instead opting for the yu.
It took the intervention of Essar Group to get it on the road after it acquired a controlling stake in Econet Wireless International (EWI).

Essar, an Indian conglomerate has transnational interests in businesses as diverse as steel, construction, energy, shipping and communications.

Its interests also include a 33 per cent stake in mobile operator, Vodafone Essar, which is a 40 million-subscriber outfit in India.

Central Bank of Kenya has designed a more detailed website that will enable better decisions on investment when buying government securities.

Speaking on Tuesday evening while launching it, the governor, Prof Njuguna Ndung’u said the site would enhance communication with the financial and other markets.

It will strive to provide accurate and timely information, and has a feed back mechanism.

He said although market participants had distinguished between information and 'noise’, it was important to manage public expectations through effective communication.

“The feed back mechanism will ensure the bank stays in touch with public expectations and responsive to the needs of the market and the public.” he said.

Mr Ndung’u said when the public has a clear understanding of the role of Central Bank, it will be possible to foster economic stability by knowing how it was likely to respond in various economic circumstances.

The new site has a chart tool to assist researchers and students analyse time series and track policy and economic performance.

Unlike the earlier one, Ndung’u said they will consider publishing parts of the weekly bulletin in Kiswahili, to enable the information reach a wider forum.

The media will also have a dedicated link which will help facilitate faster information access.

“Our new website has dedicated a link to the media houses to access information that will facilitate their role. It is encouraging to note that some media houses have published staff commentaries and analyses carried on our website.” Mr Ndung’u said.

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Family Bank customers can now repay loans through their mobile phones. The new service known as Pepesha Pesa, allows Family Bank customers to send money directly to their account in order to offset loans and other obligations.

The Pepesha Pesa service that will be offered on Safaricom’s M-Pesa platform through its Paybill feature is a key advancement in mobile banking and will offer Family Bank customers convenience while reducing the costs of travel to branches.

“Pepesha Pesa breaks the limitation of time in providing service during the banking hours only. Most importantly, is that this new service enables access to banking anytime, anywhere, therefore allowing bank customers greater accessibility and bringing financial services to their finger tips,” said Peter Kinyanjui, Family Bank’s CEO.

The service is an innovation that will instill credit payment discipline among borrowers who are mainly from the SME sector and allow the bank to extend its reach to rural areas.

“The mobile banking offers consumers added value to the current services since they are not limited to conventional branch-based banking and are able to improve their credit profile by paying their obligations on time without any barrier in time or distance” said Mr Kinyanjui.

The service will enable M-Pesa customers storing money in their cell phones to easily make payments of micro-loans extended by the bank.

China sets $100bn trade goal with EACSubmit (http://javascript%3Cb%3E%3C/b%3E:void%280%29;) Cance (http://javascript%3Cb%3E%3C/b%3E:void%280%29;)

http://www.businessdailyafrica.com/image/view/-/652186/medRes/98969/-/maxw/600/-/cvvjsbz/-/eac.jpg East African heads of state at a past summit. China is looking for ways increase trade with the EAC states.
By Cosmas Butunyi (email the author (http://javascript%3Cb%3E%3C/b%3E:void%280%29;))
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Posted Thursday, September 3 2009 at 00:00

China is looking for ways increase trade with the East African Community (EAC) states.

According to the country’s envoy to Tanzania, Mr Liu Xinsheng, the Asian country has set a trade volume target of $100 billion with EAC states by 2010. In 2006, the trade volume was estimated at $55.5 billion.

Mr Xinsheng said that this goal would be achieved through the China Africa Development Bank.
China is also looking into doubling its assistance to African countries. The country has already written off a total of US$1.6 billion it was owed by 31 African countries.

“We have provided duty free treatment for 190 export commodities,” he added.

He said China had signed several trade agreements with African countries to boost trade, including bilateral agreements with more than 40 African countries, bilateral agreements to encourage and protect investments in 23 African countries and agreements geared at avoiding double taxation with eight African countries.

The bilateral economy and trade agreements signed between China and Kenya include the Agreement on Economic and Technological Cooperation between the People’s Republic of China and the Republic of Kenya and the Agreement on Trade between the People’s Republic of China and the Republic of Kenya that was signed in 1978.

China has recently been proactively seeking to increase its investments in African countries, Kenya among them. Last month, the Lake Basin Development Authority (LBDA) announced that the Magwagwa Dam Multipurpose development project in Nyamira district in western Kenya would be constructed by a Chinese firm, Sinohydro Corporation.

