Commentaries


Confidence has brought Kenya where it is today
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By Musikari Kombo

Confidence is a critical ingredient in the management of countries — confidence that we can handle problems, confidence that the law will take its course and confidence that taxes will be used well.

In the 2005 Budget, my Finance colleague said: "The Budget has deliberately not factored in budgetary support from bilateral development partners. We will have to use our own scarce resources in the most efficient way".

It was the first time in independent Kenya’s history that a Finance minister was configuring the Budget without bilateral support. It may be the first also in the continent that a Finance minister had the courage to run a country without factoring in bilateral support.

He added: "… if bilateral partners provide budgetary support, I will use it to reduce Government domestic borrowing and to increase spending on core poverty programmes."

The minister was not pursuing egoistic nationalism. On the contrary, he was issuing a statement whose pragmatism reflected the direction Kenya was to take in the years ahead. What prompted the dramatic departure from donor dependency?

Two years earlier, Kenya had a successful Consultative Group meeting with development partners, 10 months after the Government came to power, the first such meeting in over decade. At a public meeting, donors pledged $4.1 billion (Sh274 billion) in development aid.

Previously, pledges of $100 million (Sh6.7 billion) occasioned front-page treatment in the media. In the 2004 Budget, the Minister for Finance was exuberant: "Institutions are considered world opinion setters", and the importance of development partners "to our development effort cannot be over emphasised".

Do not halt core poverty programmes

But in the year that followed, it became clear that the pledges were prey to all manner of conditions and a slight argument occasioned halting of aid. The disagreement this time was over corruption. We were very resolute — we had to go through the due process, investigate allegations, prosecute and punish the culprits.

Our friends did not think we were moving fast enough! While the country needs a clean, corruption-free Government, election promises had to be kept even as we investigated corruption. It did not make sense to halt core poverty programmes because allegations of impropriety had been made in the Press.

Unfortunately, it is core poverty programmes that attract the generosity of friends and which are stopped when donor relations sour. This is where internal capacity is critical. The confidence to look at internal capacity is the most profound development the Kenya Government has instituted.

It has forced us to empower the revenue collection agency and it has pursued its mandate vigorously. The Kenya Revenue Authority has reported increases in revenue of 20 per cent annually. This has enabled the country to fund programmes with a singularity rarely seen in the continent, a fact that was acknowledged in an Africa Peer Review Mechanism meeting of Heads of State and Governments.

While the connection between economic growth and an independent Budget has not been empirically established, the country’s economy has grown by 4.8 per cent, 5.6 per cent and 6.1 per cent in the past three years.

Programmes are not held hostage

Growth aside, we have implemented trend-setting programmes whose effectiveness has been phenomenal. Free primary education is a good example. When the Government introduced it, there was no donor to finance the cost. It was introduced on the premise that funding would be from local resources.

Assistance was received after the programme was already functional. More than 1.5 million children went to school for the first time, including an 80-year-old man who had had a lifelong dream of reading the Bible for himself.

The other example is the Constituency Development Fund. This is a programme where central Government monies are allocated to constituencies for projects that people and their elected representatives choose. Now, nearly $1.7 million (Sh119 million) is allocated to each of the 210 constituencies annually.

The implications have been staggering in the number of cattle dips, classrooms, health centres and feeder roads built and the transformation in local authorities for better services. These programmes have been implemented from a Budget that is funded more than 90 per cent with money from local revenue.

It does not mean we are receiving less aid than we did before. The fundamental issue is that the programmes are not held hostage to disagreements with donors. The delivery involves the people and has imbued confidence in the electorate to manage resources.

When leaders force their way into power, they start their days wondering how to stay in power. They are afraid someone stronger might force their way to power.

They do not make bold attempts to increase or collect taxes forcefully. But leaders who come to office democratically can take calculated risks because citizens are willing to bear the pain of experimentation. They trust the Government.

The writer is the Local Government minister. He spoke at the London School of Economics

I Found this artical and i thought it would be a good issue to discuss as a Kenyan and we as Africans. so only constructive comments.

My Kenyan friend ( his name is Timothy :D ) mentioned to me about Kenya's 2030 plan. I believe this can be achieved with huge proportion of budget being spent on infrastructure ( building roads, ports, IT etc )-- and also education.. I was informed that Kenyan govnt provides many scholarship scheme for its citizens to study abroad.


country’s economy has grown by 4.8 per cent, 5.6 per cent and 6.1 per cent in the past three years

Wow very constant growth ! By this rate the GDP could be doubled in 12 years or so :banana:

My Kenyan friend ( his name is Timothy :D ) mentioned to me about Kenya's 2030 plan. I believe this can be achieved with huge proportion of budget being spent on infrastructure ( building roads, ports, IT etc )-- and also education.. I was informed that Kenyan govnt provides many scholarship scheme for its citizens to study abroad.

Wow very constant growth ! By this rate the GDP could be doubled in 12 years or so :banana:

Alot has happened over the last 5 years especially on the economic front and regarding democratic governance in Kenya. Kenya's vision 2030 development plan is largely modelled on those of the asian tigers programmes. I believe if it is followed through, it will dramatically change the country to a middle income state.

But what really impresses me is the change in attitude of Kenyans. Previously, Kenyans would sit back and look on as they watched their country deteriorate, they wouldn't complain when they drove on bad roads or as some big shot swindled the public coffers in some corrupt scam (some of which succeeded in bringing the economy down to its knees). Almost everyone had lost hope in the governance of the country and in the country itself to the extent that there was a mass exodus of professionals to the western nations and down south to SA,Botswana and Namibia. No one wanted to live in Kenya.

Then came the change of guard in 2002 that saw president Kibaki come to power on a platform of widespread reform. Suddenly, for the first time, the govermnment was held accountable for its actions by the citizens, helped in part by the new freedom of speech and liberal mass media. Kenyans now felt that they had a stake in the running of their country. This rebounded on the economy as a feel good effect took over. New economic policies were passed and the economy improved to levels not seen since shortly after independence. Kenyans now feel proud of their country and the progress its making.

Kenya Is on the right track.i hope whoever comes to power at the end of the year after elections will continue with the same spirit.While the opposition is busy politicking the economy is growing.With multinational companies investing in kenya at this pace i believe kenya will reach a 10% growth rate by 2011.

I have always been looking up to Kenya, i particularly like a lot of companies from Kenya that make africa proud including the airline itself, Kenya Airways.

I think Kenyas growth is the most solid out of all the African nations. It isnt so closely linked to commodities such as Angola.

I pondered some time ago, what will be the first African country to hit 10% growth (excluding those recovering from wars or oil producers). My money is on Kenya.

And dont forget the effect of an independent South Sudan which will be linked to Kenya by a new rail line.

And dont forget the effect of an independent South Sudan which will be linked to Kenya by a new rail line.

I also see a highway joining sudan to kenya in addition to the railway line. If all goes well, maybe an oil pipeline from S.Sudan to the Kenyan coast. The plan is to build a new port at Lamu to cater for both Ethiopia and Southern Sudan (Statistically, its a shorter distance to pump oil from southern Sudan to the Kenyan coast than it is to Port Sudan). Kenya's largest bank recently announced it intends to have about 10 additional branches in southern sudan in addition to those currently in Juba and Rumbek. And most materials for reconstruction will most likely be sourced from Kenya.

The total number of countries that will be directly use Kenya as a hub for trade in the near future will be seven (Ethiopia, Tanzania, Uganda, DRC, Rwanda, Burundi, Southern Sudan...and hopefully Somalia if they are ever peaceful). Kenya is now positioning itself as the regional business hub and I think this will have a positive effect on all the surrounding countries.

When South Sudan gets rid of the North, they will certainly be keen to use Mombassa as a port. An oil pipeline, simiar to that going from Chad-Cameroon, will probably be needed some time too.

And all the exports to South Sudans new middle-class, and agricultural imports from what remains one of the largest untapped agricultural lands on the planet. South Sudan alone should add 1 or 2% points to economic growth.
Kenyan firms will be bidding for the construction of South Sudans new capital too.

The economic benefits are many. I just hope that power generation is increased in line with the increased demand from economic growth.

Sorry, I forgot to add the efforts of the EAC to create a tarrif-free trade. The three countries together must have a population of 80million. Kenya is the most industralised so will gain a lot from exports.

offtopic

:llama: :llama: :llama:

Sh1bn allocated to fibre optic cable project

Story by JUSTUS ONDARI
Publication Date: 6/15/2007
The Government yesterday showed its resolve to go ahead with its fibre optic project ahead of the regional initiative by factoring in Sh1 billion for The East Africa Marine System (TEAMS) project.

The project could get Kenyans hooked onto the international fibre system mid next year.

TEAMS is different from the first initiative, the Eastern Africa Submarine Cable Systems (EASSy) project that has been held up because of negotiations over its ownership and funding.

This is an initiative of various telecom companies in eastern and southern Africa though some governments have been working through the New Partnership for African Development (NEPAD) attempting to supervise its construction and management.

Kenyan investors

The 9,900 kilometre cable is to run from South Africa to Sudan. Worried that the project was taking too long, Kenya opted to team up with the United Arab Emirates telecommunications company Etisalat, and set up the TEAMS project.

Mr Kimunya’s move is a a big shift from last year’s financial estimates which were an anti-climax.

In the budget, Mr Kimunya removed VAT charged on computer equipment and parts, and accessories despite promising to facilitate faster growth of the sector to create employment opportunities for the youth.

The minister had also earlier promised that the Government would facilitate training, ICT research and development and promote value addition services including incubators and telecentres among others.

In his speech, Mr Kimunya said: “The country needs to do a lot more to reap the full benefits of ICT, which include reduced costs, increased productivity and increased employment.”

This was meant to be achieved through the ‘Framework for Improved ICT’, which involves continuing to create an enabling environment for private sector participation, through further liberalisation of the sector and by investing heavily in e-governmentment.

Kenya will finance 40 per cent of the project, Etisalat 20 per cent, and still to be identified private Kenyan investors, the remaining 40 per cent.

The Government has said that the laying of the cable between Kenya’s Indian Ocean port of Mombasa and Fujairah in the United Arab Emirates will have Kenyans connected by March 2008.

Yes, Kenya's decision to go it alone and put the fibre infrastructure it needs is a very encouraging sign of economic independence in East Africa. The sort that makes one really proud of Kenya.

Not to say that pan-african projects like Eassy should not be supported, but the wrangling that has been holding Eassy back and some shareholders wanting to hi-jack Eassy and change the terms of access to this crucial resource has meant that the Kenyans have looked at altervatives that will work better for East Africa which still remains the only region that is not linked by a sub-marine fibre cable and has to rely on the more expensive yet slow satellite connections. Kenya by the way has one of the most sophisticated markets for internet services and i learned that Google is setting up its African office in Nairobi.

Yes, Kenya's decision to go it alone and put the fibre infrastructure it needs is a very encouraging sign of economic independence in East Africa. The sort that makes one really proud of Kenya.

Not to say that pan-african projects like Eassy should not be supported, but the wrangling that has been holding Eassy back and some shareholders wanting to hi-jack Eassy and change the terms of access to this crucial resource has meant that the Kenyans have looked at altervatives that will work better for East Africa which still remains the only region that is not linked by a sub-marine fibre cable and has to rely on the more expensive yet slow satellite connections. Kenya by the way has one of the most sophisticated markets for internet services and i learned that Google is setting up its African office in Nairobi.

Thanks for the compliment Kulani. I didnt know about google. Do you have some more info on it?

I also see a highway joining sudan to kenya in addition to the railway line. If all goes well, maybe an oil pipeline from S.Sudan to the Kenyan coast. The plan is to build a new port at Lamu to cater for both Ethiopia and Southern Sudan (Statistically, its a shorter distance to pump oil from southern Sudan to the Kenyan coast than it is to Port Sudan). Kenya's largest bank recently announced it intends to have about 10 additional branches in southern sudan in addition to those currently in Juba and Rumbek. And most materials for reconstruction will most likely be sourced from Kenya.

The total number of countries that will be directly use Kenya as a hub for trade in the near future will be seven (Ethiopia, Tanzania, Uganda, DRC, Rwanda, Burundi, Southern Sudan...and hopefully Somalia if they are ever peaceful). Kenya is now positioning itself as the regional business hub and I think this will have a positive effect on all the surrounding countries.

That's exactly what I want to point out. Nairobi's Jomo Kenyatta Int'l Airport is well-positioned in the middle of southern half of Africa to serve like a focal point of goods and passenger transhipments. Mmm... how about a giant glossy futuristic new terminal for Nairobi ? And cheap but efficient express rail connection to downtown ? :banana:

That's exactly what I want to point out. Nairobi's Jomo Kenyatta Int'l Airport is well-positioned in the middle of southern half of Africa to serve like a focal point of goods and passenger transhipments. Mmm... how about a giant glossy futuristic new terminal for Nairobi ? And cheap but efficient express rail connection to downtown ? :banana:

http://img101.imageshack.us/img101/5403/jkiaexpansion4cj.jpg
^^
They are already expanding the JKIA. I guess it will be glossy but most important is that it will now be one of Africa's largest airports and the largest airport in East and Central Africa. Its already a hub for the region. I hope the rail link will be added in the near future.:)

^^ Very brilliant and soo futuristic :banana2: KLM has already made JKIA as its African hub.

With progressive leadership of Mr. Kibaki, I believe that Kenya will become advanced soon. IMO Kenya must have its share of some of the world's tallest, world's longest, world's most futuristic infrastructure --- probably you might think this is a kinda waste of money but this is the most effective way to instill pride to the citizens and to put a country on the world map. The return will be so huge and can be used to support various internal/domestic projects

Anyway i'm not an economist but that's what I discussed with my Kenyan friend Mr Timothy today :)

^^ Very brilliant and soo futuristic :banana2: KLM has already made JKIA as its African hub.

With progressive leadership of Mr. Kibaki, I believe that Kenya will become advanced soon. IMO Kenya must have its share of some of the world's tallest, world's longest, world's most futuristic infrastructure --- probably you might think this is a kinda waste of money but this is the most effective way to instill pride to the citizens and to put a country on the world map. The return will be so huge and can be used to support various internal/domestic projects

Anyway i'm not an economist but that's what I discussed with my Kenyan friend Mr Timothy today :)

^^
I guess having big infrastructure projects does boost the national morale but you must attain a certain level of development before you engage in grand projects. Malaysia's projects eg, the Petronas towers put the country in the spotlight, but this was after about 2-3 decades of consistent national economic growth and transformation of the country into a middle income state. Kenya is just recovering from decades of misrule/mismanagement. Once the primary problems of the country have been solved, maybe some of the worlds largest projects may be built here. (but that is still a long way from happening).

^^ Nooo.... I would love to refer to some African countries like what Sudan ( I saw those grandiose projects that will transform Khartoum ) is doing , well I know that Sudan is blessed with huge oil reserves but come on, Kenya has a superb location ! Nairobi and Mombasa are worldly known cities and it has mega tourism potentials ! And no need to make it soooo huge... but something smaller but in the same time super attractive --- how about hotels ? or Mountain trains that cross through the game reserves > or simply an Express rail line connecting airport to downtown Nairobi will make a hit :banana:

^^ Nooo.... I would love to refer to some African countries like what Sudan ( I saw those grandiose projects that will transform Khartoum ) is doing , well I know that Sudan is blessed with huge oil reserves but come on, Kenya has a superb location ! Nairobi and Mombasa are worldly known cities and it has mega tourism potentials ! And no need to make it soooo huge... but something smaller but in the same time super attractive --- how about hotels ? or Mountain trains that cross through the game reserves > or simply an Express rail line connecting airport to downtown Nairobi will make a hit :banana:

^^
If it comes to projects that will pull in the tourists (and hence more revenue) that is OK. Alot of focus seems to be directed to the tourism industry of late. Nairobi is slated to have a massive six star hotel and Mombasa just had another new hotel added to its south coast. Some hotels are begining to offer attractions that were previously exotic in this part of the world eg. the ice skating rink at Panari centre. The animal migration at the Maasai Mara park has been selected as one of the seven wonders of the natural world (and im sure this in itself will prove a major tourist attraction).

Yes, Kenya's decision to go it alone and put the fibre infrastructure it needs is a very encouraging sign of economic independence in East Africa. The sort that makes one really proud of Kenya.

Not to say that pan-african projects like Eassy should not be supported, but the wrangling that has been holding Eassy back and some shareholders wanting to hi-jack Eassy and change the terms of access to this crucial resource has meant that the Kenyans have looked at altervatives that will work better for East Africa which still remains the only region that is not linked by a sub-marine fibre cable and has to rely on the more expensive yet slow satellite connections. Kenya by the way has one of the most sophisticated markets for internet services and i learned that Google is setting up its African office in Nairobi.

thanx, i hope it will materialize soon

By James Ratemo

Supermarket chain, Nakumatt Holdings, has been ranked 25th in the annual Planet Retail listing of top 30 global retailers.

The chain becomes the only African retailer out of South Africa that made it to the 2006 rankings with South Africa taking the first six positions.

Planet Retail is a leading provider of information on global retail and food service industries, monitoring more than 5,000 outlets as well as market developments in 211 countries.

With over 15 years of industry insight, it has offices in London, Frankfurt and Tokyo.

The annual report is compiled from information based on sales performance, corporate strategy and growth plans.

To make it to the list, Nakumatt managed to beat, Germany’s Metro Group, UAE’s Abu Dhabi Co-op, Petronas of Malaysia, Saudi Arabia’s Farm and Le Charcutier Aoun of Lebanon.

A retail analyst at Planet Retail, Mr Oliver Heins, said "other than the principal South African players and Nakumatt, there is little to report on movements by other chains across sub-saharan Africa."

Speaking in Nairobi moments after receiving the news, Nakumatt Holdings Managing Director, Mr Atul Shah expressed his pride for the ranking, which he attributed to support by firm’s stakeholders.

"As a truly Kenyan Company, I am proud that global research organisations have recognised Nakumatt’s standards which are at par with the world’s best," he said.

Highlights of a report compiled by Heins and released over the weekend shows that South African retailers continue to dominate the ranking with regional power houses beginning to form in the Gulf States and French retailer Carrefour forecasted to become the third largest retailer by 2012.

Last year, South Africa retailers accounted for 60 per cent of the region’s sales and also scooped the top five positions.

The report further notes that in Sub-Saharan Africa, the informal sector is fast growing with the rise of modern retailers in the region’s lucrative markets.

^^
Nakumatt has come a long way from the small family shop in Nakuru just over a decade ago to become Kenya's version of Walmart (or shoprite-in the African perspective). Right now they are on an aggressive expansion programme that will see them open a store in virtually every major Kenyan town and in every East African city.

This year they are opening two mega stores in Kampala. The city only has two other major stores: Shoprite/Game (from SA) and Uchumi (Kenyas largest retail chain and Nakumatt's chief rival). Having two Nakumatt stores here will drastically revolutionise shopping in Kampala (especially if they build those department store like retail chains like those in Nairobi.) Nakumatt is also opening new stores in major cities in Tanzania and Rwanda. if they continue with this trend, a good number of African countries will have Nakumatt stores just like they have Shoprite stores.:banana:

bold Nakumatt!

that is one thing about kenyan companies, when they get a foot hold in kenya they just start craving for africa and i think that is what is driving all the this economic growth. the list of kenyan companies in other countries is growing at an enormous rate. props to kenyan C.E.Os

Safaricom shatters East Africa’s corporate earnings record
Written by Kui Kinyanjui

Mr. Michael Joseph, CEO Safaricom21-June-2007: Safaricom has emerged as one of the most profitable Kenyan company with historic results that saw its pre-tax profits hit Sh17 billion.

This is the highest that a Kenyan company—whose results are made public— has made, eclipsing corporate giants listed on the Nairobi Stock Exchange.

With profits at this level, Safaricom nearly made as much money as what Kenya Airways, East African Breweries and Barclays Bank did combined. These businesses made a combined pre-tax profit of Sh21 billion on revenues of Sh94 billion.

This is the kind of money that all Kenyan banks and insurance companies have been struggling to make in a single year for sometime. Kenyan banks combined made a pre-tax profit of Sh27 billion in 2006.

With Safaricom’s revenues and net profits growing by over 30 per cent over 2006, these results underlie a robust performance of the economy, but also opens a new debate over whether mobile carriers are overcharging customers with the company now earning an operating margin of 38 per cent.

This means that for every shilling the company generates in revenues, 38 cents goes into operating profits.

These results are expected to whet the public’s appetite to buy Safaricom shares when it is listed on the NSE in the current fiscal year. The company’s performance was driven by an increase in mobile subscribers from four million in 2006 to six million in 2007, a growth of 54 per cent. The newly launched money transfer service, Mpesa, has also opened a lucrative business line that has helped it diversify its revenue base and transformed it into a financial service firm.

“Our profits represent a new record for corporate companies in Kenya. As a result, we are pleased to announce dividends of Sh4 billion, pending shareholder approval,” said Les Baille, the company’s Chief Financial Officer.

The stage is now set for the company to go public later this financial year, with the government planning to offload 25 per cent of the company in an initial public offering.

“The process is moving forward. We have started unbundling Safaricom’s shareholders in preparation for the IPO,” said Finance Minister Amos Kimunya.

Telkom Kenya, which is currently the majority shareholder with a 60 per cent stake, along with Vodafone Plc holding 40 per cent, is expected to transfer its stake in Safaricom to the Treasury, after which the 25 per cent stake will be offered to the public.

Investors will be buying into a company with a healthy growth in subscriber numbers, profitability and free cashflow.

The firm said it plans to target about two million new subscribers by the end of the year, on the back of renewed investment in its infrastructure and a focus on under-served rural areas.

The company’s strategy going forward will be to double the size of its network by adding 460 new base stations and offering more value added services for corporate and high end customers such a 3G service, already in trials.

Safaricom has invested Sh65 billion in total capital expenditure since operations began over six years ago.
Much of that investment has been ploughed into infrastructure costs.

The company now has 1,200 base stations around the country, with 67 per cent of the population covered by the service.

Last year, Safaricom spent Sh16 billion building its network, focusing on new customers in rural areas. It plans to spend Sh18 billion this year, with 45 per cent of that investment purely on rural areas.

“It can no longer be said that we do not focus on rural areas, indeed they are a major focus for us going forward” said Michael Joseph, the company’s CEO.

Growth within the last year has been attributable to the introduction of new products and services.

The company lowered its international calling charges early in the year after its acquisition of an international gateway licence, resulting in a 70 per cent drop in prices.

The company introduced the Saasa tariff – now commanding 35 per cent of the company’s total subscriber base – the first of its efforts to reduce the cost of calling.

Earlier this week, the company announced further price cuts across its tariff offering, with the costs of calling dropping by an average 37 per cent.
New services such as a loyalty programme, the launch of its Blackberry product and an East African roaming agreement also contributed to subscriber and revenue growth.

A money transfer system, among the first in the world, is pegged to drive growth in the coming year as the company shifts its focus form individual transfers to a payments system for goods and services.

“Transactions on Mpesa reached Sh500 million over the last three months. This is going to be a major growth area for the company as we let people pay for services such as power or electricity using the product,” said Mr Joseph.

The anticipated subscriber growth will also translate for a need in enhanced customer care needs, which the company is planning to meet by recruiting 1,000 new staff in that capacity in the course of the year.

The company’s record growth took off in 2004, when it posted an increase in turnover from Sh19 billion to Sh27 billion, resulting in profits after tax of Sh5.9 billion up from Sh3.5 billion in 2003.

While acknowledging the growth as “extremely good”, Mr Baille noted that several challenges had led to more capital expenditure for the company.

The company says it expects growth to start slowing as subscriber numbers and the amount of capacity available on the network begin to plateau.

The exchequer made Sh5 billion from the firm from income tax, on top of which the firm also pays 16 per cent VAT charges and 10 per cent on excise requirements.

Ladies and gents lets hope that this becomes the trend of not only kenyan companies but also africa. i will be in kenya in one months time and i want ideas of what is the best companies to buy shares in. really needed advise.

Ladies and gents lets hope that this becomes the trend of not only kenyan companies but also africa. i will be in kenya in one months time and i want ideas of what is the best companies to buy shares in. really needed advise.

Oh, be sure to take tons of pics while you're there, I'd especially love to see the residential areas!:)

Anyhow, as for the question, I'd bet that with the aggressive expansion they are off to now, nakumatt might be a good company to invest in.

Here's a good article:

http://www.msnbc.msn.com/id/19279866/

NAIROBI - One recent Sunday, Paul Abeno, a mid-level computer sales executive, shuffled through aisles of brass cabinet pulls, colored tiles and tiny glass-encased models of three-bedroom homes landscaped with paper trees. He stared through the glass at Baobab Village.

"Too late," he said to himself, noting the sold-out sign.

But there were other offerings at the third annual home expo here, and he wandered over to Acacia Court, Simba Villas and Green Park, three of the many new developments along the Kenyan capital's edges.

"I was told all these are bought and everyone's moved in," Abeno said, looking down at the red roofs. "I've just come to see what's on offer so in the near future I can get one for myself."

Traipsing through the Nairobi Exhibition and Convention Center on this weekend were small-business owners, teachers, civil servants, farmers, recent college graduates and others, who make up a group of Kenyans often invisible to the outside world: neither desperately poor nor outlandishly rich but someplace in between.

On a continent where people are often trying to escape or simply survive, here were people perusing six-burner stoves who said they wished to stay, aspiring homeowners who have been fueling what amounts to a construction boom in this east African city of skyscrapers and rusted slums; leafy, moneyed neighborhoods; and lately, it seems, a thousand half-built cinder-block condominiums with pools, gyms and broadband Internet.

Although the Kenyan economy is growing at 6 percent a year, economists are uncertain whether the proliferation of new housing and accompanying mortgages reflects a growing middle class or simply a more prosperous one.

Fragile optimism

The dominant economic picture of the country, they say, is one of entrenched inequality, with the number of people slipping into poverty increasing and the gap between rich and poor widening.

But that statistical picture does not account for the sense of fragile optimism along the aisles at the convention center on a Sunday or, for that matter, around a city where billboards advertising mortgages promise "a new lifestyle" with images of a well-dressed man walking across a sun-splattered lawn.

"Looking at these houses, you see a whole life," said Nicholas Kinoti, a clothing designer with his own shop, which caters to a wealthy clientele. "I thought instead of paying rent, I could adjust and pay a mortgage."

He was among dozens swarming the booth for a new development of Kansas-made prefabricated houses called Green Park, whose managing director is a former aid worker who once dealt with the Ethiopian famine.

Kinoti counts himself among a relatively small but notable group of Kenyans who have climbed their way into a kind of life their parents barely imagined. His mother and father were subsistence farmers and managed to send their son to a university in Nairobi. He got a job with a travel agency afterward and, with help from brochures of Paris and heavy doses of television, developed a taste for fashion and an urban lifestyle.

Aided by wife's income as a secretary and with his business doing well, Kinoti was able to get a mortgage. He has a car and the money to eat aged Gouda crostini once in a while at Mercury, a swanky restaurant that wouldn't be out of place in New York, were it not housed in a strip mall.

But Nairobi is a city where people's ambition and energy often surpass their environment. Women in high heels and suits weave past others in sarongs and flip-flops along the city's pounded-dirt sidewalks. Men push heavy wooden carts along streets increasingly crowded with Mitsubishis and Toyotas.

So it was perhaps not surprising, said Patrick Wamayu, a mortgage officer with Barclays Bank, that when banks began offering mortgages to wider swaths of the public, they got a flood of customers with modest-paying jobs and hopeful enough visions of the future to tie themselves to a 20-year mortgage.

Until recently, such loans were available to only the very rich and came with interest rates around 30 percent. But a shift began as Kenya's financial laws changed, requiring banks to have less cash in reserve. Lower interest rates on treasury bonds also encouraged banks to find other ways to invest money.

These days, Barclays offers interest rates around 13 percent and is opening six new branches in Kenya.

One of those is about 30 minutes beyond downtown Nairobi, along a potholed road with occasional signs that scream "Buying and selling!" and "Endya Flats! Master ensuite!" The road leads to a bustling suburban town at the foot of the cool and rolling Ngong Hills, made famous in the book "Out of Africa" as the locale of Karen Blixen's coffee plantation.

Besides the bank, Ngong Town is all cyber cafes, hardware stores and lumber yards these days, a sign of the furious construction along the dirt roads that twist through the surrounding hills. The area is home to many of Kenya's famous athletes and a growing number of less-wealthy strivers buying up new houses, whose red roofs make a random pattern from a distance, unlike the uniform rows of many U.S. suburbs.

John Nyaga moved with his wife and two daughters into his new house there eight months ago. It is one story of cinder blocks with turquoise trim, three small bedrooms and flowering pink bougainvillea wrapped around a fence.

In the living room, he has a Sanyo flat-screen television and shelves lined with motivational books such as "Think Big" and "The 7 Habits of Highly Effective People."

"I like the books that tell me I can use my mind to change things," said Nyaga, who is 33 and works as a computer programmer.

His father was a farmer with eight wives, and Nyaga grew up the youngest of more than 60 children. He and his siblings lived with his mother in a wood-frame, mud-walled house without electricity. Taking the donkey to fetch water as a boy, Nyaga envisioned a future as a farmer.

But when he reached high school, he began visiting an older sister, who had become financially successful working for a Kenyan bank. She had a house with electricity and a television, and her children attended private school.

"I remember you could study at any time there," Nyaga said, explaining that at home he planned his studies around the availability of a lantern. The visits "made me view things differently," he said, "because I could see both sides now and after school, I thought I should live an urban lifestyle."

Big dreams

With his sister's help, Nyaga attended a university, and he eventually got a job that earns him enough to pay the equivalent of a $100-a-month mortgage and still tuck away another $30 or so in savings each month. He recently sold his car to make the down payment on his house and now commutes to Nairobi via matatu, a type of wild minivan taxi that is the city's public transport.

Nyaga can name 10 friends who have also gotten mortgages, he said, including colleagues at work and others with jobs at the power company. "My expectation is that the economy will still rise," Nyaga said.

At the same time, he nonchalantly mentions hard facts of Kenyan life, statistics that inform the bleaker predictions of think tanks but that he simply factors into a life he is determined to make better.

"Now, you have to be very fast in making decisions," he said. "Prices are rising, and the average life span is down. Now it is around 49. So in 10 years' time, I would like to have finished my mortgage and maybe go into my own business after that."

"I don't believe in stopping at one point -- I will move to Lavington," he added, invoking the wealthy Nairobi neighborhood of sprawling lawns and gardens. "I wouldn't mind that."

Researcher Charles Wachira contributed to this report.

© 2007 The Washington Post Company

^^
Thanks Dantexavier for that lovely article. I cant think of a better way of creating a picture of a rising prosperous middle class in Kenya especially in the country's cities and towns. Almost everyone is optimistic that the economic growth being experienced now will change the lives of more Kenyans for the better.:)

Ladies and gents lets hope that this becomes the trend of not only kenyan companies but also africa. i will be in kenya in one months time and i want ideas of what is the best companies to buy shares in. really needed advise.

There are a number of companies that are about to embark on listing on the Nairobi Stock Exchange. The company whose initial public offering most people are waiting for is Safaricom (East Africa's most profitable company). I guess it will be the biggest IPO in Kenya's history. Safaricom's IPO will also take place on the London Stock Exchange. Other notable companies are Telkom Kenya, Kenya-Re, and maybe a successful re-entry of Uchumi supermarket stocks on the bourse.:)

A further sign of confidence. It's only the beginning (toe dipping), soon it will be two feet firmly on the ground. See http://search.ft.com/ftArticle?queryText=kibaki&y=3&aje=true&x=18&id=070402000919&page=2

WORLD NEWS: Kenya dips a toe in international bond markets
By Barney Jopson in London, Financial Times
Published: Apr 02, 2007


Kenya's government is to underscore its growing -economic confidence as it prepares for an election by issuing a sovereign bond in the international markets for the first time.

It is seeking to capitalise on burgeoning economic growth - for which the three-year old government controversially claims credit - and to establish a benchmark to help Kenyan companies raise funds abroad in future.

Kenya is joining a queue of African countries - led by Ghana, Nigeria and Zambia - that are exploring ways to tap international debt markets. The prospect of a presidential election, due by the end of the year in Kenya, is also likely to have focused attention on the potential symbolic benefits of a bond issue.

Amos Kimunya, the country's finance minister, told the Financial Times it would launch a dollar-denominated bond valued at up to $73m in the next few months.

According to official figures, Kenya's gross domestic product expanded by 5.8 per cent in 2005 and 6 per cent last year having improved steadily from a paltry 0.6 per cent in 2002, the final year of Daniel arap Moi's deadening regime.

Yet his successor as president, Mwai Kibaki, still leads one of Africa's most unequal societies and is confronted by widespread disappointment over his perceived failure to live up to promises made in the December 2002 election to rein in pervasive corruption.

The funds raised by the bond issue - which is dwarfed by Ghana's planned $500m-$750m offering - will not be included in Kenya's annual budget. Instead they are likely to be devoted to long-term infrastructure investment projects.

Mr Kimunya said Standard & Poor's, the credit rating agency, had given the planned issue a B+ rating. Bankers from Citigroup, JPMorgan and other institutions had flown to Nairobi to study and offer comments on the government's plans.

Asked about the bond's maturity, Mr Kimunya said: "We would love 15 years . . For me, the longer the better." But its duration and coupon will depend on the outcome of further consultation with bankers, brokers and potential investors.

There are a number of companies that are about to embark on listing on the Nairobi Stock Exchange. The company whose initial public offering most people are waiting for is Safaricom (East Africa's most profitable company). I guess it will be the biggest IPO in Kenya's history. Safaricom's IPO will also take place on the London Stock Exchange. Other notable companies are Telkom Kenya, Kenya-Re, and maybe a successful re-entry of Uchumi supermarket stocks on the bourse.:)

So Safaricom is going for a dual listing on NSE and LSE? Who owns Safaricom? Any idea of its net worth or perhaps turnover and profits per annum.

So Safaricom is going for a dual listing on NSE and LSE? Who owns Safaricom? Any idea of its net worth or perhaps turnover and profits per annum.

Safaricom is 60% owned by (http://www.safaricom.co.ke/2005/default2.asp?active_page_id=158) Telkom Kenya and 40% Vodafone UK!! its probably worth around $2bn (http://business.guardian.co.uk/story/0,,2014421,00.html)

$2 BILLION??!! that is massive for a 6 yr old cell phone company

$2 BILLION??!! that is massive for a 6 yr old cell phone company

immense growth considering vodafone's initial investment of $20m in the year 2000 has grown to over $700m in a short period!!
I think Africa has some of the highest returns on investments

$2 BILLION??!! that is massive for a 6 yr old cell phone company

that's a return on investment (ROI) of 3,400% over 6 years!!! lovely numbers indeed. And they still tell you there is risk in investing in Africa, look at the returns. Smart investors are reaping huge returns quietly by investing in Africa.

that's a return on investment (ROI) of 3,400% over 6 years!!! lovely numbers indeed. And they still tell you there is risk in investing in Africa, look at the returns. Smart investors are reaping huge returns quietly by investing in Africa.

they will always tell u there is risk in africa. what the hell do they mean by 'risk'. there is risk in investing in wall street, that is a fact. they do not know a whole lot about africa and they dont try to do there homework that is why they result to the assumption that it is risky investing in africa. check this out kulani, Safaricom in the last three months has shown how mobile telephony can easily take on a giant industry like the financial services sector and win with the launch of M-pesa, a money transfer service (the first in the world) In the three months since the product was launched, it had generated revenues of Sh500 million. A full year could easily have generated Sh2 billion in additional revenue, without breaking a sweat. Safaricom’s CEO, Mr Michael Joseph, says M-pesa is geared to drive the company’s growth in the coming year as it shifts focus from individual transfers to a payments system for goods and services.“Transactions on M-pesa reached Sh500 million over the last three months. This is going to be a major growth area for the company as we let people pay for services such as power or electricity using the product,” said Mr Joseph.

note: M -pesa was introdused 3 or 4 months b4 safaricom reported its annual financial report

^^
another Safaricom service I particularly like is the one regional network service. I get to use my sim card anywhere within East Africa without a roaming charge. This was due to a partnership between MTN in Uganda and vodacom in Tanzania which now operate as if they are one phone network (Theres no need to change cards once you cross the border). The idea came from celtel's one network startegy (another world's first-where you can now use one network from Kenya all the way to Gabon, DRC and Congo.)

^^
another Safaricom service I particularly like is the one regional network service. I get to use my sim card anywhere within East Africa without a roaming charge. This was due to a partnership between MTN in Uganda and vodacom in Tanzania which now operate as if they are one phone network (Theres no need to change cards once you cross the border). The idea came from celtel's one network startegy (another world's first-where you can now use one network from Kenya all the way to Gabon, DRC and Congo.)

i sure did not know about that one. this is the sort of intergration we need if the three countries are to become one country

^^
another Safaricom service I particularly like is the one regional network service. I get to use my sim card anywhere within East Africa without a roaming charge. This was due to a partnership between MTN in Uganda and vodacom in Tanzania which now operate as if they are one phone network (Theres no need to change cards once you cross the border). The idea came from celtel's one network startegy (another world's first-where you can now use one network from Kenya all the way to Gabon, DRC and Congo.)

I heard about that. Very innovative and shows that the East African mobile operators have a lot of foresight and vision that will lead to economic integration in the region. I wish our operators could do that in the SADC region too. About the money transfer, that's a really lovely initiative and i will try it out to see how it works when i come to Kenya.

I was talking to some friends of mine who work for a Private Equity Fund in Joburg about Safaricom and the possibility of an IPO there, they just came back from West Africa and told me they are looking to diversify their investments in Kenya (they already have an investment in Kenya Airways).

I heard about that. Very innovative and shows that the East African mobile operators have a lot of foresight and vision that will lead to economic integration in the region. I wish our operators could do that in the SADC region too. About the money transfer, that's a really lovely initiative and i will try it out to see how it works when i come to Kenya.

I was talking to some friends of mine who work for a Private Equity Fund in Joburg about Safaricom and the possibility of an IPO there, they just came back from West Africa and told me they are looking to diversify their investments in Kenya (they already have an investment in Kenya Airways).

^^
Kulani, the principle of the mobile money transfer system is really simple. I found a small article on it:

M-PESA is aimed at mobile customers who do not have a bank account, typically because they do not have access to a bank or because they do not have sufficient income to justify a bank account. All they need to do is register at an authorised M-PESA Agent by providing their Safaricom mobile number and their identification card. Once registered, customers can:

1.Put money into their account by depositing cash at a local Agent
2.Send money to other mobile phone users by SMS instruction, even if they are not Safaricom subscribers.
3.Withdraw cash at local a Agent
4.Buy Safaricom airtime for themselves or other subscribers

I think it will not be long before SADC countries follow the same route in integrating the phone networks. Right now Celtel is working on joining the Zambian network to the integrated East African one. My guess is other companies in the region will take the que and do the same (especially MTN).

Kenyan companies are mostly making a bull run on the Nairobi Stock Exchange and I think its the best time to invest in Kenya. Many local companies look really promising especially for long term prospects.:)

^^
Speaking on money matters, another unique financial services company I'd like to point out is called Pesa Point. Its not a Bank but it outsources a service that most banks cannot do without-The ATM machine.

They have partnered with major banks in Kenya to provide the ATM service in as many locations as possible throughout the country. That means they are the most convenient cash access points in kenya as you can find them everywhere: at petrol stations,supermarkets and street corners. It also accepts visa cards therefore catering for a wider global market.:)

KENYAS RETAIL STORES
Here are pics of Kenya's largest retail chain stores:

Nakumatt Supermarket
http://i56.photobucket.com/albums/g186/mwafrika/a0004.jpg
http://i56.photobucket.com/albums/g186/mwafrika/a0006.jpg
http://farm1.static.flickr.com/15/21466093_533611d14c.jpg

Uchumi Supermarket
http://www.djxp.com/gallery/albums/userpics/10002/Nairobi%2018.jpg

Tusker Matresses (now called Tuskys supermarket)
http://www.djxp.com/gallery/albums/userpics/10002/Digz%20023.jpg

http://www.djxp.com/gallery/albums/userpics/10002/Nairobi%203.JPG

http://www.djxp.com/gallery/albums/userpics/10002/Digz%20020.jpg

Nakumatt and Uchumi have expanded or are about to expand into other African countries. Tusky's is also a strong contender.:)

Coca Cola to build $10.4m regional headquarters in Nairobi
By A STAFF WRITER
The EastAfrican

Soft drink giant Coca Cola is finally putting up a Ksh700 million ($10.4 million) headquarters building to oversee its operations in 27 East and Central African countries, after years of shuffling its regional offices.

The Nairobi office is responsible for Angola, Botswana, Burundi, Comoros, Congo Brazzaville, Democratic Republic of Congo, Djibouti, Ethiopia, Eritrea, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Namibia, Reunion, Rwanda, Seychelles, Somalia, St Helena, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

The ground breaking ceremony in Nairobi’s Upper Hill area was led by Kenya Vice President Moody Awori and Nathan Kalumbu, Coca Cola’s president and chief executive for Coca Cola East and Central Africa.

Mr Kalumbu said the new headquarters will end the perennial problem the organisation has faced of having its operations housed in three different buildings in the Kenyan capital. This has adversely affected fast decision making and collaboration.

Some of our employees are housed at the Old Mutual Building in the Central Business District, another group is at Britak Centre, and the third is at Symbion House, next to Don Bosco Catholic Church. This has proved to be a real challenge in terms of teamwork and rental costs among others,” said Mr Kalumbu. “So we undertook to find a way of consolidating our employees into a single building in order to improve productivity and teamwork as well as contain the rising costs arising from working separately.”

Coca Cola has had a presence in Africa since 1928, when its first bottling plant was established in Johannesburg. In the rest of Africa, Coca Cola, the soft drink, was first produced after the Second World War. The business has been continually expanding ever since.

With its track record in marketing innovation, Coca Cola’s proposed new head office is a vote of confidence in the newly expanded East African Community with its population of over 110 million people.

“Over the last eight months, our building consultants and ourselves have worked extremely hard to develop the new building design that we have, because we knew it highlights our tremendous strengths in these markets, as in many others, in a strategic and compelling way. It is the key to fulfilling our collective vision for a brighter and more prosperous business,” he said.

The building is expected to be complete by June 22, 2008, a year from the ground breaking.

All roads to Nairobi people!!:rock: :dance:


Google sets up base in Sub-Saharan Africa
By Russell Southwood, Balancingact-Africa, 11 June 2007

http://mybroadband.co.za/nephp/?m=show&id=6695

Google is moving outside of the continental comfort zones for most global investors, North and South Africa, and is opening its first operation in Sub-Saharan Africa.


Kenya has been chosen as the base camp for what is likely to turn into a sub-regional business. It has chosen Joseph Mucheru, former CEO of Wananchi to be its Site Lead- Kenya and although he has barely got his feet under the desk, Russell Southwood spoke to him about what Google might be doing, infrastructure initiatives and Kenya's media and communications bills.

Q: With more competitive markets in Kenya, it's an exciting time for anyone in the telecoms and Internet markets there. So why did you leave Wananchi?

Strategically, Wananchi is going into building infrastructure. There's no denying there's a huge need for it but I've always had a passion for content and applications. In the past, I've always been dragged into infrastructure to support my web business.

Also this is the first time an international content player like Google has entered this market and it's very exciting. And this is another reason I've chosen to work with them.

Q: So what does Google want to do?