Flood mitigation
According to the LBDA boss, Joseph Khaemba, the 103 metres high dam would have a storage capacity of 645 million cubic meters and would be used for hydroelectric power generation, irrigation and flood mitigation.

The project is expected to be completed by 2011 and will 120 mega watts of hydropower, irrigate 15,000 hectares of land in Kano and Nyakach plains and supply water to more than 60, 000 families in Nyakach and Sotik district.

It is also expected to act as a reservoir, with the upstream dam site measuring 3,160 square kilometres. It will employ more than 100 people at power station and enable 8, 000 families to benefit from irrigation.

The Kenyan and Chinese governments have also partnered in the High Grand Falls power generation project along Athi and Tana basins which is expected to inject an additional 200 MW into the national electricity grid.
Past projects undertaken by China in Kenya include the construction of the Moi International Sports Center, the expansion of the Eldoret hospital and the building of the Gambogi-Serem Highway.

Populous nation
China’s main exports to Kenya are electric appliances, industrial and agricultural implements, textiles, building materials and drugs. Kenya on the other hand exports tea, coffee, leather to the world’s most populous nation.

According to the embassy, in 2002 the value of trade between China and Kenya reach $186.4 million, with China exporting $180.6 million to Kenya and importing goods from Kenya worth $5.8 million.

At present, the Chinese Embassy estimates that there are over 20 Chinese companies doing business in Kenya. The two countries also collaborate in education.

Mumias Sugar Company (MSC) Ltd is set to diversify its investments in water manufacturing.
The Western Kenya-based sugar miller is exploring opportunities to set up a water bottling plant to exploit excess water from their power generation plant.
Evaluating tenders
Mr Peter Kebati, the company’s chief finance officer said the company was already evaluating tenders from local and international contractors seeking to set up the plant.
"We are evaluating tenders. We expect to set up the plant in the next six months," Kebati said, adding that the company would sell its water at competitive market prices.
The sugar miller commissioned the power generation project in May this year, increasing its power generation from 12MW to 38MW.
The Sh2.6-billion project, which was funded by a loan from PROPARCO, an international development finance institution, has increased the company’s power supply to the national grid to 26MW from 3MW.
MSC weathered hostile industrial unrests to post a 33 per cent growth in earnings in the last six months ending June 30, 2009.
Its revenues jumped to Sh1.6 billion from Sh1.2 billion in a similar period last year.
During the industrial action by farmers, the company’s sugar production shrunk by 13 per cent to 231, 014 tonnes from 265, 263 tonnes.
Crushing capacity
The company’s crushing capacity also plummeted from 2.2 million tonnes of sugar cane up from 2.4 million tonnes in the same period last year.
The teething problems experienced during the tie-in of the sugar plant with the co-generation power also led to lost production time and lower than anticipated power generation.

The Retirement Benefits Authority (RBA) will use the popular social networking website Facebook to sensitise Kenyans to save for retirement.

Mr Justus M’Igweta, the RBA chairman said the move was one in a range of strategies the authority will adopt in a fresh campaign to create curiosity among Kenyans on the need to save for retirement.

Facebook is a social forum that connects people with friends and others who work, study and live around them.

M’Igweta said RBA, through its Facebook group at "The nest egg – lets save for retirement" would soon embark on an online education campaign where university students would discuss pension.

"This campaign is intended to inculcate a saving culture in our youth at a younger age," he said while launching RBA third Strategic Plan in Nairobi.

Scheme compliance

The new plan running from July 2009 to June 2014 has set out eight strategic objectives for the next five years during which RBA would strive to improve the level of services provided to the industry and to the public.

The objectives include harmonising and streamlining the sector through implementation of the national pensions policy, increasing total membership of retirement benefits by five per cent and increasing scheme compliance to 100 per cent.

The authority will engage at least five million Kenyans in awareness activities on retirement benefits by June 30, 2014 and increase average benefits replacements rates to 32 per cent.

M’Igweta expressed confidence the objectives would be achieved in partnership with stakeholders to ensure increased pension’s coverage, which would in turn increase domestic savings and spur greater economic growth.

RBA Chief Executive, Mr Edward Odundo said strategies have been developed for each of the objectives, and a monitoring and evaluation programme set up to review their progress.

DB,
Your posts are solidly enriching.
Whereas news originating from Mumias Sugar depict a picture of an innovative and successful company, there are no signs in its hinterland to reflect the same. Producer prices for sugarcane are simply a pittance and the sugarcane farmer lives in abject poverty. Industrialization should better the lives of citizens and not impoverish them at the expense of brokers and middlemen. Mumias Sugar Company besides its core sugar production business also sells molasses, produces power(26MegaWatts is no mean feat given that GoK is spending 14 Billion for Aggreko to supplement the national grid with 80 Megawatts) and now Mineral water.This is an immensely successful company that should substantially better the lot of western Kenya.
Mike

Thanks for these updates, DB.

After four years of waiting, aloe vera farmers in Kerio Valley have been licensed by the Kenya Wildlife Service to harvest and put the product on the market.

Further, Baringo Aloe Bio-enterprise that leads the project, Landmawe the marketing agent, Kenya Forest Research Institute and KWS, signed a memorandum of understanding on Thursday.

Potential

The agreement binds the parties to play their roles in marketing aloe from the area, which now covers seven districts, to reach its potential estimated at 50 tonnes of extract annually.

Aloe vera is a member of the lily plant family that is full of juice and closes like a cactus. It has been used for its medicinal and skin care properties for centuries.

Speaking during the signing ceremony at his Nairobi office, KWS director Julius Kipng’etich, said aloe farming would be a profitable enterprise as the plant grows naturally in the region.

“Because of its scarcity elsewhere, aloe should give better returns to farmers, but it will also depend on the business model used,” he said. “We will ensure that it will be a win-win between the community and partners.”

The European Union, through its community development trust fund has given grants amounting to Sh12.3 million for the sustenance of the project, to boost rural livelihoods. Construction of a factory in the area is complete.

The fund’s programme manager, Joseph Ruhiu, said the project has local relevance as well as a national function. “The MOU opens a new front in the use of aloe in the country,” he said.

Baringo Central MP Sammy Mwaita, said commercial farming of aloe would economically help residents of the arid area. He thanked KWS for plans to issue guidelines on sandalwood, so that farmers could plant it commercially.

“This is meant to save sandalwood in forests,” Dr Kipng’etich said. “If that happens, it will help our people,” Mr Mwaita said. “This is an arid area that can benefit if these plants are grown commercially.”

Sandalwood has been valued and treasured for many years for its fragrance, carving, medical and religious qualities.

Local organisations that have incorporated ethical practices in their operations will be recognised following a planned launch of an ethics award scheme.

The awards, an initiative of KCA University, will recognise employees and firms that uphold and promote ethics for the benefit of the marketplace, environment and the community.

The scheme will be launched during the upcoming Pan African Conference on the ethical dilemma of the global economic conference that will take place in Nairobi between September 22 and 25.

The awards are expected to bring about responsibility among companies in the country, often criticised for lack of ethical practices.

The University says scheme is intended to ensure that ethical values are well balanced to address the requirements of stakeholders.

Flexible approaches

"The selected categories used to measure ethics are non-prescriptive and adaptable as they focus on results and not procedures, tools or organisational structure.

Companies are encouraged to develop and demonstrate creative, adaptive and flexible approaches for meeting their ethical objectives," said KCA University in a statement.

The scheme will award companies employing ethics in two categories – individual and corporate – and is open to both private and public sector organisation.

"Ethical organisational culture is achieved by an organisation when it maintains high levels of moral standard and continual improvement in three key areas— code of ethics, executive commitments and integration of ethical values in all organisational strategic operations.

We are positive, many companies will be challenged to embrace ethical issues in their corporate policies," the university said.

An international foundation, Free Play Foundation, has launched a solar powered radio to help women in rural areas keep in touch with news.

Director in the Department of Information Ezekiel Mutua, said the radio would serve people living in areas with no power.

The radio has a detachable solar panel that charges it through sunrays.

It also has a winding lever enabling it to be used when there is no sun.

Kinetic energy is generated to run the radio when one winds the lever.

"Women are the backbone of the economy and the radios will help them listen to news as they move around in their farms and other areas," said Mutua.

Only 21 percent of women have the privilege of listening to radio and still the bulk of them are living in urban centres," said Phoebe Asiyo Chair of Caucus of Women Leadership in Kenya.

Programme Manager for Caucus for Womens Leadership in Kenya Peter Ochola said the radios would be distributed in 10 constituencies, their pilot area before more distribution to other parts of the country.

solar energy

"Women will need to form listening groups of about 25 and they will then be given a radio.

We will change this arrangements according to the demographic figures we collect during the study," said Ocholla.

He challenged other media houses to give more space to local programming dealing with issues affecting the rural folk.