Initially there will be three big things. Firstly, we want to optimise the use of Google applications in the region. We already have a lot of customers in the region but further development of the market is hindered by the absence of an international cable offering cheap bandwidth.

Google understands that this is an impediment and is willing to go to the extent of buying international bandwidth that locals don't have to pay the current considerable premium they are.

The second thing they want to develop is their Maps product to make sure it has local information that is searchable and useful.

The third thing is using Google advertising in ways that can help monetize local content. Lots of people have done local content but most times it's flopped. We hope to show that there's a way of doing advertising that can support content. If we can do this, it will generate jobs and work.

But I should say clearly that I've only been with the company a week.

Q: So what's your role?

I'll be the Site Lead - Kenya and will lead a whole team. I'll be involved in facilitating all the initiatives going on in the area.

The company is massive but works in small teams. So I'll help determine what can be done and be pro-active about making it happen which means I'll be acting in an entrepreneurial way.

Q: I hear that Google is also interested in policy issues?

Google has an interest in what's happening in terms of policy and has a policy team and they want to have someone in every region. Their concern is to ensure that when policy is made that it benefits all of mankind. So it is willing to support someone who will participate in policy debates. So for example, here in Kenya, that person might look at the media and communications bills and Google would be able to lend its support and bring in its experience of these issues from elsewhere.

all roads to nairobi coz this is good stuff. we are talking of international businesses investing in kenya. keep em coming

Wall Street calls on NSE brokers over Safaricom
Written by Ole Turana

Michael Joseph12-July-2007: Safaricom’s listing has attracted some of the biggest and most prestigious investment banks on Wall Street and in London.

With the Monday bid deadline imposed by the Treasury fast approaching, enquiries by the Business Daily revealed that at least six global investment banks have approached local brokerage firms for partnerships that would advise the Treasury on how to handle the Sh33 billion deal, the biggest initial public offering (IPO) in East Africa.

They include: Goldman Sachs, J P Morgan, Credit Suisse First Boston, PNB Paribas, HSBC, Citibank and Standard Bank of South Africa, known locally as Stanbic.

Though the Nairobi Stock Exchange (NSE)—along with other emerging market exchanges — has in the last three years attracted global attention due to the high returns to investors, it has mainly been considered an exotic backwater at the global level due its high liquidity, low value transactions and the potential political risks.

But with Safaricom $500 million IPO, it has become difficult for these global players to ignore Kenya — a feat that symbolises the coming of age of stock exchanges in sub-Saharan Africa.

The Kenyan market has recently attracted Rennaissance, a big international brokerage, signalling the advent of a trend that could see other global investment banks take firm steps to establish a toe-hold in the sub-Saharan capital markets in Nairobi and Johannesburg as regional financial hubs.

But even as brokerage houses struggle through the task of putting together consortia to vie for the work, the big local brokers are complaining that the Treasury is forcing them to shoulder too much baggage by forcing them to bid together with three smaller local rivals.

Some players are already lobbying the Treasury to reduce the number of sponsoring stockbrokers in each consortium from four to two.
In its invitation for expression of interest (EOI) the Government called for a consortium made up of a lead transactional advisor which has to team up with a lead broker and four co-sponsoring brokers.

“The lead transaction advisor should be an institution licensed in Kenya under the Capital Markets Authority or the Banking Act or a consortium of institutions which may include those that are not licensed in Kenya, with a full range of expertise and experience in providing lead advisory services for similar transactions,” said the Treasury’s press advertisement.

Due to the size of the Safaricom deal and recent experience that has seen three local investment banks dominating new listings, Treasury had changed the rules to force the big players to partner with smaller rivals. This was meant to broaden the capacity of small stock brokers to handle huge and complex deals and ensure that new faces get into the deal making gravy train.

But the big brokers now reckon that their smaller rivals are too weak and lack the infrastructure needed to handle these kind of deals and are therefore unable to find credible partners who have experience in placing huge volumes in the market.

People privy to the on-goings in the deal-making circles said one international firm was perplexed when they knocked on the offices of a local company only to be met by plastic chairs and what looked, by international standards, hardly a place to conduct the multi billion business that is equity trading. They walked out without making enquiries.

A reduction in the number of sponsoring brokers which the Treasury was said to be considering is however likely to be seen as back-peddling on official efforts to strengthen the small brokers’ capacity to handle IPOs.

“Lack of credible local partners to team up with the international investment banks is going to be the test of our capital market’s ability to stake its claim at the international arena as a serious emerging market worth giving a shot,” said a source who declined to be named due to his involvement in the bids.
The capacity crunch is an outcome of the packaging of the Safaricom IPO by the government.

The local capital market has 18 licensed stock brokers of which six double up as stock brokerage and investment banks. The six players are Drummond Investment Bank, Dyer and Blair Investment Bank and Suntra Investment Bank, ApexAfrica Investment Bank, Standard Investment Bank and African Alliance Investment Bank.

The Treasury move to allow international players is a pointer to the dearth of requisite expertise in handling arguably the largest initial offer in the history of the country stock market.

This is despite local brokers’ involvement in the recent successful IPOs, where leading brokerage houses teamed up together to bid for the business.

The push to have international lead transactional advisor is also underpinned by the complex role that the advisor is expected to play in preparation for the offer.

The advisor will be required to undertake financial due diligence, carry out valuation of the company, advice on the appropriate share structure and share pricing and prepare relevant documents such as Information Memorandum and the Prospectus.

The valuation of Safaricom remains a critical and controversial issue. The Treasury and its partner in Safaricom, Vodafone continue to disagree on the actual value of the company.

So far, three valuations have been done officially and unofficially. Vodafone which owns 40 per cent of the company has valued Safaricom at Sh91 billion ($1.3 billion), the Government at Sh420 billion ($6 billion), while Dyer and Blair Investment Bank’s valuation is Sh161 billion ($2.3 billion).

The government valuation is based on what is the preferred method in valuing telecommunication company the Average Revenue per User (ARPU). With an estimated subscriber base of over 6 million and each ARPU valued at $1,000 the government figure of Sh420 billion is the standard accepted value.

The huge disparity in valuation has confounded analysts. This is likely to be the reason behind tacking along a global investment banking to determine the valuation, as this would appeal to a global standard that Vodafone would find difficult to accept.

Market watchers indicate that brokerage industry can be clustered into two categories. The big eight brokers with the financial muscles and strong management and the rest are underdogs.

However, even the big brokers not in a position to engage in the complex transactional structuring that Safaricom will require.

That is why international investment banks have been courting local brokerage houses to make up wining consortium. Though no firm teams have been formed already, the leading brokers have a head start by locking in international partners.

Market players expect realignment as time runs out toward the deadline. Things are expected to take a definite turn depending on how Treasury moves in to address the capacity constrain.

why is the valuation figures differing to such a big extend, do you smell something fishy about that?

^^
The difference in valuation could have come about due to various reasons. Dyer and Blair Investment Bank could have valued Safaricom on the basis of their assets and its profit margins.

The governments valuation, based on ARPU, includes the "intangible'' income earned by the company per month every time an individual uses Safaricoms service. This will definitely give a higher figure but placing the value at $1000 per person is too high IMO. (maybe its to make the company more appealing to the public before the IPO on the bourse).

Vodafone wants to offload its shares in Safaricom and if it has found a suitor, it would be in the best interest of the second party to acquire the shares of the company based at a lower valuation.

Nakumatt, Barclays credit card out

Story by NATION Correspondent
Publication Date: 7/13/2007

Barclays Bank and retailer Nakumatt Holdings yesterday unveiled a co-branded Nakumatt Visa Credit Card.

Speaking during the card’s launch at the Grand Regency hotel in Nairobi, Nakumatt’s director of operations, Thiagarajan Ramamurthy said the card was similar to others existing in other parts of the world.

Head of Barclaycard, James Kinyany, said card holders will enjoy the benefits offered by both Barclaycard and Nakumatt supermarket.

The benefits include low interest rates starting from 2.5 per cent, 50 days interest-free credit, and flexible payments of a minimum of 10 per cent after the interest-free period. Cardholders will also be sent detailed statements every month for ease of their financial planning. Mr Kinyany said the co-branded card would help to increase cardholders.

“This will leverage the position we have in the market” he said. Barclaycard has a 65 per cent market share in the credit card market having issued 60,000 cards so far.

Some of the most popular cards are the soccer affiliated Barclays English Premier League and the Manchester-United cards, buoyed by the growing interest in European football in Kenya. Cardholders will earn one SMART point for every Sh100 worth of shopping in Nakumatt and one SMART point for every Sh500 spent anywhere else in the world. Nakumatt Holdings IT director, Sailesh Savani said holders of the Nakumatt Visa credit card, will enjoy benefits unique to the supermarket chain.

They will also earn 20 per cent bonus SMART points every month. Other discounts and value add-ons will be introduced soon.

The launch of the Nakumatt Visa credit card is part of Nakumatt’s strategic plan to introduce a range of financial solutions for its customers. Nakumatt also plans to introduce a new generation loyalty card with a 16K memory chip, and enhanced security features, allowing customers to withdraw cash at the supermarket’s tills countrywide.
^^
I guess we are slowly witnessing the merger between retail and the financial services sector. First it was banking through mobile phones and soon, through your local store.

^^
The difference in valuation could have come about due to various reasons. Dyer and Blair Investment Bank could have valued Safaricom on the basis of their assets and its profit margins.

The governments valuation, based on ARPU, includes the "intangible'' income earned by the company per month every time an individual uses Safaricoms service. This will definitely give a higher figure but placing the value at $1000 per person is too high IMO. (maybe its to make the company more appealing to the public before the IPO on the bourse).

Vodafone wants to offload its shares in Safaricom and if it has found a suitor, it would be in the best interest of the second party to acquire the shares of the company based at a lower valuation.

The $1000 price per subscriber was the market price last year of African mobile operators. I remember MTN spent that price when it acquired Investcom for $5.5 billion. Investcom had roughly 5.5 million subscribers in 10 countries.

Vodafone is putting the lower pricing probably because it wants to up its stake, so when you want to up your stake, you would rather put a lower valuation so you can get it cheaper and then accept the higher valuation when you are selling. Interesting ain't it?

The $1000 price per subscriber was the market price last year of African mobile operators. I remember MTN spent that price when it acquired Investcom for $5.5 billion. Investcom had roughly 5.5 million subscribers in 10 countries.

Vodafone is putting the lower pricing probably because it wants to up its stake, so when you want to up your stake, you would rather put a lower valuation so you can get it cheaper and then accept the higher valuation when you are selling. Interesting ain't it?

^^
Thanks for clarifying the $1000 price Kulani. It seemed odd that it could be set that high for the Kenyan market. i also noticed Investcom has a roughly simmilar number of subscribers. It makes sense now.

All the headquarter news in one post:

General Electric moves Africa’s hub to Nairobi
http://www.bdafrica.com/index.php?option=com_content&task=view&id=1291&Itemid=4744

http://www.gesecurity.com/GESecurity/images/140x140_ge_logo.jpg

04-June-2007: General Electric Company, the world’s leading producer of large and small jet engines for commercial and military aircraft, will move it’s Africa corporate headquarters from South Africa to Nairobi, company officials have said, continuing the growth of the capital as a hub for multinational business for sub-Saharan Africa.
The GE office in the capital will now be responsible for corporate-level decisions for the company’s African business, it will also spearhead the company’s hunt for new businesses on the continent, the firm’s president for Africa, Yibrah Tesfasghi, told Business Daily.

Young & Rubicam relocates African HQ to Nairobi
http://bdafrica.com/index.php?option=com_content&task=view&id=484&Itemid=2826

http://www.sostav.ru/articles/rus/2006/columns/visitka/images/0033_logo.jpg

14 July 2007: The creation of a pan-African headquarters for media and advertising group Young and Rubicam (Y&R) brands in Nairobi is the latest in a trend of big business centring wide-reaching regional operations in the capital city.In February, the global office of Y&R agreed to move their African operations headquarters from Johannesburg, South Africa, to Nairobi.

The former managing director of Y&R’s local subsidiary, Ayton Young & Rubicam (AY&R), Mr Chris Harrison, became chief of the pan-African operation in the move.

From his Nairobi office, Mr Harrison will oversee Y&R’s operations in 12 African and Indian Ocean countries, between South Africa and the Sahara, including west African economic powerhouses Nigeria and Angola and the prosperous French-controlled island of Reunion.

Google sets up base (Nairobi) in Sub-Saharan Africa
http://mybroadband.co.za/nephp/?m=show&id=6695

http://jkontherun.blogs.com/jkontherun/google_logo.jpg

11 June 2007: Google is moving outside of the continental comfort zones for most global investors, North and South Africa, and is opening its first operation in Sub-Saharan Africa.


Kenya has been chosen as the base camp for what is likely to turn into a sub-regional business. It has chosen Joseph Mucheru, former CEO of Wananchi to be its Site Lead- Kenya and although he has barely got his feet under the desk, Russell Southwood spoke to him about what Google might be doing, infrastructure initiatives and Kenya's media and communications bills.

NAIROBI: Coca Cola to build $10.4 million regional headquarters
http://www.bevmanager.com/article/article/nairobi-coca-cola-to-build-104m-regional-headquarters.html?tx_ttnews%5BbackPid%5D=19&cHash=338282460b

http://srpskenovineogledalo.co.yu/pub/44/slike/Coca-cola-logo(new)01.jpg

Soft drink giant Coca Cola is finally putting up $10.4 million headquarters building to oversee its operations in 27 East and Central African countries.

Coca Cola has had a presence in Africa since 1928, when its first bottling plant was established in Johannesburg. In the rest of Africa, Coca Cola, the soft drink, was first produced after the Second World War.

The business has been continually expanding ever since. With its track record in marketing innovation, Coca Cola’s proposed new head office is a vote of confidence in the newly expanded East African Community with its population of over 110 million people.(bm)

you get the feeling that kenya has the momentum right now. i ma just exited bcoz these are major companies, GOOGLE, GE, Y&R and COKE are bringing their african hq to kenya. from jozi to nairobi, why? this would be the perfect time for sa to help kenya maximise and tap on all this and strengthen their economic ties which need fixing

Maize farmers count blessings and cash

Maize farming has never been so good in recent years. It is a time of bounty and farmers are now terming the undertaking as lucrative. This turnaround has been brought about by incentives given by the various players in the sub-sector.

Only a few years ago, maize farmers overburdened by costs gave up the activity.

They were disappointed because of exploitation by middlemen who bought the yield at throwaway prices. This was after they had used so much money in land preparation, farm inputs and labour, among other costs.

Farmers who used to get 10 bags of maize per acre are now harvesting more than 30 bags.

Added incentive

It is all about the better seed variety, adequate and proper preparation of land, provision of required inputs such as fertilisers and general crop husbandry. The price has also been another added incentive.

Mr Joseph Kirior, a farmer in Cherangani Division of Trans Nzoia district, has all the reasons to smile because of the bountiful harvest of last year.

“I harvested some 400 bags of maize from my 20 acres and this I attribute to the incentives by various stakeholders including Kenya Seed Company and Agricultural Development Corporation among others,” he told the Nation at the Nakuru Agricultural Society of Kenya show.

He expects this year’s production to be better, he says, thanks to the Ministry of Agriculture’s motivation of farmers through the incentives.

Mr Kirior says the provision of machinery services by the Agricultural Development Corporation has reduced the cost for farmers. Farmers hire tractors and other implements from ADC.

“The machinery services have helped lower the cost of farming and are like a subsidy to the farmer who is always overburdened,” he says.

Since the programme was introduced, many farmers, including the small scale one, have benefited, he says.

Many farmers who did not own tractors and other implements had to incur extra costs in hiring the machinery, not to mention the cost of repairing the machines.

The Government, through the Ministry of Agriculture, initiated the idea and selected some districts where the tractors were to be leased to farmers.

He says seed quality was another plus to farming, adding, the newly introduced 6,213 from Kenya Seed has better yield than others.

Mr Kirior says that although 614 variety is resistant to disease, it does not give more yield than the former.

Farmers, he points out, have been educated and most of them know quality seed. They only require education on better land preparation and application of the fertilisers.

Mr Kirior is full of praise for agricultural shows, which he says have been important fora to educate farmers.

“This is where farmers from all over the country can learn new technologies to improve farming” he says.

He says, for instance, that it would be impractical for farmers from Mombasa to visit Kenya Seed offices in Kitale.

The shows and field days have created awareness among the farmers.

Mr Kirior says he is one of the farmers who have taken advantage of the shows to learn new technology on farming and it had paid dividends.

He adds that he can now sustain himself on the income from maize farming, unlike in the past when farmers were exploited.

Another incentive is the better price offered by the National Cereals and Produce Board, which buys a bag of maize at Sh1,300.

However, the money is taxed and the farmer ends up earning about Sh1,200.

Mr Kirior says one of the problems maize farmers face is the moisture content of the produce, which the board has to certify before buying it.

Another problem is wetness, which results in the maize getting discoloured.

“This is one of the reasons that farmers end up being exploited by greedy business men who end up buying the maize at throwaway prices,” he says.

Mr Kirior says that, if farmers had access to facilities to dry their maize, they would earn more as they would have more yield.

The leading maize production districts in the country include Trans Nzoia, Uasin Gishu and Nakuru.

The Minister for Agriculture, Mr Kipruto arap Kirwa, said at the Show on Tuesday that the country expects to harvest some 25 million bags of maize from Rift Valley Province alone.

He said the current yield of 22.2 million is expected to shoot up in the province.

The province produces about 80 percent of the country’s output with the balance from Western Kenya and parts of Eastern Province.

Mr Kirua said that, for the first time Eastern Province, particularly Ukambani area, which has been getting relief food, has produced some 300,000 bags of maize.


http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=1&newsid=102420

you get the feeling that kenya has the momentum right now. i ma just exited bcoz these are major companies, GOOGLE, GE, Y&R and COKE are bringing their african hq to kenya. from jozi to nairobi, why? this would be the perfect time for sa to help kenya maximise and tap on all this and strengthen their economic ties which need fixing

This is a great thing in my opinion. It shows that African cities like Nairobi are really ready to rival the traditional choices like Johannesburg as business hubs and will certainly lead to Africa growing and diversifying. I hope more cities especially in West Africa also begin to receive this kind of attention from multi-nationals who must begin to realize that Africa is big and diverse with a really big market. But i think Kenya Airways has really played a major role in positioning Kenya today as a business hub in the continent and other airlines in Africa should really emulate them. Today you can pretty much criss cross the continent and go anywhere in the world (especially the East - China, Turkey, India etc) with Kenya Airways.

This is a great thing in my opinion. It shows that African cities like Nairobi are really ready to rival the traditional choices like Johannesburg as business hubs and will certainly lead to Africa growing and diversifying. I hope more cities especially in West Africa also begin to receive this kind of attention from multi-nationals who must begin to realize that Africa is big and diverse with a really big market. But i think Kenya Airways has really played a major role in positioning Kenya today as a business hub in the continent and other airlines in Africa should really emulate them. Today you can pretty much criss cross the continent and go anywhere in the world (especially the East - Chine, Turkey, India etc) with Kenya Airways.

^^
Kenya Airways has indeed helped turn the fortunes around for Nairobi and Kenya in general especially in business and tourism. Its hard to imagine that the airline was going under in the 90's with a few old airplanes, poor services as well as poor management that was the hallmark of all Kenyan government enterprises. Thank God it was privatized in time to become 'The Pride of Africa'. The trend of efficient modern airlines has been picked up all over the continent from Virgin Nigeria to Ethiopian Airlines.

With the success of Kenya airways, the Kenyan government is trying to privatize other modes of transport eg. railways (though its still too early to see the impact.) and the telecommunications sector (Telkom kenya and Safaricom are bound to be privatized and listed this year on the Nairobi Stock Exchange) and very soon The national highways will also be privately managed and toll charges paid by the road users. This way, it is hoped that kenya's roads will be upgraded to acceptable standards in the fastest time possible after years of neglect.

The business community in Kenya seems to be better managers than the government. Privatization is the way forward for the country.:)

This is a great thing in my opinion. It shows that African cities like Nairobi are really ready to rival the traditional choices like Johannesburg as business hubs and will certainly lead to Africa growing and diversifying. I hope more cities especially in West Africa also begin to receive this kind of attention from multi-nationals who must begin to realize that Africa is big and diverse with a really big market. But i think Kenya Airways has really played a major role in positioning Kenya today as a business hub in the continent and other airlines in Africa should really emulate them. Today you can pretty much criss cross the continent and go anywhere in the world (especially the East - Chine, Turkey, India etc) with Kenya Airways.

^^
Kenya Airways has indeed helped turn the fortunes around for Nairobi and Kenya in general especially in business and tourism. Its hard to imagine that the airline was going under in the 90's with a few old airplanes, poor services as well as poor management that was the hallmark of all Kenyan government enterprises. Thank God it was privatized in time to become 'The Pride of Africa'. The trend of efficient modern airlines has been picked up all over the continent from Virgin Nigeria to Ethiopian Airlines.

With the success of Kenya airways, the Kenyan government is trying to privatize other modes of transport eg. railways (though its still too early to see the impact.) and the telecommunications sector (Telkom kenya and Safaricom are bound to be privatized and listed this year on the Nairobi Stock Exchange) and very soon The national highways will also be privately managed and toll charges paid by the road users. This way, it is hoped that kenya's roads will be upgraded to acceptable standards in the fastest time possible after years of neglect.

The business community in Kenya seems to be better managers than the government. Privatization is the way forward for the country.:)

--------------------------------------------------------------------------------


By Kioi Mbugua


It is not difficult to see why Kenya has remained considerably stable in spite of unstable political, social and economic systems.

Kenya was founded on British colonial heritage with all the baggage that goes with that. It has been argued that ‘Berlin’ boundaries that divided ethnic nations are a major source of conflict in Africa. But some countries that were under the British such as Ghana and Kenya have demonstrated remarkable potential in political stability and peace.

A strong bureaucratic system and culture bequeathed to the independent states may explain this. In Angola and Mozambique, the Portuguese did not have long-term investments in the colonies. Independent governments inherited an unstable political and social system. This partially explains why Angola and Mozambique remained unstable for the better part of their independent period.

The Kenyatta regime entrenched political stability through recognition of minorities then united under Kadu. It is interesting that Kenyatta retained a Kadu Vice-President to succeed him against popular will from his political base in central Kenya.

The no revenge political culture has cemented fundamental values in politics — Kenyatta did not revenge against the British for his long incarceration and he prevailed against Mau Mau followers and homeguards not to settle scores.

President Moi did not substantively destabilise the Kenyatta State though he scuttled his political elite and constituency when he sensed that his reign was under threat. Kibaki, perhaps the best gentleman among them, has retained a substantial part of the Moi bureaucracy and has had no time to settle scores in the Rift Valley.

Kenya has replaced leadership through democratic means and elections since independence. Whatever accusations may be levelled against elections, the nation’s picture has been one of the brightest in Africa.

The society has also evolved a relative culture of peace. The so-called spirit of hospitality many foreigners often cite may be a manifestation of a stoic people’s capacity for tolerance and endurance. Though there are many resources, cross border and ethnic conflicts, the national system still demonstrates capacity for resilience.

Kenya maintains a professional and apolitical army. Unlike Uganda, Rwanda, Eritrea and Ethiopia, where the military took power after fighting long guerrilla wars, Kenya has developed a fairly representative and national army. Its services at UN missions have rated the institution highly internationally. The schisms in 1964, 1971 and 1982 pale in significance compared to other countries.

Ethnicity is more political than social. Most Kenyans have no problem with members of different ethnic groups. The problem arises when there is competition for resources and this is orchestrated through power politics. However, the politics of ethnicity may be our greatest threat. When Kanu was perceived as a party of big ethnic groups, Kikuyu and Luo, Kenyatta struck a gentleman’s agreement with Kadu, then perceived as a party of small ethnic groups. This unity has solidified in successive regimes.

The political field has been reduced to a boardroom democracy between ethnic barons of five major ethnic groups namely: Kikuyu, Luhya, Kalenjin, Luo and Kamba. The rest have to choose which bandwagon to align themselves with.

The big challenge for the political system is whether to evolve a non-ethnic, ideology-based movement such as Tanzania’s Cha Cha Mapinduzi or a constitutional dispensation based on proportional representation.

This rift valley defines party politics in ODM-Kenya and Narc-Kenya and informs the unending constitutional reforms quagmire. Nothing short of a constitutional re-engineering will redefine the political landscape.

Kenya: Nairobi Stock Exchange in the Global Market

Business in Africa (Johannesburg)

18 July 2007
Posted to the web 18 July 2007

Michael Preiss
Johannesburg

Kenya's stock market is the world's 6th worst performer this year after declining by about five percent between January and June. The Nairobi Stock Exchange (NSE) is only outpaced by Sri Lanka, which declined by six percent, Trinidad Tobago at eight percent, Saudi Arabia at12 percent, Jamaica at13 percent and Venezuela at 24 percent.

On the winner's side, China's CSI Index continues to surprise investors and has gained 112 percent year-to-date. Local Chinese investors have discovered the stock market with a vengeance and China in turn seems to have discovered Africa in a big way this year.

For decades China has played on its solidarity with developing African nations, but in recent years Beijing has looked to the continent as a source of natural resources as well as a growing market for it's goods. Energy hungry China imports about 30 percent of its oil needs from Africa and bi-lateral trade reached $55bn last year, a five-fold increase since 2001. China is now Africa's third largest trading partner after the United States and France.

India already has a very strong foothold in the continent, especially in East Africa. The Chindia factor coupled with technology and the Internet is transforming Africa and Kenya beyond recognition and is finally putting the continent back onto the map of international investors.

African economies are forecast to grow by an average of 5,8 percent this year, according to United Nations statistics, after recording an overall GDP growth rate of 5,7 percent in 2006.

One new noticeable trend is Africa's expanding capital markets. All African markets with the exception of Kenya have performed very well so far this year. Nigeria and Botswana are among the world's top performing markets. Lagos Stock Market has risen 52 percent while the Gaberone Index gained 43 percent. South Africa is up 16 percent, Namibia 17 percent and Mauritius 20 percent.

Expected funds flow and buying into laggards however, seems to indicate that the Kenyan Stock market looks rather interesting and offers good risk/reward entry at current levels of valuation. There is a growing probability that the NSE will catch up with other African stock markets from the third quarter of this year, especially once the Initial Public Offer (IPO) of East Africa's most profitable company, Safaricom, is listed on the bourse.

Kenya hopes to raise Ksh 35bn from the sale of a 25 percent stake in Safaricom, East Africa's biggest mobile-phone company. Finance Minister, Amos Kimunya is doing the right thing and is sending the right signals to both locals and foreigners to entice investors back to the NSE.

Larger flows of foreign funds are expected to come into the NSE, which should again bring new confidence and renewed hope to the local bourse. For the longer-term investor, the market seems to be at an equilibrium now and the potential for upside gain most probably will be greater than the downside risk at current levels. Foreign investors are often positively surprised to hear that proportionally more people make mobile phone calls in Nairobi than they do in New York. The younger generation of Kenyans more outward-looking, enterprising and better educated, less dependent on the patronage of state and local politicians are re-shaping Kenyan business.

More and more foreigners seem to take notice. Overall investment into African capital markets, however, is still rather small. But stock markets like the NSE are making significant progress. In October 2006, the NSE began automated trading, moving away from the open cry system of trading that had been used for 15 years.

According to the Institute of International Finance (IIF), net private capital flows to emerging markets totaled $502bn, of which Eastern Europe/Russia received the largest share at $218,4bn, followed by Asia Pacific including China at $197,3bn, Latin America at $45,9bn while Africa that is home to nearly 750mn people took only $40,1bn.

However, more global fund managers seem to agree that the risks of investing in Africa in general and in Kenya in particular are less then they are perceived to be. Africa often rakes in better returns for investors than Europe, Asia or America. For instance the Kenya Electricity Generating Company (KenGen) IPO that heralded more retail investor participation on the NSE saw the exchange's equity turnover rise by almost 300 percent, in May 2006 when KenGen was listed, to Ksh11,4bn.

It set in motion a new era of stock market investing in Kenya, which went from one extreme of bullish sentiment to the other where some investors lost more money than they thought when the market had an expected and natural pull back. Instead of being "once bitten and twice shy" local investors might want to see the stock market more as a long-term investment instead of short-term speculation.

Michael Preiss is a Chartered Wealth Manager and Chairman of African Capital Management

i dont think i agree with this guy

Kenya Ranked Top Ten Tourist Destination in The World

Business Daily Africa
http://www.bdafrica.com/images/stories/Tourism/bd-tourists-Masai-Mara.jpg

20-July-2007: Kenya’s tourism sector is on its way to achieving its ambition as one of the top 10 long haul destinations, according to a new report.

The report which was published earlier in the week by an international destination website, www.lastminute.com, shows bookings to Kenya have increased significantly in the past few months as holiday makers plan for their summer holidays.

This has put Kenya on an equal footing with top long haul destinations such as the Maldives and Thailand.
Lastminute.com is an online travel agent that helps main European travellers book their holidays.

Statistics show that travellers are looking for far-flung destinations to spend their summer with Kenya as one of the best sellers.

The rise in the country’s popularity is attributed to the availability of top of the range holiday packages that the country has recently released in the market as it climbs the leisure business management ladder.

Kuoni’s 2006 long haul report released earlier in the year showed Kenya had moved to the fourth position, ahead of Dubai. Maldives and Thailand maintained the top two positions with Egypt ranked third.

Kenya is expected to maintain its position in 2007 with Egypt dropping to position nine as the US jumps to position three from six.

The report shows that Tanzania is slowly building momentum having been listed among the top 20 long distance destinations.

The country is ranked 18th while China is expected to leap two steps up from position eight in 2006.

Industry insiders say Kenya must boost its marketing campaign to maintain the position and stay ahead of the competition.

Seychelles which has invested heavily in hotels and raised the quality of its services to record a 20 per cent growth in tourist arrivals is among the countries to watch.
The Kuoni report says small destinations have been growing faster as travellers seek to holiday in remote destinations.

Kenya’s tourism sector has been growing steadily over the past four years rising to a revenue peak of Sh56.2 billion last year.
Tourism has been identified as one of the key drivers of the road map to Kenya’s economic take off.

Vision 2030 is also expected to push up the country to the top 10 long distance destinations.

Other key trends emerging in the tourism sector include an increased average stay from 13 days to 14.5 days.
Over half of the clients who book with Kuoni are choosing to take holidays of 15 days and more.

This will mean more business for the hotels in Kenya and increased spend in the destination.

Kenya is also attracting couples who wish to wed. According to the Kuoni report, Kenya emerged as the fifth popular wedding destination and is expected to raise to fourth this year.

Along with weddings the country is also attracting a number of honeymooners.

Aggressive marketing by players in the industry has been attributed to the country’s prominence in the tourism sector.

^^ go kenya! go kenya!:banana: :banana: :banana:

Investors Eye Meru For New Hotels

Investors in the tourism industry are preparing to snap up development sites in parks and reserves in the Meru conservation area, on which sit the Meru and Kora national parks and the Bisanadi and Mwingi national reserves.

A new management plan for the area, unveiled during the Meru National Park branding last week, opened 13 new sites to build tourism facilities in the 870 km square land.

Eligible investors will have opportunities to put up lodges, tented camps and other products for tourists.

The Kenya Wildlife Service director, Dr Julius Kipng’etich, said investors would be invited on August 16 to hand in expressions of interests for four sites.

“We will ask investors to present the best ideas they have for developing the sites through an expression of interest,” said Dr Kipng’etich.

The target, he said, is for the tourism industry to put up exclusive accommodation facilities, which will cater for high end tourists. “We want this to be a high end tourism destination,” said the director.

The move is in line with the Ministry of Tourism’s shift from mass to exclusive high end tourism.

The Kenya Tourism Board’s managing director, Dr Ongong’a Achieng, said the move was occasioned by developments in the industry, which had moved from the doldrums and was on the path of development and sustainability.

“We want to generate more income rather than bring in more visitors,” said Dr Achieng .

The number of visitors to the country last year stood at 1.8 million and the tourism promotion body projects a figure of five million tourists by 2010.
Mr Achieng said the exclusive lodges, far from beaches at the coast, will be necessary for the industry since they make tourists to spend more as they get involved in many different activities.

The Meru National Park has in the past five years been a hive of activities as KWS, with funding from the French Development Agency (AFD) and the International Fund for Animal Welfare (IFAW), engages in activities to revive it. Roads have been constructed in the park at a cost of Sh251 million, while Sh262 million has been used to construct staff houses for game rangers.

A 43 kilometre electric fence to reduce human/wildlife conflict has been put up at a cost of Sh35 million. The park had in the past been the premier destination for visitors wanting to experience the true “African wilderness.”

It, however, experienced a down-turn in the 1970’s due to rampant banditry and poaching in the area and later fell to neglect.

It was made popular in the 1950’s by George and Joy Adamson and their escapades with a famous lioness named Elsa. Joy Adamson acquired the lioness after George shot its mother in self defence. For two years, George and Joy trained Elsa to return to the wild.

In 1960, the two wrote the book Born Free about Elsa, which was an instant international success. The couple separated in the 1970’s and on January 3, 1980, Joy was found murdered in Northern Kenya under mysterious circumstances.

George denied involvement in the murder and in 1981 a Turkana tribesman named Nakware Ekai, Adamson’s employee, was convicted of her murder and sentenced to life in prison.

Efforts to revive the park have seen a massive translocation programme, which is intended to bring in more than 4,000 animals to the area.

African megastores proliferate across continent

By Elizabeth A. Kennedy The Associated PressPublished: June 7, 2007

NAIROBI: At thousands of street corners across Africa, tiny wooden kiosks are arranged to peddle everything from phone cards to glass bottles of Coca-Cola.

But the continent in recent years has been seeing an increase in what long has been a staple in the West: The "megastore," selling food, electronics, beauty products, furniture and even, in some cases, cars. They are part of an often overlooked economic boom of sorts across the world's poorest continent.

The Kenyan supermarket Nakumatt, which has 18 stores, is poised to become the most wide-reaching East African megaretailer, with plans to open its first outlets outside the country starting in November.

Like the U.S. chains Wal-Mart and Target, many Nakumatt shops are brightly lit and stuffed with television sets, refrigerators and other big-ticket items, alongside staples like vegetables, milk and bread.

The new stores planned for Tanzania, Uganda and Rwanda would make Nakumatt ready to match the ambitions of giants based in South Africa, like Metcash and Shoprite, according to analysts at Planet Retail in London. Until now, those companies have been the only retailers in the region with the financial power for expansion plans of this scale.

U.S. inquiry casts shadow over prominent Hong Kong businessmanMurdoch's arrival worries Wall Street Journal staffChina's economic growth accelerates despite efforts to slow it downThe African Development Bank reported in May that the rate of economic growth on the continent would rise to 6 percent this year, the highest level in two decades.

Some countries have reported especially striking results, The Malawi economy grew by 8.5 percent last year, for instance.

In Kenya, Nakumatt has grown thanks to the relative financial stability in the largest economy in East Africa, which last year grew 6.1 percent, the highest rate since 1981.

The retailer also is gearing up to be listed on the Nairobi Stock Exchange by 2009.

Planet Retail said Nakumatt would find a large customer base outside Kenya, particularly in Tanzania's urban centers of Dar es Salaam and Arusha.

"In both cities, South African retailer Shoprite has already opened stores, but market sizes and economic stability suggest there is room for more," the analysts said in a recent report.

The Shoprite Group of Companies is the largest food retailer in Africa. Over all, it runs 886 outlets in 17 countries across Africa, the Indian Ocean islands and southern Asia.

Another Kenyan supermarket chain, Uchumi - which means "economy" in Swahili - has a branch in Uganda, but has suffered vast financial woes. Uchumi shut down in June 2006 after 30 years of business, saying it could no longer sustain its losses and blamed mismanagement, political interference and competition.

Local media described the closures as "one of the greatest corporate disasters in the history of independent Kenya."

A government-led rescue plan saw the reopening of all but 3 of 17 Uchumi stores in Nairobi. The Ugandan outlet, operating under a local franchise, has continued to operate.

So-called "big-box stores" in the United States, like Costco, have long been the target of critics who say their discounted goods drive out "mom-and-pop" shops and sap communities of their local flavor.

But Nakumatt, which has been in business for more than 20 years but only recently supersized its stores, has been quick to state that it was not out to hurt small businesses or local farmers.

Earlier this month, Nakumatt, which in the past has stocked mainly foreign goods, pledged to support local industry.

"We stock local products, we deal with local investors, local banks," said the Nakumatt operations manager, Thiagarajan Ramamurthy.

Owners of the local corner kiosks say they do not see much of a threat.

David Mwauria, who has been selling flowers on the roadside just steps away from the newest Nakumatt in Nairobi - a hulking stone building - said that he has had even more customers since the store opened weeks ago.

"Some customers come here to buy, some go there," he said. "There is enough business to go around."

Kenya Facing Impeding Energy Crisis Due To Fast Growth

Business Daily Africa 27/july/2007
http://www.bdafrica.com

Like many of the countries whose economies are on the take-off, fueling the growth of the Kenyan economy has emerged as one of the most pressing problems facing policy makers.

The past four year of steady economic growth has seen demand for electricity rise at the rate of 10 per cent annually against a supply growth of about 8 per cent kicking off a reserve thinning process that key players are now seeking to address by shifting the activities of bulk consumers to off peak hours.

More recently, the total electricity supply rose by 15.4 per cent from 466.1 million KWh in April, to 538.2 million KWh in May 2007.

But progress on this front has been dimmed by a steep rise in peak demand from by 18 per cent from 827 MW to 975 MW by the close of March this year against an installed capacity of 1037 MW.

As the economy continues to expand, demand is expected to continue rising, raising the possibility of an energy crisis that may conversely slowdown the growth.

Demand for electricity is expected to grow at an annual rate of five per cent in the next 10 years posing a big challenge to players in the electricity generation business.

Analysts say the pressure on electric power is mainly because Kenya lacks alternative energy sources such as coal and oil, making the country largely dependent on hydropower, which accounts for about 60 per cent of the total electricity supply.

In the first quarter of this year, total consumption of petroleum products declined by 4.4 per cent from 696 000 tonnes between January-April, 2006 compared to 666 000 tonnes in the first quarter this year.

Yet overall consumption of petroleum products rose significantly helped by heavy demand from the manufacturing and transport sectors.

Besides, consumption of Liquefied Petroleum Gas (LPG) rose by a margin of about 59 per cent in the last four years signalling a shift in lifestyle at the household level away from wood-based fuel.

The Petroleum Institute of East Africa (PIEA) reckons that this development should boost current per capita consumption of LPG to more than 12kg -- that is considered suitable for the Kenyana economy.

Continued growth in demand for petroleum products in the region has recently pushed Kenya Pipeline Company — a key supplier to operational limit.

Total throughput by the Kenya Pipeline Company between 2002 and 2006 increased by 39 per cent, mainly due to increased economic growth in the region and also the extra burden imposed on diesel consumption by thermal electricity generators in Nairobi, Eldoret and Uganda.

Renewed Libya/Kenya Energy Co-operation following President Kibaki’s trip in May has opened the way for state owned Tamoil to be involved in the financing of the Mombasa refinery upgrade, pipeline capacity enhancement, development of LPG imports and storage facilities.

The refinery upgrade is estimated to cost $250 million while the LPG facilities are at $45 million.

Further, the bilateral trade co-operation is expected to make available to Kenya petroleum products and crude oil at concessionary prices, under terms that were set to be discussed this July in Nairobi.

Tamoil are already in Kenya downstream marketing after acquiring Mobil assets in Nov 2006. Tamoil also won the tender (51per cent participation) to extend the pipeline from Eldoret to Kampala in partnership with the governments of Uganda and Kenya.

Libya is an oil and gas producing OPEC giant with Europe as its main market.

Her entry into Kenya is projected to provide between 30 per cent and 40 per cent of national requirements.

It is understood that a Kenyan ministerial delegation to Venezuela in June discussed possibilities of future sales of petroleum to Kenya by Venezuela at concessionary rates. Co-operation in areas of oil and gas exploration was also among other issues discussed.

Kenya recently opened an embassy in Brazil to promote business relations with mostly oil-rich South American countries.

Venezuela which produces crude oils that are heavy and mostly with high sulphur content and destined mainly for the USA market.

President Hugo Chavez has of late used its huge hydrocarbon resources to extend its influence across the globe.

Recently , he engaged in a virtual nationalization of oil production assets in the country thus reducing control of oil by international oil majors.

Only refineries with sufficient cracking and sulphur removal capabilities would benefit from Venezuelan crude oils.

The Kenya Government should exploit alternative energy sources so as to sustain the economic growth that Kenya is experiencing.Over relience on hydroelectic power and oil is not good for the economy.It makes the country vulnerable to international price changes for the case of oil.
What, do you guys think, are the alternative sources of energy that Kenya should invest in?

The Kenya Government should exploit alternative energy sources so as to sustain the economic growth that Kenya is experiencing.Over relience on hydroelectic power and oil is not good for the economy.It makes the country vulnerable to international price changes for the case of oil.
What, do you guys think, are the alternative sources of energy that Kenya should invest in?
^^
Geothermal power is the way to go. I understand that only about 30% of the country's geothermal potential has been harnessed.

Other sources:

1) Wind Power-like the ones on Ngong hills. Kenya has vast plains and lots of elevations where wind can be harnessed easily for power potential.

2)Solar Power- A radical idea but I think if most houses run on this type pof power, there would be less pressure on the grid thus freeing more power for industrial use. (Maybe some large scale solar power plants in North Eastern province like they have in Rwanda may also work).

3)Biomass-Mumias sugar company has began producing electricity from sugar production and its supplying a good portion to the national grid. More sugar companies in Western Kenya can follow suit.

4)Power pooling-This is what i think will be the most effective way of increasing power supply in future. linking all East African power grids into one large grid and also joining the Southern African grids with it. Uganda has oil and the Nile (Thermal and very large hydropower stations are possible) Tanzania has coal (Thermal) and Uranium (Nuclear power if we ever get the greenlight from G8 and resources plus manpower to set a nuclear power plant).

...I just hope something is done before Kenya slides into what we refer to here in Uganda "load shedding" (Power rationing). Im writing this using a standby generator as power is very unstable.

3)

The Kenya Government should exploit alternative energy sources so as to sustain the economic growth that Kenya is experiencing.Over relience on hydroelectic power and oil is not good for the economy.It makes the country vulnerable to international price changes for the case of oil.
What, do you guys think, are the alternative sources of energy that Kenya should invest in?

If anything, they can learn from the power crisis in Ghana, West Africa where they relied on the hydro electric power source that Nkrumah built in the 1950s until today!!! :bash: :bash:

I am liking the postings on this thread keep em coming fellaz

Written by Nick Wachira

Kenyan business leaders in the private sector rarely come out in the open to comment about policy issues of strategic national importance without raising political eyebrows.

Yet, on a daily basis, they wrestle with major national and regional issues that are currently shaping the face of Kenyan business and could affect the country’s national competitiveness.

These may range from local and regional taxation, infrastructure, trade policy, monetary policy and even labour law. Changes in all these issues affect business confidence.

To gain a sense of what captains of Kenyan industry feel about how the country has performed and where it is going, Nick Wachira spoke to East African Breweries group managing director Gerald Mahinda.

BD: As an corporate chieftain has worked outside Kenya, deals with regional business issues on a daily basis and one who has helped turn around key African companies, what would you say are the key achievements that Kenya has made in the last five years?

Mr Mahinda: These are quite a number. They include growth the capitals markets in Kenya, I am made to understand Kenyans went in hordes to Kampala to line up for the last Stanbic IPO! Tourism, marketing outside our conventional Anglophone markets has benefited Kenya immensely, growth of telecoms has been phenomenal and construction industries are struggling to get sufficient cement to meet their needs, certain tax policies have also been very friendly to the common man in trying to ensure he too gets a bite of the national cake.

The CDF phenomenon was a first and has seen development drill down to village level despite political affiliations.

This was as you know not possible in the past. Overall there is a lot to be thankful for and the business profits that most organisations are posting is evidence of this.

BD: The question of political risks and public governance used to feature a lot when companies were considering huge investments in Kenya, is that still the case? What has changed in terms of investor confidence and how this affected EABL’s capital expenditure programme since 2002? Where is the company going?

Mr Mahinda:The phenomenal growth of the NSE and the move towards electronic trading is by itself a massive show of investor confidence.EABL has been on a growth momentum in the past few years.

Several milestones have been met in the past five years such as increase in profits from about Kshs 2 billion in 2002 to 9 Billion in 2006. It is also in this period that EABL’s market capitalization hit the $1 billion mark.

For EABL our capital expenditure is on track and as per strategy and barely influenced by investor confidence. For we business people, the political landscape is of little interest to us except where it impacts on business environment.

Utopia would be when business environment and political issues are totally divorced enabling the politicians to do politics and the business people to do business.

BD: How does the change in local business confidence related to what is happening in our neighboring countries and Africa as a whole?

Mr Mahinda:Yes, the global economy has improved in the past few years and the same is true for East Africa. Tanzania has attracted a lot of foreign investments mostly in the mining sector in the region while Kenya continues to attract a large number of intra-regional investments. Uganda has also had an increase in the industry sector.

This means that the region degree of economic freedom has improved and those sentiments are being felt around the world improving the regions prospects as an economic hub.

You saw the recent visit by the Chinese Head of state to several African countries. Non can be more compelling than that to prove that we ( Africa) are indeed the next “big thing” in world economics.

Yes I think countries are continuously repackaging themselves and making them more attractive. Rwanda’s investment policy is known to be one of the most attractive in this regard.

BD: You recently wrote an op-ed where you commended the role of local capital markets in funding economic growth in the region. In what way, do you think the NSE should reposition itself as a financier of business development in the region? Will cross listings and convergence of African stock exchanges and monetary policy regimes help?

Mr Mahinda:Certainly. We need to first and foremost stop seeing ourselves as Kenyans or Ugandans or Tanzanians…We are East Africans…include Burundi and Rwanda and we are looking at a population in excess of 100million…imagine a market size of that number and imagine a borderless business environment. The potential to trade is massive.

I think the responsibility is not just on the NSE but on the DSE, KSE to jointly work together in enabling a faster more friendlier EA stock market. If Kenya is anything to go by, once these markets are synergised the economic benefit and opportunity is immense. For traders and business people as well to tap into 100 million plus people is a great advantage.

BD: The prevailing opinion has been that countries like Kenya must overly on foreign investors to grow, but now we are seeing a major rise in capital nationalism. Does Africa need to overly on foreign capital and in what situations can you make a case for Kenyan companies or the government to tap into international capital markets as is currently planned?

Mr Mahinda:I have always been of the opinion that Africa does not for one need donor funding…as we speak Kenya is the best example. In the recently read Budget, Kenya was literally self financing and had 95 per cent of its revenues from local collection. If you look at the Kenyan “chama” phenomenon there lies an opportunity for government to move fast and incentivise local collective borrowing and investment.

These “chamas” are now multi million entities run professionally. Ask Trancentury for their genesis to understand what I mean. There will certainly be times when international investors may be required but even this is not for long…Africa is awakening and we must be a apart of this new change. We cannot be at the periphery of change, we must be that change that we seek.

BD: With the resurgent economy, many big companies are fast finding themselves becoming big fishes in small ponds as far as seeking further growth locally. Should Kenya map its national strategic interests in key industries with the pan African strategy pursued by Kenyan firms?

Mr Mahinda:Every company’s aspirations are to be internationally recognized while giving great returns to its stakeholders. Companies in Kenya are no different. By tapping the potential available regionally and eventually on a global level, they assert themselves. There is a huge potential in the pan African market and this has not escaped the notice of many companies including EABL.

As a solid business with years of experience, we have got a few lessons that we can share... that as much as one wants to grow and expand one must also ensure they have fully tapped into the local market not just from a competitor entry point of view but also from a resource maximising point of view. Speed without a laser guided trajectory can be as devastating as speed without control.

BD: In what way should Kenya at its current stage of growth reposition itself to both gain business influence and power across Africa and around the world?

Mr Mahinda:By improving access to employment, education, infrastructure and investment. Kenya has already began repositioning its self as a force to reckon with the Africa. However all these can only be done with the right leadership…we must continue and enhance the running of government as a private business.

The recent turnaround of loss making parastatals is a classic example. We will need to run government as any business in the world. With checks and balances and with consequences and reward. We must then have an outlook to influence the world in many ways through our extraordinary skills and services but also our exceptional products.

At the end of the day, nurturing the optimal talent base for this country is perhaps the most critical component for this, moving forward.

Written by Bob Bell & James Makau
27-July-2007: Kenya has emerged second to Nigeria among African recipients of foreign exchange remittances with households headed by women leading beneficiaries of offshore money transfers from individuals.

The money is largely used by relatives to fight poverty through education and health support as well as investments in real estate and shares listed at the Nairobi Stock Exchange.

Remittances are now the single largest source of forex ahead of tourism and horticulture in Kenya and, in Sub-Saharan African (SSA) countries, the transfers exceed official development assistance, a new report by the International Monetary Fund (IMF) says.

The remittances have the potential to strengthen local currencies were they to be injected at the same time in an organised manner, but have had little impact because they are disbursed piecemeal throughout the year.

In Kenya, it is estimated that at least $1 billion is being remitted annually

up from about $750 million in 2005. Between 45 per cent and 65 per cent of the money is received informally and therefore not captured in official records.

They funds alleviate poverty, smooth consumption, affect labor supply, provide working capital, and have multiplier effects through increased household spending. Anecdotal evidence suggests that most often women head the recipient households.

For the most part, remittances seem to be used to finance consumption or investment in human capital, such as education, health, and better nutrition.

But in Kenya, remittances are being used also for investment in the stock and the property market. Recently Nairobi Stock Exchange chairman Jimnah Mbaru revealed that his company Dyer & Blair Investment Bank was in negotiation with several clients abroad on how they could invest their savings in the stock market.

Property developers and managers Villa Care chief executive Daniel Ojijo said that 40 per cent of the buyers for new houses are actually Kenyans residing abroad. The realtors have promotions planned for the diaspora.

“Property has minimal risks for those residing abroad and many are buying for rental receipts waiting until they come back. They may even decide to live in the houses once they come back,” Mr Ojijo said.

Another study quoted in the IMF paper say that migrant remittances to Ghana serve to smooth household consumption and welfare over time, especially for food crop farmers, who are typically the most disadvantaged socioeconomic group.

In absolute terms Kenya, Nigeria, and Senegal are the largest recipients of remittances in the region.

Remittances form a quarter of all exports for at least four countries on the continent. For Lesotho, Cape Verde, Uganda, and Comoros, for instance, remittances have since 2000 amounted on average to more than 25 per cent of export earnings.

“Remittances can also contribute to stability by lowering the probability of current account
reversals. Because they are a cheap and stable source of foreign currencies, remittances are
likely to stem investor panic when international reserves are falling or external debt is rising,” says the report.

It goes on to say that remittances may in fact be self-correcting as an overvalued currency deters remittances, and hence Dutch disease effects - impact of remittances on the real exchange rate and export competitiveness - are not sustained.

It says: “However, studies in Latin America and Cape Verde have found evidence that remittances do have Dutch disease effects on the competitiveness of the tradable sector.”

In Sub-Saharan Africa (SSA), remittances are part of a private welfare system that transfers purchasing power from relatively richer to relatively poorer members of a family or community.

But the same report say that while remittances can facilitate the entry of households into formal financial markets, only a fraction of the sums remitted by migrant workers from SSA finds its way into the formal system.

“The high fees formal providers charge is a deterrent for poor migrants who want to send small sums of money home, and even if a migrant has access to banks the recipient may not. So migrants rely more on import-export operators, retail shops, and currency dealerships—but there are no records of the transactions these conduct,” the report says.

Banks are not always interested in the small remittances market and analysts quoted find that concentration in the banking sector, financial risk, and exchange rate variability typically increase transaction costs.

“Financial sector reforms that address any or all of these structural problems in the receiving and sending countries are also likely to lower the cost of remittances,” says the report.

In 2005, remittances to the 34 SSA countries reporting are estimated to have been about US$6.5 billion.

Remittance flows to SSA are relatively small, four per cent of total remittances to developing countries and just 33 per cent of those to India, which receives the most. In contrast, countries in Latin America and the Caribbean received 25 per cent of all remittances, as did the countries of the East Asia and Pacific region.

Relative to GDP, too, the volume of remittances to SSA is generally smaller than in other developing countries. On average remittances in the region are about 2.5 per cent of GDP, compared to almost 5 per cent for other developing countries.

However, there are striking exceptions in SSA. In particular, remittances were almost 28 per cent of GDP in Lesotho, and more than 5 per cent in Cape Verde, Guinea-Bissau, and Senegal

guyz, with all this good stuff happening at this rate is it realistic to say that 2030 goal is achievable? and what are the basic mandatory foundations and changes that need to be done ASAP. sure enough the development is there but something is not being that HAS to be done, POINT IT OUT personally i think the missing essence is ROADS AND AN EXTRA VIBRANT LOCAL MANUFACTURING SECTOR i would have added ICT but when the fiber optic project is done its gonna be boom in that sector. we need to produce and export more locally manufacutered goods and our export should be dominated by "MADE IN KENYA" goods. this leads to the need of top quality roads and railways system, how many businesses have we lost to SA because we do not have descent transportation infrastructure? many of 'em. the roads issue just pisses the crap out of me coz we cant even mantain our roads and when we do it takes years to get a single simple project done why? ask the gods they might give u a better answer. btw i went to a local mall here in usa and i found white t-shirts and their tags read "MADE IN KENYA" you bet it, i bought 5 of them. your views and opinions please.

Nairobbery, the finance PS is promising something about the infrastructure which is the greatest concern you are raising here; see this article

Kenya economy seen growing 6.3pct in 2007 - government official
Wed 25 Jul 2007, 15:01 GMT

[-] Text [+] NAIROBI (Reuters) - Kenya's economy is seen growing 6.3 percent in 2007, up from 6.1 percent last year, according to first quarter statistics to be published soon, a senior government official said on Wednesday.

The government is keen to capitalise on improved economic performance as it seeks re-election at polls in December, reinforced by a central bank projection of 8 percent growth by 2008.

"Our first quarter figures show growth of 6.3 percent (in 2007), which is quite encouraging," Joseph Kinyua, Finance Ministry permanent secretary, told a lunch hosted by the oil sector. "Those figures should be published in the coming days."

Kenya has been on the road to economic recovery since President Mwai Kibaki's administration came to power in 2002, when growth was just 0.6 percent.

Inflows from Kenyans abroad and foreign investors have driven the Nairobi Stock Exchange to record highs this year and propelled the shilling to gain about 5 percent versus the dollar since the start of the year, making it one of the best-performing emerging market currencies.

Last month, Kinyua said his ministry expected to see the shilling's strength wane in the coming financial year as infrastructure spending spurred demand for foreign currency.

SHILLING STRENGTH

On Wednesday, he reiterated the government's commitment to boosting infrastructure, which he said was the private sector's top concern, and his views on the local unit's direction.

"Although we believe the shilling may be a bit hard, as the economy continues to grow ... it is likely to weaken," he said.

Exporters say the shillings gains have eroded the competitiveness of their products. On Wednesday, the Kenyan currency was trading against the dollar at 68.00/10, down from 67.05/15 shillings a week ago.

Earlier this month, Kibaki said the country's fourth general election would be held in December, and that he would even like to see them held sooner.

Robust growth, driven in part by soaring revenues from tourism, will increase his confidence.

But some critics say the growth figures reflect only a correction after years of decline under Kibaki's predecessor Daniel arap Moi, whose legacy of mismanagement and graft are blamed for ruining an economy once envied by the region.

International donors say east Africa's biggest economy needs to grow by 10 percent in order to halve the number of people living in poverty by 2015.

Critics say growth is still hampered by high levels of crime, corruption and patchy infrastructure and that it has not trickled down to the poor.

© Reuters 2007. All Rights Reserved

Why dont they just give the roads to private companies. Id rather pay tolls to use good roads than pay taxes to a government that is slow on improving the roads.

Why dont they just give the roads to private companies. Id rather pay tolls to use good roads than pay taxes to a government that is slow on improving the roads.

me too, the government hasnt fixed the roads so why the heck not try a new methon like what my friend kenguy suggests. id rather pay toll and use a smooth well organised highway

I've travelled on a number of the country's main highways in recent months and here is my opinion:

1) Nairobi-Mombasa highway:This has to be the best highway in East Africa. Most of it is in perfect condition and has been built to international standards (big up to straburg construction company). Only a small section around Mariakani before entering Mombasa still needs some work done. A new dual carriageway is being built from Machakos turn-off to JKIA linking the Athi river/ Mlolongo area to the rest of Nairobi.

2) Nairobi-Nakuru: Around 70% of this highway is in almost perfect condition upto Gilgil. Gilgil-Nakuru section is being rehabilitated 24/7 and the work resembles that of Mombasa road. The Nakuru dual carriageway is being extended upto lanet. It should be complete by the end of the year.

3)Nakuru-Kisumu: If there is a hybrid between a cattle track and lunar surface that passes for a road- this is it! It should be declared a national emergency and I wonder why the government has been so slow on Rehabilitating it.

4)Kisumu-Busia: Very good smooth road upto the Kenya /Uganda border. Wish other roads were like this one.

5)Nakuru-Eldoret: This is almost like the Kisumu road though slightly better. though some sections are barely motorable. Again-emergency work needs to be done.

6) Kisumu-Bungoma: The road is in good condition IMO. Id place it under motorable. A good number of minor roads in Nyanza and Western have been redone but I feel more needs to be done.

7) Nairobi-Namanga: Kenya's main southward bound road is OK upto the Tanzania border. But compared to the road on the Tanzanian side, it looks neglected. Thank God it will be fixed as part of a joint E.A.C. infrastructure project.

8)Nairobi-Nyeri: This highway is 80% perfect. Most of the work is nearly complete. The problem areas are most of the Nairobi-Thika dual carriageway and a small section around Karatina town.

9)Nairobi-Meru-Embu: This highway has been completely redone and I have no objections so far. I just hope the standard of the highway remains as it is for a long time.

10)Nyeri-Nanyuki: This highway is perfect. Not even a crack. the best open country highway in the land.

11)Mombasa-Malindi:God have mercy!!! a total overhaul is needed. But I wonder when that will happen.

There are some important roads such as Kisumu-Kisii-TZ, and Nairobi-Garrissa which I hear is terrible that I haven't trevelled on. Though I must say the roads have improved. My problem is the speed of work and the quality.

Obviously, Nairobi's highway upgrades and those of major cities are still in the pipeline (again my main complaint is the speed of inception and construction.)

I've decided to post an interesting article I read on the BBC website

If you 'd like to cut to the chase these are the products they are on about - http://www.craftvillageuk.com/site/web/products?ProductId=3&catPage=1


A group of carvers in western Kenya are looking forward to the first Simpsons movie hitting big screens around the world, even though they are unlikely to see it.


Marg bust from http://www.craftvillageuk.com

Although most of them in the remote village of Tabaka in Kisii have never watched the animated TV show, Homer, Marge, Bart, Lisa and Maggie have changed their lives and the new film should see demand for their work soar they hope.

Soapstone carving is a traditional craft passed down from generation to generation, and the Abagusii tribe is renowned for their carving prowess.

So when Twentieth Century Fox designated the Tabaka soapstone carvings as official Simpsons merchandise in July 2006, their lives improved overnight.

The Tabaka Classic Carvers are licensed to produce 12 models of the show's characters, and they are keen to expand their portfolio.

Pauline Kemunto and her husband work with the Simpsons team in Tabaka; he carves the figures and she smoothes the soapstone afterwards

"I don't know who they are," she says about the dysfunctional cartoon family.

"But I like them because I earn from them."

Accident

The team carve replicas of the characters that sell for $6, a huge improvement on the $1 per piece they earned before The Simpsons came to Tabaka.


Carving
We know the physical characteristics of the Simpsons so well that we don't have to copy from anywhere
A Tabaka carver

The business employs around 80 people - the carvers, the miners who provide the soapstone and the women who wash and polish the finished statues.

The head of the team, Daniel Oigo Mogendi, said he won the tender by accident when he had gone to the capital, Nairobi, to collect payment for a soapstone chessboard.

His client asked him to carve a prototype of Homer, the big-bellied family man who is fond of a beer.

"I'd seen The Simpsons once on television, but I didn't care, I still carved it," he explains.

"The sample was very heavy and they decided to make it lighter."

Now, all the characters are as familiar to him as his family, including minor characters such as Springfield police boss, Chief Wiggum.

Favourites

The whole project is the brainchild of Paul Young, who was temping on building sites and as a shop fitter in the UK when he came up with the idea in 2004.

Carvers
At first the carvings were too heavy and had to be made smaller

"My sister used to live in Uganda and would send back traditional African carvings. I thought if you could get something with a more Western spin it could do well," he says.

It took more than a year for the Tabaka carvers to come up with a sculpture that would work.

"At first we tried full figures. But the hands would snap off during shipping so we'd try them with Homer's hands in his pockets, but then there was the weight issue," he says.

Eventually a bust was felt to be the best solution and the carvers now reproduce the famous features without even looking at the stone.

"We know the physical characteristics of The Simpsons so well that we don't have to copy from anywhere," says one of the carvers.

"The measurements are even engraved in our memories."

Slideshow Bob (Copyright Twentieth Century Fox)
It takes skill to replicate the characters exactly each time

Packing boxes stacked against the walls of the grass thatched hut that serves as their studio reveals the far-flung destinations of the Tabaka soapstone carvings - the US, the United Kingdom and Italy.

The famous figurines are about to go on sale in the UK at the Craft Village UK, priced at about $40.

Mr Young says 30% of this goes to Kenya, not just to the carvers but to pay for the print work, quality control and packaging.

"My favourite carving is of Sideshow Bob," he says.

"He's not my favourite character, but it shows how gifted the carvers are as it's replicated exactly with such skill each time."

Just what is drawing all these companies to Nairobi???

http://www.eastandard.net/hm_news/news.php?articleid=1143972154

Business News

Celtel Africa relocates to Nairobi
--------------------------------------------------------------------------

By Kenneth Kwama

Mobile Telecommunication Company Celtel International is set to relocate its regional office from Netherlands to Nairobi.

Celtel Kenya CEO Mr David Murray confirmed the move, saying the presence of Celtel-Africa offices in Nairobi will greatly benefit operations of the Kenyan office and offer several job opportunities to locals.

"Both offices will work independently, but the fact that the Africa office will be located here is an added advantage because it will offer us a number of synergies and also support local operations," Murray said in an interview.

This is seen as part of the parent company’s move to expand and consolidate its position in the African market.

The move comes hot on the heels of a recent announcement by Mobile Telecommunication Company Group (MTC) of Kuwait that it was setting up a US$10.5 billion investment fund to expand mobile telecommunication operations in Africa through Celtel International.

MTC owns Celtel, which has a presence in 14 African countries including Zambia, Kenya, Uganda, Tanzania, Nigeria, Niger and the Democratic Republic of Congo, amongst others.


Endorsement of the country as an excellent destination for Foreign Direct Investment


MTC also disclosed it was embarking on an expansion programme code-named Acceleration, Consolidation, Expansion (ACE), aimed at tripling the company’s customer base to 70 million subscribers by 2011.

Celtel Africa currently has about 25 million subscribers. Murray said the move was a serious endorsement of the country as an excellent destination for Foreign Direct Investment and good logistical network.

Celtel International gave a hint of its intentions for Africa last year when it pioneered the development of one network across East Africa.

This later expanded to cover Congo and the DRC. This, Murray said, significantly lowered the cost of international calls across these countries by eliminating interconnectivity costs.

"It means if you are roaming on a Kenyan number, you are able to remain within the same network, thus eliminate other costs that come with international calls," he said.

Celtel Kenya says it is set to add a number of new products to its product line up and also add value to the already existing services as part of its expansion plans.


Firms have been lobbying for the removal of excise duty


"We don’t want to exactly say what we are planning to do, but all actions are intended to give the best value to our customers," Murray said, adding that one of the company’s tariffs called ‘Mambo 6’ is very popular amongst the youth and has so far netted over 100,000 new customers.

"These are people who want to talk to their friends and family and have been finding it easier and cheaper to do this through this tariff. We still expect the number to grow," said Murray.

He, however, said that the mobile communications sector is yet to have a level playing field, despite attempts by the Communications Commission of Kenya (CCK).

Both Celtel and Safaricom have been lobbying for the removal of excise duty on mobile services. Telkom Kenya, which has also started offering wireless services, pays Value Added Tax (VAT), but not excise tax.

Murray praised the decision by the CCK to implement a number of reforms, including putting an upper limit to cross-network call charges, saying it was good for growth of the industry.

He said the sale of telephone lines by his company had jumped by 30 per cent since implementation of the new directions.



--------------------------------------------------------------------------------

That's a good move by Celtel International and definitely a vote of confidence in Nairobi. I have always wondered how wise it was to have their head-office being based in the Netherlands away from all their businesses.

My guess is that kenya is favoured by its geographical position. Celtel largely covers the East and Central African region and is taking advantage of Kenya's position as the regional communications hub.

Kenya: Agriculture Drives Economy to New Hight




East African Standard (Nairobi)

1 August 2007
Posted to the web 31 July 2007

Washington Gikunju
Nairobi

Boosted by positive growth in agriculture, manufacturing, hotels and restaurants, transport and communication and financial sectors; the economy has registered a 6.3 per cent growth for the first quarter ended March 31.

This is compared to a 4.1 per cent increase in Gross Domestic Product (GDP) in a corresponding period last year.


The unprecedented quarterly economic survey, released yesterday, puts Kenya at par with South Africa as the only sub-Sahara African countries that have adopted the internationally recommended Quarterly National Accounts (QNA) system of economic performance survey.

The figures generally show an economy firmly on the growth trajectory except for the coffee sub-sector, which recorded a negative production growth of 5.9 per cent from 17.6 metric tonnes (MT) in the first quarter last year to 16.6 MT this year.

Presenting the economic survey on Tuesday, Planning and National Development minister, Mr Henry Obwocha, said the move to QNA is part of the country's migration process to the International Monetary Fund's (IMF) recommended Special Data Dissemination Standards (SDDS).

"Kenya is currently subscribed to IMF's General Data Dissemination Standards (GDDS) and hopes to graduate to the more rigorous SDDS of which QNA is one of the prescribed data requirements," said Obwocha.

While expressing displeasure with the negative growth in the coffee sub-sector despite a total Government assistance package of about Sh6 billion in the last two years, Obwocha however, noted that the industry was likely to record positive growth next year given its turnaround time estimated at about three years.







The agriculture sector recovered from the drought experienced in the first quarter of last year to record an overall growth of 12 per cent up from 0.3 per cent in a similar period last year.

Tea production went up by 119.7 per cent to 108.7 MT in the period, horticulture exports rose by 0.3 per cent to 44.5 MT while milk production improved from 75 million litres to 108m litres.

The manufacturing sector grew by 7.4 per cent compared to 7.1 per cent in the first quarter of last year.

During my search, I stumbled over this. Great news for Kenya:cheers:


Kenya economy expected to grow by 7%

2007-07-31 15:42:15

APA-Nairobi (Kenya) Kenya is expected to achieve a 7% Gross Domestic Product growth rate this year, Planning Minister Henry Obwocha said on Tuesday.

Obwocha said the growth is due to demand for goods from Kenya from the regional market.

Speaking in Nairobi while releasing the first quarterly GDP estimates, the minister however warned that fluctuations in global prices of fuel could undermine the expected economic growth.

“Demand for goods from Kenya by the regional market is expected to further boost economic growth in the country but this could be undermined by fluctuations in global oil prices of fuel,” he said.

He said agriculture, manufacturing, tourism, finance, transport and communication sectors have continued to provide the needed momentum in economic growth in Kenya.

Nairobi plans Africa’s first seven star hotel

Only days after its ISO 9001/2000 certification, Kenyatta International Conference Centre Corporation, the parastatal that manages the conference centre, is planning to construct a Shs 17 billion complex to tap into the ever growing international conference hosting.

The complex expected to be completed in three years’ time will be modelled along Malaysia’s Kuala Lumpur International Conference centre will house Africa’s first seven star hotel complete with 220 VIP suites 20 of which will be presidential suites in internationally recognised and certified standards.

If approved, work on the site could begin as early as next year once the ongoing shs 1.2 billion rehabilitation programme on KICC is completed. The current phase of the rehabilitation is expected to be completed by the end of the year.

Philip Kisia, KICC Managing Director, revealed that the corporation had already submitted the plans to the Ministry of tourism, treasury and office of the president for approval.

“It will be a complex,” Kisia said, “complete with several shopping malls, bars and restaurants, cinema halls, duty free shopping complexes, hotels, car rentals, health clubs, curio shops, salons and barber shops, churches, mosques and other prayer centres…a complex providing anything and everything anybody can dream of in terms of needs.”

It is expected that once complete, the complex will transform KICC into a city within a city in the same lines as the Sandton Conference Centre in South Africa or Kuala Lumpur in Malaysia.

Kisia says: “The reason why the government and KICC board of directors are committed to this project is because modern conferencing is expanding very rapidly going beyond the capacities of the conferencing facilities which were constructed even in the 1980s through the 1990s because they are very limiting in the fast emerging scenario, yet it is extremely lucrative.”

The conference centre was built in late 1960’s but it opened its doors as a meeting facility in 1970s after it was officially opened in September 1973 by the late President Mzee Jomo Kenyatta.

It is estimated that when the convention centre is completed, it will increase the revenue generated by the center as a state corporation from shs 250 million to shs 2.3 billion annually. In the last two years, KICC has increased its turnover by 250 percent.

“The revenue generated to the national economy by the conference center annually is expected to be upwards of Shs 25 billion while employing more than 500 people on a permanent basis. Not to mention the huge number of business opportunities expected to be generated,” said Kisia.

According to the plans drawn by the KICC board, the convention centre is expected to have underground tunnels connecting its complex which will also house some shops to enable those strolling around the centre to do their shopping.

Parking facilities will also be underground, while the helipad on top of the KICC main twenty-eight floor structure is being revived to begin handling helicopter landings. Helicopters will be used to provide shuttle services for visitors from the airports to the convention center and other destinations.

The plans document possibilities of constructing a cable car network that will ferry passengers from the convention center to various parts of the city above the Nairobi skyline at a fee.

The convention center according to the plans, will occupy the area from Garden Square restaurant, all the way to Sheria House, Public Service Commission (PSC) headquarters and the Comesa grounds across parliament road part of which is currently being used as a public pay car park and open grounds for exhibitions and other activities.

The KICC boss says the ambitious plans for the convention are aimed at positioning Kenya to compete effectively in international conference tourism that has traditionally been a preserve for European and American countries.

In the recent years, Asian countries have emerged as competitors in preferred destination for conference tourism.

“Once the convention centre is complete,” Kisia said, “our only competitors will be South Africa and Egypt, but we are determined to dominate this market in the entire East African region, and the Comesa trading block because we have the capacity and the widest range of attractions to offer than any of our competitors.”

Keep following on that ernestombayo7

Kenya Strikes Coal

Kenya is on the verge of striking commercial coal reserves, which could change its energy security situation as it strives to bridge a widening electricity supply gap.

Coal deposits have been found in 11 out of 20 wells drilled so far in sections of Kitui and Makueni districts, a Ministry of Energy report shows.

The wells are spread over an area of 20 square kilometres, part of a 400 square kilometre area targeted for prospecting.

Coal samples from the area that were analysed in South Africa have returned a positive assessment, with its quality being classified as comparable or better than that found in South Africa.

The ministry has invited independent consultants to do a feasibility study on the deposits. Tenders towards that end were advertised on Monday last week. Coal prospecting is now concentrated within the Mui and Yoonge areas although it will eventually expand to other areas. The whole area under target stretches about 80 kilometres with a width of about five kilometres.

The area is within a zone known as Permo-Triassic, a mineral rich zone that extends from South Africa through to Somalia.

The 11 wells have confirmed coal deposits ranging from 1.88 to 12 metres in coal seam (thickness). The depth ranges between 75 and 320 meters. The analysis found that it had almost equal calorific value with South Africa’s, its ash content was lower, meaning it has less foreign matter. It was also found to be more volatile, with less fixed carbons.

But it has more moisture and sulphur content. However, higher sulphur content is seen as an added advantage because it can be used in other industrial processes.

Most local coal is used by cement manufacturers and is mainly imported from South Africa. Bamburi Cement, the country’s largest cement maker, uses over 150,000 tonnes of coal every year, mainly from South Africa.

In South Africa, electricity is four times cheaper than Kenya’s. But Kenya seems to have decided to shift gears based on Ministry of Energy projections for electricity investment in the next 20 years.

The plan indicates that Sh133 billion will be invested in coal projects to generate additional 1,000 megawatts or about 20 per cent of the national electricity needs. By then, Kenya will have electricity generation capacity of 4,871 megawatts against a demand of 4,620 megawatts - a reserve of five per cent.

Current capacity stands at 1,045 megawatts (until October when it will be 1,105megawatts) against a peak demand of 1,082 megawatts creating a reserve margin of minus four per cent.

Kenya’s situation is such that 67 per cent of total power is generated from hydro sources, 10 per cent from geo-thermal and 23 per cent from thermal which is price sensitive to fluctuating international fuel prices. One advantage of coal is that it is readily available as long as reserves last and are therefore not affected by weather patterns.

According to Mr Stephen Mutimba, the Director of Energy for Sustainable Development Africa, an energy management consultancy group, the discovery is opportune for the country as it needs a lot of energy to push the vision 2030 development agenda. However, there have been fears over polluting attributes of coal mining.

“Our carbon emissions are low unlike in other countries like in Europe where they are closing their coal mines in favour of renewable energy because their carbon emissions are already very high,” said Mr Mutimba.

Coal is also used to increase heating of iron and steel making furnaces, heat cement making kilns, making of zinc batteries and as a liquid fuel. According to the World Coal Institute, coal fuels 40 per cent of the world’s electricity.

The institute forecasts that coal will continue to play a key role in the world’s energy mix, because if rising demand for electricity and the need for steel in construction, car production, and demands for household appliances.

The institute says proven coal reserves could last for the next 155 years, compared to oil and gas reserves which can last for between 41 to 65 years at current production levels.

German Hotel Chain Eyes Kenyan Market

Source:Business Daily Africa

An international hotel chain from Germany wants to set up resorts in Kenya as the sector reaps great returns from the growing tourism market.

Kenya has been identified as one of the countries that will add value to the portfolio of the chain known as Kempinski Hotels Worldwide, portfolio. Tanzania and Namibia have also been identified in the company’s strategy to open five new hotels in Africa by 2009.

Speaking in Dar es Salaam, the group’s chief executive officer, Mr Reto Wittwer, said the group was in talks with other parties to open its first facility in Kenya. “We are in talks with local hotel investors in Kenya to establish the first trophy hotel in the country,” he said. The company usually prefers entering into management contracts for existing facilities.

Kenya Tourist Board (KTB) managing director, Dr Ongong’a Achieng, said the chain was among others that had expressed interest in establishing properties in the destination. Others eyeing the market are Accor Hotels and Prime Properties. “The entry of these chains will raise the profile of the destination and the value of tourists coming into the country,” Dr Achieng’ said.

Growth in tourist numbers has spawned a shortage in bed capacity, with the country only having 40,000 classified beds. “Without any new investments we will face an acute shortage and fail to meet the growing demand,” added Dr Achieng’. Last year the sector rose to be the highest foreign exchange earner for the country with Sh 52 billion, according to the recently released half year results by KTB.

The sector is on its way to meeting its Sh62 billion target for this year, having earned Sh34 billion during this period. Recently, a South African company, Prime Properties, was in town scouting for hotels they could partner with.

The company is looking at upgrading existing facilities by injecting capital into the units. According to the Kenya Investment Authority, Sh 564 million is expected to be put into the tourism sector by three companies who are set to increase the destinations bed capacity.

Africa Mission Safaris Ltd and Karen Blixen are expected to put up camps, while Placid View Properties will put up a hotel to the tune of Sh 450 million.

Kempinski is one of the oldest hotel chains in Europe, having celebrated it 110th birthday this year. It is in talks with hotels in Nairobi. The company says it is seeking a management contract or a hotel to take over. But they could not reveal how much they plan to invest as the negotiations are at a delicate stage.

“We have not concluded anything yet and a deal is not a deal until it is a signed contract,”said Mr Witter.

In Namibia, the chain is looking at opening four hotels in four towns with the main one in the capital city, Windhoek. They are in the final stages of concluding a deal with the government of Tanzania to establish its first tourist lodge in the Serengeti Nature Reserve by the end of 2008.

Currently the chain has two hotels in Dar es Salaam and Zanzibar, Chad and Djibouti.

Kenya Tourism: Demand outstrips supply in the Mara

Source:Business Daily Africa

Demand for beds is outstripping supply at the Maasai Mara Game Reserve as tourists flock there to witness the Seventh Wonder of the World —the annual wildebeeste migration.

Tour companies are advising their clients on alternative tourist destinations such as the Amboseli and Samburu National Park as they hold them on waiting lists.
Most of the hotels are booked all the way to October. “We have some guests who made their bookings as early as last year. Those coming at the last minute cannot find a room,” a tours manager at Bunson Travel, Ms Trupti Shah, said.

According to her, the event has attracted both international and domestic interest as Kenyans seek to savour the treasures in their country. “They are, however, yet to change their booking habits as they leave it to the last minute.”

The high demand has been driven by the annual wildebeest migration that American broadcaster ABC declared last year as one of the new wonders of the world which runs from July until September.

According to a bed capacity audit carried out earlier in the year by the Kenya Association of Tour Operators (KATO), the Mara ecosystem has about 3,700 permanent beds.

These can be found within the park, lodges outside the main reserve and the conservancies.

Mara Simba and Keekorock have the highest capacity in the ecosystem with 101 beds each while Serena Mara and Sarova each have 75 beds according to KATO.

In addition to these are the temporary camps set up on demand in the reserve and the surrounding areas, and which offer back packers an opportunity to experience the reserve at an affordable rate.

With more visitors packing and heading to the reserve, no new camps or lodges can be built since the government put out a ban last year.

However industry players have argued that constructing new lodges and camps might not be the solution because of environment considerations, saying the demand from visitors can be managed by branding the reserve as an exotic or premium park.

“The reserve has much to offer if lodges could upgrade their facilities and charge a premium on them to attract high end tourists,” the chairman of KATO, Mr Duncan Muriuki, said.

Lodges within the reserve have been re-investing their earnings with Mara Safari Club being the latest to reopen after refurbishing their tents and dinning area.

The Mara opened its doors in 1974 and is managed by the Narok County Council though a part of the reserve falls under the Transmara county council.
Over the years there have been cases of mismanagement especially by the council.

This was clearly realised late last year when tourists were stranded in the reserve due to the poor conditions of the roads which were worsened by the heavy rains.

Following the fiasco the Government stepped in and work on the road has been on going, though not complete seven months down the year.

However the Government has been able to ensure the council commits up to 25 per cent of its revenue to maintaining the conditions of the road.

According to Mr Muriuki there has been improvements within the park as the council is now working on the once impassable roads. But the one leading to Sekanani gate from Narok is still poor.

The wildebeest, might not be in town yet but the other species that accompany them such as the Zebras have already been cited an indication the main attraction will soon be crossing the Mara river.

In addition, guests can be sure to enjoy species diversity and enthusiastic bird watchers have an opportunity to spot various species.

U.S. business group assures Kenya of US$2bn American investment

http://www.afriquenligne.fr/news/daily_news/u.s._business_group_assures_kenya_of_us$2bn_american_investment_200708054949/

Nairobi (Kenya) An official of the U.S.-based Whitaker Group that seeks to promote trade between Africa and America said the instituion will help Kenya to receive the two billion dollars from the American government’s Investment Fund for Africa, sources told APA here.

The Group’s Chief Executive Officer, Ms. Rosa Whitaker, made the assurance on Saturday when she paid a courtesy call on Kenyan president Mwai Kibaki in Nairobi, a presidential statement said here.

She promised that the institution will also assist Kenya farmers to directly sell their flowers and other horticultural products in the United States.

Furthermore, she revealed that the Group has also created a partnership with U.S. companies to invest in Kenya’s agricultural sector.

Ms. Whitaker and President Kibaki also discussed ways of promoting trade and investment between Kenya and the U.S. in the interest of Kenyans.

JK/tjm/APA

2007-08-05

African Press Agency

Another investor Guys!


Panasonic opens Nairobi office

Source:Nation Media daily
issue: August 10/07

Electronics manufacturer, Panasonic, has opened a branch in Kenya, as it prepares to launch a battle to capture market share from the likes of Sony, Samsung, LG and JVC.

The five brands dominate the top tier market for high definition televisions (HDTVs) and video cameras.

Panasonic’s new offices at International Life House in the City will distribute the firm’s entire range of electronic household gadgets, although it seeks to initially promote its newer entrants, including a 103-inch plasma display television, home theatres and video cameras. “Recent consumer buying behaviour and our market research suggests that Kenya is going to be a key market for us in the coming years,” said the company’s managing director for the Gulf and Middle East, Mr Seiji Koyanagi.

The company is still drawing up its relaunch programme, but promised to establishing an efficient distribution network to ensure its products are available across the country.

However, it says counterfeits are its biggest challenge. “Safety of customers is at risk due to lack of awareness between genuine and fake products,” said the managing director.

one way or another we will get there. What i like about all this stories is that they are diversifying our economy. Hope we will meet all the 2030 goals sooner than expected

any pics of the 7 star hotel.

any pics of the 7 star hotel.

http://farm1.static.flickr.com/51/129442701_8bb8f644bd_b.jpg
^^
Its none other than Nairobis most famous landmark. I think they will change its use from offices to hotel rooms. They also want to re-open the rotating restaurant at the top of the tower for a 360 degree view of Nairobi and beyond. (I gather that on a clear day, you can also spot Mt. Kilimanjaro from the building.)

http://www.bdafrica.com/images/stories/Industry/bd-indepth-solar2.jpg


Chinese firm to invest Sh9b in Kenyan solar power plant

17-August-2007: A Chinese company has entered into a Sh9 billion partnership with a Kenyan firm to build the first solar panel factory in East Africa.

The move is expected to reposition solar as a key source of energy in Kenya by making it more affordable to millions of consumers who depend on the national electricity grid for their energy needs.

It is estimated that the Beijing Tianpu Xianxing Enterprises and Electrogen Technologies venture could see the prices of solar panels drop by up to 65 per cent.

Manufacture of solar panels is expected to open a lucrative market for scrap metal merchants who have been fighting bruising battles with Chinese experts in the past three years by boosting demand for hydraulic batteries.

Construction of the facility is set to start in October for completion in March 2008.

“There is a huge market for solar panels in this market. Currently the near monopoly in the market means consumers pay more than they should. We see prices dropping to a third of what they are currently,” said Mr Michael Munyao, the executive director of Electrogen Technologies.

The project will be implemented through Pan African Technologies, a jointly owned company in which Beijing Tianpu has a 70 per cent interest and will raise $100 million (Sh7 billion) from internal resources.

Its local partner is expected take up the remaining fraction of the financing plan in cash and kind, including $40 million (Sh2.8 billion) in cash and three acres of land along Nairobi’s Mombasa Road where the factory is to be erected by a local company of Chinese origin.

Once built, the factory will source the materials required locally and employ a minimum of 100 Chinese trained staff.
“Because they will be locally manufactured, Pan-African’s products will cost less than the currently available imported options, with a typical system retailing for Sh5,000 rather than Sh20,000,” said Mr Munyao.

Pan African is eyeing Sudan as a key market and wants to interest the government in a partnership to provide solar panelling for its planned upgrade of slums in Kibera.

Demand for energy is expected to triple in the next thirty years with alternative energy anticipated to cover the gap. Solar energy is emerging as an investment opportunity globally and its use is projected to grow by 40 per cent for next five years.

Earnings are seen rising from $7.7 billion this year to $11 billion by 2011.

Despite the global interest in solar power, Kenyan firms have seen profit decline due to the high cost of importing foreign products. “This market is highly competitive.

Changing fortunes have seen many firms shut down in the last few years,” said Margaret Mutia, the deputy managing director of Solagen, a locally owned solar panel importer.

According to the Ministry of Energy, Kenya receives around 3,000 million free megawatts of power from the sun every day.

Experts says if just 10 per cent of that figure was converted to power on the national grid, the country would be oversupplied with electricity by over 25 times.
Despite its ability to provide 25 times more power to the national grid, solar power is yet to find flavour with Kenyan consumers.

Industry players say the introduction of the government’s rural electrification programme is already posing a potential threat to the continued existence of smaller solar energy suppliers.

This year alone, the government will spend Sh8 billion in over 1,000 rural electrification projects around the country, meaning consumers that would normally be targeted by solar power firms now have the option of connecting to the national grid easily.

“Before the programme the sector was confident of continued growth from rural customers because it was so expensive to access electricity and supply was usually inaccessible,” said Ms Mutia.

High demand for electricity compelled several foreign solar power firms to invest in the country during the last decade. Now just a handful are still operational, with wary international partners pulling out of the market in the last few months.

In the late 1990s solar power companies could expect to sell 20,000 units in a year, with a comfortable growth rate of 30 per year. Now firms say they are registering drastic reductions in sales, with a 40 per cent drop experienced last year.

Just over 100,000 rural Kenyan families rely on solar energy to generate electricity in their homes. The majority of these families use smaller power units that typically can power one television and four light sources which are sold for over Sh20,000.

The change in fortunes has not been bad for all solar power companies. Chloride Exide is benefitting from a Sh300 million government programme to install solar electricity converters in secondary schools in arid and semi-arid lands in North Eastern, Eastern, Rift Valley and Coast Provinces.

The 44 year old power company has successfully provided power solutions to over 30 schools through the program. “Installation is currently ongoing. The tender was awarded after a competitive bidding process and is sponsored by the Ministry of Energy,” said the company in a statement.

Chloride Exide recently shifted from providing batteries to renewable energy solutions, diversification which Solagen believes will save it and other firms from perishing in a shrinking market.

The smaller firms are seeing increased sales of water heating implements to urban consumers who can enjoy savings of up to 60 per cent on power bills.

Around the world, solar power is slowly gaining recognition as a reliable and cheap form of energy. Internet firm Google recently implemented the world’s largest corporate solar installation, installing 9,212 solar panels to gain 1,600 kilowatts to power the firms offices.

In the last 24 hours, Google produced 5,286 kilowatt-hours of electricity from the sun, which is enough to run 11,276 hair-dryers at the same time.

Flavio Briatore and Naomi Campbell plan Sh1.5bn Malindi hotel

Story by NATION Correspondent
Publication Date: 8/21/2007

Formula One boss and Italian billionaire Mr Flavio Briatore and his business partner British supermodel Ms Naomi Campbell have unveiled grand plans to invest billions of shillings in the tourist resort of Malindi.