Another initiative—Wamama Radio— will be launched for Maasai women in Narok North once a permit was received from CCK, said Eunice Marimu Caucus district convener.

The foundation partnered with Pastoralist Journalist Association, African Woman Child Features , United Nations Childrens Foundation, Handicap International and the Government.

The project launch follows Safaricom’s initiative which introduced solar charged mobile phones.

The government has advanced the Kenya Meat Commission Sh100 million to enhance its capacity to slaughter livestock faced with starvation, a minister has said.

As a result, the meat processor is currently operating on a 24-hour shift, slaughtering an average of 800 cows, says Livestock Development minister Mohamed Kuti.

Frequent machine breakdowns and electricity rationing which have in the past hampered the firm’s efforts to slaughter animals brought in by pastoralists, have been addressed.

The minister said the Sh98 million given to the State firm has enabled it fix its aging machines. “We now have a fully operational KMC. The few hitches it was facing have been fixed and can now operate 24 hours each day,” he said.

The meat processor is currently purchasing animals at risk of succumbing to drought from farmers at a cost of Sh8,000 each. This amount is from the first batch of Sh200 million grant already allocated for the purpose though Mr Kuti disclosed that negotiations for an additional Sh500 million loan are ongoing.

He said more than 130,000 animals have died in the last few weeks either on the fields or during transportation to the meat processor.

Mr Kuti said Sh200 million has been advanced to the Agricultural Finance Corporation to be lent to ranch owners at a 7.5 per cent interest to help them buy animals from farmers for sale later.

Increase uptake

“We are aiming at increasing the uptake of livestock from pastoralists by availing funds to ranches that have enough livestock feed,” said Mr Kuti during a press briefing at his Kilimo House office.

Already, purchase of livestock has been completed in Loitokitok, Loyiangalani, Sololo and Kajiado districts. The programme is ongoing in Hola and Tana River districts whereas countrywide schedule for livestock auctions would be published soon, he said.

To cater for the large number of animals expected to be purchased, KMC has leased land from the East African Portland Cement for the next 60 days. This would serve as a holding and feeding ground for the malnourished livestock.

Mr Kuti said a vaccination campaign expected to cost Sh200 million is currently underway to counter disease outbreak as a result of livestock movement. He said the upsurge in diseases was as a result of change in altitude and not because of drought.
He estimated that the purchasing programme will save about 100,000 livestock.

Kenya has about 1.4 billion hectares of potential fish farming areas, Fisheries Minister Paul Otuoma says.

He said the country has the capability of realising 11 million metric tonnes of fish annually.

This translates to Sh750 billion per year besides creating job opportunities to thousands of citizens.

It would also create employment for other actors such as fish feed manufacturers, fish processors and traders.

Otuoma was speaking at the Sagana Aquaculture Farm in Kirinyaga on Saturday when he launched a fisheries economic stimulus programme for district fisheries officers from Eastern and Central provinces.

He said the country produces 4,220 metric tonnes of fish, while only 772 hectares are currently under aquaculture since 1920.

He said: "Fish farming will eventually be rolled out in 140 constituencies and digging of ponds has started already."

The minister said the Government has set aside Sh1.12 billion towards the programme and challenged fisheries officers to support it.

"We have now dispatched fish officers to assist farmers to dig ponds," he said.

He said the officers are expected to roll out 200 fishponds per constituency.

He also cautioned the officers against mishandling the funds allocated for the projects.

Mwalimu Sacco Society has recorded a surplus of Sh1 billion during the six months period ended June, 2009.

While releasing the financial reports on Friday in Nairobi, the Chief Executive Officer Joshua Ojal said the society’s surplus is expected to increase to Sh1.4 billion.

"These are good results, and a sign that we are growing in our area of business and expect better results in the coming years," he said.

He noted that currently, the Sacco has deposits and shares worth Sh13 billion, making it one of the Sacco’s with the highest savings in Africa.

"We have given out loans amounting to Sh11.5 billion, which is 95 per cent of our savings, back to our members at very competitive rates," he said.

National chairman Shem Mutoka said the company believes in innovation and diversification of their products and making their products responsive to customer needs.

He said that the company has received an ISO certification from the Kenya Bureau of Standards, owing to its superior standards.

"We have a good service charter, strategic plan and operate on stringent performance contracts which have resulted to the certification," Mutoka said.

He added because of their liquid nature, the society is buying out commercial bank loans of its members because of the banks high interests lending rates.

"We have started an international money transfer system in collaboration with commercial banks and expect to widen our Automated Teller Machines (ATM) by joining the Sacco link service offered by the Cooperative Bank," he said.

Also present during the function were Vice-Chairman Benson Bilai, a host of society board members and senior managers.

http://www.theeastafrican.co.ke/business/-/2560/653562/-/5hilauz/-/index.html

Coconut farmers to gain as markets for products grow

http://www.businessdailyafrica.com/image/view/-/654072/highRes/99770/-/maxw/600/-/dwc9vk/-/coconut.jpg A trader prepares coconut juice for sale. Coconut farmers are upbeat about the sector’s growth as markets for products grow. /Laban Walloga
By Ben Sanga (email the author (javascript:void(0);))



Posted Monday, September 7 2009 at 00:00

Coconut farming is springing back to life with its products starting to gain a stable footing in the markets.

The Kenya Coconut Development Authority (KCDA) is upbeat that the annual yield will surpass its estimated potential of Sh13 billion in the near future.

This comes as good news to farmers who had opted to uproot palm trees citing lack of the government incentives and poor returns.

A coconut tree is estimated to produce over 100 varieties of products that can be sold locally and in international markets, but it attracts low returns.

“Estimates are that this country fetches Sh3.2 billion from this sector, annually, but its potential is Sh13 billion. In fact we even expect it to surpass these figures once all systems we have rolled out starts to yield fruits,” said Jonathan Sulubu, KCDA managing director.

The crop’s main product is wine which constitutes 60 per cent, nuts 24 per cent, makuti (for roofing) 12 per cent while brooms and coco wood constitute 24 and 0.3 per cent respectively.

Manufacturers of coconut products now say they are targeting the local market.

According to Kokocepts Plantations, a coconut oil manufacturing company, coconut products have started to gain a strong footing in the local market. Kokocepts is one of the factories producing virgin oil.

The company’s director, Roy Baya, said more products are being sold in the local market, contrary to the past when they relied on the export market.

“We started to export in 2007 and we were doing 16,000 litres per month into the US and European markets, but we have now redirected our efforts to the local markets because of the recession,” said Mr. Baya.

About 500 litres of the oil is now sold in the local market. Other companies that produce coconut oil include Bicode Company and Coast Coconut Oil.

Despite its rich, but untapped potential, the sector referred to as a ‘sleeping giant’ due to the coconut palm’s multi-purpose uses — has in the past lacked government push with efforts put to revival of the traditional tea and coffee cash crops. This has led to decrease in its productivity with farmers shunning coconut farming for more lucrative cash and food crops.
Pests and diseases, poor crop husbandry practices as a result of inadequate extension services have been the main challenges contributing to lower yields. The ongoing erratic weather patterns has also impacted on the production.

As part of the government’s effort to revamp coconut farming and make the crop economically viable, in July 2008, it set up KCDA to regulate and promote the sector. The parastatal has already rolled out various activities aimed at uplifting the sector.

“Our job was relatively easy because we did not start from the scratch as coconut trees existed. But we are also encouraging plantation of the crop’s seedlings as most of those in existence are too old to produce to the required standards,” said Mr Sulubu.

Recent survey indicates that there are 7.4 million coconut trees that cover 200,000 hectares in the country with products from the coconut valued at Sh3.2 billion.
Out of the 7.4 million trees, million trees were over 60-years-old and they are no lnger as productive.

The authority plans to replace the old trees after completion of the first phase of revamping the sector that saw the plantation of over 169,000 seedlings.

Other than old trees, the crop has in the past also been affected by the Lethal Yellowing (LY), disease whose symptoms were witnessed in 2006.

With recent effort to market the crop as important as coffee and tea, the sector is likely to grow further.

“We have partnered with Tanzania in the search of the best species that would take short time to produce because in as much as there are several investors willing to invest in factories dealing to process coconut products they have developed a cold feet because the raw material (coconuts) is not enough,” said Mr. Sulubu, adding that there are plans to join forces with Pwani University to research on other coconut species.

http://www.businessdailyafrica.com/Company%20Industry/-/539550/654048/-/u768muz/-/index.html

http://www.businessdailyafrica.com/-/539552/653944/-/583j0s/-/index.html

Coffee exporters are holding discussions with Israeli cooperative societies to have the Kenya's premium coffee sold in supermarkets there as branded Kenyan coffee rather than a blend of other varieties.

Supermarket

Cooperatives Affairs minister Joseph Nyaga said over the weekend that if the talks are successful, Kenyan coffee will for the first time be on Israeli supermarket shelves, which is expected to boost earnings as well as brand.