Dr Pierino Liana, the East and Central Africa and the Middle East representative of the Lion Group, which is owned by Mr Biatore, said yesterday that the two investors were set to build a top class hotel called The Billioneres Resort in Malindi.

“The six star hotel would be built where the closed Jambo Village hotel was situated in the upmarket Casuarina area. Its construction alone will cost at least Sh500 million,” said Dr Liana yesterday. Building and equipping the hotel would cost over Sh1.5 billion.

According to documents, the exclusive hotel would target the famous names around the world, including some of the richest people, to Malindi.

“We would like to construct a five or six star hotel targeting the top men of the world in Malindi,” said Ms Campbell in her first ever interview with local journalists last Friday since she began the latest of her annual visits to Kenya.

She said they also planned to invest in other areas, apart from bringing in the very rich of the world to Malindi. Among these is establishing a modelling school for Kenyan girls.

Materials factory planned --------------------------------------------------------------------------------
Source: The Standard
Last Updated on August 23, 2007, 12:00 am
By Morton Saulo

Kenya and Malaysia have embarked on a $ 12 million (Sh840 million) plan to put up a factory to manufacture building materials.

The factory will avail building materials targeting cutting the time spent on construction.

Speaking after receiving a Malaysian delegation on Wednesday, Housing minister, Mr Soita Shitanda, said it takes three years for the Government to develop 600 units, but this would now be significantly reduced. Currently, more than 120,000 civil servants require houses.

"We are at the initial stages of establishing a factory that will produce materials to roll out houses efficiently and timely," Shitanda said.

To be built at Mlolongo area near Nairobi, the factory will help change the construction industry in the neighboring countries.

Malaysian works minister, Mr Dato Seri, said construction of the factory requires 50 acres of land for the drying and storage of building materials.

He urged the Government to present for a housing zone map to enable the construction of the factory in a centralised location.

The minister said a technical committee comprising experts from the public, private and the Malaysian government will oversee its construction.

The National Housing Corporation (NHC) will manage the factory on completion, he said.

Multi-billion shilling Tarda investment plan is unveiled
--------------------------------------------------
Source: The standard
By Tom Mogusu

The Government has announced a multi-billion shilling master plan that will open the Tana and Athi River areas for tourism investments.

The plan will be rolled out by the Tana & Athi River Development Authority (Tarda) and is expected to take 14 years to complete at a cost of Sh9.6 billion.

Tarda acting Managing Director, Mr Samuel Marima, announced yesterday that the plan, once implemented, would double the number of tourists arriving into the country from last year’s 1.5 million over the master plan’s implementation period.

‘‘It is anticipated that about 65 per cent of the investment costs will be borne by the private sector through investment in hotels and other related facilities,’’ Marima told a stakeholders workshop in Nairobi.

The public sector will contribute 35 per cent of the plan through investment in infrastructure such as roads, airstrips among other amenities.

The public sector’s funds will also go towards supporting community based eco-tourism ventures.

The Permanent Secretary for Tourism and Wildlife, Mrs Rebecca Nabutola, told participants that the tourism master plan would play a bigger role in positioning the area as a key tourism destination.

‘‘This is going to be one of the most exciting places to visit once the project is completed and the entire region is opened up for more tourists,’’ she said.

‘‘It will also diversify Kenya’s tourism product away from the beaches and wildlife.’’

At its full implementation, Tarda estimates that some 300,000 direct and indirect job opportunities would be created.

So far, the area has attracted interest from Mumias Sugar Company (MSC), which is planning to put up a multi billion sugar factory.

If implemented, the factory will make use of the area’s rich soil to grow sugar cane.

Marima explained that the tourism master plan should play a bigger role in the government’s plan to open up the Tana River area for tourism.

However, Marima said the project’s success would require the support of stakeholders such as the Tourism Trust Fund and the Kenya Tourism Board (KTB).

Last year, the Kenya Tourism Board (KTB) was allocated Sh700 million to market Kenya as a top tourist destination.



--------------------------------------------------------------------------------

Nairobi cafes buzzing as real coffee finally comes home


Xan Rice in Nairobi
Friday August 3, 2007
The Guardian

Time was, not so long ago, that if you wanted to buy a cup of quality Kenyan coffee your best bet was a coffee shop in the US or Europe. In Nairobi, where coffee bushes grow wild in the suburbs, people wanting a shot of caffeine made do with instant granules from a tin.

No more. Plush coffee bars are springing up all over the capital, serving home-grown lattes and cappuccinos to young, status-driven Kenyans breaking from the country's tea-drinking past. Where there were no proper coffee shops in 1999, there are now more than 20. In the gritty city centre alone, Java House, the best-known chain, serves 1,500 cups of premium coffee a day.

"Sometimes you need a real kick in the morning," said Wambui Mburu, 25, a stockbroker, drinking a cafe mocha before work. "That it comes from our back yard makes it even better."

A few years ago, nobody could have predicted the coffee shops' success. Though coffee has been grown in Kenya for more than a century, virtually all used to be exported. To guarantee the flow of foreign exchange, farmers were prohibited from harvesting and roasting beans for local consumption. Solomon Waweru, managing director of the Coffee Board of Kenya, said this meant that even coffee pickers would take a flask of tea with them into the fields.

Not only was there no coffee drinking culture, but the economy was foundering when Java opened its first outlet in a rundown shopping centre in Nairobi in 1999.

"People thought we were crazy to try to sell coffee to Kenyans," said Jon Wagner, an American former relief worker who co-founded the company eight years ago, and has seen revenues grow every quarter since. "It was virgin territory but we believed a good cup of coffee would always find a market."

While Java's stores initially proved a hit with expatriates, more than 70% of customers are now Kenyans, mostly under 40. With seven outlets, some offering wireless internet, the company plans to list on the stock exchange and open branches in Uganda and Tanzania.

Java's success has inspired other Kenyan companies to enter the field. C Dorman, a coffee exporter, has opened 10 shops in the capital since 2003 and recently opened a store in the port city of Mombasa. Sasini, a leading tea and coffee producer, is about to open its first retail store in an upmarket mall.

The growth of the coffee culture has coincided with an upswing in the economy. Many coffee shop customers are the same people targeted to buy Blackberry devices by the two mobile phone operators, and to read the new pink Business Daily newspaper.

For some, the atmosphere and exclusivity of the coffee house is as important as the beverage. "People who come here are serious people who are building the country," said Charles Maitho, 32, an insurance broker sitting in a buzzing downtown Java decorated with original art. "This is no place for idlers."

Kenya build Sh67bn digital city
Written by Kui Kinyanjui
31-August-2007: The governments of Kenya and the United Arab Emirates (UAE) have entered into a Sh67 billion partnership to establish East Africa’s first digital city.

Athi River town on the outskirts of Nairobi has been earmarked for the project that will be modelled on the successes of Dubai Internet City.

The initiative is expected to create new jobs as major corporations set up base and use local resources to conduct their business.

Besides, proponents of the project say it will position the country as a regional base for manufacture and development of ICT products.

“Kenya has seen an increasing number of foreign ICT companies set up offices in Nairobi that they intend to use as entry points to the regional market,” Dr Bitange Ndemo, the Permanent Secretary in the Ministry of Information, said.

The partnership for the project was formed at the request of the UAE government and has seen the two governments draft a memorandum of understanding that is currently before the Attorney-General. Two Middle Eastern companies have expressed interest in undertaking the project.

“There is significant demand. Companies have already approached us looking for incentives or joint partnership opportunities to start operations in Athi River,” said Dr Ndemo.

In the last few years, several companies have opened regional bases in the country, including Microsoft, Nokia, HP, Ericcson and Cisco, all of whom have all cited the region’s relevance as the biggest emerging market for ICT products .

Athi River —located just 50 kilometres from Nairobi City Centre — is currently a hub for several industries, including cement firms, manufacturing concerns and is home to an export processing zone (EPZ).

It’s conversion into a fully fledged ICT city could transform the dusty town into the main industrial base of the country.

However, the proposed digital city will face challenges that reflect the wider needs of the country as it increasingly relies on the ICT industry to drive economic growth, which according to a recent African Development Bank report, is expected to reach its highest levels in 20 years driven by the new sector.

Those challenges include an acute shortage of trained IT workers and inadequate infrastructure.

In response to that need and the development of other ICT driven industries such as the business process outsourcing sector, the government plans to heavily invest in beefing up the country’s infrastructure to increase access to internet-related services.

It also aims to increase of technology content in the school curriculum and is currently offering subsidized bandwith to universities to encourage e-learning.

you beat me to that. amazing news. just when i was thinking of investing in a house over there this comes along. minght be worth a few bob in a few years id say.

I Think the property value is going to soar in that area, actually there was a time i lived in mlolongo for six months b4 i moved to imara daima estate and then to america

I Think the property value is going to soar in that area, actually there was a time i lived in mlolongo for six months b4 i moved to imara daima estate and then to america
^^
Now that you mentioned Mlolongo, I hear that most of the town is gone. It was bulldozed to give way for a new dual carriageway though I havent seen it myself. Though I also think the prices of properties in the area are going to skyrocket. I wonder how far they have gone with the greenpark project.

Kenya build Sh67bn digital city
Written by Kui Kinyanjui
31-August-2007: The governments of Kenya and the United Arab Emirates (UAE) have entered into a Sh67 billion partnership to establish East Africa’s first digital city.

Athi River town on the outskirts of Nairobi has been earmarked for the project that will be modelled on the successes of Dubai Internet City.

The initiative is expected to create new jobs as major corporations set up base and use local resources to conduct their business.

Besides, proponents of the project say it will position the country as a regional base for manufacture and development of ICT products.

“Kenya has seen an increasing number of foreign ICT companies set up offices in Nairobi that they intend to use as entry points to the regional market,” Dr Bitange Ndemo, the Permanent Secretary in the Ministry of Information, said.

The partnership for the project was formed at the request of the UAE government and has seen the two governments draft a memorandum of understanding that is currently before the Attorney-General. Two Middle Eastern companies have expressed interest in undertaking the project.

“There is significant demand. Companies have already approached us looking for incentives or joint partnership opportunities to start operations in Athi River,” said Dr Ndemo.

In the last few years, several companies have opened regional bases in the country, including Microsoft, Nokia, HP, Ericcson and Cisco, all of whom have all cited the region’s relevance as the biggest emerging market for ICT products .

Athi River —located just 50 kilometres from Nairobi City Centre — is currently a hub for several industries, including cement firms, manufacturing concerns and is home to an export processing zone (EPZ).

It’s conversion into a fully fledged ICT city could transform the dusty town into the main industrial base of the country.

However, the proposed digital city will face challenges that reflect the wider needs of the country as it increasingly relies on the ICT industry to drive economic growth, which according to a recent African Development Bank report, is expected to reach its highest levels in 20 years driven by the new sector.

Those challenges include an acute shortage of trained IT workers and inadequate infrastructure.

In response to that need and the development of other ICT driven industries such as the business process outsourcing sector, the government plans to heavily invest in beefing up the country’s infrastructure to increase access to internet-related services.

It also aims to increase of technology content in the school curriculum and is currently offering subsidized bandwith to universities to encourage e-learning.


Great to see that this project has moved forward. Remember this in Spring 2006:

Monday, May 08, 2006
Kenya multi-media technology park

A breakfast meeting was held today to discuss plans for a multi-media technology park to be located in Athi River / Kitengela area. This is one of the key milestones in the ICT policy, which was approved by the Cabinet, but is yet to be passed by Parliament.

The multi media park is to be modelled along the likes of Egypt’s Smart Village and Ebene in Mauritius.

Microsoft has already signed up to be the first tenant of the park and has offered to assist in its design.

The first park may be hosted by the Export Processing Zone Authority on their 1,000 acres in Athi River. In addition to tax benefits, the zone already offers various benefits including, cheap rents, easily obtainable immigration permits for companies (guaranteed for general manger, technical manager, financial manager and 2 directors), connected with fibre optic cable, and guaranteed electricity supply from KPLC.

Athi River/Kitengela is close to Jomo Kenyatta International Airport and over 20,000 new housing units are being built in the area. Some major problems facing the area are water shortages and traffic congestion. But the traffic problems could be alleviated by the (soon) construction of dual carriageway road from Machakos to Nairobi and removal of the mlolongo weighbridge to a location further down Mombasa road.

Government
The Minister (Mutahi Kagwe) and permanent secretary (Bitange Ndemo) of Information & Communications are a dynamic pair whos’ vision is to make Kenya be known as an ICT destination, not just for tourism, politics, coffee, and tea. The two are very passionate about ICT and how the country and people can use ICT to achieve development and business goals.

Minister Kagwe also said;
- The government would set up an ICT board to market the country as an ICT destination (similar to the Kenya tourism board).
- Confirmed the country would go it alone (& look for support elswhere) on the EASSy submarine cable project if Kenyan demands for time, quality, and cost are not met. (SA is to blame for most delays)
- Said the recent Kengen fundraising demonstrates the country has enough capital to meet its development needs, if channelled properly.
- Called on media to hype business in Kenya not endless political stories.
- Called on the business community to be more assertive in challenging the government when they feel aggrieved.
- Is convinced Kenya can put up a better park than Egypt
and invited the private sector to also set up their own parks with the government giving incentives.
- Said ICT products would be zero rated in the upcoming budget in June 2006

Other bits
- Rural Internet: Telkom Kenya will begin rolling out wireless CDMA this month with affordable units costing about $30. Also the Communications Commission of Kenya (CCK) is willing to waive some licensing charges for companies that want to start rural ISP’s.
- Business incubators: Incubator policy is expected to be passed by Parliament by the end of 2006.
- Training: The Kenya College of Communications & Technology (KCCT) has been transferred from Telkom Kenya to the CCK to better serve the country's ICT training needs.

Kenya is leading the way.

Less dependent on foreign aid?
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

Fifty years ago, starting in Ghana, a string of African countries began to win independence. But in spite of political autonomy, many needed donor aid – and still do. Kenya would like to think it is different. Just 5 per cent of its budget is funded by donors, compared with 50 per cent for some neighbours.

Martha Karua, justice minister, told members of the Kenyan diaspora in London in March: “When I hear a foreign diplomat or a development person trying to talk down to us, I always ask them: ‘Excuse me, don’t you think your voice is disproportionate to your money? If you have an issue, we welcome you as a friend to discuss it. But don’t talk like you’re the colonials.”

Government spending in 2006-07 is expected to be KSh566bn, the bulk funded by tax revenues, which are rising thanks to economic growth and more efficient collection. Borrowing, which contributes the rest, is also on the up. The budget, however, does not tell the whole story as it does not include funds from non-governmental organisations, nor does it show aid flows triggered by specific events. When drought struck parts of the country last year the government was compelled to call for assistance even though there were surplus crops in some regions. It is also questionable whether the government could have pursued its policy of universal primary education without significant contributions from donors.

Still, the Kenyan government is less dependent on foreign aid than many and can, ironically, attribute that to its failure to become a free-market democracy under president Daniel arap Moi in the 1990s. Donors led by the World Bank and International Monetary Fund cut off lending several times during the decade in protest at human rights abuses and corruption. By the end of the 1990s this had precipitated a grave financial crisis. Kenya had to weather it alone but by doing so learned how to live with less foreign assistance. .

Copyright The Financial Times Limited 2007

I love that article, financial indipendence is the way forward. we should keep going like that and try to attain S.A financial indipendence, this is the kind of confidence and self belief that is driving kenya. The days are over when africans begged for everything, not anymore.

Absolutely, thanks for the article

great article.

Kenya is gaining respect internationally and I can only hope that any new government in 2008 will not mess up the momentum

Kenya is gaining respect internationally and I can only hope that any new government in 2008 will not mess up the momentum

AMEN. I think any change will not affect the economy but i hope we get a better leader or stay with what we have now. If it aint broke, Dont fix it.

Foreign firms scramble for telecoms profits
Written by Okuttah Mark

28-September-2007: More global IT players are setting up offices in the country following growth in banking and telecommunications sectors.

Hewlett Packard had no meaningful regional representation, with only an office in Nairobi that acted as an agency.

But according to Mr Kennedy Mbwaya, the regional managing director, the growth in the banking industry and telecommunication sector informed HP’s decision to set up a regional office in the city, representing nine countries.

The nine are Kenya, Uganda, Tanzania, Ethiopia, Eritrea, Rwanda, Sudan, Somali and Seychelles. He said among these , Kenya could attract more IT investments due to its global positioning.

“The growth in financial and telecommunications sectors has forced most companies in to automate businesses in order to offer their services to the mass market,” said Mbwaya.

HP is giving IT support to a number of banks, including Equity and Diamond Trust while the telecommunication companies include Nokia, Ericsson, Celtel and Safaricom.

Others are Unilever and Procter and Allan. Other than supplying them with IT equipment, some of these companies have fully outsourced their IT services to HP.

“HP acts as a team leader or prime contractor then works with partners to integrate their products to fit the requirement of the client” said Mbwaya.

Getting one key contractor who then subcontracts the others saves time and eliminates hustles associated with pitching the work to a number of contractors.

He gives an example of a three year $ 22 million project his company did for the Uganda government on Financial Management system which is up and running. A
similar project being done by the Kenya government with financial support from the World Bank is yet to go live despite being initiated in 1997 and started in 2003.

He says the delay was caused by the awarding of the contract to number of companies who are not coordinated.

Other than increased demand of IT adoption in the country, Mbwaya notes that there is an increase of locally trained IT personnel. “People have begun appreciating that this is the information age and more investments are being made in training, research and development,” said Mbwaya.

He said clients did not want to spend a lot of time managing their IT infrastructure in terms of down time, installation of new software or upgrading the software.

“ With the software one does not need to call the IT support persons in case of any problem. The only thing that one need to do is to install the software then it will do the trouble shooting and add what is supposed to be added and even do a diagnosis of a problem,” he said.

Other than that the software has the ability to gauge whether the IT environment needs to be expanded or scaled down. This, he says, helps an organisation to directly link its IT department to business and even measure the impact of IT investment into the business. He says most productive businesses are those that are closely linked with the IT department.

Globally HP has invested $3.6 billion on research and development. Locally it has entered into partnership with Strathmore University to offer technology training.
so as to increase the human capacity required in the region. So far 300 people have benefited from the partnership.

He says as more and more people appreciate the use of internet the penetration of ICT in the country will continue to go deep in the rural areas. He points a number of government and private sectors led projects as good indicator for the development and penetration of ICT in the country and also making Kenya as an ICT hub.

Among the projects he lists are, Digital Villages, Digital Schools project, National fibre optic project the metro fibre optic and the Business Process Outsourcing initiatives.

Kenya turns to Comesa as tax threat looms in EU
Written by Allan Odhiambo

27-September-2007: Africa’s largest trade bloc may hold the future for Kenya’s growing exports sector that is facing an uncertain future in traditional markets such as Europe, latest trade data indicates.

Though Europe has for decades been the prime outlet, especially for primary products, statistics show that its importance as a consumer of Kenya’s exports has dipped significantly.

Trade and Industry ministry data shows that since 2000, the volume and value of Kenya’s exports to the Common Market for Eastern and Southern Africa(Comesa) has surpassed that of the EU and is steadily growing.

In 2005, for instance, Kenya’s shipments to Comesa alone accounted for 34.57 per cent of total exports compared to the EU’s 24.9 per cent. This translated into Sh90 billion in earnings from Comesa compared to Sh68.4 billion from the EU.

This decline in trade with Europe is partly attributed to introduction of stringent standardisation measures as well as the climate change debate that has seen the food miles -- the notion that airfreighted goods are harmful to the global environment -- gain grounds in the consumer market.

Europe’s importance as Kenya’s main trading partners is expected to diminish further should the existing economic partnership agreement that Africa, Caribbean and Pacific nations signed with the European Union expire at the end of this year without replacement with a new pact.

Within the Comesa region, there are indications that exports growth is particularly strong in the Free Trade Area (FTA) where cross-border movement of goods has been harmonised under the common tariff arrangement.

More recently, trade within the FTA received a big boost with the establishment of regional standards for products such as grains to ease the flow of goods across national borders.

Richard Sindiga, the acting chief economist at the Ministry of Trade and Industry reckons that this growth has awakened Kenya to the fact that its future in the export market lies on trade with neigbours. “It is a market that is ours for the taking as long as we remain aggressive in improving the quality of our products,” he said.

Manufactured and processed products such as petroleum remain Kenya’s key exports to Comesa, a development that analysts say offers the potential of pulling along products from primary sectors such as agriculture through value addition.

According to the Economic Survey 2007, value added industrial supplies exports stood at 66 per cent in 2002, but had increased to 78 per cent in 2006. Value addition for fuel and lubricants exports amounted to 99.9 per cent in 2002 but had declined marginally to 99.8 per cent in 2006.

This impressive growth in value addition of industrial products such as petroleum has improved Kenya’s penetration of the Comesa market catching the attention of planners.

Over the past four decades, growth of Kenya’s exports has been slowed down by continued reliance on primary products that are consumed by mainly in the traditional European market and American markets.

Kenya has developed two distinct market positions in its export markets. To the EU, Asia and other developed countries, Kenya is repositioning itself as a supplier of food and agricultural products, while to Comesa and other African countries, it emerging as an exporter of industrial goods.

The impact of this reliance on the export of primary products is expected to become clearer in December should the country fail to sign new Economic Partnership Agreements (EPA) with the EU.

Primary horticulture products from Kenya currently enter the EU market at zero duty thanks to preferential arrangement with the EU under the Cotonou agreement that expires on December 31 this year.

Should Africa, Carribean and Pacific countries fail to strike a new agreement Kenya’s trade with Europe would revert to a General System of Preference (GSP) in January.

Under the GSP platform, some of the products that Kenya has exporting at zero rate will attract duty ranging between 8.5 per cent and 15.7 per cent.

This is seen to bear the potential of translating into a loss of Sh114 billion in trade and investment from Europe.

Analysts say with value-addition the impact of this loss or diminished access to the Eurpoean market may be reduced by balancing it with exports to the Comesa region.

Though disparities existed in terms of growth in the two key markets, there is need to strive and consolidate the exploitation of potential on either side to maximise on returns.

“ We may be looking to markets closer to home because of economies of scale, but you realise other markets abroad are also still critical to segments of the economy such as the horticultural industry.

“We also look up to other emerging markets such as Asia just to build on any advantage that may arise” Steven Smith, the chairman of the Kenya Association of Manufactures (KAM) said.
Trade and Industry Permanent Secretary David Nalo said enhancement of national production through value addition holds the key in consolidating gains in key international markets which have not been fully exploited.

“Ours is to try and maximise on opportunities available on all sides of the divide...it doesn’t matter where the chances may arise because our approach is holistic,” Trade and Industry permanent secretary David Nalo said.

Davidson appointed director as Kenol eyes African market
Written by Mwaura Kimani

27-september-2007: In a bid to expand in Africa, Kenya Oil Company Ltd (Kenol) has appointed former Kenya Commercial Bank boss Terry Davidson as a director in a flurry of other management changes.

Kenol says the appointments are strategic as the firm seeks to position itself as a leading player in the African oil market. According to a statement, the firm plans to venture into other markets in Africa through investment in service stations, LPG facilities, exports and bulk trading.

Kenol has been enhancing its competitive position on the continent and is currently a key player in Kenya, Uganda, Tanzania, Zambia, Rwanda and Ethiopia, where it has vast business interests and investments.

Three other non-executive directors, Robert (Bob) Patterson, formerly the CEO of Mobil Oil Kenya, Desterio Oyatsi and Per Nils Vilhelm Jacobsson were also appointed.

The company has also announced the payment of an interim dividend of Sh1.50 per share, which will be made on or about 5th November . Early this year, the company moved to acquire service stations in Kenya Zambia, Ethiopia, Tanzania and Uganda.

Kenol/Kobil is the local market leader with a 23.78 per cent share of the oil market and Shell has 21.04 per cent, while Total and Chevron have 17.94 per cent and 15.26 per cent, according to the Petroleum Institute of East Africa (PIEA). The company has also signed key agreements in Rwanda and Ethiopia, acquiring over 90 service stations.

“Kenol’s strategy is to continue focusing on consolidation and growth of it’s downstream network around Central, Eastern and Southern Africa, while developing and strengthening it’s position in LPG, aviation, lubricants and bitumen segments”, said Jacob Segman, Kenol’s acting chairman and group managing director, in a statement.

The announcement came on a day that saw Kenol stock plummet at the Nairobi Stock Exchange. The share shed four shillings yesterday to settle at Sh102, down from Sh106 during the previous day’s trading.

Mr Davidson served as the CEO of Kenya Commercial Bank for four and a half years until he took an early retirement this year.

During his tenure at the bank, he engineered a turnaround which saw the bank move from a loss-making enterprise to a profit-making public enterprise, with its market capitalisation increasing from Sh3 billion to its current position at Sh56 billion.

Economy on track: AIG

Story by LEE MWITI
Publication Date: 10/5/2007

The economy is still on track to grow by 6.5 per cent this year despite uncertainties caused by the impending General Election, AIG Global Investment Group says.

This is the fund manager’s projection based on their economy assessment. The Government’s official projection is 6.8 per cent. “We uphold our economic growth focus at 6.5 per cent for the year 2007,” AIG East Africa senior investment manager, Peter Wachira, said.

The 6.5 per cent rate was a revision of its first quarter focus that put the growth rate at 5.3 per cent.

However, despite the prospect of faster economic growth, AIG says, Kenyans should brace themselves for tougher times ahead with the increase in the cost of living expected to remain at double-digit level, due to rising food and fuel prices.

The economic growth focus compares favourably with Sub-Saharan growth, projected to tug along at a rate of 6.9 per cent, the highest in a decade.

According to AIG, high food and oil prices are expected to put an upward pressure on the inflation rate which is the Government measure of change in price movement, and by extension a strain on the pockets of Kenyans as they will have to dig deeper into their pockets to maintain their lifestyles.

“Inflation pressure remains a major concern in our market,” said Mr Wachira.

It is also expected to impact on the money market with interest rates projected to rise, especially on the short end of the market. Wednesday’s release by the Government of representative data, put September’s overall inflation rate at 11.7 per cent down from 12.5 per cent in August.

However despite the fall, the fund managers focus that the rate will remain above 10 per cent in the foreseeable future.

At the stock market, AIG says, they expect prices to go up in the long-term supported by the strong economic growth.

The shilling is expected to experience marginal weakness due to prevailing uncertainty as electioneering activities peak.

The positives out wheigh the negatives hence it is only getting better

Fixed line incumbent, Telkom Kenya, is set to become a giant player in the information and telecommunication sector if all plans materialize.

The giant corporation currently battling with restructuring and privatization has successfully launched the fixed wireless telephone service – CDMA that is already giving the mobile (GSM) operators, Safaricom and Celtel Kenya a run for their money.

In the late 2005, the company launched a wholly owned subsidiary, Jambo Telkom, licensed to provide and operate telecommunication facilities and services.

Telkom is also expected to enter into the GSM market before privatization as the fourth mobile service provider.

Now, the corporation is planning an entry into the broadcast sector next year when they launch a nationwide television station.

Another telcom company expected to rollout television services is Kenya Data Network (KDN), who in May last year received its broadcast licence from the sector regulator, Communications Commission of Kenya (CCK). This will allow KDN to offer Cable TV (IPTV) service. However, KDN does not want to become content providers who want distribution including the dominant satellite provider, South African owned DSTV.

Last month Telkom South Africa was among the five applicants issued with television broadcast licences by the country’s regulator, Independent Communications Authority of South Africa (Icasa).

The other four were Walking on Water (WoW) TV, On Digital Media (ODM), e-Sat and Multichoice Africa.

FS has learnt that Telkom Kenya is currently working on a business model ahead of the launch expected shortly after the corporation’s restructuring and subsequent privatization due by the first quarter of next year.

And if this materializes, the operator will be among the dominant players in the television broadcast given that it has frequencies covering almost the entire country.

The plan is in line with Telkom’s mission “to be among the top five communications solution providers in Africa by 2010.”

By 2010, the corporation expects to be a wholesaler of telecommunication network facilities and services to a customer base compromising service providers and end users.

It anticipates having an estimated staff of 6,500 mainly engaged in technical, marketing and planning. Sales could be over Sh40 billion and net income of Sh7.5 billion. A key feature of Telkom Kenya will be its emphasis on providing and delivering services to maintain its competitive advantage.

While confirming the development, Telkom Kenya managing director, Mr. Sammy Kirui said “though not our priority at the moment, it is indeed true that we are working on modalities to launch a television station.”

Unlike new entrants to television broadcast, Telkom Kenya has infrastructure, which can allow transmission throughout the country.

However, the firm is in the process of improving and installing more infrastructures in readiness for television broadcast, “we are also putting infrastructure in place and working out business model at the moment,” said Kirui.

“We are looking at various issues such as the expected target audience, aspects of return on investment (ROI), more infrastructure and other more issues before the rollout,” said Kirui.

“But at the moment our priority is restructuring and privatization of the corporation,” added Kirui.

What Kirui could not address is whether Telkom TV will be Free-to-Air, Pay-TV or Cable-TV.

“We are still discussing the modalities including partnership with organisations with experience in broadcasting,” said Kirui.

Currently, Telkom offers broadcast services both television and radio to licensed companies at a fee. The incumbent can also provide OB (outside broadcast) services to any radio or television outlet.

Outside Broadcasting is the production of television or radio programmes (typically news, sports and other programmes) from a mobile television studio. This mobile control room is known as an “Outside Broadcasting Van”, “OB Van” or “Scanner”. Signals from cameras and microphones come into the OB Van for processing and transmission.

Currently, Telkom Kenya is able to transmit live or recorded pictures/ sound to/ from any part of the world and within Kenya.

The firm also provides terrestrial channels for national transmissions and satellite channels via Intelsat satellites for international transmissions.

Today, Telkom’s broadcast services may be used for receiving or transmitting daily national and international news packages.

At the moment, bookings for TV programmes (or satellite feeds) should normally be addressed by a broadcasting organisation (customer) to Telkom Kenya. The booking should include an undertaking to meet the charges related to the transmission.

It should also include the television coding standard (e.g. PAL, SECAM or NTSC) if international technical coordination and commentary circuits if required.

Requests should also be submitted at least 48 hours in advance for international transmissions and one week in advance for national transmissions.

Despite poor publicity over working conditions in Kenya’s flower industry, the country recorded an 8 per cent leap in market share for the period up to September.

Global flower sales results released last week saw Kenya widening the gap between it and the next best suppliers — Columbia and Ecuador — whose market share is tied at 25 per cent well behind Kenya’s 40 per cent.

That is where Kenya was in 2000 when it edged out Israel and Columbia, the then market leaders. Israel has since retired as a major contender and its place has been taken by Ecuador.

Kenya Flower Council chairman Erastus Mureithi said the “Kenya agenda” launched at the international Hortifair in the Netherlands last week would be pushed as a major promotion campaign to dispel the negative publicity about the industry.

The campaign will be undertaken by the newly formed Kenya Horticulture Council, the result of the merger of the two industry lobbyists, the KFC and the Fresh Produce Exporters Association of Kenya (FPEAK), whose international chapter was launched in Amsterdam at the Hortifair.

The surge in Kenya’s market share has jumped from 32 per cent earlier in the year, is attributed to a shortage of flowers that hit the country over the past two months owing to the abnormal cold weather, creating a serious shortage in Europe.

It is also a blessing in disguise for a sector that had for the better part of this year complained that a strengthening shilling was hurting its business.

Due to the shortage, flower prices have soared, fuelling expectations that the horticulture industry — which last year earned some Ksh49 billion ($731.3 million) in foreign exchange — could this year surpass this figure by a big margin, given that Africa supplies close to 75 per cent of Europe’s flowers, almost half of them coming from Kenya.

At the moment, Kenya’s flower exports are almost three times bigger than those of the next six suppliers from Africa combined.

The formation of KHC is aimed at creating a stronger voice in addressing cross-cutting issues in the multibillion horticultural sub-sector. It will take at least a year for both KFC and FPEAK to fully dissolve and put the industry under a single lobby group.

KHC will be initially managed by a new board comprising three directors from each association and a representative from the Ministry of Agriculture. The Flower Council and the Fresh Produce Association chief executive officers, Jane Ngige and Dr Stephen Mbithi respectively, will each manage a separate unit as a formula to eventually have one of them take over the overall running of the new outfit.

Dr Mbithi explained that the two institutions agreed to form a new, bigger body to spearhead promotion and publicity, training and research, lobbying and compliance.

Small-scale farmers — whether growing for export or for the local market — will be co-opted, a move that will make the council stronger, as small growers produce more than 60 per cent of exported fruits and vegetables.

Mr Mureithi added that is also expected to make it easier for support bodies to channel development funds to the sector unlike in the past when they had to decide whether to fund through FPEAK or the KFC. The two bodies will, beginning January next year, move to one office block.

FPEAK, a body representing exporters of fruits and vegetables, was established in 1975 as the premier private association in the horticultural industry to enhance the country’s competitiveness in the export market. KFC was established in 1996 to bring together independent flower growers to ensure implementation of acceptable local and international standards.

Mr Mureithi pointed out that merging of the two is a milestone in the industry, as Kenya’s produce will be branded accordingly as it seeks to diversify markets in the face of growing competition and defend its record from accusations of abuse of human rights and environmental degradation associated with flower growing.

Horticulture earned the country Ksh49 billion last year becoming the second biggest foreign exchange earner after tourism at Ksh56 billion ($834 million). This year projections are that horticulture could climb to Ksh56 billion ($834 million).

"At the moment, Kenya’s flower exports are almost three times bigger than those of the next six suppliers from Africa combined."

my friends that is some serious kick-ass statistic right there. makes me proud to be kenyan

Tata to set up assembly plant in Kenya

Written by Wangui Maina

November 6, 2007:

http://www.bdafrica.com/index.php?option=com_content&task=view&id=4148&Itemid=5810

Tata Motors is looking at entrenching its presence in Kenya through a vehicle assembly plant to be located in Mombasa.

Most of the vehicles sold by the company in Kenya are presently assembled units imported from India.

“Right now we don’t know how much we will invest in such an assembly but its part of our expansion strategy,” the executive director of Tata Africa holdings, Naresh Leekha, said yesterday on renewal of their partnership with Marshalls East Africa.

Tata is also looking at introducing a low-end vehicle in the market in a bid to broaden their range outside the commercial vehicles segment.

The company is rolling out a back-up system for the vehicles, which has already been launched in South Africa before bringing them into the market.
Currently, the company is scouting for other opportunities in the country, especially in the telecommunications, engineering, and tourism sectors.

“We are looking at various viable investments in the country to broaden beyond vehicles and have a keen eye on something big in Nairobi,” Mr Leekha said.

Tata, India’s largest auto maker, has a strong presence in the Kenyan light and heavy truck category. Statistics from Kenya Motor Industry (KMI) Association show Tata sold 245 units during the first half of 2007 and is looking at selling over 600 units by the end of the year.

Tata Tipper is the market leader in heavy trucks less than 20 tonnes, having sold 58 units by mid this year compared to 41 for its nearest competitor.

The increased sales have mainly been driven by the boom in construction in the country, which has increased demand for this category of vehicles.

Tata Africa is a subsidiary of Tata Group, one of the largest companies in India with a market capitalisation of $69.8 billion, as of November 1. The has stakes in sectors including telecommunications, consumer products, chemicals and energy.

Investors in matatus shift to 26-seater buses

Written by Steve Mbogo

http://www.bdafrica.com/index.php?option=com_content&task=view&id=2191&Itemid=5822

30-July-2007: Commuter transport operators are shifting their investment in favour of 26 seater mini-buses.

Industry insiders say the shift has been so rapid that tyre manufacturers such as Sameer Africa have had to invest in new production lines to cope with demand.

“We have been facing (supply) capacity problems for this type of tyres,” said Mr Eric Kimani, the managing director of Sameer Africa.

The new production line is expected to increase the production of Yana light truck tyres by a margin of 2,700 units per month, bringing the total output to 15,000 units per month.

Mr Kimani said demand for the tyres had increased by 30 per cent compared to the same period last year.

Data from the Central Bank of Kenya (CBK) and the Kenya Motor Industry Association (KMI) indicate that there has been a significant increase in the sale of new light trucks that are usually converted into matatus, or used to transport agro-produce and consumer products.

During the first four months of this year, sales of new 14-seater type of vehicles dropped by 25 per cent compared to a similar period last year 2006, according to the CBK. Sales of light trucks increased by 16 per cent over a similar period last year.

KMI’s 2006 data indicate that while the industry sold 390 trucks that carry less than 20 people, sales of motovehicles that carry more than 20 people increased to 663.

The most popular model among this category was Isuzu NPR, which is a very popular model for Manyanga matatus. It was followed by Mitsubishi Canter and Nissan Diesel in that order.

Bill Lay, the Managing Director of General Motors East Africa reckons that sales of light trucks are growing at an average rate of 35 per cent per annum.

Regional sales have however been affected by a reduction of East Africa common external tariff from 25 to 20 per cent, which has menat increased competition from imported light trucks.

The decision by the industry to change into bigger matatus is seen partly as a pre-emptive measure aimed at forestalling business inconveniences if the Government decides to reintroduce an order to phase out the small matatus, first introduced in 2005.

The decision was first taken to remove them from operating in the Central Business District (CBD) because the infrastructure was not adequate and contributed to vehicle and human traffic congestion.

But the Government sooner rescinded on the decision in what most Kenyans considered as political reasons.
Mr Dickson Mbugua of the Matatu Owners Association said those investors buying light trucks in place of small matatus are focused and “do not want to be caught up unawares” when the Government decides to reintroduce phasing out of the small matatus.

By the time the Government froze its order, some banks had already developed products to help finance prospective investors.

But Mbugua says it is better that the rule was first relaxed because a crash programme especially on how to finance acquisition of bigger matatus need to be put in place.

“Investors, commuters, financiers and the Government need to come up with how this should be done to determine how the financing – the amount, period of payment and what interest rates should apply,” said Mbugua.

He said a similar plan has worked in Brazil and is being implemented in South Africa

great stuff chui, very informative.

KCC eyes Sh1bn milk exports by end of year

Story by NATION Correspondent
Publication Date: 12/6/2007

A leading milk processor will have exported up to Sh1 billion worth of products by the end of this year.

New Kenya Co-operative Creameries managing director Francis Mwangi said the exports had continued to grow, with the emergence of new markets.

“The value of (our milk) exports last year was Sh50 million, and we are expecting this to grow to Sh1 billion by the end of this year,” he said.

He was speaking at the company’s headquarters in Industrial area, Nairobi, where he announced a pay hike for unionisable workers.

Mr Mwangi said the challenge was to for farmers to produce more and meet the growing demand.

“There are new markets in the Middle East, Egypt, Nigeria and South Africa, and many more are opening up in Comesa,” he said.

New KCC had maintained an average of Sh30 million in monthly exports, and profitability had significantly improved this year, Mr Mwangi added.

The products that registered significant growth in the export market are long life ultra heat treated milk (UHT), ghee and powder milk.

Mr Mwangi said the company had also increased its local sales, averaging Sh520 million per month.

“The milk we produce is of the highest international standards, and our factories have been audited by several international consumers who will soon sign contracts with us.”

The company will increase its processing capacity by 150,000 litres per day, from April next year, bringing the total capacity to 500,000 litres daily.

Currently, he said, the company was processing between 350,000 to 360,000 litres per day. “The challenge is to enable them produce more milk to meet the increasing demand for products.”

I am happy for all these coming to Kenya.

Kenya: New Car Sales for 2007 Hit Double Digit Barrier

Business Daily (Nairobi)

10 December 2007
Posted to the web 10 December 2007

Wangui Maina

Dealers in new vehicles are on course for an impressive performance this year with growth estimated at over 20 per cent; the first time in several years.

By end of November 2007, over 11,900 vehicles had been sold compared to the 10,051 units that were sold in total in 2006 and 941 units in 2005. The industry had a target to sell 12,000 units by the end of the year.

Economic growth has boosted major activities in the agriculture, tourism, construction and transport sectors which have helped the dealers realise good sales. Most sales have been of commercial vehicles compared to the saloon cars, whose sales have decreased due to the second hand market.

Statistics from the Kenya Motor Industry (KMI) Association, a body that collects the industry's sales month on month, show that the One Tonne pick-up is the leading segment having sold 2,844 units by November representing 23 per cent of the whole industry.

Light Trucks are second with 1,530 units followed by the 4 wheel drive Estate (4WD) with 1,495 units. Double Cabin pick ups are also on demand having sold 1,273 units. Increased sales in the pick-up class are driven by customers opting for multipurpose vehicles that can ferry both passengers and goods.

Big corporate sales representatives, security companies, SME's and farmers are responsible for driving sales of this segment up. The One Tonner Toyota Hilux has sold 485 units, with the Toyota Land Cruiser and Nissan Hardbody proving to be most popular.

The construction and haulage sectors of the economy have increased sales of light, medium, big and heavy trucks as well as prime movers. The light truck Mitsubishi FH, sold by Simba Colt, is the most popular vehicle in the whole country having sold 527 units.

Speaking to Business Daily Simba Colts marketing manager, Nawaz Popat, noted this model was the dealers "bread and butter" as it suits most kind of transporters ranging from the farmer, manufacturer or even a small business for ferrying milk or cabbages.

"There is big demand for haulage which has led to demand for trucks. We have realised 35 per cent growth in this segment," he added.

The all wheel drive segment has emerged as the ideal luxury vehicle with over 70 models available as options.

Toyota Kenya launched a new Land Cruiser 200 over the weekend, adding to the already extensive Land Cruiser range, of 11 models, available in the market. The brand holds 46 per cent of the class making it the "King of 4WD luxury vehicles" says Simon Mwiti, Toyota's national sales manager.

However, in this segment the Land Rover, which has a market share of 17 per cent, has proved to be the ideal status luxury vehicle with 12 different models, including the Range Rover vehicles. Sales of the Land Rover helped the company increase its half year profit before tax by 46.6 per cent to Sh412 million compared to the same period last year.

Data from KMI, shows that Range Rovers have the highest price tags in the market with prices ranging between Sh12 and Sh16.5 million on offer. The Range Rover Sport 4.2L has the highest tag.

According to the Land Rover's sales and marketing manager Roy Kyalo, the Range is targeted for the niche market and has been positioned as the ideal choice in the luxury car segment.

"We have customers paying cash upfront while others take up our finance packages with commercial banks," he added when asked the popular mode of payment for these vehicles.

According to the industry, finance packages have become the preferred way for paying for vehicles across the market. "With most commercial banks offering financing options and dealers partnering with them our customers are taking this as the option to fund their purchases," DT Dobie's marketing manager Josephine Njuguna said.

Customers pay a deposit of 10 per cent of the retail price and the balance is broken into instalments which are agreed upon with the dealer and bank with an interest on top.

The increased sales in 4WD vehicles are a reflection of a global trend where they have become the trendy vehicles to drive mainly due to their novelty, safety and luxury of the vehicles.

Most vehicles launched in the market this year entered this segment and include the Hummer by General Motors, Mercedes GL, Jeep Wrangler and Commander, Range Rover Sports and Toyota Land Cruiser among others.

Buses also recorded good growth with companies like Citi Hoppa, KBS, Express Connection and other long distance transporters boosting sales.

Njogu Gachagua, Citi Hoppa's operations manager, revealed the company had bought over 100 buses this year mainly due to the growth in the PSV sector. To him a good engine, economic fuel consumption - in the light of increasing fuel prices - and durability are the main qualities they are looking for in their buses.

Sourcing most of their buses from Isuzu and Nissan Diesel the PSV Company has boosted the sales for these dealers. By October this year General Motors, the Isuzu dealers, had grown by 48 per cent with sales mainly boosted by the buses.

Toyota continues to hold its six years domination of the market. The good performance of Toyota is in line with their global sales which are set to end General Motor's 75 year reign as the world's biggest auto maker this year. In Kenya GM is the third largest dealer. CMC is second while Simba Colt is fourth.

The industry is optimistic they will surpass the sales of this year in 2008 and most dealers are looking at launching new products to keep up with international trends. Customers can expect new Defender, Range Rover, Toyota, Mitsubishi and Jeep models in 2008 among others.

Kenya's popular Matatu buses still colourful, but safer after rules change

NAIROBI, Kenya - Thousands of privately owned buses, known as Matatus, compete for passengers with flashy paint jobs, names like Razmatazz, Czar, House Snoop and Gambino Family and on-board audiovisual entertainment: bass-heavy and played at top volume.

While reckless driving and spotty law enforcement continue, new government regulations and enforcement have boosted Matatu safety and comfort.

The Matatus are essentially souped-up minibuses. Each carries about a dozen passengers and are as old as the country itself. Kenya's leaders after 1963 independence from Britain allowed the private Matatu sector to develop with little government interference - either in tax collection, or safety regulations.

The idea was to foster an affordable transport system for Kenya's poor. Matatu is the Swahili word for three - early fares for a trip in the capital, Nairobi, were just three of Kenya's smallest coins, said Gerishon Ikiara, a top official in Kenya's transport ministry.

Over the years, the industry flourished, but so did related woes, Ikiara said. Owners skipped paying government registration fees while many buses became barely roadworthy. Gangs controlled and sometimes fought over the business.

Overcrowding was rife, and the ride perilous.

"Apart from road accidents, there was bad behaviour by owners, drivers abusing the commuters. Children and the elderly weren't able to board. The Matatus were overcrowded, like bags of potatoes," he said. "People wanted something to be done."

President Mwai Kibaki's 2002 election marked the first time an opposition politician had won Kenya's presidency, and his government wanted to make a quick impact. In 2003, it took aim at the Matatu industry. It ordered devices that limit the speed of the vehicles, seat belts for all passengers, load capacity clearly marked on the outside of the vehicle, uniformed and salaried drivers and permits for each vehicle.

The changes have made it much easier for new entrepreneurs to enter the sector, helping it grow. The head of the owners' association said it wasn't clear if the regulations fostered better returns for individual owners. But everyone agrees it's a highly lucrative business, that's expanding.

With all the new competition, fares haven't increased, but they can vary widely, depending on supply and demand. One rush-hour trip out of Nairobi was about 75 US cents, while going against the traffic into town cost about 15 cents.

Violence continues to be a problem. One of Kenya's most notorious gangs, the Mungiki, has been linked to beheadings and other recent violence believed sparked by a struggle for control of lucrative Matutu routes.

But the regulations have made a real difference. While many drivers still weave dangerously in Nairobi's traffic, Matatus generally have safety belts and fewer passengers than in earlier years.

Where attempts to regulate the Matutus by Kenya's dictator Daniel Arap Moi failed amid massive drivers' strikes, Kibaki's legitimately elected government was able to face down the owners, as most citizens supported their government.

There were about 44 deaths per 10,000 vehicles on Kenya's roads before 2003, said Ikiara, the transport official. Deaths per 10,000 vehicles are now around 30 - or about a 25 per cent reduction. Some 44,000 government-registered and properly permitted Matatus ply the rutted roads of Kenya, population 34 million, the government says.

While firm figures for taxes collected from the industry as a whole weren't available, the government logs about US$44,000 per month in fines alone, Ikiara says. In past years, little government revenue came from Matatus.

Analysts say that paying taxes and other fees to the government are crucial for the development of young democracies like Kenya's, as it invests citizens in their state's governance.

"If you don't exist on the tax ladder, you can't really demand services," says James Skikwati, director of the Inter-Region Economic Network, an economic consultancy. "Let the people pay taxes, and you'll have a revolution."

In the past, highly nationalized and regulated economies kept growth low. Only as Africa's governments have sold off state-owned industries, and loosened strict regulation of others, has the world's poorest continent seen economic growth rates that can even approach those needed to make a long-term dent in poverty.

While Matatus have long-boasted their distinctive style, the rules prohibiting overloading and speeding has meant owners have had to try to boost earnings by attracting more customers than their rivals.

Thus a recent growth in the decoration of the buses, which has in turn provided jobs for young people who might otherwise go without work. In garages across Nairobi, young men spray-paint elaborate designs on bus bodies, install enormous sub-woofers inside, and mount flat-screen televisions and DVD players to the ceilings.

"It's like T-shirts. If everyone wears white, no one notices," says a noted Matatu designer, Elijiah Gichuhi, age 35. "But each Matatu is unique, with crazy designs."

As fashions change, so do the designs. For now, American hip-hop is big, but shifting tastes only means more work for Gichuhi's eight-person company, Cream Team.

"This government, at least it has given us a change to do something with ourselves," he says. "Now it's just competition. We each want to be the best."


http://canadianpress.google.com/article/ALeqM5iFa-iZPVYGI1Iyj2xyyEaYcXLoEg

Hotel chains to invest in Kenya

The Standard.
Published on December 17, 2007, 12:00 am
By Philip Mwakio and Phionah Mwadilo

The tourism marketer, Kenya Tourist Board (KTB) has called on hotel chains to invest in the country.

KTB Managing Director, Dr Ong’ong’a Achieng’, said the world’s oldest luxurious hotel group is keen on setting up base in Kenya.

"The Kempiski Group is eager to start business hotels in Nairobi and Mombasa," he said.

Ong’ong’a said KTB has done a lot to market the country to international hotel investors.

He also said two other hotel chains from France are interested and have indicated their willingness to open five star resorts in Nairobi.

The Kempiski Group, founded in 1897, has hotels in neighbouring Tanzania and Zanzibar.

Ong’ong’a also said South Africa ranks as the leading source market of African tourists to the country.

"South Africa is an important source market in the region other than the East African circuit," he said.

He said tourists from South Africa are valuable to the industry.

"We are already working with leading South African tour operators and have intensified relations there," said Ong’ong’a.

Elsewhere, hoteliers at the Coast have welcomed the opening of a KTB office at the Moi International Airport.

The facility, in terminal one, will be a contact office for all tourism activities at the Coast.

Meanwhile, players in the tourism industry at the Coast are optimistic that the General Election will not affect hotel bed occupancy.

General Manager of Sunrise Beach Resort and Spa, Mr Victor Shitakha, said people have confidence in the destination and arrival trends have not changed.

"Business looks good. There are those who have booked till December 26 as their check out date and then return after December 28. This is a clear indication that they are going to vote," he said.

Venta Club Temple Point, Watamu General Manager, Mr Isaac Rodrot, said that there has been a slight change in the timing of hotel bookings.

He said most domestic tourists who frequent Coast hotels have instead booked for December 28, a day after Kenyans go to the ballot.

"There was a slowdown of arrivals after the first election opinion poll, but things have reverted to normal and tourist charter uploads are almost the same," he said.

The Kenya Association of Tour Operators (Kato) Coast branch chairperson, Ms Tasneem Adamji, said most hotels are fully booked and the same number of international charter flights from Europe is expected.

"There is relative calm as far as negative or counter productive publicity is concerned. Any negative publicity could deal destination Kenya a devastation blow with massive tourist booking cancellations, said Adamji, who is also the managing director of African Quest and Safaris Limited.

Mr Charles Muia, the general manager of the Mombasa Serena Beach Hotel and Spa, said that they are having a busy season with the hotel operating at full capacity.

The Club Sun N Sand Beach Resort in Kikambala, Kilifi district has seen better arrivals than last year.

"Our hotel is operating at full capacity and we are having full house ahead of the Christmas and New year festivities,’’ said Mr Frederick Andimilleh Makumbi, the hotel’s general manager.

Phone firm to invest Sh7bn in Kenya

Story by JUSTUS ONDARI
Publication Date: 4/17/2008
France Telcom will inject an additional Sh7 billion into Telkom Kenya during the year, as it gears to roll out its mobile phone service under a new platform.

Telkom Kenya offers a fixed wireless service using CDMA technology, but wants to switch to the GSM technology to match its rivals, Safaricom and Celtel, as it seeks to upstage the two in the cellular phone market.

Speaking in Nairobi during a country tour, France Telcom chairman and chief executive, Mr Didier Lombard, said the new funding underlines the French firm’s commitment to Kenya as an investment destination.

“We are investing in Kenya for the long-term because we believe it is one of the fast growing economies in the world,” said Mr Lompard.

It was his first visit to the country since his company paid Sh26.1 billion in December last year, together with a Dubai-based Alcazar Capital Limited, to secure a 51 per cent stake in Telkom Kenya.

In keeping with its tradition, the GSM cellular phone will operate under its Orange brand name.
About 20 per cent of the Sh7 billion will go towards upgrading Telkom Kenya’s international broadband capacity and fixed line network.

Asked about the date of the launch, Mr Lompard said, “We will launch the service very soon.”

Econet Wireless is also slated to launch its mobile phone services by July, adding up to four, the number of companies operating in the rapidly growing sector.

Flanked by the company’s senior management, Mr Lompard said Telkom Kenya will retain its current corporate name.

“The decision will be made here in Nairobi but we will not force the change of name. It is up to the Telkom Kenya board of directors to decide whether we embrace the Orange brand or not,” said Mr Lompard.

But with a controlling majority in the board room the chairman’s desire could as well pass

Century-old rail system needs Sh80bn upgrade

Business Daily.
Written by Zeddy Sambu
May 1, 2008:

A grand plan to revamp Kenya’s rail network and shift most traffic from road to rail has been unveiled.

Authorities are proposing a broader, standard and electric gauge to replace the one-metre gauge in the network spanning 2,156 kilometres in just over a decade from now.

The Kenya Railways Corporation (KRC) unveiled the plan on Tuesday.

A detailed plan for the project, that will allow faster trains at a speed of between 80 kilometres an hour to 120 kilometres per hour, is expected to be ready within three months.

Construction is estimated to cost Sh80 billion and could last between 10 to 16 years.

The project will also see the network expanded beyond the borders to neghbouring Democratic Republic of Congo, Rwanda and Burundi, bringing the entire Eastern African region under a seamless connectivity.

Funding for the highly ambitious project will be drawn from the private sector and if it takes off, the plan dubbed: The Railways Master Plan 2050, will ease traffic on major cities to rail.

The new look Kenyan rail network will serve as the regional transport and logistics centre for countries in the region. The Kenya Railways Corporation (KRC) unveiled the plan on Tuesday.

Stakeholder, however, say infrastructure plans need to be harmonised with other economic blueprints at the national and regional level.

Pressure has been mounting for the Kenyan rail company to reinforce funding and build a structured rail system. Even after rail operations were concessioned to South African private operators two years back, users want more efficiency. Frustrated at the current state of affairs, they have petitioned authorities to reduce the implementation time frame for the plans.

An efficient rail service could reduce transportation charges that account for up to 40 per cent of all costs incurred by local businesses in moving goods by road.

“It is the challenge of the Government to ensure that current transport costs come down. The level of services provision must also be guaranteed,” said Mr Steve Smith, the chairman of the Kenya Association of Manufacturers.

More than 80 per cent of the world uses the standard rail gauge network which offers greater capacity and efficiency. Kenya’s rail network is over a century old. It was constructed between 1895 and 1901, with no improvements ever since.

Last year, the rail moved just over two million tonnes of cargo compared to double this capacity in the 1980s.

KRC is taking the cue from regional players who during a meeting in Uganda last week resolved that 25 per cent of governments’ spending be set aside for roads and railways.

KRC said it would concentrate on the reforms while the new private managers — Rift Valley Railways — would concentrate on ensuring efficiency on the one metre gauge.

“We are yet to come up with a water-tight plan. The future of the rail is about speed and size of the train engines to be operated,’ Jonathan Mturi, the chairman of KRC board of directors ,said.

Inefficiencies in the railway system have limited options for transport in Kenya as the roads cannot cope with heavy traffic. As a result, regional ports have become congested and inefficient.

“We need a commercialised and motivated rail system for the region. The rail in its current state is a burden,” said Smith. The financing mode for the project is yet to be determined.

“Our options are still open. They range from Build Operate and Transfer, private capital as well as fund raising from the Capital markets,” said Nduva Muli, the KRC managing director. KRC is driving the project on behalf of the Kenya government.

The plan proposes to open up the Northern Kenya region with new priority constructions along the Lamu- Juba (south Sudan) route and Nairobi- Addis Ababa with Archers Post as the junction for the two rails.

Roads account for 90 per cent of Kenya’s and the region’s transport, leaving an insignificant 1.5 per cent to local rail operators under the Rift Valley Railways consortium in a 25 -year concession agreement. KRC owns the train engines and wagons and supervises the concession contract.

Rail is a cheaper mode of transport and is preferred for bulk cargo. It is also environment-friendly .Yesterday, participants proposed a rail/road link system as is the case in the developed world.

Other players proposed that management of some of the rail’s branch networks be concessioned for proper management and use. Currently, only the 146km Magadi-Konza route is managed by Magadi soda Company. KRC network has 11 such branch lines.

Recent threats of diversion of cargo from the Mombasa port to other neighbouring ports that threatened Kenya’s strategic position as a lifeline for vibrant economies of the region warrants more reforms to continue with this key role.

Finally, the Port of Mombasa will be joining the big league in the world when it starts handling the larger ships that are now taking over the shipping business.


The Government has set aside Sh20 billion to upgrade the port.

Currently, the port handles smaller ships that are slowly being phased out in favour of the larger ones called post Panamax, with bigger capacities.

Since many fleets around the world are converting to post Panamax ships with over 6,000 TEU (Twenty-foot Equivalent Units — shipping container), ports are also reassessing how they can fit in the cut-throat business.

The expansion of the port of Mombasa could not therefore have come at a better time.

The port will now claim a niche in the maritime industry.

Although port users will have to wait until 2013, when the first berth of the planned expansion is completed, a sigh of relief is slowly creeping in among the business community.

The volume of trade is expected to increase tremendously once the project, with funding from the Japanese government is completed, a decade from now.

It is expected to address constant complaints from port users of major delays.

The flow of containers was not in tandem with the increasing trade and demand for services.

Although some shippers had threatened to go through the Port of Dar es Salaam in Tanzania, Mombasa still remained the favoured choice because of its location, technological advancement and bigger capacity.

But most importantly, the Kenya Ports Authority (KPA), which is currently serving as a feeder port, will have a new status with the expansion, which involves the construction of a second container terminal.

The allocation of Sh20 billion in this year’s Budget by Finance Minister Amos Kimunya removes doubts about the Government’s commitment to the expansion.

The Japanese Government will spend Sh16.2 billion in form of a loan to Kenya, which is expected to pump in about Sh4 billion for the project.

The KPA head of operations, Captain Twalib Khamis, said the project was a reality and that proper work on the terminal is set to start next year.

Enlarge channel

“The first berth is expected to be ready in five years, while the whole project will be finalised in 2020. It is a very big and complicated project that will begin with the enlargement of the 12 kilometre channel from Likoni (Kilindini wharf) to the end in Port Reitz.

“But the main terminal will be built in Port Reitz on land that will be reclaimed with soil from the dredged material,” he said.

Once the work is complete, said Capt Khamis, the Port of Mombasa will be the hub for eastern Africa and the Eastern Indian Ocean region.

Some of the countries that will rely on the port for import and export of cargo are Uganda, Democratic Republic of Congo, Rwanda, Burundi and Kenya.

He said there was a big demand for services which had led to congestion of the port that currently handles between 400,000 and 450,000 containers a year.

This translates to a total of 15.9 million tonnes last year, a rise of more than 1.5 million tonnes or 10.5 per cent compared to 14.4 million tonnes handled in 2006.

“This would help decongest the port and increase the capacity of KPA to handle about 1 million containers per year.

“The project will have a big multiplier effect because it will open up the western part of Mombasa, mainly in Changamwe through the expansion of the road network,” said the captain.

Port users have welcomed the move, saying it would increase the volume of trade and decongest the port.

But they are also cautious, saying they hoped the project was a reality and not the usual talk from the Government.

Mr Evans Ochieng, the proprietor of Tohel Agencies, a clearing and forwarding company mainly dealing in the import of cars, supported the expansion plan saying it would minimise delays at the Port.

“It’s a wise idea that is long overdue but we hope we will also be able to deal directly with the port instead of going through Container Freight Stations (CFSs) as this is the only way delays can be dealt with,” he said.

Mr Ochieng said currently, the cost of doing business through the port was very high because of the steep charges they incurred through delays in clearing their goods when they pass through the CFSs.

He said it was different when they dealt directly with the port and suggested that the old system be reinvented to have a one-stop operation system.

“Car importers for instance, have to contend with the delays because most CFSs do not have the capacity to clear goods fast enough and therefore, forcing us to go beyond the requisite 10 days for goods to stay at a station before starting to pay extra storage charges.

Expecting relief

“The system of dealing with CFSs ... started about two years ago and is inconveniencing us and that is why if the expansion project is realised, we will be expecting some relief,” said Mr Ochieng.

Kenya International Freight and Warehousing Association (Kifwa) Mombasa branch chairman Peter Otieno said the Kenyan economy was bound to take forward strides once the modernisation project was complete.

He said employment would be created because there would be extra cargo to be handled.

“It is also likely that Mombasa will not only be a handling port but a transshipment hub because the port would handle bigger vessels that currently do not call at Mombasa Port,” he said.

UK firm to start search for gold in western Kenya

Written by Allan Odhiambo

Goldplat says it will be starting the search for the precious mineral in the last quarter of the year.August 1, 2008: London-listed company, Goldplat, is optimistic of launching its gold prospecting operations in western Kenya before the end of the year.

It has indicated the activities are taking off in the last quarter as it sunk an additional $500,000 into the project.

Chief executive, Demetri Manolis, said the launch of the Lolgorien project was in to gear and equipment would be shipped to the site from South Africa by tomorrow.

Goldplat Plc is listed in the alternative investment segment of the London Stock Exchange (LSE) and has mining projects in South Africa and Ghana.
It produces precious metals like gold, silver, and platinum in the continent

Retail Bulletin Issue 190

Kenyan-based Nakumatt is planning to open branches across East Africa as it lays out an aggressive expansion strategy. Within the next 12 to 18 months, the retailer is planning to open outlets in Rwanda's capital of Kigali, Uganda's capital of Kampala, and the Tanzanian cities of Arusha and Dar es Salaam. Following these openings, Nakumatt will be a true pan-East African retailer.
"We plan to expand to Kigali, Kampala and Dar es Salaam and Mwanza very soon. We also want to open branches in Meru and Nyeri, both in Kenya," said Nakumatt's IT director, Mr Sailesh Savani. Most of the new stores will be sized between 4,600 and 5,600 square metres. To facilitate this expansion and ensure smooth operations, the retailer also has plans to upgrade its IT systems.

According to Savani: "We are implementing Oracle retail and financial systems, phase one of which will be complete by the end of this year. This would see some drastic improvements in our supply chain management whereby our suppliers will have better visibility of stocks and sales of their relevant products, which would help in effective and timely replenishment to reduce stock outs. Over the next two years, we will be investing over USD4 million in upgrading our IT systems."

The retailer is gearing up to go public as it plans to be listed on the Nairobi Stock Exchange by 2009. Savani revealed the Kisii branch in eastern Kenya was among the best performing branches ever since it was opened. "Our goal is to increase our market share by reaching out to customers in the next three years," he added.

Comment by Planet Retail:

Nakumatt's plans to open in Uganda, Rwanda and Tanzania are ambitious for the region. Previously, only Kenyan retailer Uchumi had a foreign operation, with one store operating in Uganda's capital Kampala. However, following the financial collapse of the company and the subsequent closure of its Kenyan stores until financial intervention from the government, further ambitious expansion plans will have to be put on hold. With all other Kenyan retailers confined to their local market, Nakumatt will be the most expansive Kenyan retailer, ready to match the ambitions of South African retailers such as Metcash and Shoprite. Until now, these have been the only retailers in the region with the technical know-how and financial power to realise any expansion plans of this scale.

By upgrading its supply chain and technical systems, Nakumatt is building the support structure necessary to implement such an enlarged operation. Already operating with a sophisticated structure in Kenya, Nakumatt has the experience to facilitate its foreign ambitions. Certainly, Tanzania is a market where Nakumatt stores would find a large enough customer base, especially in urban centres such as Dar es Salaam and Arusha. In both cities, South African retailer Shoprite has already opened stores, but market sizes and economic stability suggest there is room for more.
With its existing stores performing well, and a sound investment strategy in hand to support its expansion, Nakumatt should be able to avoid the mistakes made at Uchumi, such as opening too many stores too quickly, without a proper financial basis. If the plans for openings in East Africa are realised, Nakumatt's planned listing at the Nairobi Stock Exchange by 2009 should be one event to celebrate.

Copyright: www.planetretail.net

Nakumatt set for supermarket wars

Wednesday, 08 April 2009 08:43 By Patrick Kagenda
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Will Kenyan, South African giants leave Ugandan kiosks in the mud?
As Kenya’s leading supermarket chain, Nakumatt gets ready to open shop in Kampala, it seems set on competition with Kenyan rival Uchumi and South African stores Game and Shoprite.

Retail market watchers, however, say the Nakumatt survival strategy had better watch-out for the small roadside supermarkets and shops.

“Nakumatt must study the mistakes of Uchumi and, before it, Metro Cash & Carry that have suffered because of the resilience of the small shops here,” a Kenyan businessman living in Uganda told The Independent , “The small shops may not have huge capital investments and business skills but the culture of consumers here favours them.”

Unlike Kenya and South Africa where small roadside stores are stocked with emergency items like razor blades, batteries, and candy, Ugandans typically buy all items in small shops near home. These are cheaper, allow purchases of smaller quantities and offer easy credit.

Ironically, since the small shops buy their merchandise from supermarkets and wholesellers, logic would suggest that they would die out as the supermarket culture spreads. They have not.

Nakumatt is keeping a lid on its strategy but the location of its first store, its size, promised variety of items stocked, and its proposed opening of two other stores before 2010, are significant indicators.

Nakumatt’s 75,000 square feet store, with a promised 50,000 different products is to be located in the Oasis Mall on Yusuf Lule Road next to the Garden City Mall which houses Uchumi is a shopping grown for the high- end buyer.

Nakumatt stores in Kenya grossed Shs 85 billion (KShs 3.3bn) in sales during the 2008 Christmas season alone.
Nakumatt is set to compete with Game, located at the Lugogo Shopping Mall in Nakawa and Shoprite with a store at Nakawa and another in downtown Kampala. Next in line are the medium-sized Quality, Capital, and Payless. These have branches strawn around the city and its suburbs. Below these are small “supermarkets” like Kenjoy and others.

Nakumatt has invested US$ 3 million in its Nakumatt Oasis Hypermarket and plans to invest another US$ 2 million in its own expansion plan. Jeff Nchaga, the Uchumi country manager told The Independent that they are not shaken by the coming of Nakummat.

“I have to admit Nakummat is very strong, but we all have different strategies of doing business,” he said, “We have been here for 5 years and we have built a strong customer base.”Nchaga said Kampala consumers are moving from shopping at kiosks to supermarkets.

A Roadside Duka facing extiction?
“There is a lot of untapped business in Kampala. Nakummat is a regional supermarket and I hope it will do regional business,” he said.

He ruled out a price war as the current economic hard times rule out any price cuts.

Nakumatt is no stranger to competition. Starting as a small retail shop in Nakuru dealing mainly in mattresses, hence Nakumatt, it took on then leading household name and near monopoly supermarket Uchumi. Although both deal in similar products, Nakumatt has a reputation of being better managed.

It is known for staying open late, and introducing customer bonuses and promotions like the `cash back scheme’ that allows an ATM card to be used to buy goods and also get some money on top in cash; the MPESA transactions, and the Nakumatt Visa card.Its Operations Director Thiagarajan Ramamurthy was recently awarded the top marketing award in Kenya, the Fellow of the Marketing Society of Kenya (FMSK) award.

Nakumatt has 18 stores in Kenya’s major towns. It has two stores in Rwanda and has plans for four stores in Tanzania. Its regional expansion is part of a plan to be listed on the Nairobi Stock Exchange in 2010.

Its entry into the Uganda market was initially planned for 2007 but was put off mainly because of uncertainty over the small customer base.

Although an affluent class to fraternize large supermarkets has emerged, the most successful operation will be one that penetrates the majority working class consumer. Game, Shoprite, and Uchumi are located in areas that target the rich car-owning class.

Nakumatt needs to avoid the mistake of Metro Cash and Carry which, after positioning itself as an elite-only store, opened too many smaller convenience stores and Lucky 7 centres too quickly under competition from Shoprite. It did not survive. In Kenya, Nakumatt has recently introduced the C-Stores, which are modeled like the Lucky 7s.

Uchumi has opted for the other extreme of running one high-end store with mixed financial fortunes. Nakumatt’s biggest challenger in Kenya today, Tuskys is patronized mainly by the lower-end customers.

Nakumatt has recently suffered set-backs in its Kenya operation.

In November 2008 one of their stores in Nairobi was demolished by the government. It was built on a road reserve. In January 2009, a fire razed a Nakumatt store in downtown Nairobi killing 27 staff. Nakumatt’s parent company, Nakumatt Holdings and Charterhouse were a few years ago linked to money laundering and the evasion of taxes amounting to Shs 0.5 trillion (KShs18 billion). It was set to open shop in April but has since postponed to another date.

Strange seeing that Game isn't a supermarket but rather more of a wholesaler.

Strange seeing that Game isn't a supermarket but rather more of a wholesaler.

Well, in E.Africa, it is considered a supermarket. Especially in Uganda.

Kenya: Nakumatt Invests Sh1.2 Billion in Rwanda Expansion
http://www.f-arch.com/images/nakumatt%20kigali%20(small).jpg

Nakumatt Holdings has finalised a buyout bid with the proprietor of one of Rwanda's leading supermarkets, City Market Supermarket.

The supermarket chain is also undertaking the development of the Sh1.2 billion Gateway Mall complex in partnership with Virunga Property Development for its second outlet. The company will be trading in Rwanda as Nakumatt Rwanda S.A.R.L.

The conclusion of the buyout plan now paves the way for the establishment of Nakumatt City Centre at the Union Trade Centre (UTC) complex. Speaking during the sealing of the buyout plan at UTC, Nakumatt Holdings Director Thiagarajan Ramamurthy said the chain will invest more than Sh195 million in the transformation of the Nakumatt City Centre outlet.

"Rwanda is our first regional presence outside Kenya. It is a testimony of the vibrant local economy and conducive investment conditions," said Mr Ramamurthy.

Nakumatt City Centre is set to open its doors early in July. The supermarket will cover a shopping space of more than 25,000 square feet and stock more than 20, 000 products. Nakumatt Rwanda S.A.R.L will employ more than 60 Rwandese nationals and will also embark on a programme to develop the capacity of Rwanda manufacturers and producers.

Nakumatt Holdings' bid to establish a chain store in Kigali was made possible by the Rwandese government which allowed Kigali City to lease the land to them.

That led to the allocation of a 30,000 square metre piece of land in Kimihurura, a prime area of Kigali City, to Virunga Property Development Ltd, the developers of the approximate Sh1.1 billion Nakumatt project. The area is currently being occupied by the Republican Guards.

The complex will have parking space for 450 cars and 10 floors of shelf space supported by retail, entertainment, conference, office and apartment services.

Nakumatt Holdings has been developing shopping malls in partnerships with landowners and financial institutions.

In Rwanda, Nakumatt will participate in the development as an anchor tenant, paying rent to the developer. Nakumatt will be Rwanda's first multi-national branded chain supermarket.

In Kenya, it runs 19 stores in major towns including Nairobi, Mombasa, Kisumu, Eldoret, Meru and Kisii and has 24 hour services at selected branches. The company employs about 3,600 people and recorded a turnover of over $300 million (Sh19.5 billion).

Nakumatt plans new stores for Tanzania and Uganda as it fights it out for the region's supermarket business with to giant retailers based in South Africa, like Metcash and Shoprite, according to an evaluation carried out by Planet Retail, an advisory firm based in London. Besides retail business, the chain is making quiet forays into the financial services sector through the Nakumatt Visa Card launched two years ago.

Overall expansion into the region is expected to see the chain's profits rise to Sh1.2 billion by 2010 with projected three branches in Uganda, two in Rwanda and four in Tanzania.

The company expected to return a profit of Sh847 million during the last financial year that ended in February, 2008 up from Sh539 million the previous year.

"The plan is to export shopping culture into other countries and prepare to compete with established chains from other African countries," said Mr Ramamurthy in an earlier interview.

Nakumatt also expects to increase its workforce to 6,000 by February, 2010. The expansion is expected to help Nakumatt increase the number of transactions a month from 1.6 million across it 19 branches, to three million transactions by February, 2010.

The plan also involves efforts to raise basket value, the average spend per customer, from the current Sh1,050 to Sh1,200 by February, 2009.

Last year, Nakumatt Holdings also made its debut ranking in the prestigious Planet Retail top 30 global retailers listing.

To make it to the Planet Retail Top 30 Grocery Retailers in Africa & the Middle East, 2006 ranking, Nakumatt managed to beat, Germany's Metro Group, UAE's Abu Dhabi Co-op, Malaysia's Petronas, Saudi Arabia's Farm and Lebanon's Le Charcutier Aoun.

well i welcome the ambitions of nakumatt and as a kenyan its always good to see kenyan companies spread teir wings. im worried abt the competitions with the south african supermarkets because SA companies have found kenya to be their kryptonite and that makes me think that they(sa supermarkets) will come out with everything they got against kenyan companies so as to protect their east african turf. hopefully nakumatt will stand its ground.

Nairoberry I think Nakumatt has an early edge because of familiarity to the market, so long as they can keep or access quick liquid cash in readiness to fight perceived or impeding competition from SA firms I think they are safe and dry I also understand they have a pan African expansionist strategy.

Nairoberry I think Nakumatt has an early edge because of familiarity to the market, so long as they can keep or access quick liquid cash in readiness to fight perceived or impeding competition from SA firms I think they are safe and dry I also understand they have a pan African expansionist strategy.

yeah man, the access to alot of money is my only worry, i.e shoprite, game and cash & carry have access to loads of money more than their kenyan counter parts. but in terms of business strategies and marketing i believe that nakumatt is well equiped in that area. Wouldnt it be nice to have a kenyan version of shoprite? they say dreams sometimes come true.

Kenya's recovery budget
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By JUSTUS ONDARI Posted Thursday, June 11 2009 at 22:30

Finance minister Uhuru Kenyatta on Thursday transferred Kenya’s development programme to the constituencies as he sought to jump-start the sluggish economy and create more jobs. In what in essence is the country’s fiscal stimulus package, Mr Kenyatta injected funds into key sectors of the economy but channelled much of the money through the 210 constituencies.

Members of Parliament could not have asked for a better Budget as he boosted the Constituency Development Fund. Mr Kenyatta, also, the Deputy Prime Minister, proposed to have the Roads Maintenance Levy and the Kenya Roads Board Acts amended to allow 22 per cent, or Sh4.7 billion, of the roads maintenance fund to be channelled through the CDF for the maintenance of rural roads.

This will increase the amount of money devolved through CDF for roads from Sh10 billion in 2008/09 to about Sh18 billion or an average of Sh86 million per constituency. This represents an 80 per cent increase compared to the year ending in June 2009. “I am confident that CDF mechanism will ensure timely and efficient utilisation of these funds for the intended purposes,” he said.

But he hit hard at Cabinet ministers, permanent secretaries, provincial commissioners and other senior public officials who will now be allowed to use only one vehicle whose engine has a capacity of 1,800cc or more. Reading this year’s Budget against a backdrop of numerous socio-economic challenges facing the country, Mr Kenyatta was, however, confident that the economic foundation laid between 2003 and 2007 was still intact.

“We should not allow our ‘economic car’ to be run on a reverse gear again as happened early last year,” the minister said as he projected a three per cent economic growth in 2009. Mr Kenyatta allocated an additional Sh22 billion — or Sh105 million per constituency — as conditional Economic Stimulus or Resilience Package.

The money will be used to finance infrastructure development, boost education and healthcare and revive other development projects at the grassroots. The funding, to be provided under the respective ministry’s votes, will be released through the CDF framework. To ensure equitable regional development, he allocated a total of Sh1.8 billion for the construction of fresh-produce and wholesale markets countrywide.

The move was aimed at providing markets for farmers, and facilitating commerce, trade and rural enterprise development. The allocation means that every constituency will get Sh10 million to built the markets. Another Sh1.1 billion — or Sh8 million per constituency — will be used to build 200 fish-farming ponds covering 140 constituencies. This will in turn improve nutrition and create over 120,000 jobs and income-earning opportunities in all regions.

The constituencies will also receive Sh525 million, or Sh2.5 million each, for the construction of Jua Kali (informal sector)sheds and another Sh210 million — or Sh1 million per constituency — to equip the sheds with appropriate tools and equipment.

Besides the direct funding to the ministries of Medical Services and Public Health, Mr Kenyatta allocated Sh4 billion under the Public Health Ministry for the construction and equipping of a health centres in every constituency, each of which will get Sh20 million.

To promote preventive health-care, an additional 4,200 nurses, or 20 nurses per constituency, will be employed on contract terms countrywide at a cost of Sh655 million, which translates to Sh3.1 million per constituency. In promoting education, he allocated Sh1.5 billion for the upgrading of two primary schools in every constituency.

Each of the schools will also be equipped with water harvesting and underground water storage facilities. Under this arrangement, every constituency will get Sh7 million. The Budget also allocated Sh6 billion for the construction of a secondary school as a centre of excellence in each constituency, translating to Sh30 million per constituency.

Another Sh1.3 billion will be used to hire an additional 10,500 primary school teachers on contract, or 50 primary school teachers per constituency, to improve the quality of educational service. Each constituency will also receive Sh2 million from the allocated Sh353 million to recruit an additional 2,100 secondary school teachers on contract terms, or 10 teachers per constituency.

Noting that dependence on rain-fed agriculture has continued to expose the country to famine, the Budget initiates a programme intended to reduce farmers’ reliance on rain-fed agriculture to enhance the country’s food production. To boost agriculture, which accounts for a quarter of the country’s wealth, Mr Kenyatta increased the allocation of line ministries — encompassing ministries of Agriculture, Livestock, Fisheries and Forestry — by 63 per cent to Sh35 billion, up from Sh21 billion last year.

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Chirau Ali Mwakwere, Kenya’s Minister for Transport
By GITHUA KIHARA (email the author (javascript:void(0);))


Posted Monday, June 15 2009 at 00:00

A second oil refinery with a capacity to process 120,000 barrels of oil per day will be constructed in Lamu at the Kenya Coast, to meet the growing demand for oil products in the region.

Dr Mutule Kilonzo, the lead consultant of the Inter-Ministerial Committee on the Second Transport corridor, said the refinery will be built at the new port of Lamu whose construction is expected to begin next year.

It will largely refine crude oil from Southern Sudan and other parts of the world to serve the larger East African market.

“It will be set up as a merchant refinery that essentially entails being able to refine crude oil for any new comer for a fee,” Dr Kilonzo said.

“Southern Sudan does not wish to continue its dependence on the North for obvious reasons. In principle, an alternative oil pipeline is needed and Kenya will be the place to put up that pipeline,” said Dr Kilonzo.

Southern Sudan currently exports its oil through a 1,600-kilometres pipeline connecting its oilfields to the Red Sea at Port Sudan, while in comparison, the proposed Lamu to Juba pipeline will be 1,500km.

It is therefore proposed that the pipeline be constructed alongside a railway line linking the Southern Sudan oilfields to the proposed Lamu Free Port.

The entire second transport corridor — of a super railway line stretching from Lamu, passing through Garissa, Isiolo, Mararal, Lodwar, and Lokichoggio and branching from Isiolo to Juba, Addis Ababa and Nairobi — dubbed ROOLA, has other components to be implemented jointly with the pipeline, the railway line and the port.

Among these are a super highway that will connect Lamu to Addis Ababa and Juba in Southern Sudan.

A fibre optic infrastructure to link the entire corridor will also be laid and international airports constructed in Lamu, Isiolo and Lokichoggio, three important centers along the new transport corridor.

The three centers will also be made resort cities, Dr Kilonzo said.

According to the director of Shipping and Maritime Affairs at Kenya’s Ministry of Transport Peter Thuo, the government has started the tendering process for the project, which is expected to cost $16 billion.
“We are currently reviewing international and local bid that were submitted in the expression-of-interest stage to carry out feasibility studies on the project,” Mr Thuo said.

The shortlisted bidders will be required to submit detailed bids for provision of financial and technical services.

The project will be implemented through a public private partnership according to Mr Thuo. Once the feasibility studies are complete, said Mr Thuo, it will be easy to seek implementing partners.

According to Dr Kilonzo, partners will be sought based on specific components of the project.

Although the government of Qatar had shown AN interest in funding the construction of the Lamu port in return for 100,000 acres of land at the Tana Delta to grow fruits and vegetables, Kenya’s Minister for Transport Chirau Ali Mwakwere early this year said that other options were also being explored after the move drew mixed reactions, adding however that the government was keen on implementing the project.

“Some investors may only be interested in financing one component of the project, like say the railway line,” Dr Kilonzo said.

He said that various countries among them India, the United Arab Emirates, the US and Qatar have already shown interest in financing the project which was first mooted in 1975. The railway line has already been incorporated in the East African Railway master plan,” Dr Kilonzo said.

The Lamu refinery will refine some of the crude oil for the sub-regional market while the rest will be exported. Sophisticated cargo handling equipments will also be put up to facilitate tanker loading in the high seas.

The port plan also features a second pipeline to be constructed from the Lamu refinery to Addis Ababa to deliver refined oil products to Ethiopia.

A branch of a pipeline is also being considered to join Lamu to the existing Mombasa-Kampala pipeline to transport oil products to Uganda.

“But this will be decided once the planned pipelines are complete,” said Dr Kilonzo.

Uganda, which is a landlocked country relying on Mombasa port, has already planned to go-ahead with the construction of a refinery for the two billion barrels of crude reserves recently found on its territory, according to Uganda’s energy minister.

Investor interest is already heating up for Uganda’s oil discoveries since explorers — Tullow Oil and Heritage Oil — discovered hydrocarbons in the Lake Albert region bordering the Democratic Republic of Congo. Kampala expects to start pumping oil from next year.

Kenya, Dr Kilonzo said, provides an ideal gateway to the sub-region with a well-developed port as well as its increasingly diversified aerodrome network.

Southern Sudan, a recent addition to the family of peaceful nations, is expected to be a huge exporter of oil, which is more economic if refined at the port of exit, Dr Kilonzo said.

The government, he said, will also commission a study soon to explore the feasibility of extending the railway line as well as the pipeline from Juba to Bangui in Central Africa and onward to Yaoundé in Cameroon.

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Rift Valley Railways personnel repair a section of the Kenya-Uganda railway line in Kibera, Nairobi, on Friday last week.

Trade between Kenya and Uganda is set to increase significantly in the next few years after the two countries proposed to construct a railway line linking Mombasa to Kampala.


The building of the line is expected to begin in the last quarter of the next financial year and will cost more than Ksh3 billion ($37.5 million). It is not, however, clear how much the Ugandan government will be committing to the joint project.

In what appears to be a move towards making Kenya the region’s business hub, its government will overhaul the current cargo clearing system at the Port of Mombasa, which has traditionally been characterised by bureaucratic procedures.

“The port of Mombasa plays an important and strategic role not only in Kenya’s development but also in the development of the hinterland countries of Uganda, Rwanda, Democratic Republic of Congo and Southern Sudan that it serves,” Kenya’s Finance Minister, Uhuru Kenyatta, said while presenting the government’s 2009/2010 budget in parliament on Thursday.

“However, the current clearing system for cargo faces a number of challenges that compromise our country’s ability to maximise on the benefits that accrue from international trade.”

Mr Kenyatta said plans are underway to expand the port to accomodate bigger ships “while the ongoing work on the construction of a second container terminal will be accelerated.” Recent automation of operations at the port has greatly eased cargo clearance.

But even as the two states propose the ambitious plan that is aimed at boosting trade within the region, experts have warned that it could take a long time before the proposal is implemented.

“While money has been allocated, what is required is a transparent blueprint that clearly spells out the priority infrastructure to be developed or rehabilitated over the next five years. We continue to talk about roads but ignore water and sewerage infrastructure,” Ashif Kassam, managing partner at Nairobi-based consultancy firm RSM Ashvir, observed.

“The current government procurement system needs to be realigned to systems used in the private sector, which are robust and respond to procurement needs effectively. The issue of fixed-price contracts would ensure bids go to the best technical proposals,” he added.

In Uganda, Finance Minis-ter Sydda Bbumba said without expressly mentioning the railway project that the government would scale up investments in physical infrastructure.

In his budget speech, Mr Kenyatta said the railway line would ease movement of goods between the two countries, which mainly rely on road transport.

The current line, operated by Rift Valley Railways, has been hit by intermittent conflicts that have interrupted its operations on several occasions.
“The government of Uganda has made a decision to construct a new standard gauge railway line from Mombasa to western Kenya and to Kampala in Uganda.

The new railway line will not only reduce the cost of transport but also facilitate faster movement of freight and passengers, thereby enhancing competitiveness and improving the welfare of our people,” Mr Kenyatta said.

According to the Economic Survey 2009, Uganda is Kenya’s number one export destination, having bought goods and services valued at Ksh42 billion ($525 million) last year.

Then, Kenya imported goods worth slightly over Ksh5.2 billion ($65 million) from Uganda, a decline from Ksh5.9 billion ($73.8 million) in 2007.

There are proposals that part of the road maintenance fund be invested in the new railway project, but that is subject to consultations with the minister for roads, Mr Kenyatta said.

“We will be proposing an amendment to the Roads Maintenance Levy Act and the Kenya Roads Board Act to make roadbed for railway line development and maintenance eligible for funding,” the finance minister said.

Analysts say the success of the new line — which is also expected to serve Rwanda, DRC and Burundi — will only be assured if the two countries adopt the internationally recommended track width of 1.4 metres. The region’s rail system is a metre wide, a size experts have termed “obsolete” and “unproductive.”

Meanwhile, Mr Kenyatta’s assertion that he will be seeking to fund the budget deficit through domestic borrowing this financial year has been criticised.
Analysts say the country could be headed back to a borrowing spree just a few years after the government said it would “exclude all multilateral budgetary support.”

“The increased borrowing is necessary to maintain expenditures on key infrastructure projects and poverty reduction,” Mr Kenyatta said.

^^ the project was joint kenya and uganda new railway project, sorry to have forget the heading but here is the link: http://www.theeastafrican.co.ke/news/-/2558/610814/-/r2hev3z/-/index.html

Maize farmers will earn Sh1,950 for every 90kg bag of maize they sell to the National Cereals and Produce Board (NCPB), Agriculture minister William Ruto has said, adding that the board will open up maize buying centres in the South Rift region from July I.

Speaking at Sotik Primary School sports ground during the memorial service of the late assistant minister for Home Affairs Lorna Laboso, the minister urged farmers to exploit the good prices instead of selling their produce at throwaway prices to unscrupulous middlemen.

He said that over the years, farmers in the region have been exploited due to a delay by the NCPB to set up centres during harvest seasons.