Speaking during a Saturday evening dinner at the Israeli ambassador’s residence hosted for visiting deputy prime minister Avigdor Lieberman, Mr Nyaga said the negotiations are expected to be complete by the end of this year.

Naivasha MP John Mututho, who is also chairman of the Parliamentary Committee on Agriculture, said the move would also boost the recognition of Kenyan cofee globally.

“The mistake we have always made is the failure to add value to our coffee. It is now exported mainly for blending with other inferior varieties and that is our biggest loss as a country,” said Mr Mututho.

http://www.nation.co.ke/business/news/-/1006/653864/-/item/1/-/ge4xtoz/-/index.html

DB, thanx for your contribution to this thread. when i started this thread wanted to post articles that illustrate the progress kenya is making as a whole. i dont see the need to post every buiness article from the daily nation, after all almost all of us visit nation.co.ke every other day. try and post articles that talk about the broad picture of the kenyan economy not about women funds or solar radios for rural folks or coconut farming. i thanx for your coperation.

^^okay that will be my last post:cheers:

The country’s grain trade has moved to embrace technology with the launch of a facility enabling traders keep track of commodities in transit and trade online by posting offers and making bids online.
E-trade— which was launched over the weekend by the East African Grain Council (EAGC)— will allow traders make use of cell phones and the Internet to transact and it is expected to streamline trading and procurement of grain.
The electronic initiative is expected to take off once the food supply situation normalises.
Strong economy
"Although the country is facing a severe shortage of food stocks, we felt that this new facility will open the way for grain farmers to achieve better prices for their crops once the situation stabilises," Ms Constantine Kandie executive director EAGC said in Eldoret, where the facility was launched. http://www.standardmedia.co.ke/images/monday/nhcap070909_03.jpgMaize farmers harvest their crop.

"E-trade is an electronic grain trading platform linking sellers and buyers of grain," she said, adding that the new facility will reduce transaction costs that have over the years been associated with low returns for the farmers.
The facility allows grain traders willing to sell their grain to post their offers while the buyers post bids.
Trading platform
"All the offers and bids are listed on the trading platform making all the deals transparent, which is not the case in other markets," she said.
The new facility will allow players in the grain trade business to track all the transactions and the location of the commodity.
The new system is also expected to strengthen trade linkages between small-scale traders and large enterprises, such as processors, government institutions and food aid agencies.
"We are expecting an increase in demand once the country’s food situation improves. We also see all the players involved benefiting from enhanced competitiveness," Kandie said.
Traders will have to operate an account with the EAGC and can also subscribe to short message services alerts that will regularly inform them when offers and bids are posted on hte platform.
"E-trade will also enable small-scale traders to access markets and increase trade," saod Kandie.

Privatisation of Mombasa Port has started in earnest, signaling better services are on the way.Last week, the Privatisation Commission of Kenya led a team of consultants on a tour of the port to view facilities owned by the Kenya Ports Authority.
The Government aims to privatise berths 11 to 14, stevedoring services and Eldoret Inland Container Depot.
Port Executive Director Solomon Kitungu said the team’s mandate include evaluating the projects, identify potential investors and advise the Government on available options.
"They will also look at the possibility of establishing the berths as an independent and commercial functional unit from the rest of the port," Mr Kitungu said.
Increase efficiency
KPA Harbour Master Captain Twalib Khamis said the initiatives would increase efficiency and container capacity at the port.
"We also have a skilled workforce, efficient gang composition and strong union representation," Mr Khamis told The Standard.
Last Saturday, Dockworkers Union General-Secretary Simon Sang told a pecial conference for members that the union would discuss with Government the plan to privatise stevedoring services.
Mr Sang said stevedoring services were central to dockers and there should be consultation before being handed over to private operators.
"There is a threat from Government to privatise stevedoring. The union has not been consulted on this issue," he said.
KPA is building a second container terminal west of Kipevu with a 1.2 million 20ft equivalent units capacity. The Sh16 billion terminal will be completed by 2013 and will also be run by a private operator.
Berths 11 to 14 were originally designed to handle general cargo, but due to growth of containerised cargo, is being used to handle container vessels using the ships’ own gear.
KPA says Government intends to convert these berths into a fully-fledged container terminal with modern container handling equipment.
This requires physical restructuring of the berths, including strengthening of the quay.
The terminal will then be leased to a private operator, while KPA remains the landlord authority.
Proposals from local and international firms are expected before September 25, for Cabinet approval.