He added that since maize was ready for harvest in Sotik District, the board will start by opening up the centres there.

Fertiliser

The Eldoret North MP said the Government has imported an extra 1.5 million bags of fertilizers, which is expected in the country on June 26.

These would be sold at Sh2,500 for a 50kg bag, but he assured the farmers that the prices could be reviewed down further.

Mr Ruto said the government had also allocated Sh1 billion to the Agricultural Finance Corporation (AFC) to be dished out to farmers as loans.

The loans, he said, would be given to the farmers without demands for title deeds as has been the case in the past.

However, he said, those to benefit are must be registered in groups of 10 members or more.

He added that the ministry, he will also provide districts across the country with tractors to be hired out to farmers for use in their farms.

This would check outdated farming practice like use oxen to cultivate land, he said.

Beekeepers in northern Kenya districts are set to benefit from a Government grant of Sh87 million, to develop the sub-sector.

The funds, part of which are from the African Development Bank (ADB), will see beekeepers undergo training on production, processing and marketing of honey.

More than 6,000 modern beehives will also be distributed to over 100 groups spread across 12 districts.

The regional coordinator of Ewaso Ng’iro North Development Authority Mr Kiema Mwandia said the move is aimed at boosting honey production in the region to supplement livestock, which is the main source of livelihood there.

Mr Mwandia added that the project will also see over 500,000 indigenous and exotic seedlings planted along the riparian areas of the main tributaries of River Ewaso Ng’iro to supply the bees with nectar.

“We are working closely with Kenya Forest Service in establishing apiaries and planting bee-friendly trees,” said Mr Mwandia.

link http://www.businessdailyafrica.com/Company%20Industry/-/539550/611002/-/u9ohacz/-/index.html

link: http://www.nation.co.ke/magazines/smartcompany/-/1226/611118/-/sa8mp5z/-/index.html

http://www.nation.co.ke/magazines/smartcompany/-/1226/611124/-/sa8modz/-/index.html

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The Government has unveiled a stimulus package to reduce reliance on rain-fed agriculture and enhance food production.

Finance Minister, Uhuru Kenyatta said the bold move would mark the beginning of a journey to attain food security in the country so the Kenyans never go hungry again.

The new measures would focus on mechanisation, irrigation, use of hybrid seeds and water harvesting.

Part of the plan is establishing efficient storage and marketing systems and application of scientific farming methods.

As a first step, the Government has allocated substantial resources to ministries responsible for agriculture, irrigation and regional development.

In addition, it allocated Sh3 billion toward rehabilitation and expansion of irrigable land under Bura, Hola, Tarda, Wei Wei and Kerio Valley.

Uhuru said from the investments the Government expects to harvest about one million bags of rice and maize by the end of December this year.

"As we scale up resources toward irrigable agriculture, we are confident that this great Nation will emerge as a net exporter of food by 2012," he said.

Agriculture is the mainstay of the country’s economy and represents 24 per cent of Gross Domestic Product (GDP) and about a third of its produce is exported.

However, production in the sector recorded a significant drop, declining by 5.1 per cent last year compared to a two per cent in 2007.

The decline was mainly due to low production of food crops owing to the disruption of agricultural activities during the post-election violence, unfavourable weather and high cost of agricultural inputs, particularly fuel and fertilizer.

Further, the failure of the short rains between October and November last year resulted in a sharp decline in domestic food production, particularly maize.

New plans

To promote agricultural sector and protect wheat farmers from cheap imports, the Government undertook to raise the current import duty rate on wheat from 10 per cent or $50 (Sh4,000) whichever is higher to a rate of 25 percent.

To support dairy farming sub-sector through further incentives, Uhuru announced new plans to grant an exemption of import duty and to zero rate for value added tax (VAT), heat insulated milk tanks, to help dairy farmers in preserving their milk.

He also said the Government would also enhance the national food reserves through encouragement of individuals and groups to store their produce.

Uhuru proposed to zero rate VAT on vatable supplies for the construction of grain silos, in addition to refrigerated trucks.

Safaricom fired another shot in the race to reap fully from value added services, when it signed an agreement yesterday to stream live television to its subscribers.

The agreement with Nokia, and pay television firm Digital Mobile TV (an arm of DStv), will see the mobile phone services provider beam DStv channels to subscribers with high-value Nokia handsets, configured to receive such broadcasts.

As the market opens up, and with the launch of the Teams and Seacom fibre-optic links later this month, the mobile phone market is set to experience a significant increase in new services.

While Safaricom’s latest offering is already available to subscribers with N97, N77 Nokia phones, others with the N79, N85, N86, N97, E75 and Nokia 5800 Xpress must buy a Nokia mobile TV receiver to access it.

The N97 and N77 are what are called Digital Video Broadcasting –Handhelds (DVB-H), phones enabled to receive digital broadcasts.

Personalised TV

"The service will enable us deliver personalised TV to people on the go," said Mr Peter Arina, chief commercial officer Safaricom.

The service is currently available in Nairobi and Mombasa, but will soon be rolled out to major towns across the country. The three partners are banking on the football craze and huge fan base in the country, for a quick uptake of the service, with promotional materials centered on the ongoing Confederations Cup, and next year’s World Cup.

Subscribers will pay Sh1,000 every month for the mobile TV service

"We are looking at offering different packages, depending on individual preferences. We also want to capture the mass market so pricing is unlikely to go over Sh1,000 a month," said DMTV General Manager Felix Kyengo.

Safaricom customers subscribing to the service now will, however, get the content free until April next year. The lowest priced handset through which one can get the service goes for about Sh23,000 but Nokia Head of Marketing East and Southern Africa Regina Karani said the company is expecting DBV-H enabled phones retailing at between Sh10,000 and 15,000 in the Kenyan market by the first quarter of next year.

"This will enable more people access the service. In addition, as technology evolves, there will cheaper handsets with the function coming into the market," she said.

Vivendi Universal has emerged as one of the suitors for Zain’s operations in Africa. The deal would be worth an estimated Sh936 billion ($12 billion).

If Vivendi succeeds, it would mark an ironical return of the company to the Kenyan market, after selling its 60 per cent stake in KenCell — the predecessor of Zain Kenya — to Celtel in 2005, for $230 million. Celtel in turn sold the business to the Kuwait-based company, Zain, in August last year, as part of the larger Celtel Africa, which spans 12 African countries, for $3.4 billion.

South Africa’s MTN is said to be another contender.

Vivendi is one of the largest European entertainment companies. It has a 56 per cent stake in a French mobile network — SFR — that offers mobile services in Re-Union Islands and Morocco, and it is likely that this is the brand the African operation will don.

MTN has operations in much of the region, but Kenya has remained elusive for it. It unsuccessfully attempted to buy KenCell in 2004.

Zain has grown the Kenyan operation.

It has, for instance, built the 13 per cent market share it had at the time of the takeover, to over 20 per cent currently.

However, it sill remains a distant second to Safaricom with a market share of about 70 per cent.

For Sh930 billion, Zain could make a handsome profit for the company it bought for $3.4 billon.

However, Zain Kenya refused comment on the latest developments, saying they were awaiting instructions from the head office in Kuwait.

Zain Group has posted record results for the financial year ended December 31, last year, with revenues increasing by 26 per cent to reach $7.441 billion, although fourth quarter results were hit by currency fluctuations, according to an unnamed company official.

Zain, which has operations in 22 countries across the Middle East and Africa, increased its customer base by 50 per cent to reach 63.5 million subscribers, while net profit increased by 6 per cent compared with 2007 to reach $1.2 billion.

Ground-breaking


"Despite a very challenging environment on many fronts and huge investments in network expansion, the group was able to achieve appealing and realistic levels of profitability during 2008," said Dr Saad Al Barrak, CEO, Zain recently.

He added that Zain committed more than $3 billion in network upgrades and expansion in 2008, mainly in Ghana, Iraq, Nigeria, Saudi Arabia and Sudan, which contributed to the company’s customer acquisition and revenue growth.

"These markets will continue to grow and we expect to further reap further rewards in the years ahead especially since they are all part of our ground-breaking and customer alluring ‘One Network’," he added.

But even these developments were not enough to completely shelter Zain from the global economic downturn, which dented growth in the fourth quarter, according to a report from Zawya Dow Jones.

"Results would have been much better if it wasn’t for the depreciating currencies in the Middle East and Africa. Year-on-year we are expecting an increase but it will be limited as currencies in Kuwait and Africa have depreciated against the dollar," an unnamed Zain official was quoted as saying on Zawya Dow Jones’ website

After a threat from prevailing global economic recession, oil exploration efforts are looking up once again.
Africa Oil Corporation— a Canadian oil firm— has re-jigged the efforts through a new partnership to explore black gold in the arid northern Kenyahttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.eastandard.net/mag/InsidePage.php?id=1144017012&cid=457&#) region.
Africa Oil Corporation signed the agreement with the Dubai-based oil exploration firm, Black Marlin Energy Ltd (BMEL) to seek for oil and gas resources in Anza basin, thought to hold part of the oil wealth extending to South Sudan.
http://www.eastandard.net/images/tuesday/fj160609_08.jpgAn engineer at an oil exploration site. The renewed oil search is a major boost to Kenya’s oil exploration initiative. [PHOTO: FILE]
They would prospect oil in Block 10A in the Anza Basin of northern Kenya.
The agreement also extends to exploration of potential oil fields in Ethiopia and lead towards drilling if commercial quantities of oil are found in northern Kenya and in Ethiopia’s Ogaden Basin in southern Ethiopia. In Kenya, Africa Oil will transfer a 20 per cent license interest to Black Marlin Energy subsidiary, East African Exploration Ltd (EAXL) in the Production Sharing Contract.
Black Marlin Energy Chief Executive Jeff Hume announced last week, the firm plans to invest Sh770 million over the next three years in the exercise. He said Africa Oil brings strong technical experience to the Joint Venture while Black Marlin’s business model offers high quality seismic services.
gas potential
"I am very pleased to be able to announce this strategic and exciting transaction and look forward to working very closely with Africa Oil Corp," he said last week.
Hume believes there is good oil and gas potential in the Anza Graben in Kenya. "We believe that oil and gas will be discovered somewhere in Kenya in the next two to three years," he said.
Hume said in the prospective Block 10A Production Sharing Contract, Africa Oil has executed a seismic contract with BMEL’s Upstream Petroleum Services Ltd, a geosciences services unit.
EAX is an operator in Block 1 in Kenya with a 50 per cent interest and is 40 per cent partner in Block L17/L18 near Mombasa.
Kenya represents EAX and Black Marlin’s largest exploration commitment worldwide. Africa Oil holds a 100 per cent interest in Block 10A and has farmed into Block 9 with a 30 per cent interest. Africa Oil Corp farm-in transaction with BMEL is however subject to government approval. The oil exploration agreement is a boost to the country’s oil exploration initiative as it comes against a continued global economic downturnhttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.eastandard.net/mag/InsidePage.php?id=1144017012&cid=457&#) that has restricted the operations of many oil-prospecting companies.
facilitate growth
Opening the fourth East African Petroleum Conference in Mombasa recently, Energy Minister Kiraitu Murungi said the economic crisis was a serious threat to the country's pursuit for oil deposits as most companies involved in the search were caught up in the situation.
In his Budget speech Finance Minister Uhuru Kenyatta said the Government has introduced new measures to reduce the cost and encourage private sector players to conduct oil exploration activities.
He said plans are in place to grant import duty exemption on equipment and inputs excluding motor vehicles imported by a licensed company for direct and exclusive use in oil, gas or geothermal exploration and development.
Uhuru said these would help fast-track ongoing exploration initiatives and complement Government’s efforts towards addressing the aspirations of the people and facilitate growth of the economy.
The measures in the 2009 Budget anchored on the Theme: "Overcoming Today’s Challenges for a Better Kenya Tomorrow" comes when local oil exploration efforts appears to be looking up again after encountering serious threat from the global economic recession.
Kiraitu said most companies engaged in oil exploration in the country had either put on hold or scaled down operations due to the capital intensity of the exploration process.
"I wish to confirm that Kenya 's exploration efforts have been seriously affected by the economic crisis," he said.

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The World Bank has approved a Sh7 billion ($90 million) investment programme to strengthen agriculture in East Africa.

The East Africa Agricultural Productivity programme would benefit Ethiopia, Kenya and Tanzania with an allocation of $30 million (Sh2.5 billion) each.

The Bank’s Sector Manager for Agriculture and Rural in the Africa Region Karen Brooks said the funds would strengthen generation of technology, training and dissemination programmes for regional priority commodities.

She identified the commodities to be prioritised by the three countries under the programme as dairy, cassava rice and wheat.

"Agricultural technology is fundamental to growth in productivity and will enable agriculture to play a transformative role in Africa’s economic development," said Brooks.

She said the programme would contribute to the growth, structural change and food security of the three countries.

Advanced technology

Agriculture accounts for two-fifths of the Gross Domestic Product in East Africa and it is the primary source of income for more than two-thirds of the population. It is key to poverty reduction and better livelihoods for the people of three countries—which have a combined population of nearly 160 million.

David Nielson, the Task Team Leader of the programme said advanced technologies are necessary to empower farmers improve their responsiveness to food price shocks through increased access to inputs, including seeds of improved cultivators and improved livestock.

Agricultural investment

"This programme will support the three countries to lower barriers of movement of technologies across borders and increase the regional space for inputs markets constrained by the small size of national markets," he added.

The programme will support efforts to scale up and develop national research programmes into Regional Centres of Excellence that would take a leading role in technology generation, dissemination and training on a regional basis.

Nielson said it is part of the Bank’s regional agricultural strategy to support activities that will be co-ordinated across three or more countries and generate benefits that spill over country boundaries.

It will also strengthen regional integration in the Common Market for Eastern and Southern Africa and provide a platform for regional agricultural policy harmonization, he added.

The programme will complement the agricultural investment programmes that are being implemented in the three countries.

KCB shares go on sale in Rwanda bourse

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Updated 23 hr(s) 57 min(s) ago

Kenya Commercial Bank (KCB) commenced trading its shares on Rwanda Stock Exchange yesterday as it sought to make cross-listing part of its expansion strategy.

Cross-listing is when a firm lists its ordinary shares on one or more foreign stock market in addition to its domestic market.

Rwanda Minister for Finance and Economic Planning, James Musoni inaugurated the trading and commended the bank for pursuing the region’s economic integration process.

"KCB has, by this cross-listing, shown its confidence in our financial sector and the growth of our economy thus giving our people the opportunity to buy its shares," said the minister.

He expressed confidence that the action by the bank would make other private sector companies in Rwanda list their shares on the stock exchange.

KCB Group Chairman, Peter Muthoka said the bank was excited to be the first private equity listed on the Rwanda market.

Chief Executive Martin Oduor-Otieno said the move was vital to the growth of Rwanda’s stock market, which has been dominated by bonds since inception 18 months ago.

"This is very important for us as we help open a new chapter for this country’s finance market," he said.

Timing Ideal

He said the move would provide investment opportunities to thousands of Rwandese willing to invest in the stock market.

The action by KCB comes barely seven months after the bank began operations in that country. Muthoka described the timing as ideal.

"We hope investors share our vision of an East African business that is owned, managed and patronised by East Africans," he added.

Muthoka told Rwanda investors that the Group reported profit before tax of about RWF 42.7 billion (Sh6.02 billion).

He said the good performance enabled the Board pay a dividend to shareholders of about RWF 7 (Sh1) for every ordinary share.

"We know that the value of the shares on any stock market reflects the actual value stakeholders attach to the business and we continue to put in place strategies to ensure we sustain our good performance going forward," Muthoka said.

Sh140b infrastructure budget to lift investment

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The Government is betting on its Sh140 billion expenditure on roads, rail, ports, broadband and energy to lift up the economy.

In the 2009/10 budget, Treasury intends to scale up its investment in infrastructure, in the hope construction work would generate jobs.

With the shelving of plans to float the Sh33.6 billion infrastructure bond, Treasury has been under pressure to raise funds for infrastructure projects.

In the 2008/09 fiscal year, the Government floated a Sh18.5 billion infrastructure bond, in an effort to bridge this financing gap.

The move was supported by a heavy participation of the World Bank, European Union, African Development Bank and China, especially in the road and energy sector.

While Treasury has been increasing its allocation, progress in putting back the country’s infrastructure to top condition has been slow, with no new roads coming up over the last six years, especially in rural areas. "While we have made significant progress in expanding the road net work in rural areas, we still face serious challenges with respect to timely routine maintenance to ensure they are functional throughout the year," Deputy Premier and Finance Minister Uhuru Kenyatta told Parliament last week.


Fuel levy fund

This is despite the fact that part of the fuel levy fund is available for this purpose.

To improve the state of rural roads, Treasury is seeking to have a portion of the fuel levy meant for the rural roads, channeled through the Constituency Development Fund.

In order to deal with cargo pile-up problems at the port of Mombasa, the Government will establish in the course of the year a single window port community based system to facilitate faster, efficient and competitive clearance.

"In addition, plans are underway to dredge the port and make it accessible for bigger ships, while the on-going work on the construction of a second container terminal will be accelerated," Uhuru said in his budget speech. Meanwhile, the railway system remains derailed as the Government attempts to wriggle out of its concession agreement with the Rift Valley Railways consortium.

Plans to construct a new standard gauge railway line from Mombasa to Western Kenya and to Kampala in Uganda remains uncertain, given the diplomatic row between the two states over Migingo Island.

Treasury is thinking of using the road maintenance levy to invest in this railway.

KDN in a Sh1.5b deal to upgrade network

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Kenya Data Networks has signed a Sh1.5billion deal with Alcatel-Lucent to upgrade its broadband network across the region.

The money is part of the Sh15.6billion ($200million) KDN intends to use to expand its infrastructure and capability in the region.

The agreement covers the supply, integration, installation and deployment of Alcatel-Lucent’s advanced optical networking, and optical switching solutions for KDN’s transport network across Kenya and in East Africa.

The deployment of the Alcatel-Lucent solution will start from Mombasa to Nairobi, before extending to the major links connecting Kenya with neighboring countries.

"Our objective is to continue providing our customers with a wide range of beneficial, easy-to-use carrier, business and residential services...this will provide us with a cost-effective transmission solution without service interruptions," said Kai Wulff, CEO of KDN.

Kai said home and office users can use the company’s Wi-fi connection (butterfly) for free.

The new venture will see KDN leverage on Alcatel-Lucent’s Triple Play Service Delivery Architecture to give mobile, residential and enterprise customers more speed, higher quality, and unequalled stability for triple play services along with guaranteed quality of service for business critical applications, and future mobile services.

Once deployed, KDN’s expanded network will cover 12 metro areas across Kenya. The expanded network will enhance KDN’s state-of-the-art IP infrastructure with more resilience, more capacity, and more flexibility. It also sets a new benchmark for high performance and Quality of Service, two key components required to offer reliable triple play services at non-blocking speeds, simultaneously to both business and residential users.

Women financier to up lending

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By MERCY GAKII Posted Friday, June 19 2009 at 20:00

The Kenya Women Finance Trust plans to increase the amount of money it disburses to women to Sh15 billion this year, up from Sh9.1 billion that was disbursed in 2008.

Already, the organisation has loaned out Sh5.7 billion to more than 298,325 women. “Women have great discipline in servicing their loans, a habit that we have trained and encouraged them to cultivate. That is why we can boast of a 98 per cent repayment rate,” said Dr Jeniffer Riria, the chief executive.

The women’s trust is also hoping to get a license that will allow it to start taking deposits by the end of the year, to enable women make deposits with it.

The women’s finance trust has also announced plans to start mobile banking services in line with mobile phone services provider Safaricom, and will submit its findings to the Central Bank of Kenya later in the year.

Rural women

The micro-financier has expanded to 167 branches up from 142 the year before, bringing loan facilities nearer to its target clients — the rural women who mostly have had no prior experience in business.

“If successful, the plan will enable us take services closer to our clients who are mainly rural women in micro and small enterprises.” The trust was the first to launch a 3-in-1 medical cover for its clients, which today runs at Sh36 million.

Jubilee sees new growth in downturn

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Jubilee Holdings Ltd, which owns insurers in Kenya, Uganda, Tanzania and Mauritius, is eyeing the opportunities that the global economic slowdown will generate to grow its business this year.

According to the firm’s chairman, Nizar Juma, the group’s financial strength, expertise and depth of resources to execute development initiatives and regional expansion will enable it tap into the opportunities.

“We believe that in difficult times there are customers who will place increasing emphasis on financial strength and quality in the selection of their insurance provider,” Mr Juma told the shareholders during the company’s 71st Annual General Meeting held at Nairobi’s Serena Hotel on Monday.

“Such opportunities will be at the forefront of our growth strategy in 2009 and beyond,” he said.

Noting that crisis is starting to directly impact on the region, he said the company will increase its emphasis on sound risk management and effective oversight. This will safeguard the insurer’s position in the region while focusing on profitability.

During the year ended December 31, 2008, the company’s pre-tax profit increased by 11.2 per cent to Sh900.7 million up from Sh809.6 million recorded in 2007.

Mr Juma said the performance was achieved under difficult market conditions hit by the post-election violence and the financial crisis.

Most challenging

“The year 2008 will be remembered as one of the most challenging years in the history of the region,” he said.

Over the same period, its gross written premium increased by 33.8 per cent to Sh7.6 million.

The group’s general insurance grew by 34.7 per cent to Sh5.2 billion from Sh3.8 billion in 2007 while medical insurance premium grew by 19.3 per cent to Sh1.5 billion from Sh1.2 billion over the same period.

Life insurance premium income and deposit administration inflows increased by 30.2 per cent in 2008 to Sh2.3 billion from Sh1.8 billion in the previous year.

Pokot residents excited about cement factory

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Trailers being loaded with limestone at Kavee Quarry in Ortum, West Pokot District. The deposits are then transported to Uganda for cement production. Photo/JARED NYATAYA.

By BARNABAS BIIPosted Sunday, June 21 2009 at 17:51

Construction of a cement factory in Pokot will transform the livelihood of the local community by providing income that will improve their living standards, district development officer Ms Gladys Kinyua has said.

The move follows endorsement of Cemtech Limited, a subsidiary of an Indian company, with rights to establish a cement factory at Ortum in Pokot Central District.

Pokot County Council chairman Mr David Moiben disclosed yesterday that the company has forwarded a proposal and work plan worth over Sh8.1 billion to build the cement factory at Sebit and Chebchoi area.

Construction of the plant is expected to commence next month.

Members of the community called on the government to fast track the issuance of an industrial license to enable the company commence construction work.

Interest

Another cement manufacturing company, Mehta Group has also expressed interest in putting up a processing plant in Ortum.

“The government will supply electricity to Ortum under the rural electrification programme to enable the investor put up the factory,” Mr Moiben said.

He added that water supply will be connected to the site to speed up the construction process, noting that the project will boost the socio-economic status of the locals.

“We expect council revenue to increase following the construction of the factory. It will also create multiplier effect as it will promote the establishment of small and medium scale enterprises,” said Mr Moiben.

Ms Kinyua disclosed that the district was endored with untapped minerals such as gold, rupees and green-jennet and challenged other investors to explore the potential.

Pokot residents excited about cement factory

http://www.nation.co.ke/image/view/-/543016/highRes/68101/-/maxw/600/-/duw8daz/-/PIX+4.jpg
Trailers being loaded with limestone at Kavee Quarry in Ortum, West Pokot District. The deposits are then transported to Uganda for cement production. Photo/JARED NYATAYA.

By BARNABAS BIIPosted Sunday, June 21 2009 at 17:51

Construction of a cement factory in Pokot will transform the livelihood of the local community by providing income that will improve their living standards, district development officer Ms Gladys Kinyua has said.

The move follows endorsement of Cemtech Limited, a subsidiary of an Indian company, with rights to establish a cement factory at Ortum in Pokot Central District.

Pokot County Council chairman Mr David Moiben disclosed yesterday that the company has forwarded a proposal and work plan worth over Sh8.1 billion to build the cement factory at Sebit and Chebchoi area.

Construction of the plant is expected to commence next month.

Members of the community called on the government to fast track the issuance of an industrial license to enable the company commence construction work.

Interest

Another cement manufacturing company, Mehta Group has also expressed interest in putting up a processing plant in Ortum.

“The government will supply electricity to Ortum under the rural electrification programme to enable the investor put up the factory,” Mr Moiben said.

He added that water supply will be connected to the site to speed up the construction process, noting that the project will boost the socio-economic status of the locals.

“We expect council revenue to increase following the construction of the factory. It will also create multiplier effect as it will promote the establishment of small and medium scale enterprises,” said Mr Moiben.

Ms Kinyua disclosed that the district was endored with untapped minerals such as gold, rupees and green-jennet and challenged other investors to explore the potential.


How much money do these companies typically take?

^^No clue,but they open up rural areas:)

Tax waive on airtime will boost ICT growth

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By James Ratemo

With mobile communication popularity on the rise, all eyes are on Finance Minister Uhuru Kenyatta to see if he will reduce or waive taxes on airtime and mobile phones.

Stakeholders say high cost of communication prohibits growth in the telecommunications sector, especially in rural areas.

Yu Marketing Director Anna Othoro said mobile phone companies pay 10 per cent excise duty and 16 per cent VAT on air time.

The custom duty on mobile phones and accessories has also seen prices of handsets remain high and out of reach for some Kenyans.

Nokia Communications Manager, Eastern and Southern Africa, Dorothy Ooko said the same logic used to zero rate taxes on computers two years ago should apply to mobile phones since most people access the Internet via phones.

Internet experience

"Top on my wish list is removal of VAT and license fee on all mobile phones in East Africa. Stakeholders especially ordinary Kenyans will find mobile phones affordable and this will empower them in carrying out their activities," she said.

She said for many people in Africa, their first Internet experience will be with a mobile device as laptops and PCs are too costly or impractical.

"The Internet penetration in Kenya is about 33.6 per cent. We believe that through mobile phones, this penetration can be increased as entrenched in Vision 2030," she argued.

The high cost of mobile phones is also partly to blame for the increased shipping of counterfeits cell phones to the country.

The Ministry of Information requested Treasury for a stimulus plan for the ICT sector to help stock computers in rural digital villages ahead of the fibre optic cable.

PS Ministry of information Bitange Ndemo said inadequate funding for computers in schools and digital villages would delay technology take up once the undersea cable lands.

"We have also requested treasury to extend the rebate to schools so that we can have enough computers to ensure maximum utilisation of the fibre optic. We are waiting for the budget to see if our request will be accepted," he said.

The much-awaited fibre optic cable would land in Mombasa this week.

Kenya has for long been relying on World Bank funding to roll out digital villages. Although the World Bank has okayed release of the Sh800 million ($10million) for Digital Villages, Dr Ndemo said recently, there are hitches on the utilisation of the money due to the Bank’s usual bureaucracy and stringent requirements.

Expressed hope

The money was part of the Sh9.1 billion given through the World Bank’s Kenya Transparency and Communication Infrastructure Programme .

Kenya ICT Board Deputy Managing Director Victor Kyalo expressed hope that the Finance Minister would pump in more money for completion of a digital data centre and the ongoing laying of terrestrial fibre cable.

Emirates to increase flights to Nairobi, set up visa agency

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Updated 2 hr(s) 7 min(s) ago
By John Oyuke

Emirates Airline plans to increase flights to Nairobi to cater for the increasing number of visitors from the United Arab Emirates to Kenya.

The airline also plans to set up a dedicated visa-handling agency in Kenya as the number of business and leisure visitors from the Middle East increases.

Regional Manager for East Africa Essa Ahmad said the carrier plans to increase flight between Nairobi and Dubai from 12 to 14 by end of this year. He said Kenya was an important market and the airline was keen on seeing the strong linkage between Dubai and Nairobi maintained.

Ahmad said the airline was keen to expand the scope of its services through increased flights between the two cities as it expands its network across Africa.

The decision by the airline comes at a time when Kenya Tourism Board figures indicate a surge in tourist numbers from the United Arab Emirates to Kenya.

Roads and housing lift cement sales

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Updated 16 hr(s) 11 min(s) ago
By John Oyuke and Reuters

Bamburi Cement Group expects consumption in East Africa to grow 12 per cent this year thanks to road projects and individual home building.

Managing Director Hussein Mansi said cement consumption in East Africa is still growing.

He, however, noted the increase is slightly below the expectation growth. "We were expecting it to remain 15 per cent but we see about 12 per cent," Mansi told reporters in Nairobi yesterday.

Kenya, Uganda, Tanzania and Rwanda unveiled a boost in spending on infrastructure projects this month in their annual budgets to maintain growth.

tough environment

The Group announced trading results for the financial year ended December 31, 2008 early this year.

It recorded a 10 per cent increase in operating profit to Sh6.1 billion up from Sh5.5 billion in 2007.

Group chairman Richard Kemoli said the group returned impressive results this year despite a tough operating environment.

He said despite the challenges across the region, the group recorded strong sales, especially in Kenya stimulated by strong market recovery after the first quarter of the year augmented by good production performance.

The Group majority owned by Lafarge, the world’s biggest building materials group, said in February the cement market might prove resilient during the global economic downturn.

Kenyan wins international biologists award
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Posted Saturday, June 27 2009 at 11:55

A Kenyan has been named winner of the 2009 Young Women Conservation Biologists Award. Ms Shivani Bhalla was unanimously selected by Society for Conservation Biology (SCB) Africa Section Young Women Conservation Biologists Awards Panel.

This is the third year that the award has been presented. The Award certificate will be presented at the 2009 SCB meeting, to be held in Beijing from 11-16 July, 2009.

"In addition to Ms Bhalla’s academic excellence, her breadth and depth of activities in the conservation and community awareness arenas was second to none," a statement from the panel says.

It quotes Dr Phoebe Barnard (SCB Africa Section Award Panel Chair 2007 and 2009) saying: "We in Africa are really fortunate to have conservation biologists with such passion and energy in our midst." Ms Bhalla is currently attaining her PhD through the University of Oxford’s Department of Zoology.

Working with pastoralists in Samburu, Northern Kenya, Ms Bhalla seeks to reduce livestock loss to predators, track lion movement in and out of the protected areas (Samburu, Buffalo Springs and Shaba National Reserves) and monitor habitat changes and prey numbers.

Africa’s lion population has dramatically reduced in recent years because of habitat reduction and human-lion conflict. "If local communities are not engaged as part of the solution, lions will disappear from the landscape, " says Ms Bhalla.

The 2009 mainstream SCB awardees (for the SCB LaRoe and Distinguished Service Awards) include Joel Berger, George Schaller and Kamal Bawa, and Ms Shivani will be attending the conference to receive her award personally.

The 2007 winner of the YWCB Award was Margaret Aanyu, freshwater biologist from Uganda, and the 2008 winner was Kristal Maze, chief director of biodiversity planning and mainstreaming from South Africa.

The non-monetary award is on a nomination basis and is aimed at recognising the contribution of early to mid career African women in conservation. The nominee is expected to demonstrate evidence of leadership, creativity, self motivation and enthusiasm.

Kenya eyes Eastern Europe for tourist arrivals

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June 27 2009]

Kenya said on Friday it has launched a tourism marketing campaign in Eastern Europe with the first stop being Moscow, where 200,000 US dollars has been provided for the initial tapping of the Russian tourism source market.
Tourism Minister Najib Balala, who is leading a marketing delegation in the key eastern European tourist source markets of Russia, the Czech Republic and Poland, said the initial investment will focus on consumer advertizing and placement of 36 billboards at strategic points in the city of Moscow.
"The motive of reaching out to Russia and Eastern Europe is to increase the number of arrivals from this important market," Balala said in a statement from the Tourism Ministry.
"In doing so Kenya will have diversified her tourists markets and avoided over-reliance on the traditional markets of Western Europe and North America," he added.
The statement said the initiative was part of the Kenya Tourist Board Tourist Source Market Diversification Program which runs from June to August.
Balala also announced the opening of a Marketing Development Representative office in Moscow represented by a reputable international firm, "Aviareps Russia". The firm was appointed two months ago and has already started work.
Last year, Kenya received a modest 3,000 tourists from Russian, but this number is remarkable given the minimal tourism promotion investments that Kenya has devoted to the country.
Owing to its expansive population of 142 million people with a very high per capita income of 14, 700 dollars, the Russian federation has a high potential as a tourist source market.
As part of the current marketing initiative, the Kenya Tourist Board will organize a familiarization trip for Russian travel writers, travel trade and investors to Kenya in July to experience the destination.
Then they will be in a better position to help market Kenya in Russia.
Even though there are no direct air connections between Nairobi and Moscow, the minister said it is possible that by the end of 2009, there will be direct flights either through charter, or by a scheduled airline following the launch of the Kenya destination in Russia.
Kenya's tourism earnings declined by 20 percent in 2008 to 52. 71 billion shillings (about 676 million U. S. dollars) from the previous year's 65.4 billion shillings.
KTB attributed the reduction in earnings to the country's post- election violence in 2008, which battered the east African nation's economy and scarred visitors.

Zain, Western Union tap Diaspora cash

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Published on 26/06/2009
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By Macharia Kamau

Western Union has tapped its advantage in handling remittances from Kenyans living abroad, under a new partnership with Zain Kenya. Under the agreement unveiled yesterday, the two firms will allow the Kenyans living in Africa and the Middle East to send money to their kin via their handsets using Zap, the international mobile money transfer and banking service owned by Zain. The move could make up slightly for loss of local market share by Western Union to Safaricom’s M-Pesa service. The Standard reported last week that PostaPay, Western Union and Moneygram had lost a significant chunk of their market share in local money transfers to M-Pesa. The partnership between Zain and Western Union is, however, limited to transfers among the 24 countries in Africa and Middle East, where Zain operates.

Much of the money remitted into the country originates from Western Europe and North America. "This service will enable people working and living abroad to send money home safely and fast to their friends and families, not only in the cities, but also directly to the villag-es," said Dr Saad Al Barrak chief executive Zain Group. The agreement will enable people to send money from participating Western Union locations around the world, in the same way they do today.

A Changing Landscape

On the receiving end, subscribers to Zap in selected countries will be able to choose whether the means through which to receive the money, either at a Western Union Agent or in accounts tied to their mobile phones. "The ability to move money with a mobile phone is changing the landscape of financial services and we look forward to connecting Western Union’s global network with the Zap platform to extend services throughout Africa," said Gail Galuppo executive vice president and chief marketing officer Western Union. The agreement will give Zain Kenya a chance to tap into the lucrative remittances market that sees billions sent into the country every year. Traditional money transfer services have been the dominated this market in the past. Remittances by Kenyans living abroad have steadily grown over the years, to becoming one of top foreign currency earners for the country.

Statistics from the Central Bank of Kenya show the total amount remitted to Kenya stood at Sh48 billion.

ICT and Outsourcing to Kenya event 2008

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KenCall - Winner of the Legatum Award 2007

8fp6dPIoaes&feature

State to put one million acres under irrigation

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William Ruto,Agriculture Minister

Published on 28/06/2009
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The Government will increase land under irrigation to one million acres (404,700 hectares) in five years, to attain food security despite increasing drought, an Agriculture ministry official said.

The country experienced long droughts, last year, leaving 10 million people in need of food aid and causing the sector, which contributes 25 per cent to gross domestic product, to contract sharply.

Very little land is currently irrigated, especially for grain production. "If every year we put between 200,000 and 250,000 acres, then in five years’ time we would have a million," Agriculture Permanent Secretary Romano Kiome told Reuters. He said the initial phase of the programme, which was allocated Sh3 billion ($39.11 million) in the Budget, will aim to revive moribund irrigation schemes.

Several projects in different parts of the country including the coast ran aground due to mismanagement in the past.

Kiome said the ministry had cut projected 2009 output for the staple of maize due to poor rainfall beginning in March.

"We had initially projected about 26 million bags... we have scaled it down to 24 million because of where we are on the weather," he said, adding the country requires 32 million bags. "Unless the weather improves, we are at risk."

The Government opened up maize imports earlier this year, and Kiome said retail prices of maize and flour were stabilising.

He said the production outlook for vegetables was much better because they grow faster and rains that had already fallen might support it.

Coffee Export Earnings

Meanwhile, Kenya expects its coffee export earnings to rise to 12-15 billion shillings ($156-196 million) in 2009 thanks to good prices and higher output, the ministry of agriculture’s top official said on Friday. While Kenya’s crop is relatively small, its high quality beans are sought after by world roasters to blend with coffee from other regions. The east African country has previously earned 8-10 billion shillings each year on average.

"Prices are good ... I expect between 12 and 15 billion," Agriculture Ministry Permanent Secretary Romano Kiome said in an interview.

Kiome told Reuters he also expected

coffee output to jump to 60,000 tonnes in the season to the end of September, up from 42,000 in the 2007/08 crop year.

Essar Telecom Kenya gets Sh7.5bn funding

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A client sends a text message at the a yu connection centre.

By JEVANS NYABIAGE
Posted Tuesday, June 30 2009 at 16:38

Mobile phone services operator Essar Telecom Kenya Holdings Ltd has received Sh7.5 billion from Pan African Infrastructure Development Fund (PAIDF) to expand its African operations.

“We are delighted to have PAIDF as an investor in our business. We look forward to leveraging our understanding and experience of the telecommunications industry along with PAIDF’s regional presence and intelligence as ETKL enters its next phase of network roll out in the Kenyan market,” said Essar Telecom Kenya chief executive Srinivasa Iyengar on Tuesday.

New equity

The new equity is expected to help the company expand to other areas of the country.

Essar global last year said it was investing $500 million over two years in Econet Wireless Kenya, now known as Essar Telecom Kenya Holdings Ltd for more expansion.

The company through its subsidiary Essar Communications Holdings bought 49 per cent of South Africa-based Econet Wireless International in December 2007, which in turn holds 70 per cent of Econet Wireless Kenya Ltd.

According to the company records, it currently has about 400,000 subscribers on its network in Nairobi and Mombasa and expects this number to grow significantly as it completes it roll-out across Kenya by end of the year.

Mr Tshepo Mahloele, CEO Harith, the fund managers for PAIDF said the investment is in line with the fund’s strategy to partner with companies and individuals looking to expand on infrastructure investment opportunities on the African continent.

Essar holds a 33 per cent interest in Vodafone Essar, which is a joint venture with the Vodafone Group and is one of India’s largest cellular service providers with over 75 million subscribers.

Target youth

Essar Telecom Kenya entered the Kenyan market in October 2008 in an environment then dominated by Safaricom, Zain Kenya and Telkom Kenya.

When the yu brand was launched in the Kenyan market, the strategy was primarily to target the youthful segment.

Analysts in the telecoms sector, however, predict that the Kenyan market which is more difficult to penetrate is not determined by pricing but service satisfaction.

PAIDF is a Pan African fund focused on investing in and developing infrastructure projects across African nations. The PAIDF is based in Johannesburg and Tunisia.

CMA to step up investor education campaigns

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Published on 29/06/2009

The Capital Markets Authority (CMA) has pledged to step up investor education campaigns to restore confidence in the local market.

Mrs Stella Kilonzo, the authority’s chief executive said capital markets would only function efficiently when investors are knowledgeable.

"The authority is pursuing an elaborate investor education programme through various channels," said Kilonzo.

She was speaking during the CMA University Challenge Award Ceremony in Nairobi on Friday.

The year-long initiative attracted 24 finalists from 12 universities including University of Nairobi, Kenyatta University, Moi University, Egerton University and Jomo Kenyatta University of Agriculture and Technology.

The purpose of this initiative is to enlighten young Kenyans on the opportunities presented by investing in financial products, promoting a savings culture among the youth and informing them on the returns and risks associated with such investments.

The market regulator recognises that investor awareness is vital, since market abuses and malpractice target the unsophisticated investor.

Market reform agenda

The best way to protect such an investor is to raise his/her knowledge base and skills on issues related to investment in equities and other Capital market products.

"The Authority has therefore identified investor education and protection issues as crucial in the market reform agenda," said Kilonzo. The all-inclusive investor education programme is aimed at creating a forum for the exchange of ideas and information among experts, practitioners and the investing public.

The idea is to seek to develop a dialogue that will assist both the current and potential investors have a better understanding of the capital market with an aim of improving the volume and depth of engagement within the market.

Investors are the backbone of capital markets and determine the level of activity in the market and economy.

Investor interests

A core mandate of the CMA is the protection of investor interests, a role that it seeks to achieve by empowering investors through information and awareness programmes.

Meanwhile, the Kenya Association of Stockbrokers and Investment Banks has appointed Michael Gichohi of Suntra Investment Bank the chairman of the new board of directors.

Other directors are Mr John Kirimi, Mr King’ori Gathinji, Mr Dennis Waweru, Mr Geoffrey Odundo and Mr Fred Maina.

Those who exited are Mr Job Kihumba of Standard Investment Bank and Mr George Maina of Africa Investment Bank.

The two did not offer themselves for re-election as they are board members at the Nairobi Stock Exchange.



Sharia-friendly broker gets licence from CMA

Published on 26/06/2009
By John Oyuke

FCB Capital— a subsidiary of Family Community Bank— has been licensed as an investment bank.

Capital Markets Authority (CMA) has allowed the bank to undertake Sharia compliant investment banking activities in the country and region.

FCB Capital Chief Executive Mr Nathif Adam said the Bank is fully capitalised in line with CMA requirements and plans to make a thrust into untapped investment opportunities.

"This is yet another quick "first" for us and a confirmation of our commitment to deliver value to the community and our country," he noted.

He said through FCB Capital, the group aims to deliver a full choice of alternative investment opportunities, enabling Sharia-compliant investors to construct balanced portfolios.

Adam said the bank’s products and services would cover a wide range of Sharia-compliant investment activities, including Islamic Bonds (Sukuk) and Sharia compliant stocks.

It also plans to cover property Investment Funds including Real Estate Investment Trusts and mutual funds. Others are Public-Private Partnership projects through the issuance of Sukuk (bonds) such as Municipality Sukuk, among others.

These, Adam added, would be in addition to offering structured Product Funds, such as trade finance portfolios, venture Capital and Private Equity, pension Products, Corporate Advisory and Sharia Advisory.Adam believes that there is a clear market need for a bank such as FCB Capital.

Trade Finance

"We several inquiries from Kenyan and regional investors seeking our expertise" he noted.

He explained that through its business approach which works on an equity syndication model, the bank is confident it would play a pivotal role of directing profit-seeking capital to important niche investment opportunities.

Adam said the bank also expects through its links with the Islamic finance fraternity globally, to be a new fund raising channel in the form of Foreign Direct Investment (FDI).

Adam said the FDIs would be reasonably priced and include long-term financing suitable for infrastructure projects.

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Kenya has managed to convince Tanzania to put up a joint gas plant in Mombasa for processing of natural gas deposits from her southern neighbour.

The African Development Bank will finance studies for construction of the Dar -es- Salaam-Tanga-Mombasa natural gas pipeline that will pave way for the construction of the plant by year end, according to an energy official at the East African Community (EAC) Secretariat.

Last week, potential investors were invited through a memorandum on the United Nations Business Development to express interest for the pipeline project.

Energy minister Kiraitu Murungi and his counterpart William Ngeleja, Tanzania’s minister for energy and minerals are expected to complete modalities for the multi-billion twin projects.

“I have invited my Tanzanian counterpart for talks in Nairobi for the Tanzanian gas to be processed in a new plant in Mombasa,” said Mr Murungi recently.

“With the assistance of the AfDB, we are going to carry out a study for the pipeline to run from Dar- es- Salaam to Mombasa via Tanga,” Mizengo Pinda, Tanzania’s prime minister recently told investors in Dar- es -Salaam.

Tanzania has natural gas reserves in Songo Songo, in Mnazi Bay, at Mkuranga, some 40 kilometres south of Dar es Salaam and Kiliwani on the Songo Songo Island.

Analysts say it makes more sense to build another extension from Kenya’s pipeline to serve Tanzania, rather than Tanzania going it alone and building one from Dar-es-Salaam.

Among the expected beneficiaries include Kenya’s biggest independent power producer at Rabai near Mombasa.

The single largest power project by an independent power producer Aldwych International Limited and Burmeister & Wain Scandinavian Contractor AS (BWSC) is set to be completed by December, easing current pressure on the national grid.

“The plant could use natural gas which is cheaper, once we complete an arrangement-for a pipeline connecting Mombasa and the gas fields at Songo Songo in Northern Tanzania are complete,” said Energy Permanent Secretary Patrick Nyoike.

When completed, the Sh12 billion plant will add 90 megawatts to the national grid through a 20-year power purchase agreement signed with the Kenya Power and Lighting Company (KPLC).




The project has been awarded on a 20-year Build Own Operate (BOO) basis through international competitive bidding process.

The plant is likely to use modern technology hence more efficient than existing independent power producers (IPPs) whose construction has taken too longer than initially planned.

In March, the EAC Sectoral Council on Energy approved the terms of reference for the feasibility study of the line to supply natural gas to Mombasa for power generation and other industrial applications both in Mombasa and along the route.

While the gas plant and pipeline projects were to start in 2004, the delay is attributed to competing interests of the two countries, elbowing out the more crucial business concerns.

All along, Tanzania intends to construct an oil refinery in Dar-es Salaam and a 1,150 km petroleum pipeline from the port of Dar -es -Salaam to Mwanza. The country has vast gas deposits used to generate electricity.

The off-shore Songo Songo gas fields in Lindi region were discovered in 1974, but gas production started 30 years later (in July 2004).

It is estimated that possible gas reserves that can be produced are in the range of between 0.8 trillion to one trillion standard cubic feet.

A total of 10 wells have been drilled in the area with five wells currently on production and others significantly potential for gas production. Current production is estimated at 70 million standard cubic feet per day.

Main gas use is for power generation and in lesser amount as industrial fuel replacing oil.

Plans are under way to drill more wells north and west of Songo Songo Island to increase the reserves. The gas supply would be boosted from Mnazi Bay in Mtwara region where huge reserves were discovered in 1982.

With production estimated at 0.9 million standard cubic feet per day, natural gas from the Mnazi Bay is also currently used for power production for Mtwara and Lindi regions, generating about 4.5 MW of electricity.

AfDB has set aside Sh360 billion for lending to various projects on water, petroleum and power infrastructure in the country in the next three years.

A leading cement maker from India plans to transform the economy of Pokot Central District, once its new factory is completed. The Cemtech Sanghi Group has received full approval from the Government to build an $80 million (Sh6.24 billion) cement factory to mine the large limestone deposits in Sebit and Ortum areas of the district. The Ortum factory will become the third largest in Kenya, after the Mombasa-based Bamburi and East African Portland Cement factory at Athi River. "We will have the capacity of producing enough cement for local consumption in Western Kenya and other parts of the country," said Mr Jaresh Rawal of Cemtech Limited.

Annual Production

The factory will have a capacity of 600,000 to one million tonnes of cement annually, and will employ 700 Kenyans directly and another 1,000 indirectly when it begins operations. Documents availed to The Standard show Cemtech planning to build a school and medical centre for the community living in the area, and provide them with free water. Rawal said construction of the factory would also improve the infra-structure in the area, as the road network would have to be upgraded. Discussions are underway on the possibility of upgrading the railway line from Marich Pass to Kabarnet and Nakuru.

Cemtech also plans to transfer technology to the area, by building wind and solar power plants, to supplement its energy sources. Extra power generated, will be available for use by the community. Central Pokot District Commissioner Joseph Were told The Standard 5,000 families would benefit from the factory. Construction work for the main factory at Sebit will commence this month, and the plant could be operational by mid 2010. "The Government agreed terms with Cemtech Limited from India to construct the plant, because their proposal would benefit the local community," said Were.

A feasibility study by the Kerio Valley Development Authority (KVDA) shows limestone deposits in Ortum and its surroundings can sustain the factory for over a century.

A leading cement maker from India plans to transform the economy of Pokot Central District, once its new factory is completed. The Cemtech Sanghi Group has received full approval from the Government to build an $80 million (Sh6.24 billion) cement factory to mine the large limestone deposits in Sebit and Ortum areas of the district. The Ortum factory will become the third largest in Kenya, after the Mombasa-based Bamburi and East African Portland Cement factory at Athi River. "We will have the capacity of producing enough cement for local consumption in Western Kenya and other parts of the country," said Mr Jaresh Rawal of Cemtech Limited.

Annual Production

The factory will have a capacity of 600,000 to one million tonnes of cement annually, and will employ 700 Kenyans directly and another 1,000 indirectly when it begins operations. Documents availed to The Standard show Cemtech planning to build a school and medical centre for the community living in the area, and provide them with free water. Rawal said construction of the factory would also improve the infra-structure in the area, as the road network would have to be upgraded. Discussions are underway on the possibility of upgrading the railway line from Marich Pass to Kabarnet and Nakuru.

Cemtech also plans to transfer technology to the area, by building wind and solar power plants, to supplement its energy sources. Extra power generated, will be available for use by the community. Central Pokot District Commissioner Joseph Were told The Standard 5,000 families would benefit from the factory. Construction work for the main factory at Sebit will commence this month, and the plant could be operational by mid 2010. "The Government agreed terms with Cemtech Limited from India to construct the plant, because their proposal would benefit the local community," said Were.

A feasibility study by the Kerio Valley Development Authority (KVDA) shows limestone deposits in Ortum and its surroundings can sustain the factory for over a century.


I hope these guys walk the talk.We want to see developement everywhere.

^^Bidding wars was the only obstacle for this project but cemtech won it and am sure they will walk the talk.

KCB club members off to the Far East

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By NATION Reporter
Posted Wednesday, July 1 2009 at 15:34

Kenya Commercial Bank has organised a business tour for 100 of its Biashara club members to visit Malaysia, Singapore and Thailand.

The tour set for next week will expose the small and medium-size entrepreneurs to international business and enable them learn from more established SMEs in the three countries.

“We aim to see our small and medium enterpreneurs graduate into medium sized companies or even large organisations by giving them international exposures where they are able to network,” said Ms Catherine Njoroge, the divisional director for retail banking.

Ms Njoroge noted that small and medium enterprises in Malaysia play a vital role in the economy and are considered to be the backbone of industrial development.

This will be the third international trip since the bank launched the club two years ago. Last year the bank took 180 of the club’s customers to Dubai and Guangzhou in China.

The entrepreneurs will have an opportunity to hold meetings with business people and make contacts and purchases, as well as visit a number of trade exhibitions while in the three nations of Malaysia, Singapore, and Thailand.

“The trip to the Far East is an accomplishment of the promise we made to our Biashara Club customers during the launch of the Biashara Club. As a bank we see our SME clients as partners in business who deserve the best in terms of availing opportunities to help them grow with us.”

Noting that the global economic system is becoming more integrated and presenting new opportunities and more threats, Catherine said the bank would continue to enlighten its club members to edge for the competitive dynamics in the ever changing business world through focused training, seminars and workshops that will cascade new business ideas and skills.

Countries like Singapore, Malaysia, Thailand, South Korea, Indonesia, and Taiwan have succeeded in turning their once agrarian economies into industrial powerhouses to become global leaders in the technology, manufacturing, and service industries, something that the club members will learn on their tour of these nations, Catherine noted.

“We may not be able to quickly and easily duplicate such results here in Kenya but we believe those we are taking there will be able to learn one or two things necessary to help us move forward.”

Kenya and Canada power agreement

gBQwnmqUrW4&feature

Telkom Kenya launches WAP portal

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By MERCY GAKIIPosted Wednesday, July 1 2009 at 12:36

Telkom Kenya has launched a wireless application protocol (WAP) portal that will enable its mobile subscribers to have access to the internet.

Launched under the Orange World brand, the portal is an online gateway that will offer subscribers instant and fast access to news, sports, games, listings, travel information and entertainment while on the move.

Telkom Kenya confirmed that for the next one month, Orange Mobile subscribers will access the service free of charge, with no price increase on a user’s monthly tariff.

Head of Marketing and Strategy Jean-Michel Chanut is confident that WAP-enabled phone handsets will soon usurp current handsets.

“This will probably be the next must-have accessory. Our service will be affordable and phone handset prices will probably experience a substantial price drop in the next few months.”

To connect to Orange World, a user requires a WAP or internet-enabled phone with an Orange card.

The user launches the browser application and selects home, which then enables them to surf all available content as they normally would on the web.

Orange World content is categorised to include news, sports and economy in the information section.

There is the fun categories for ring tones, wallpapers and animations, and tools category that has information on pharmacies, administration, embassies, airlines companies, hotels, banks, pray hours, travel agencies, car rental, emergencies, car rental, emergency numbers, hospitals and my page categories; for price for various contents.

'This new service falls in line with our strategy for the next three or four years, where we are looking at being the leader in the areas we are strong and that includes broadband services,” said Telkom Kenya chief executive, Mickael Ghossein.

:rock:

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KenGen invests in Sh1 billion plant to curb power crisis

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Updated 5 hr(s) 43 min(s) ago
John Njiraini

To address the deepening energy crisis, KenGen is constructing a new generation plant.

The Ngong Wind Turbine Power Project, which will inject an additional 5.1 MW to the national grid, will be commissioned in September this year. The plant to cost Sh1 billion will generate electricity from wind and forms part of small plants that KenGen is investing in to cater for electricity demand in the short-term."Developing of the project helps the country meet the rising energy demand that is growing at about eight per cent annually," said Hezron Ng’iela, KenGen Senior Project Engineer during a tour of the plant.

transmission lines

Construction of the plant comes at a time when the country is staring at a worsening power crisis following the shutting down of Masinga Power Station and possible closing of Kamburu Power Station in the next few months due to falling water levels. This has forced the country to rely on thermal generation to meet demand, leading to an increase in retail tariffs and souring production costs for manufacturers. According to Ng’iela, the Kenya Power and Lighting Company completed construction of the transmission lines that would integrate the power produced with the national grid.

The Ngong wind project, which is financed by a loan from the Belgian Government, is the first phase for KenGen’s foray into clean energies.

Plans are underway to embark on the second phase that will see the construction of another wind plant with an installed capacity of 5.7 MW.

Firm starts direct flights to Mwanza

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By MWANIKI WAHOME
Posted Sunday, July 5 2009 at 18:40

Precision Air, in which Kenya Airways has a 49 per cent stake, made its inaugural direct trip to Mwanza from Jomo Kenyatta International Airport last Friday.

This opens a new financial stream for the national carrier that registered a loss of Sh5.6 billion for the year ending March 31, on account of a ballooning fuel-hedging loss.

The introduction of the route brings to 13 the total number of destinations served by Precision Air in East Africa, and a total of 381 departures a week.

The direct route doubles the frequency of flights between Mwanza and Nairobi from four to eight each week.

Previously, it flew four weekly flights to Mwanza via Kilimanjaro. The number of passengers has increased from 216,990 in 2004 to 538,305 this year.

Businessmen can now connect through JKIA to South Africa, Dubai, London, Entebbe and Doha.

“The direct flight to Mwanza will ensure that flying time is minimised. The route is to a large extent a business travellers’ traffic, especially fishing and the mining industry, which is growing very fast,” said the airlines chief executive officer, Alfonce Kioko.

There is also a class of travellers who use flights for connection to other destinations, he said.

Precision Air has 49 per cent of the market share in Tanzania, and has a turnover of Sh5 billion.

Property developers, building contractors and individual homeowners will soon be able to purchase all their building tools and equipment under on roof.

This is as soon as a hardware superstore, currently under construction within Nairobi city centre, by Alibhai Shariff and Sons Ltd, is complete.

Alibhai Shariff, a household name in Kenya, will open East Africa’s first multiple building store Alibhai Shariff Builders World on Mombasa Road, less than 10km from Nairobi City Centre.

The idea is to offer simple solutions in hardware, paint soft furnishings to customers in an all encompassing one-stop- shop.


Tin Shack

In the early 1920’s, the founder Alibhai Shariff came to Kenya from India with his sons. He started a bicycle shop near the railway station and a photograph from 1927 shows a tin shack on a dusty street, sporting the sign "Alibhai Shariff". This became a hardware store, and moved to then Bazaar Street (now Biashara Street) to Government Road (now Moi Avenue) and finally to today’s premises.

Most Kenyans and long-term residents are familiar with Alibhai Shariff’s hardware shop in Shariff House at the intersections of Kimathi Street and Kenyatta Avenue. In 1982 Alibhai Shariff expanded into a 3rd branch at Westlands. This will stay open whilst their city centre branch closes. Meanwhile, customers can look forward to the launching of their large project Alibhai Shariff Builders World this month.

Offering customers everything one could need for building, maintaining, finishing and furnishing, the "one-stop" solution shop offers professionals as well as home owners and tenants the ideal solution to all building, construction and maintenance issues. Instead of visiting multiple shops around Nairobi and getting frustrated by traffic, customers can save time and alleviate stress by finding all they require in one place.


Key Units

With more than 30 departments, 40 world-class brands, 20,000 single key units and a planned 150,000 units, the store is thinking big, but also intends to keep its reputation for quality and affordability.

This superstore will also have a Dorman’s coffee shop, washrooms that include a disabled toilet, elevator, a supervised children’s play area, parking for 60 cars and consultancy rooms. On the ground floor is a unique paint shop offering buyers the opportunity to mix and match colours according to Solar Panel. From power drills to swimming pools and tableware, from generators to kitchens and potted plants.

The Shariffs have invested heavily in this new venture. They employ more than 150 employees – a mix of employees have worked for them for 40 years, and newer college graduates.

Apart from a few specialists who know how to operate a store of this magnitude, their employees are all Kenyan. Consultants are trained on site: the first floor of Alibhai Shariff Builders World has a special training room to ensure continuous training. The intention is to create more than just sales personnel: they will train staff to offer specialist and technical advice to customers on anything from water pumps to carpeting.

Stanley & Facom Tools, a UK-based company has partnered with this local hardware store and will be supplying building and construction tools.

It is billed as one of the largest suppliers of tools for the construction industry in the world, with factories in Europe, USA, Middle and Far East. Peter Allen, Area Sales Manager, Stanley & Facom told FJ that the building has been completed and this shop should be opened before or by next year.

Kenya set to tap power from renewable energy

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By OLIVER MATHENGE
Posted Monday, July 6 2009 at 22:35


Kenya is fast-tracking its plan to boost renewable energy as hydro power increasingly becomes unreliable due to erratic rains.

Several such power projects are scheduled to kick off next month. The initiative is being coordinated by the office of the Prime Minister.

The envisaged 20-year plan to boost the country’s power by 2,000 megawatts has been turned to a three-year “crash programme”.

In adopting renewable energy, Kenya hopes to reap added gains of turning the country into a green economy.

By going green, Kenya will be joining a global initiative to combat climate change through environment-friendly practices, that promise millions of new jobs.

The term green energy is a relatively new term in Africa but experts argue that the continent can earn billions of dollars by turning to green economies.

The green energy initiative is in tandem with the UN initiative of carbon trading. It allows developed countries to offset some of their emissions from cars, factories and homes by funding clean energy projects in the Third World.

On top of winning carbon trading points, the renewable energy generation in Kenya will inject additional power to the national grid to assuage fears of the manufacturing sector and potential investors.

Manufacturers have blamed the high cost of locally produced goods on expensive electricity tariffs.

Kenya obtains more than 75 per cent of its 1,200MW of power from hydro. The country’s only existing source of renewable energy is geothermal power, which has not been fully exploited.

By June 2012, according to Prime Minister Raila Odinga, the country will have boosted its energy capacity by up to 2,000MW through geothermal, wind, bio-fuel, solid waste and coal-driven power plants.

He outlined the green energy initiative plan to MPs during the PM’s question time just before Parliament went for recess.

Mr Odinga chairs a taskforce that is to advise the government from next month on the projects to be implemented. The taskforce’s greatest task is establishing financing partnerships with the private investors.

Members of the steering committee of the taskforce include the PM, his two deputies and the ministers for Energy, Industrialisation, Environment and Agriculture. Others are the PM’s permanent secretary and the chairpersons of Kenya Private Sector Alliance and Association of Large Power Consumers.

The experts group will be chaired by Energy PS with his counterpart at Treasury and the PM’s economic adviser acting as alternative chairs.

The membership will be drawn from KenGen, KPLC, Geothermal Development Company and the National Environmental Management Authority.

In an interview with the Nation, the PM’s economic adviser, Prof Hiroyuki Hino, explained that by embracing the green economy concept, the country would gain in two major ways.

First, he says, the country will be able to save it environment from degradation and reduce the effects of climate change.

“We will be able to produce more energy at reduced cost and eventually be able to get into carbon trading. This will in turn boost the country’s economy and the livelihood of Kenyans,” Prof Hino said.

The Energy ministry has so far identified six geothermal projects in Olkaria and Menengai with a total capacity of 490MW. Financing is the only obstacle to exploitation.

According to Prof Hino, the government, through engagement with the private sector, aims at reducing the time used to setting up the projects from two years to one.

“The physical construction of a geothermal plant can take up to two years. Most of this time has in the past been taken up by conducting feasibility studies and seeking financing,” said Prof Hino.

He added: “We plan to come up with all the possible projects. We will then invite proposals from foreign and local firms to invest in the projects.”

In his 2009/2010 Budget speech, Finance minister Uhuru Kenyatta said to generate clean energy and transform Kenya into a green economy, the government planned to establish a Green Energy Facility.

The facility will offer interest-free long-term loans to firms that opt to replace conventional high-cost energy generation with low-cost green energy alternatives.

The minister intends to spend Sh500 million and expects to elicit donor support through this initiative to scale up its operation. He also allocated an additional Sh400 million for the installation of solar technologies in the arid and semi-arid regions.

The allocation has been criticised as meagre by some industry players but the PM says that identification of the projects would lead to the search for funding.

Northern districts

The United Nations says Kenya has the capacity to generate more than 3,000MW of electricity if it tapped into wind energy in its vast northern districts.

Prof Hino explained that the government had identified Turkana and Ngong where wind power generation projects with a capacity of 360MW will be set up.

Egypt draws upto 7,520 MW of its energy from wind-power projects while Mexico gets 5,000MW. The UN says Kenya has adequate wind to generate energy for both export and domestic use.

According to Mr Achim Steiner, the UN Under-Secretary-General and executive director of the Nairobi-based Unep, wind and solar power projects are beginning to take off in Africa. There are an estimated 100 projects in more than 20 countries, says the UN.

The government is also looking at the loss-making sugar factories in western Kenya as another source of renewable energy.

According to the PM and Prof Hino, up to 300MW can be co-generated through the sugar factories and help save on the amount of power being drawn from the national grid by the factories.

Expansion of Kisumu Airport on the way

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By WALTER MENYA Posted Tuesday,
July 7 2009 at 15:22

The work involves expansion of the runway length and width and improvement of the drainage system.



National carrier Kenya Airways has partnered with Precision Air to service the Kisumu route from August this year.

The service will be part of rehabilitation that the airport is undergoing to transform itself into a world class international facility.

The announcement by KQ effectively reversed an earlier decision to suspend flights to Kisumu that was set to begin on July 1 this year.

KQ head of corporate communications Victoria Kaigai said that the airline will continue operating daily on its Embraer E170 jets at special rates of Sh6,000 return and Sh3,000 for one way travel until August when the partnership agreement takes effect.

“The changes in the KQ operations on this route are to allow for the planned expansion and renovation of the Kisumu airport runway.

KQ’s Embraer E170 jets which operate on this route cannot land on the available runway space which will be shorter during the renovation period. Precision Air’s ATR aircraft have the capability to land on shorter runways,” said the statement by the airline’s corporate communications officers.

KQ announced in April this year that it was suspending flights to Kisumu from July 1 to November 30, 2009 citing the renovation of the Kisumu airport runway.

The Sh2.6 billion expansion works on the Kisumu airport have already kicked off in earnest with Kisumu Airport manager Mr Joseph Okumu expressing confidence that it would be ready on schedule.

The contractor, Chinese Overseas Engineering Company, has already set base to coordinate the work.

Upon completion, the facility will be upgraded to international status, with capacity to handle up to 280 passengers per hour.

It will handle more traffic, including larger aircrafts. In addition to the domestic flights that it currently handles, Kisumu Airport will also receive direct international flights.

The work involves expansion of the runway length and width, improvement of the drainage system, among others.

Nairobi city is headed for a major facelift that will see it ranked among major cities in Asia.

An ambitious initiative put in place by seven Government ministries include environmental beautification, putting up of CCTVs, street and building numbering and road marking.

Government Spokesman Alfred Mutua will chair the Inter-ministerial Committee on implementation of the city’s image building programme.

The project will involve Nairobi Metropolitan, Local Government, Provincial Administration and Internal Security, Roads, and Lands Ministries. They will work in collaboration with City Council and Nairobi Central District Business Association (NCBDA).

Old image

Speaking during the launch, Mr Mutua said the process is the beginning of the city’s move to regain its glory as a metropolis, while reclaiming its old image as "the city in the sun".

"Nairobi has to look successful for it to attract success and the good news is now it will," Mutua said.

Beautification will include transformation of haphazard landscaping of mostly bushes, to beautiful manicured lawns, plants and hedges.

Mutua added: "We want to promote efficiency, organisation, individual responsibility, community policing and security through use of CCTV."

Local Government PS Sammy Kirui said the process would internationalise Nairobi and promote physical aesthetics and discipline.

NCBDA chairman Timothy Muriuki said: "We are now asking business owners to install at least two CCTVs on their premises that can record and store at least one month’s footage."

Criminal activities

Town Clerk Philip Kisia urged tenants and homeowners in estates to jointly pool resources and install CCTVs, saying estates have been targeted in recent criminal activities.

The long awaited rehabilitation of the country’s airstrips is set to begin.

Kenya Airports Authority Managing Director George Muhoho said the parastatal would use Sh200 million to improve the status of 150 airstrips to boost tourism and communication.

The Government set aside money for the annual exercise aimed at ensuring the strips are safe and free from encroachment by the public.

Among the airstrips in dire need of rehabilitation is Suneka in Kisii.

The first aircraft to land at the airstrip was owned by white settlers in 1957, when there was no runway.

Currently, light aircraft use the facility. The runway was built in the early 80’s and was refurbished just before President Kibaki’s visited the area in March this year. The tattered windsock was also replaced prior to the visit.

The fence around the airstrip, erected in 2004 during the Narc administration, was brought down during the 2007 election campaigns.

Yesterday, Muhoho said they intend to do a minimum of 15 airstrips a year, in a move aimed at increasing the usage of domestic tourism flights.

Good maintenance

KAA will soon advertise for the tenders to repair, fence and clear bushes around the airstrips to ensure they are well maintained.

Some airstrips will also be expanded, alongside the rehabilitation programmes, he added.

Already, Wajir Airstrip in North Eastern is being upgraded to airport status, while Rusinga and Mfangano airstrips will be fenced and expanded to accommodate more light aircraft. Yesterday, Immigration Minister Otieno Kajwang lauded the move saying it would enhance domestic tourism.

"It is a good move, and we fully support the Government’s plans, which will also revive activities at the villages and boost trade," said Kajwang.

Many tourists visiting the historic island frequently, use Mfangano and Rusinga Island airstrips. KAA says Kabunde Airstrip in Homabay, Rusinga in Mbita, Macalder and Lichota in Migori, Turkana, and Otaro will also be rehabitated. KAA will also build small terminals and other facities and deploy permanent security personnel to guard them.

Previously, some of the airstrips lacked the requisite facilities.

The Kenyahttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.eastandard.net/business/InsidePage.php?id=1144018737&cid=14&#) Industrial Research Institute (Kirdi) is building a Sh5 million pineapple factory in Homa Bay District to streamline marketing of the crop in Southern Nyanza.
The institute has taken over the former Homa Bay Millers and work on the plant is going on. Farmers termed the construction of the factory a major breakthrough for the region’s economy.
http://www.eastandard.net/images/wednesday/bus080709_01.jpgMs Marceline Akeyo, a pineapple seller in Homa Bay District. Traders like her will soon start selling the fruit to the kirdi processor
Homa Bay District has an estimate of 160 acres under pineapple, and most of the crop is grown by the roadside, according to the District Agriculture Officer Protus Khisa.
Neighouring Districts — Ndhiwa, Rachuonyo and Suba— also grow the crop. Kirdi’s research scientist Japheeth Anuro confirmed, the pineapple project was on course.
"We want to install an equipment to process the pineapples and then to make business sense out of the fruit" Mr Anuro said.
Pests a threat
He said the plant will process up to 10 tonnes of high quality pineapple juice per day. Mr Anuro said the decision to set up a pineapple plant in Homa Bay was part of Kirdi’s strategic plan to help make Kenya an Industrialised nation as spelt out in the Vision 2030.
Mr Khisa said the Ministry of Agriculture was supporting the project and was spearheading a campaign to have local farmers increase the acreage under cotton.
"We are encouraging people to produce more of the fruit. In Kobama, we now have 60 acres of land under pineapple," Mr Khisa said.
The Ministry, he added, is also trying to eradicate some pests and diseases that might hinder the production of the fruit. According to the Ministry, pests like Pineapple Leaves pot and Pineapple Mealybug are a threat to the fruit. Besides processing pineapple juice, Kirdi will also manufacture fruit jam, and help in marketing the products.
"We shall also produce canned pineapples, dried pineapples and wine," he confirms. "We have started making marketing contacts a head of production," he said. Farmers are being mobilised and a society—The Kagan, Kanyada, Gem and Kochia Horticultural Cooperative Society — has been formed to scale up pineapple production. Anuro says mobilisation has not been easy because farmers are scattered all over and have many commitments.
The region is also rich in mangoes, oranges, pawpaw, passion, watermelon and tomatoes— fruits Kirdi targets.
"Our processing plant will add value to these fruits that might be considered inferior," the research scientist said.
Kirdi will ensure raw and processed fruits are sold to retail shops, supermarkets, urban outlets and other processing factories all over the country to address overproduction.

Kisumu Airport will start receiving international flights by March next year.

Kenya Airports Authority Managing Director George Muhoho said upgrading of the facility was in progress and expected to complete on schedule.

"Going by the speed at which the work is moving, we are sure by next year the facility will be ready for use," he disclosed.

The expansion will cost Sh2.9 billion. The contract was awarded to Chinese overseas engineering Company.

Work on the airport started on October 29 last year and was to take 22 months. According to the site project engineer’s representative Patrick Kain, phase one of the project that involved gravelling the runway is complete.

"The second phase will end in September 2 this year. The final work will end on March 20," he said.

The upgrade will also see construction of the run way and increase its length by 3,000 metres.

Currently, work on the run way extension was 67 per cent complete, taxi way and Apron 37 per cent, while Air field Ground Lightening was 12 per cent complete.

Other complete areas are terminal building (five per cent) and car parking bay 33 per cent.

KAA Legal Officer John Tito said they had compensated a big number of the Kogony clan that donated land for the expansion. The officials were speaking during a site tour.

Stocks deals now go the SMS way

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Standard Investment Bank joins a league of several service providers that have signed up with mobile phone firms for payment of their services. Photo/FILE

By JOSEPH BONYO
Posted Thursday, July 9 2009 at 17:14

You can now buy or sell shares from the comfort of your house or office following the launch of a service that only requires you to have a mobile phone.

Standard Investment Bank on Thursday introduced a short message service for its clients to place orders for shares trading at the Nairobi Stock Exchange.

According to the banks’ executive chairman James Wangunyu, the EasyHisa mobile product is aimed at offering convenient services to their clients.

Find time

“Clients are increasingly getting busy and do not find time to physically come to the offices. The product, therefore, aims at offering that convenience of time as well as reduce costs,” Mr Wangunyu told journalists in Nairobi.

The new service will, however, have to guarantee security to investors who have become prone to fraud text messages before they can fully embrace it.

“We are assuring our clients that this service is secure and we shall be confirming to them within one hour of placing their orders with us,” said Mr Donald Wangunyu, a director of the firm.

The investment bank joins a league of several service providers that have signed up with mobile phone firms for payment of their services.

This mode has gained popularity with the increase in penetration of the mobile phone handset in the country currently estimated at 33 per cent.

Trading at the NSE has grown over time with the bourse in 2006 adopting an automated trading system that heralded the market into a more technology based trading from the previous open cry system.

Adopt technology

“The CMA has constantly urged that market players adopt technology that creates convenience for investors. As a player, we have taken this into account and hope others too, do the same,” said the investment bank chairman.

The Central Depository and Settlement Corporation as part of its custodial service also has an SMS update for investors interested in tracking their shares. The service enables the public to keep a tab on their stock’s performance.

While several players in the capital markets have constantly embraced online service for placing and executing sale and buy orders from clients, this is yet to take root.

The situation has been blamed on the lack of Internet access to a majority of retail investors at the stock market.

link:http://www.businessdailyafrica.com/Company%20Industry/-/539550/621892/-/u92qvez/-/index.html

Stock trading goes mobile
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New thermal plant in Kipevu
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Kenya has potential to achieve MDGs, says centre

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By MWANIKI WAHOME
Posted Friday, July 10 2009 at 14:31

Kenya may not achieve the Millennium Development Goals by 2015 although it has the potential to make great strides by then, a director has said.

MDG Centre East & Southern Africa director Glenn Denning, however, noted that the country was in a better position than most in Africa in achieving the set targets.

“Kenya has fewer excuses for not achieving the goals. It has a highly educated population, is not at war or land-locked,” he said.

Mr Denning spoke during the signing of MoU between his centre and the French embassy for the construction of renewable energy project in Dertu Village, Lagdera Constituency.

The $250,000 project will be undertaken jointly by the two. Ambassador Elisabeth Barbier signed for the Government of France.

Millennium village

Dertu is one of the two Millennium Villages set up to act as models on how to transform remote areas to modern ones in a relatively short time. The other is in Nyanza Province.

Mr Denning said Kenya could score quick wins through investing in agriculture and utilising its strategic position to accelerate trade with other countries.

He said the country had achieved much in education, infrastructure and health, especially in combating HIV/Aids and malaria adding that there was need to improve on what had been achieved.

Millennium Development Goals envisage a high quality healthcare, education, water, better environment, sustainable and higher income for the people by 2015 as set by the United Nations.

Paying utility bills, purchasing airtime and even bus tickets at your local convenience store will soon be a reality following the launch of a new pay bill concept on the Kenyan market.

Q-Pay-Spot, a hand-held device launched by handset company Quicktel Kenya at a Nairobi hotel will now aid consumers in paying for their utilities, credit cards, debit cards, cable TV and buying of pre-paid airtime at the touch of a button.

This new service will effectively cut down up to 75 per cent of paper work used to carry out various commercial activities.

The new technology will put consumers in a position to make timely payments for their post-paid accounts, Internet payments and issuing of parking and bus tickets at the click of a button no matter where they are across the country.

When the device processes a transaction, the breakdown of commissions is automatically done thus saving a vendor the time to pay distributors, dealers and service providers.

The technology has multiple advantages when compared to other point of sale (POS) systems as the terminal transfers data using the GPRS network, unlike the traditional telephone lines, thus giving the distributor control and evidence of payments made at many places.

There is also a significant decrease in costs as the expense of installing and implementing the terminals are zero.

The rechargeable batteries in the Q-Pay-Spot terminals make the system completely independent of power supply problems allowing you to perform over 350,000 transactions per day.

Multiple network

The new machine is a point of sale system based on GSM/GPRS technology, which works with multiple network operators at various points of sale outlets.

The device can be obtained at no cost from a dealer and all the buyer needs to do is to top up with airtime in order to carry out operations.

Among companies that have already signed up for gadget include Zain Kenya, the Orange Group, YU Network, Akamba Bus Services, White Rose dry cleaners and Kericho based Kelunet.
“There is no information stored on the POS since everything is put on the server in regard to theft and fraud.

It also saves various mobile phone operators the costs of manufacturing pre-paid scratch cards,” said Rapid Communications commercial services manager Medina Khan during the launch.

Q-Pay-Spot personnel are now planning to increase penetration of the service to remote parts of the country and will launch in Uganda in the next one month, and in Tanzania in two.

Rwanda and Burundi will enjoy this innovative service by the end of the year, according to the company.

Uchumi turnaround plan bearing fruit

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Updated 6 hr(s) 52 min(s) ago
Related Stories
By Macharia Kamau

Uchumi Supermarkets’ turnaround plan might finally be bearing fruit with the opening its first branch in three years.

Managing Director Jonathan Ciano said the outlet located at Ruaraka along Thika Road is the first of the four new branches expected this year.

It will open another branch in Nairobi while the other two will be located in Mombasa and Western Kenya.

Ciano said the Thika Road store, which has been fashioned as a convenience store and smaller than the other outlets, is a milestone for the retailer, which has been under receivership since mid 2006 after being declared insolvent.

Since being placed under receivership, the chain has been forced to close some of its outlets under a restructuring process.

It now operates 15 stores, compared to the 28 it previously had. Its search for a strategic investor has proved difficult and Ciano recently said getting one at the moment might be even given the condition of the economy. The new branch started operating early this week and will officially be launched on Wednesday and brings the number of the outlets to 16.

"We opened our doors to the public early this week and the response that we are getting from customers is encouraging," said Ciano.

Cleared debts

The store is located next to where Nakumatt’s outlet on Thika Road was situated before being demolished for allegedly being on the road reserve.

Uchumi is among the few large retailers serving the busy highway, which analysts say has a high potential, not only for retail trade but other businesses given the large population the road serves. The road also links Nairobi to the industrial town of Thika.

In a change in its business model, Uchumi intends to open more branches, but will occupy new premises as tenants in contrast to buying land and developing it as was the case in the past.

"The other branches are already being put up in partnership with developers... we are not building any on our own," he said. The chain expects its pre-profit tax for the just concluded financial year to go up by 25 per cent to Sh132 million compared to Sh106 made for the year ending June 2008. Last year’s profit was a turnaround from its loss making ways two years ago.

At a recent media briefing, Ciano said by June, the supermarket had cleared more than half of the Sh957 million owed to financial institutions and suppliers.

Kenya Power taps cable TV for network

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By JEVANS NYABIAGE
Posted Saturday, July 11 2009 at 17:20

In what is expected to stir further competition in telecommunications, power supplier, Kenya Power and Lighting Company (KPLC) has announced plans to lease its distribution network to cable television operators.

Early this year the utility firm was awarded a telecommunications licence that allows it to enter the commercial data transmission market.

In a paid up notice appearing in Friday dailies, Kenya Power said that it was seeking bids for cable TV operators to lease its distribution network as it seeks to diversify its earnings from the sale of electricity.

Tight battle

The move is expected to up the tight battle for control of the commercial data market which has remained the domain of local firms Kenya Data Networks and Telkom Kenya.

The company has huge amounts of unused bandwidth and five years ago applied for a Data Carrier Network Operator (DCNO) licence which it failed to secure on grounds of legal constraints.

Kenya Power and Lighting Company is currently installing about 1,500 kilometres of high-quality fibre optic cable on its countrywide transmission network, primarily for its own use, in a $33 million (Sh2.5 billion) System Control and Data Acquisition (Scada) project.

The project is financed by the European Investment Bank and is being implemented by Swedish technology transnational ABB.

The mainland cable network will be completed by March next year, and according to the company will only use five out of the 24 fibres.

It has already floated an expression of interest for leasing of the extra fibre capacity.

However, the Network Facility Provider — Tier 2 licence, which Kenya Power and Lighting Company has allows it to lease out the excess bandwidth capacity of the fibre.

The extra capacity will initially be available on the Nairobi-Mombasa, Nairobi-Nakuru-Eldoret-Tororo, Eldoret-Kisumu and Nairobi-Kiganjo-Nanyuki routes.

Besides increasing competition in the telecommunications sector, it is expected to boost shareholder value as the company will not only optimally utilises its current transmission system, which boasts thousands of kilometres of fibre, but also create a new income stream.

Grand Regency sale to fund port

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The Grand Regency Hotel in Nairobi,now Laico Regency Hotel

By GITHUA KIHARA
Posted Sunday, July 12 2009 at 23:11
In Summary

Sh3bn Lamu project likely to start next year with building of the first two berths


The government will use Sh2.9 billion acquired last year from the sale of the Grand Regency Hotel to build a second port, according to Foreign Affairs minister Moses Wetang’ula.

Work on the harbour, to be built in Lamu, is expected to start next year with the construction of the first two berths.

“The 22 berths port is expected to be ready by the year 2015 and will compliment the port of Mombasa in positioning Kenya as a key regional transhipment hub,” said Dr Mutule Kilonzo, the inter-ministerial committee on the second transport corridor lead consultant.

The Lamu waters are said to have a wider channel, with a natural depth of 18 metres. They are also said to have the capacity to handle large post-Panamax vessels that are currently in manufacture.

“It is expected to handle the new markets in Southern Sudan and Ethiopia and there are long-term plans to extend the corridor from Juba to Cameroon,” Mutule said.

Currently, the only regional port that can handle post-Panamax vessels is the newly opened Doraleh container terminal at the port of Djibouti, which is handling more than 80 per cent of Ethiopian cargo.

Ethiopia, according to the minister, has already finalised feasibility studies of a railway line from Addis Ababa to Moyale.

Kenya will carry out similar studies and build the other part of the line to connect Lamu to Moyale. The railway line from Lamu will also branch from Isiolo to Juba in Southern Sudan

Other components of the second transport corridor are a superhighway, fibre optic infrastructure and a pipeline along the railway line.

International airports will be built in Lamu, Isiolo and Lokichoggio, said Mr Mutule. The entire project is estimated to cost US$16 billion (Sh1.2 trillion).

The government expects to fund various components of the corridor by partnering with the private sector through a build, operate and transfer arrangement.

KPLC to upgrade sub-stations

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Published on 13/07/2009

Kenya Power and Lighting Company (KPLC) will spend Sh254 million to upgrade the Lessos and Eldoret Central Business District sub-stations.

The company’s Chief Manager, Human Resource and Administration Ben Chumo said the power units would be improved from 15 MVA to 46 MVA under the Energy Sector Recovery Project.

Mr Chumo also said KPLC had embarked on a process of reinforcing its systems countrywide to boost supply. He said the company was working on reducing the outage repair time on equipment affecting customers.

Chumo said the construction of Sh122 million 132 KV Eldoret-Kitale transmission line had started.

He was speaking at Yuya Secondary School in Cherangany where he presented a cheque of Sh770,000 donated by the company towards the construction of sanitary facilities.

Chumo said system reinforcement would improve reliability, reduction in losses and flexibility during maintenance. He said KPLC spends Sh8 million annually to fund school programmes as part of its corporate social responsibility.

wrong thread

Sh2bn set aside for farmers

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Agriculture minister William Ruto at a past press conference.

By PETER NG’ETICH and ERICK NGOVILO
Posted Monday, July 13 2009 at 22:30
In Summary

Loans from the AFC to help local growers increase production, says minister



The Agricultural Finance Corporation will have Sh2 billion at its disposal to lend to farmers in the coming season.

Related Stories

Maize buying centres to be open by July 1
Agriculture minister William Ruto has said that the money would help farmers increase their production after his ministry reduced the price of fertiliser from Sh6,000 to Sh2,500.

Speaking over the weekend in Eldoret, Mr Ruto said the youth can also get credit from Cooperative, Equity and Family banks without security to venture into farming.

“As a government, we have made arrangements with the banks so that the youth can get into groups of 10 and be given a loan without a security,” he said.

The minister said the ministry will buy 1,000 tractors this year to be distributed to the 210 constituencies in the country and improve production.

Mr Ruto said it was a shame for the country to be grappling with food security while the country had great potential to produce enough to meet demand.

Mr Ruto, who is also the Eldoret North MP, said it was absurd that some countries which have swathes of desert come to the aid of Kenya.

“We should no longer be part of the problem but be part of the solution to solve our food insecurity problems,” Mr Ruto said.

The minister said all the irrigation schemes which had collapsed would be revived to boost rain-fed agriculture.

“As we are providing finance to rain-fed cultivation, we have also embarked on irrigation in which Sh2 billion has been allocated to revive the schemes and boost food production,” the minister said.

He said the schemes which have been earmarked for revival this financial year are among others Bura, Hola, Tana and Kibwezi.

Mr Ruto said his ministry had provided Sh10 million to each constituency to construct wholesale markets and keep off middlemen from exploiting farmers.

He said the markets would have cold rooms built adjacent to them so that they can store crops for a period of six months.

Instaconnect Ltd, a local wireless Internet Service Provider (WISP), has embarked on an expansion programme to extend services to the underserved peri-urban centres.

The fresh move is part of the company’s efforts to bridge the widening rural-urban digital divide, which has become a major source of concern to policymakers.

Already the firm has begun a national rollout of Internet facilities in Mombasa and hopes to be operational in Kisumu, Eldoret and Nakuru before the end of the year.

"We intend to spend about $3million (Sh228 million) and are in negotiations with a strategic Canadian WISP partner to cater for our expansion in the coming year," says Atul Chauhan, the company’s co founder and chief technical executive.

Undersea Fibre

Internet business and access in the country has for a number of years remained a corporate affair with 80 per cent of the three million users being concentrated in Nairobi.

The entry of the undersea fibre optic cables—Teams, Seacom and Eassy— is, however, expected to increase the number of Internet users to over 10 million in the next five years.

Instaconnect hopes to take advantage of the undersea fibre optic cables, which will link Kenya to the rest of the world at cheaper rates than the current satellite connectivity, in bringing the last mile Internet connectivity countrywide.

"We plan to purchase enough capacity from both Teams and Seacom so that we can offer out clients redundancy. All our clients will be offered from 512k to 2mb business class link capacities," Chauhan told The Financial Journal last week.

The company, which also offers wireless local loop services to other ISPs, believes its economies of scale, quality of services it offers and its pricing policy would enable it remain competitive in a market currently dominated by 73 ISPs.

Amongst its direct competitors include Access Kenya Ltd, Uunet Kenya, and Swift Global, which is relying on a franchising model to cut operational costs and maximise profits.

Instaconnect, which currently serves approximately 250 corporate clients in Nairobi, specializes in providing solutions ranging from large corporate to the small and medium-sized (SME) sector.

WiMAX Network

The company, which pioneered the country’s first certified WiMAX Network in 2005, delivers robust, reliable and scalable broadband Internet services for corporate office and home office using a point-to-multipoint fixed wireless system "We provide affordable, high speed, unlimited wireless Internet services to both the corporate and retail markets. Our clients range across industry, scope and solution requirements," says Chauhan.

The company’s newly introduced IMAX Server is a complete Internet server and gateway solution with the capability of filtering website contents which can be customised to restrict employees to using websites such as yahoo mail, face book and twitter in order to increase productivity and reduce abuse of company facilities.

Chauhan says Instaconnect Application Hosted Solution brings together essential services in order to help businesses, schools and families communicate and collaborate more effectively.

These services, he says, require no maintenance and can be obtained for a minimum of Sh10, 000 per annum for up to 500 e-mail addresses.

"Everything is unified by the Start Page, a central place for your users to preview their inboxes and calendars, access your essential content, and search the web," says Chauhan.

Instaconnect, which operates on a licensed private frequency of 3.5 GHz, contends that the coming of the fiber optic cable will expose businesses to the Internet without prior arrangement on Internet security measures.

Total Security

"For this reason, we have just introduced Quick Heal Total Security that gives you complete protection from viruses, spy wares, and hackers. It also helps you stay connected and communicate over the Internet by preventing your system from threats over the Internet," says Chauhan.

Quick Heal Total Security enables one to can scan and clean mobile phone connected via Bluetooth or USB cable.

Broadband and Internet penetration and availability of bandwidth are still very low in Kenya mainly due to lack of infrastructure and relevant local content.

It is argued that investing in broadband in under-served areas would strengthen the country’s economy and provide business and job opportunities in every section of the country, with benefits to e-commerce, education and healthcare.

According to data from the International Telecommunication Union (ITU) only 7.9 per cent (3 million) of the 37,953,838 people used internet in the year 2008 compared to 0.7 per cent (200,000) against a population of 30,339,770 in the year 2000.

The Government however hopes that with the recent adoption of the Unified Licensing Regime, Kenya should have close to 50 per cent Internet penetration by 2013.

The Government of Kenya has identified ICTs as one of the key drivers of attaining Vision 2030, which aims at transforming the country to a fast developing economy.

The sector has also been earmarked for creating new jobs for the youth through the development of a vibrant Business Process Outsourcing industry.

To this end, the Government is spearheading the development of critical national and international broadband backbone infrastructure with a view to reducing the cost of international bandwidth in the country.

Lower Cost

The deployment of national broadband fibre optic connectivity to all district headquarters is to take advantage of the three sub-marine cables competing to land at the coastal city of Mombasa this year.

The completion of these infrastructure projects is expected to lower the cost of Internet access and thus spread the digital dividends to a bigger proportion of Kenyans.The projects will also make e-government a reality in the country.

http://www.businessdailyafrica.com/image/view/-/623670/highRes/87861/-/maxw/600/-/2apkht/-/CCK.jpg CCK headquarters in Nairobi.


The Communications Commission of Kenya (CCK) will spend Sh32 million equipping eight schools for the disabled with computers and Internet services.

The centres will receive free Internet connectivity for two years.

The commission will also assist people with disability to access online information by supporting a disability web portal and create awareness on the challenges affecting this group in using communication equipment.




The chairman of CCK, Mr Phillip Okundi, said there was needed to promote computer literacy for all.

“The commission is aware that not all ICT sub-sectors are moving at the same pace.

While tremendous strides have been made, there is need to lay emphasis on areas that require special attention said,” said Mr Okundi.

The CCK acknowledged that the benefiting institutions had their unique individual needs with the basic aim of bringing out the best in the students.

To ensure sustainability of the project. The CCK director -general sought to make it a core agenda for the regulator and other industry operators as part of its Universal Access Obligation for granting access to communication to all.

The beneficiaries are St Lucy Secondary School (Meru), Kibos Secondary School for the Blind (Kisumu), Thika High School for the Blind, Kuja Secondary School for the Deaf (Rongo), Rev Muhoro (Nyeri), Mombasa Secondary School for the deaf (Kisumu), Machakos Technical Training Institute.

Under implementation
This initiative follows other universal access programmes that the commission is undertaking.

Some of the initiatives outlined in the Universal Access Plan that are currently under implementation include the establishment of community telecentres, school-based ICT training centres, development of a GIS platform and national communication infrastructure development.

The strategy is being employed because of the high absorption and diffusion rate of new skills and technology within the students’ age groups.

There is also in place an IT curriculum from the Ministry of Education that is to facilitate immediate take up of the training.

The centres will serve the schools and the neighbouring communities.

The commission will supply each of the selected school with a server, four computers, and a printer.

The institutions will subsequently own the ICT training centre while the commission shall be responsible for the maintenance costs for one year, effective from the launch date in May, 2007.

As part of their contribution to this project, telecommunication operators in Kenya will provide free Internet connectivity for at least 12 months.

Italian aircraft firm to launch operations in Kenya

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By NATION Reporter
Posted Tuesday, July 14 2009 at 13:26

Italy’s largest multi-national Finmeccanica, will open its regional offices in Nairobi on September, 2009.

This was discussed during a meeting between Vice President Kalonzo Musyoka and Italian Foreign Affairs Minister, Mr Franco Fratini.

Mr Fratini said this was part of Italy’s aggressive programme to partner with stable democracies in Africa to boost investment.

“We want to partner with Kenya to foster trade and investment, so we are looking forward to a trade delegation to Kenya soon” he said.

The VP called for more investment from Italy especially in technology and manufacturing.

“We know Italians have invested in tourism sector but we need you to do more in other sectors, “ the VP said.

The Italian company has sold ATR72 type aircraft to Precision Air in the last few years.

The company manufactures helicopters, fighter jets, passenger planes and satellites and has sold several aircrafts to some East African companies.

Kenya set to adopt biotechnology

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Agriculture minister William Ruto looks at the National Biotechnology Awareness Strategy plaque after its launch. Photo/PHOEBE OKALL

By SAMMY CHEBOI

Kenya is set to adopt the controversial biotechnology as a means of boosting food production, Agriculture minister William Ruto has said.

This is despite opposition from some stakeholders who have raised their concerns of safety of genetically modified foods.

Biotechnology is good agricultural production and those opposed to it are either acting out of misinformation or selfish interests, the minister added.

“There are no miracles. If we have to produce more, we must embrace the technology. As a country, we have the option of adopting it to fight hunger or rejecting it and perishing,” Mr Ruto cautioned.

He spoke during the official launch of National Biotechnology Awareness strategy for 2008-2012 at the Kenyatta International Conference Centre. Genetically modified (GM) foods are products that have had their DNA directly altered through genetic engineering.

Unlike conventional genetic modification that is carried out through time-tested breeding and whose food has been consumed for thousands of years, GM foods were first put on the market in the early 1990s.

Mr Ruto challenged multinational companies opposed to the adoption of the technology to provide alternative methods of increasing food production. He said it was unfortunate that fierce opponents of genetic modification were themselves beneficiaries of the same.

“Biotechnology is the way to go if we are to confront its opponents. It is time we set our country free from superstitions and myths on any new developments,” he said.

And he posed; “we are pursuing disease resistant, early maturing and high yielding crop varieties. What other options are multinationals offering the country?”

He said the country’s need for more and cheap food that is safe to the people and the environment must not be hijacked by parties with vested interests.

Controversies surrounding genetically engineered crops and foods commonly focus on the long-term health effects for consumers, environmental safety, labelling and consumer choice, intellectual property rights, ethics, food security, poverty reduction and potential disruption or even possible destruction of the food chain.

The strategy is in response to Cabinet approval of the National Biotechnology Development Policy which aims at raising awareness and understanding for informed decision making.

Mr Ruto said the Ministry of Higher Education, Science and Technology had prepared a Biosafety Bill to be tabled in Parliament to regulate, guide safe use and transfer as well as commercialise biotechnology in the country.

http://www.nation.co.ke/image/view/-/623562/highRes/87813/-/maxw/600/-/mun2to/-/BuyerImage.jpg Mr Hide Inagawa, a director of the Japanese Food chain, Zensho Group Ltd, admires a packet at Iriaini Factory.
By MUCHIRI GITONGA Posted Tuesday, July 14 2009 at 19:35

Kenya tea producers are on the brink of sealing a lucrative supply deal with a Japanese fast-food restaurant chain seeking new sources of the beverage. Zensho Group Ltd says it is considering stopping sourcing tea from middlemen from next year in favour of joint partnerships.

Directors of the company have visited several small-scale tea firms in the country. With 3,600 fast-food outlets and restaurants in Japan and 200 others in the United States of America, the Japanese company has been sourcing 40 tonnes of tea annually from India and Sri Lanka through the Japanese Trade Corporation.

“We want to do away with middlemen by importing tea directly from Kenya,” said the group’s leader Hide Inagawa when they visited Iriaini Tea factory in Nyeri. “Japan consumes a lot of tea and we have seen that the Kenyan tea is of high quality.”

The development is not only good news for the farmers but also to the Kenya Tea Development Agency, which has been under pressure to expand tea consumption beyond the traditional markets of Pakistan, Egypt, Sudan and the United Kingdom. “Our intention is to diversify our markets so as to spread the risk,” Mr Vincent Mwingirwa of the agency’s marketing department said.

Faced with increased competition on the global market and low per capita tea consumption at home, Kenyan tea marketers are desperate for direct contacts with big buyers. Some tea processors such as Iriaini are counting on internationally recognised certifications like Fair Trade and ISO to break new markets.

But many of them are yet to get into production of specialty tea for niche markets. For instance, Mr Inagawa says young ladies in Japan are now going for specialty tea, a market segment that Kenya could tap.

Tea prices at the Mombasa auction have lately risen sharply due low supply resulting from the current drought. While this could mean better fortunes for growers, the looming shortage of electricity and the subsequent high charges are dampening hopes.

Being major electricity consumers, a constant challenge for many tea processors is how come up with cheaper sources of energy. The mainly small-scale tea processors have adopted an integrated approach to meet energy requirements in a cost effective manner.

The strategy includes development of mini-hydro-electricity plants, increasing efficiency and using biomass to power boilers. As a medium term intervention, a number of the factories are leasing land to plant trees for fuel which is cheaper than fossil oil and electricity. This is however raising temperatures among conservationists.

Some factories are exploring the possibility of setting up mini-hydro power generations as a long-term intervention to cushion them against surges in the cost of power from the national grid.

Imenti factory in Meru commissioned a 800-kilowatt mini-hydro power station early this year expected to save it Sh20 million annually. Following its success, four other factories in Nyeri South district have embarked on similar projects.

“We have already advertised for contractors and our plan is to commission the plant by 2011. We are also seeing it as a potential for diversifying our revenue sources,” says Mr Alfred Njagi, the KTDA Region Two manager.
According to Mr Njagi energy takes Sh12 from total cost of producing one kilogramme of tea, which eats into earnings. Processors have been operating on higher cost regimes for the last three months after electricity costs doubled mainly due to fuel cost adjustment.

DStv unveils Sh800 a month pay TV package

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Updated 23 hr(s) 24 min(s) ago
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MultiChoice Africa has launched a Sh800 a month pay TV package with 25 local and international channels.

Dubbed DStv Access, the offer includes Standard Group’s KTN, National Geographic Wild, Channel O, BBC world, CNBC Africa, Islam Channel, Al Jazeera, and SuperSport Blitz.

Others include NTV, Citizen TV, KBC, QFM, RAI, Inspiration, Kids Co, Mindset Learn, Magic World, E! Entertainment, Fashion TV.

According to Multichoice General Manager, Stephen Isaboke, the package is aimed at rescuing the region from the high priced television package and add spruce to living rooms.

"For as low as Sh800 one can subscribe to enjoy 25 quality, vibrant and exciting family entertainment channels," said Isaboke."Most people are looking at their budgets tightly and we believe this new bouquet will open up new avenues for business and television viewers," said Isaboke.This is the lowest cost in the market since inception.

The initial cost was Sh 5,600 in 1997. MultiChoice Africa President Eben Greyling said they were providing a breadth of choices rather than just focusing on specific genres with a goal of delivering world-class television and to develop local content.

DStv Access will have a range of channels ranging from entertainment, lifestyle, Sport, Children, News and others.



Another first as KTN comes to you on your mobile phone via DStv

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Another first as KTN comes to you on your mobile phone via DStvBy Maseme Machuka

Premier television station KTN has struck another first.

You can now enjoy your favourite programmes on your mobile phone after KTN joined the popular DStv Mobile TV bouquet.

Group Managing Director Paul Wanyagah said this was in line with the company’s quest to be the leader in the market in news, entertainment and educative programming.

Digital mobile television is an initiative of Digital Mobile Television (DMTV), which also offers world news channels including CNN and BBC World.

Speaking at the Standard Group offices, Wanyagah, accompanied by Assistant Director, Commercial, Mr Lawrence Njiru, said he was aware of the demands of consumers adding that was the reason KTN invested in the venture.

"We want to put sound and vision for the ever-busy and moving consumer. We are proud of this particular moment to become the first in the market to offer such a function.

Technology power

He added: "We are harnessing the power of technology. Mobile phones have become the centre of attention as technology changes. You can now send and receive money through M-Pesa and ZAP a facility supported by mobile telephony. You can also pay bills using your mobile phone. People are moving from conventional ways of technology into embracing up-to-date methods".

DMTV General Manager Felix Kyengo said KTN, by joining the Mobile Bouquet, has become part of the revolution taking place in the broadcasting industry.

Individual activity

Said Mr Kyengo: "With this revolution, watching TV will no longer be limited to the home, the conventional location for television consumption. This is in line with the changing dimension of viewership where watching TV has become an individual activity".

Kenyans will now have access to KTN while on the move, in public transport, waiting for appointments and while at work. Viewers with compatible Nokia phones and on Safaricom network service will access KTN at no cost.

Mr Wanyagah said KTN viewers would no longer miss their favourite news segments and programmes.

He said this would bolster customer satisfaction and is an innovative move. The Standard Group Ltd owns KTN.

Economy to grow at 3 p.c, says Old Mutual

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By JOSEPH BONYO
Posted Wednesday, July 15 2009 at 16:35

Kenya’s economy is projected to grow by 3.2 per cent this year.

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According to investment group Old Mutual, this will largely be driven by increased government spending and wholesale and retail trade.

“We project increased spending by the government especially on infrastructure will grow the economy albeit modestly. This will also be supported by areas such as trade and manufacturing,” said the firm’s chief investment officer George Apaka at a media briefing on Wednesday.

In the 2009/2010 Budget, Treasury allocated Sh140 billion to infrastructure development.

The amount was expected to spur growth in the construction industry, which has witnessed significant activity despite a downturn in the economy.

However, the group holds that the agriculture’s performance will record a decline despite efforts to boost the sector due to the prevailing erratic weather patterns.

Also expected to grow are tourism and manufacturing.

“In the financial sector however, we are likely to see cost containment as well as a slow down in expansion. There will also be caution and prudent lending in the wake of the financial challenges,” said Mr Apaka.

Last year saw only 1.7 per cent growth largely attributed to the post-election upheaval and the global financial crisis.

However the economy has shown signs of improvement, registering 3.9 per cent growth in the second quarter of this year.

On inflation, the analysts said they expected the current levels to stabilise, but high food prices will still pose a threat.

Similarly, foreign exchange rates and interest rates are expected to remain stable in the short term.

The groups’ projection came just days after the country received an improved rating from international body Standards and Poor Services.

The “B positive” rating, the firm noted was based on economic and infrastructural reforms put in place by the government.

In the ratings, continued economic reforms and infrastructure development were pointed out as benchmarks to the score.

A modest three per cent outlook had also been echoed by the African Development Bank as well as by Prime Minister Raila Odinga at different occasions.

Kenya Data commissions Sh7.4m solar energy plant

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Updated 2 hr(s) 46 min(s) ago
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By Ramadhan Rajab

Internet firm—Kenya Data Networks (KDN)—has commissioned a Sh7.4 million solar energy plant for rural areas to offer cost saving power solutions and ease the rollout of digital villages.

The Green Solar Power plant will provide double solutions for consumers — low cost electricity and Internet connectivity to the rural folk.

KDN officials said the plant —a partnership with Numeric India and Battery Technologies of South Africa —will help industrial consumers cut operations costs as well guard them against power outages.

KDN Chief Executive Kai Wulff said the move will give its rural customer environmentally friendly and efficient power solutions, and ensure they reap the benefits of Information Communications Technology once the national fibre optic link is activated.

"Our green power solutions will be core in assisting the rural areas that do not have electricity still access Internet connectivity at an affordable cost whilst, also providing green energy to power their daily activities.

Green power

Our aim is to ensure Kenya is connected to green power so that digital villages rollout will not be a challenge any more", Wulff said.

He said through use of green energy, KDN,has been able to reduce its energy costs by 80 per cent in the sunny season and 50 per cent during the cold season and attained return on their investment within eight months.

The Internet firm promised to provide power gadgets including batteries, solar panels, charge controllers, energy saving bulbs, inverters and other electronics to enable customers enjoy the full benefits of green power.

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Trade minister, Amos Kimunya (right) with Uchumi receiver manager, Jonathan Ciano (left) during the official opening of Uchumi's Jipange branch along Thika Road, Nairobi on July 15, 2009. Photo/WILLIAM OERI

By KABURU MUGAMBIPosted Wednesday, July 15 2009 at 16:46

The government has said it is prepared to convert Sh675 million loan it lent Uchumi Supermarkets into shares if the company’s owners made such a request. Uchumi has invited shareholders to a meeting in Nairobi on July 28 to discuss how the firm would leave receivership and return to trading at the Nairobi Stock Exchange.

For the government to agree to the conversion of its loan into equity, the shareholders have to consent to put in more money into the company, said Trade minister Amos Kimunya on Wednesday. The Sh675 million loan plus interest is due at the end of the year. The minister said that the decision on the way forward for the company would depend on the shareholders’ decision during the meeting.

“If they can bring all the money well and good, but if they cannot raise the money but invite the government to convert the loan into equity we will be willing,” said the minister during the official opening of Uchumi’s Jipange branch on Thika Road, Nairobi. Mr Kimunya requested shareholders to “think seriously” about what they want to do with the company when it finally reverts to them.

“We hope Uchumi will go back to the NSE so that people can start unlocking their value.” Uchumi’s shares have remained suspended from trading at the stock market since June 2006 soon after it was declared insolvent.

However, to be allowed to trade again by the NSE and regulator Capital Markets Authority, Uchumi has to demonstrate it has returned to profitability and was paying its creditors. Uchumi sunk into insolvency on June 1, 2006, though it reopened 45 days later following the government’s injection of Sh675 million and a compromise from the PTA Bank and KCB. Uchumi owed the two banks a total of Sh956.7 million.

Uchumi receiver manager Jonathan Ciano said that although the company regularly repays the loans, the continued existence of the debt on its books affects other areas of business. “Shareholders should ask themselves whether they should continue living on loans and continue paying interest,” he said. In May this year, Uchumi announced a net profit of Sh113 million in the nine months to March on revenue of Sh5.2 billion.

Kenya tea prices up, Pakistan leads strong demand

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By REUTERS
Posted Wednesday, July 15 2009 at 11:38

Kenyan tea prices rose at this week's auction boosted particularly by Pakistani demand, amid dwindling volumes, brokers said.

Cold weather in growing areas is expected to cut production in coming weeks and insufficient rains in this year is also seen affecting output in the world's biggest exporter of black tea.

"There was very strong general demand for the 98,052 packages (6.2 million kgs) on offer at dearer rates with a few lines remaining unsold," the Africa Tea Brokers (ATB) said in its regular market report.

About 10 per cent of the offered packages were unsold.

Top BP1s firmed to $4.00-$3.22 per kg compared with last week's $3.90-$3.35 per kg. Best PF1s went for $3.58-43.34 from $3.48-$3.30 at the last auction.

Buyers for Pakistan Packers and the Pakistan Bazaar were active while Egyptian Packers bought strongly, ATB said.

The east African producer has its coldest season over June-August and quantities are expected to drop as farmers prune their bushes in July.

Factories are usually under less pressure during the pruning season because they receive fewer green leaf deliveries and therefore produce better quality black tea.

Tea sales at Kenya's auction fell by about two million kg, or 1.2 percent, in the first half of 2009 to 151 million kg, ATB statistics showed this week.

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http://www.businessdailyafrica.com/image/view/-/624686/highRes/88325/-/maxw/600/-/h6iej9z/-/TV.jpg Power firm gives Wananchi Group a headstart in the race for control of converged media market with a plaform sharing agreement






Multi-media firm, the Wananchi Group, is using the national electricity transmission network to build a fibre optic platform expected to open a new front in the bruising battle for control of Kenya’s lucrative media market.

The platform – a product of an agreement between the media firm and Kenya Power and Lighting Company — puts Wananchi on a converged media highway that enables it to compete in television content, internet provision, data and voice transmission markets.

“We are deploying the “design unseen” network in key urban areas that enables us to install our fibre network on KPLC’s electricity poles,” said Suhayl Esmailjeee, the chief operating officer at Wananchi Group.

A national fibre optic network running on KPLC’s power transmission system offers Wananchi the potential to play in TV broadcasting and telecoms markets and a chance to compete in the internet service providers (ISPs).

Replicating KPLCs power transmission network gives Wananchi access to the more than one million electricity customers and substantially reduces the cost of cable TV transmission that is currently only possible with the expensive infrastructure support involving the digging of trenches to lay terrestrial cables.

It gives Wananchi a head-start in the race for control of premium TV market currently under the grip of MultiChoice Africa under the DStv brand but analysts warned that Wananchi could also use the massive bandwidth it offers to transmit self-generated local content making it a direct competitor in the Kenyan television scene.

Because the fibre optic cable can also be used to transmit data means Wananchi Group’s internet service provision arm can use it to take high speed internet to the one million homes and offices that consume electricity supplied by Kenya Power.

For Kenya Power, the fibre networks opens a new revenue stream that will help reverse profitability trends that have been dropping with increasing reliance on expensive thermal power from independent producers to meet rising consumer demand.

Wananchi’s fibre network will run parallel with KPLC’s own fibre optic network that the power firm is building for the planned entry into the data, audio and visual transmission market.

KPLC entered the telecoms market early this year and plans to launch the service in the first half of next year.

Mr Esmailjeee said Wananchi will use the quadruple play transmission system to relay voice, data, video and television images under a converged technology platform. Wananchi’s move is also expected to speed up the ongoing shift in the way consumers access telecommunication services.

A number of service providers have moved from radio wave-based technology – that uses satellites and base stations - to fibre optic links that offer larger capacity and are cheaper to operate in the long term.
More than 20,000km of fibre optic cables have been laid in Kenya – a large fraction of it in cities such as Nairobi and Mombasa in readiness for a looming wave of technology convergence that will see a single fibre optic line deliver almost all communication services to homes and offices.

Force change
The convergence, expected to begin in earnest in two months, will force change from the current mix of technology solutions that uses radio waves, satellite connectivity or physical telephone lines to transmit data and voice.

Front-runners in the race to connect Kenya through the fibre optic networks are Kenya Data Networks, AccessKenya, Telkom Kenya, the government through its TEAMs project and Jamii Telecom, who have laid thousands of kilometers of fibre optic cables.

The terrestrial cable networks are expected to offer a cheaper data and voice transmission platform and connect villages and homes to the international network of high speed connectivity to be offered by undersea cables like the East African Marine System (TEAMs) and Seacom.

“The undersea cables will reduce latencies and cut communication costs by 75 per cent, allowing seamless communication to the rest of the world,” said Mr Kai Wulff, the managing director of KDN.

Operating a fibre optic network has become a major competitive advantage for telecoms firms in recent months as the consumer market demand for high speed internet grows and technology pushes the convergence agenda.

“We literally have three cables lying on top of each other in some areas. We encourage sharing, but the players see cables as a competitive advantage,” said Bitange Ndemo, the Information PS.

Wananchi is a relatively late comer to the fibre optic connectivity race and is now holding the first to market advantage in the television segment of the telecoms industry.

It is banking on a $100 million cash injection it recently received from American Media Telecoms Fund (AMTF) to realize its goal of offering fibre connectivity to more than 400,000 homes in the next two years.

The network that Wananchi is building will carry a bouquet of more than 200 television channels, high speed internet and voice services into homes and offices.

“We have a complete network in Nairobi and our next goal is to ride on KPLC’s power-lines network for a national reach,” said Mr Esmailjee.

To deliver the services, Wananchi will rely on a Hybrid Fiber Coaxial network — a telecommunication technology that uses fibre optic and coaxial cables to deliver broadband content (such as video, data, and voice). The fibre will be literally twisted around specialized cables that run alongside power lines.
Unlike other players in the fibre optic market who are aiming for the largest share of the growing internet market, Mr Esmailjee said Wananchi’s primary focus will be on the TV market with data and voice services acting only as value added products.

“There is so much noise about data right now but for us TV is the growth market. We sign up between 50 and 400 new TV subscribers every month,” he said.

Wananchi offers cable TV services under its Zuku brand, which was hit by negative publicity after its high profile launch last year yielded strong market interest that consumers said was not matched with prompt delivery. Wananchi said it had lacked the money it needed to drive its plans.

Wananchi has been a main benefactor of the Africa Telecoms Media and Technology Fund (ATMTF) that bought strategic stakes in two Internet Service Providers — Wananchi Online and Simbanet as well as cable TV operator, Mitsuminet in May last year.

The company recently completed the purchase of a five per cent stake in state owned undersea fibre optic cable TEAMs. KPLC expects the latest partnership agreement with Wananchi to help drive its revenue growth by allowing it entry into new business areas.

It marks Kenya Power’s transformation into an infrastructure provider that will offer a network for the transmission of electricity, internet, television and voice services to homes.

KPLC got the licence it needed to diversify into data transmission in April this year after it met the regulator’s conditions.

The company plans to use its new mandate to create a 1,500km fibre optic backbone helped by the existing electricity transmission network. The Sh2.6 billion System Control and Data Acquisition (Scada) project is being financed by the European Investment Bank with the Swedish firm ABB as the contractor.

Safaricom’s money transfer innovation, M-Pesa, is the most popular remittances model in Kenya, latest report findings by Financial Sector Deepening and Central Bank has indicated.

About 40 per cent of the adult population rely on the model to carry out in-country remittances while one out of six people store money in their phones while travelling.

M-Pesa is also considered the least risky, less expensive and easier means of money transfer, according to the report.

The findings bring to light the threat the service portends for financial institutions’ Automated Teller Machines (ATMs) and sets the stage for a bruising contest for market share with Zain’s Zap service which operates on the same principle.

While ATM usage across the country grew to 13.1 per cent from 7.8 per cent last year, more Kenyans are now using mobile handsets to transact business.

The most common transaction through the phone is buying or sending of airtime followed by settlement of bills.

The findings also show close to two percent of the population receive salaries through M-Pesa or Zap services.

But, while Kenyans embrace mobile technology to access credit and money, other sectors of the economy continue to suffer.

The report notes that the use of insurance services has remained virtually unchanged among Kenyans.

Key stakeholders in the stock market have agreed to take concrete steps to restore investor confidence.

In a rare show of unity since the bear run hit the equity market last year, chief executives of the Capital Markets Authority (CMA), Nairobi Stock Exchange (NSE), Central Depository and Settlement Corporation (CDSC) Ltd and the Kenya Association of Stockbrokers and Investment Banks (Kasib) met in Nairobi to chart the way forward.

The stakeholders considered among other things modalities of implementing the Broker Back Office (BBO) system whose absence has largely been blamed on the rampant unauthorised sale of clients’ shares by brokers.BBO is used by brokers and investment bankers to accept the buy/sell orders from investors, executed electronically.

The system, which is often located in the brokers’ offices, accepts investors’ instructions and relays them to the Automated Trading System (ATS) at the NSE. The CMA chief executive Stella Kilonzo said in spite of various reforms which have resulted in improved market performance and development, abuses at the primary and secondary levels coupled with the need to apply ATS to increase efficiency have remained a big challenge.

Investors discouraged

" Capital Markets are yet to enjoy the full benefits of the ATS and CDS. There is need to synchronise these systems with brokers back offices system," said Kilonzo. "We are about 70 per cent down from our performance last year. This is due to waning investor confidence, reduced activity in the stock market, slowed economic growth, inflation, famine, water shortage, political uncertainty and collapse of some market intermediaries," said Rose Mambo, chief executive CDSC Ltd.

She said the key concern is safety of investors’ investments. Mambo said only 5,000 new CDS accounts have been opened in the past three months.

She said some investors have given up on putting their monies in the stock market owing to the agony they undergo when seeking compensation after the collapse of a broker.

Mambo said many investors also feel they were reaped off and ill advised to borrow from commercial banks to invest in Safaricom’s initial public offering.

"Our ailing economy has done little to improve the situation at the stock exchange. But we must act swiftly and forcefully to resuscitate the stock market," said Michael Gichohi, chairman Kasib.

The brokers and investment bankers however pointed accusing fingers at Citi Bank NA, saying the multinational still holds an approximated Sh250 million of outstanding claims.

Kenya firms seek to cross-list in South African bourse

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Nairobi Stock Exchange. Several Kenyan firms have cross-listed at the Tanzania and Uganda stock markets. Photo/FILE

By JUSTUS ONDARI in Johannesburg, South Africa
Posted Thursday, July 16 2009 at 12:58

Consultations are going on that will see companies listed at the Nairobi Stock Exchange cross-list at the Johannesburg Stock Exchange (JSE).

JSE business development manager in charge of African desk Geoff Musekiwa said the negotiations with various stock markets in Africa, including the NSE aim at allowing companies with a market capitalisation of at least Rands 500 million (Sh5 billion) to list at the biggest stock market in Africa.

Successful firms will list at the JSE Africa Board which is part of the JSE main market segment launched in February this year.

For a firm to list, must be based in Africa or most of its operations be based on the continent.

It must meet the Africa Board listing requirements and appoint a JSE approved sponsor to guide the process.

Mr Musekiwa said they have held talks with stock market players in Kenya, Zambia, Zimbabwe and Tanzania.

“We have met with Mr Peter Mwangi (NSE CEO) but we could not see Ms Stella Kilonzo (Capital Markets Authority CEO) because she was engaged elsewhere but we left some documents with her office,” Mr Musekiwa told the Daily Nation during a trip to the bourse in Johannesburg by journalists attending the 3rd Standard Media Forum.

The listing firm will retain its local listing with the costs depending on the monetary value of the listed securities.

Currently, Kenya Commercial Bank, Kenya Airways, Jubilee Insurance and East Africa Breweries are also listed at the Tanzania, Uganda and Rwanda stock markets.

Mr Musekiwa said companies that list at the JSE will have access to a market where they can raise more capital in Africa and have access to local as well as international investors.

“It is part of our efforts to promote the stock markets in Africa given their significance in economic development while enabling our firms to grow,” said Mr Musekiwa.

Already, a Namibian financial services firm, Trustco, has listed at the JSE and is in the process of raising R.200 million (Sh2 billion) for its expansion programme.

Mr Musekiwa, however, admitted that the low liquidity, mixing ownership and management and sovereignty, and territorial pride are some of the challenges they are facing.

“It is understandable because even as JSE, we were not happy when five of our companies listed at the London Stock Exchange but a few years down the line, we are happy,” he said.

Mortgage firm launches home savings scheme

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Updated 3 hr(s) 19 min(s) ago
By Morris Aron

The battle for a market share in mortgage business moved a notch higher after Housing Finance (HF) launched a savings product targeting potential homeowners.

The Cross Over Savings Account aims to bridge the gap between saving schemes and mortgages.

Housing Finance Managing Director Frank Ireri said the launch is in line with its vision to be a key housing supplier and a financial institution of choice.

"The product will allow our clients to save for homes or other commitments," said Mr Ireri.

Customers will access 100 per cent mortgage at interest rates of 10 per cent excluding a two per cent discount when applying for a mortgage.

Customer deposits

They will earn loyalty points with every deposit, which are redeemable through branded items and household appliances.

Mortgage finance institutions offer an average of 80 per cent home loans financing at interest rates of between 12.5 per cent and 17 per cent interest rates.

Only negotiated schemes provided by firms to their employees and civil servant packages offer less than 10 per cent interest rates on mortgages.

The company has rolled out several products to attract new customers.

They include Property Point, a Home Ownership Savings Plan and Makao—a one-stop construction solution for developers.

The developments have been made possible after Housing Finance raised Sh2.37 billion through a rights issue of 115 million shares.

The pool of funds adjusted the company’s books of account as it can take up Sh25 billion in customer deposits and lend out up to Sh30 billion as loans.

"The rights issue gave us the opportunity to take additional deposits and lend out much more than we were previously able," said Mr Ireri.

"We are using that window to come up with products to grow our client base."

Kenya leads in regional trade

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By KABURU MUGAMBI
Posted Thursday, July 16 2009 at 17:41

Kenya is leading in trade and investment in the East Africa Community, the bloc’s secretary general has said.

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Mr Juma Mwapachu, at the same time, lauded Kenyan businesses for aggressively investing in the region as a result boosting tax revenues and creating jobs in other countries.

“Presently, 270 Kenyan companies are operating in Tanzania not only increasing the exchequer’s revenue but also creating jobs,” he told reporters at the Kenyatta International Conference Centre, Nairobi on Thursday.

“Kenyan firms have also invested in Uganda and now increasingly in Rwanda and we hope something happens in Burundi too,” he added.

Between 2004 and 2007, the volume of trade within the community increased by 22 per cent while the total EAC trade with the rest of the world rose by 26.8 per cent up from 22.8 per cent in 2006.

“The 22 per cent growth in inter-regional trade is significant given other regional economic communities averaged 10 per cent growth in inter-regional trade,” Mr Mwapachu said during a media briefing on the forthcoming three-day East African Investment Conference to be held in Nairobi.

The conference, which kicks off on July 29, offers the regional bloc a forum to promote the area as a single market and investment zone.

East African Community ministry assistant minister Peter Munya said that since the inaugural conference in Kigali, Rwanda in June 2008, a sizeable number of enquiries, project proposals and actual investments have been recorded.

Although the conference would be held against a backdrop of global economic recession, Mr Munya said, there exists investment opportunities in the region.

He said that based on co-operation agreement between India and EAC signed in 2007, the former has been invited as guest country to the second EAC Investment Conference.

EAC ministry permanent secretary David Nalo said with the coming into force of the EAC Customs Union in January 2005 that led to opening up of borders, inter-border trade and investment have increased.

Kenya’s second fibre optic cable is on track for completion in the next five days.

Seacom, a privately-funded fibre optic project, is set for completion by mid next week, setting the stage for cheap internet connectivity and enhanced communications in the country.

“We can now confirm that all construction on Phase 1 is complete and testing is under way on the fully powered system. I am confident that July 23 will be our ready for service date,” said Seacom CEO, Mr Brian Herhily.




Market players have started gearing up for the arrival of the fibre optic link, with players realigning their product lines to take advantage of cheaper connectivity.

AccessKenya Group on Thursday announced that it had upgraded its internet core network by 10 times, raising its capacity from 1,000mb to 10,000mb at a cost of Sh60 million in preparation for the activation of Kenya’s two links, Seacom and the East African Marine System (TEAMs), which landed early this month.

The company said it hoped to ensure that its core network was scaled to handle and manage the large capacities of the international fibre cables and to ensure its core internet network is upgrade proofed for a number of years.

“We have been planning for the arrival of the international fibre optic cables for almost a year, with an integrated plan involving the international capacity, the 140km metro fibre ring covering 250 buildings which we have almost completed building, and significant upgrades of our core internet and wireless infrastructure,” said Mr Jonathan Somen, AccessKenya Group managing director.

However, analysts are sounding the alarm that the country may wind up with too much broadband connectivity as players in the industry have bought more capacity than they are willing to handle.

Access Kenya, for instance, has purchased a total of 2,500mb of capacity on the Seacom fibre optic cable which, together with a similar amount procured on the TEAMS cable, will give it a total of 5,000mb of capacity, a figure that is four times what the entire country already uses.

Kenya currently purchases 1,200mb on satellite, and market watchers warn that players in the industry may be induced to engage in a price war to entice more users to use their large amounts of capacity.

High-quality Internet
The news comes following a World Bank report which has found that every 10 per cent increase in high-speed Internet connections in developing countries results in a corresponding increase of 1.3 per cent in economic growth.

The bank’s Information and Communications for Development 2009: Extending Reach and Increasing Impact’ report found that access to affordable, high-quality Internet and mobile phone services enabled development across all levels of the economy and society.
World Bank global information and communication technologies director Mohsen Khalil said fibre optic technologies offered developing economies tremendous opportunities.

“Governments can work with the private sector to accelerate (the) roll-out of broadband networks and to extend access to low-income consumers,” he said.

KTB launches campaign to attract Japanese tourists

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Updated 2 hr(s) 25 min(s) ago
By Macharia Kamau

Kenya Tourist Board (KTB) has launched an aggressive marketing campaign to woo the Japanese as part of its global marketing initiative ahead of the high season.

A team comprising officials from the Board and those from Kenya’s Embassy in Japan are conducting travel trade workshops in Osaka and Tokyo, focus group discussion meetings and one-on-one sales calls with key members of the travel trade aimed at gaining additional insights into the Japanese market.

The campaign has been intensified with hotels and lodges locally reporting high bookings as tourists prepare to jet in for diversified products.

This has been climaxed by the wildebeest migration of about 1.3 million in the Mara that has been declared one of the Seventh Wonders of the world.

KTB Marketing Director Karrol Yambo, who is leading the team, says the country has high potential for inbound tourism, noting that the board is keen to increase tourist arrivals.

Japanese tourist arrivals for January to last month have grown by 63 per cent from 2,416 last year to 3,937 this year.

Yambo says though the base is small, KTB is optimistic that with aggressive targeted consumer marketing as well as continuous travel trade engagement, arrival figures will double by the end of June next year.

KTB in its overall marketing strategy is to entrench Kenya’s brand positioning among the Japanese consumers to increase awareness and affinity to travel to Kenya.

Consultancy firm gets Sh25 million boost

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Updated 3 hr(s) 51 min(s) ago

Research Solutions Africa (RSA), a local consultancy company has received Sh25 million from an equity fund to boost its capacity.

TBL Mirror Fund, an international private equity fund has given the market research company the money to improve service delivery.

RSA Chief Executive, Jane Delorie said the funds would advance the company’s expansion plans within the continent and strategically position it as a key player in the sector.

"This investment will be directed at consolidating our growth, and allow us to open up new markets bringing us closer to our vision of being recognised as a leading pan-African information solutions provider," she said in a statement.

The funding, she added, will also allow RSA support decision-making within client organisations through provision of high quality information solutions.

RSA offers full market research consultancy services, which include survey design, data collection, data analysis and reporting of findings.

TBL Mirror Fund, which is based in Netherlands, was established to facilitate and manage combined investment of capital and knowledge in promising companies. The Fund focuses on small and medium enterprises operating in growth markets where value can be added through know-how and involvement of the Fund’s investors.

It also provides hands-on entrepreneurial involvement and exposure to an international investor network, matching entrepreneurial governance and capital from the West, to entrepreneurs looking for added value in East Africa.

Investors of the TBL Mirror Fund are successful private individuals with a wide variety of industry backgrounds, from CEOs of large multinationals, to seasoned entrepreneurs and experienced venture capitalists.

The mirror principle means investors will be involved in management of the portfolio companies through annual visits, board membership and membership of the Fund’s investor board.

Indian telecommunications company, Essar Group, has announced joint investment plans in Africa with a Dubai based company.

The group, which offers mobile services in Kenya under the "yu" brand name, has entered into investment discussions over the telecommunications portfolio of Dhabi Group’s African assets.

The Essar Group’s move is seen as a strategy to expand its operations in Africa.

"The transaction will involve an equity infusion into these businesses as growth capital and will be the basis of a partnership to create significant presence in Africa," read a statement from the Essar group.

Standard Chartered Bank has been identified as the exclusive financial advisor to the Dhabi Group.

The Essar’s Telecom Business in Africa recently acquired controlling interest in Econet Wireless Kenya and subsequently renamed the company Essar Telecom Kenya Ltd ("ETKL,").

Further, Dhabi Group and its Chairman, HH Sheikh Nahayan Mabarak Al Nahayan, will lead a consortium of investors composed of private equity and family offices in the East African region.

The Group, which has diversified business interests with a focus on emerging market opportunities in financial services, telecommunications and real estate, has its eyes set on Africa, an upcoming telecommunication market in the recent times.

Other business interests include real estate development, hotels, oil-related services and manufacturing/diversified industrials.

Business interest

It will be recalled that although Dhabi Group and its consortia have banking interests in Asia, its portfolio was expanded in 2005 to include telecommunications services in Asia and Africa.

Essar has significant interests in telecommunications services, spanning mobile telephony, telecom tower infrastructure, telecom retail and IT/telecom enabled services.

The company currently holds a 33 per cent interest in Vodafone Essar, which is a joint venture with the Vodafone Group, and is one of India’s largest cellular service providers, with more than 75 million subscribers.

ETKL launched its services in October last year and is regarded as one of the most innovative and fast growing telecom operators in Kenya.

The company has approximately 400,000 subscribers on its network in Nairobi and Mombasa and expects this number to grow significantly as it completes it rollout across Kenya by end of the year.

When it launched its operations as Kenya’s fourth mobile telecommunications operator, yu’s market strategy has been targeting the youth with attractive tariffs and innovative products and services.

In the process, yu has been able to achieve 70 per cent brand awareness among its target audience.

ETKL has also been successfully operating under a low-cost model that has revolutionised the Kenyan mobile market and enabled it to significantly reduce the cost of mobile communications.

"The company plans to launch several innovative products and services this year," Kunal Ramteke of Essar Telecom Kenya said in a statement.
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The Government will revive and complete stalled water projects to boost food security.

Agriculture Assistant Minister Japheth Kareke Mbiuki says the perennial food shortage was due to farmers’ over reliance on the unpredictable rains.

He said the government would ensure that irrigation was adopted so that enough food for both domestic and commercial use was available.

The Assistant Minister said the stalled Mwimbi/Gitije Water project in his Nithi constituency which has stalled for decades, and which is aimed to provide irrigation water to thousands of families will be revived at a cost of Sh60 million.

He called on farmers benefiting from such government initiatives to exploit the opportunities and engage in horticultural agriculture.

Food security takes centre stage with major incentives

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By John Oyuke

The Government has unveiled a stimulus package to reduce reliance on rain-fed agriculture and enhance food production.

Finance Minister, Uhuru Kenyatta said the bold move would mark the beginning of a journey to attain food security in the country so the Kenyans never go hungry again.

The new measures would focus on mechanisation, irrigation, use of hybrid seeds and water harvesting.

Part of the plan is establishing efficient storage and marketing systems and application of scientific farming methods.

As a first step, the Government has allocated substantial resources to ministries responsible for agriculture, irrigation and regional development.

In addition, it allocated Sh3 billion toward rehabilitation and expansion of irrigable land under Bura, Hola, Tarda, Wei Wei and Kerio Valley.

Uhuru said from the investments the Government expects to harvest about one million bags of rice and maize by the end of December this year.

"As we scale up resources toward irrigable agriculture, we are confident that this great Nation will emerge as a net exporter of food by 2012," he said.

Agriculture is the mainstay of the country’s economy and represents 24 per cent of Gross Domestic Product (GDP) and about a third of its produce is exported.

However, production in the sector recorded a significant drop, declining by 5.1 per cent last year compared to a two per cent in 2007.

The decline was mainly due to low production of food crops owing to the disruption of agricultural activities during the post-election violence, unfavourable weather and high cost of agricultural inputs, particularly fuel and fertilizer.

Further, the failure of the short rains between October and November last year resulted in a sharp decline in domestic food production, particularly maize.

New plans

To promote agricultural sector and protect wheat farmers from cheap imports, the Government undertook to raise the current import duty rate on wheat from 10 per cent or $50 (Sh4,000) whichever is higher to a rate of 25 percent.

To support dairy farming sub-sector through further incentives, Uhuru announced new plans to grant an exemption of import duty and to zero rate for value added tax (VAT), heat insulated milk tanks, to help dairy farmers in preserving their milk.

He also said the Government would also enhance the national food reserves through encouragement of individuals and groups to store their produce.

Uhuru proposed to zero rate VAT on vatable supplies for the construction of grain silos, in addition to refrigerated trucks.
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Tourism Minister Najib Balala has disc