Today, March 24, 2009 is the Human Rights Defenders Day in Kenya.
The day commemorates the assassination in 1996 of Karimi Nduthu who was murdered after finalising an investigative report into the 1992/3 ethnic clashes where there were rampant incidents of state sponsored executions targeting Kikuyu, Kisii, Luo and Luyha populations in Rift Valley, Nyanza, Western and Coast Provinces.
A blog posted in commemoration of this day by prominent activist Cyprian Orina Nyamwamu “The Fight For Freedom, Democracy And Human Rights Is The Necessary Qualification For Kenyan Citizenship” posits that the war against social injustice can only be won when we finally refuse to be pawns and objects of the market which in turn assists the government to keep us impoverished.
Cyprian exhorts us “You young Kenyan professionals and activists; Stand up and be alive. Do not be corpses who died at 18 years and are waiting to be buried at 70years!”
Read “The Fight For Freedom, Democracy And Human Rights Is The Necessary Qualification For Kenyan Citizenship”
Tuesday, March 24, 2009
Monday, March 16, 2009
If the Kenya government was a business, it would have collapsed ages ago
"Why would a company hire someone that sleeps on the job, doesn’t complete assigned tasks and demands a hefty untaxed salary?" - Ken M. a Kenyan Entrepreneur, 16th March 2009The global financial crisis has led to the closing down of many enterprises. Even the Business Daily today in its headline article “Global crisis wipes out call centre jobs” tells of the local BPO industry as being in jeopardy.
Recession-proofing
Indeed “recession-proofing” business has become a buzz word, even amongst local entrepreneurs. Key in the phrase on Google and you get a result of 4,790,000 website listings.
Ensuring that one’s business can swim the tide of global financial currents, means tightening belts, something that many companies are doing as seen in the number of industries laying off non-essential staff.
In line with this economic outlook, wouldn’t it also be prudent for the government that lives off earnings in the form of tax revenue from Kenyans also tighten its belt?
News stories such as lavish spending on tea and flowers are definitely not in tune with the times.
Mars Group Kenya, a local governance and accountability watchdog in a blog posted today “The Government of Kenya is Broke” has raised critical financial management inefficiencies being perpetrated with outright disregard to the Kenyan people. This coming at a time when the same government (which previously prided itself on being self-sufficient) has whipped out the begging bowl for donors to fill.
Scandals ranging from maize to oil continue unabated, whilst we business people are warned of imminent tax hikes. The grand coalition government seems to have a more voracious appetite in ensuring its parliamentarians are kept in the lap of luxury, whilst continuing to exert pressure on small businesses to pay taxes.
The Mars Group blog outlines several spending issues that if the Kenya government was a business, it would surely collapse.
For instance, the bloated cabinet of 93 Ministers and Assistant Ministers costs Kenyans billions of shillings annually. Out of the government’s budget, 24% goes to servicing external debt leaving 76% for services rendered to Kenya. Out of this balance, 85% is spent on recurrent expenditure (i.e. paying hefty salaries and buying the latest SUV’s) whilst only 15% is left for development.
It is this 15% of expenditure that is supposed to ensure that all Kenyans reach a point of financial stability, in order to pay (“as responsible citizens”) taxes.
One does not have to be an economist, accountant or even a high school student for that matter, to see that the flow of funds here is top heavy; whilst unfortunately it is small business entrepreneurs and lower income Kenyans consumers who bear the brunt of this parasitic government. Taxes such as VAT know no class barrier, thus we “watu wadogo” pay the same taxes as MPs who earn tax free allowances topping up high salaries.
No-brainer questions
The Mars Group blog proposes several reforms, which if given in advice to small business owners would seem a no-brainer: For instance,
• Why would a company have a bloated Board of Directors (i.e. cabinet) whilst revenues remain small?
• Why would a company hire someone that sleeps on the job, doesn’t complete assigned tasks and demands a hefty salary (untaxed!)? (our MPs).
• Why would a business owner retain the services of a financial officer when it turns out that money allocated for specific tasks (such as paying for free education) is diverted for other costs (such as buying maize)?
• How on learning that money has been siphoned out of the enterprise (Anglo-leasing style) by the same finance officer, would the business owner just let the matter drop; notwithstanding the fact that annually 24% of the business budget is religiously paid to external lenders?
• After finding out about the siphoning of funds, wouldn’t a prudent business owner ensure that such corrupt loans cease to be paid immediately?
• Wouldn’t an entrepreneur use legal redress so that the business doesn’t have to pay the corrupt loans?
Either way, remaining in the status quo would without a doubt crush the business before too long. The government is only lucky in that it gets free money from taxes without even having to pretend to offer adequate services.
That is until we finally demand that the government also tightens its belt.
Read THE GOVERNMENT OF KENYA IS BROKE: What Mwai Kibaki, Raila Odinga, and Parliament must do to deal with our current financial crisis
Wednesday, March 11, 2009
Eyewitness account of the 10th March Student March
There has been wide debate on what really happened on Tuesday's University of Nairobi student's march. Blame has been hurled on the police, the students and even Prime Minister Raila Odinga.
Onyango Oloo, a social justice activist was there and his comment is posted on the Sukuma Kenya blog.
Read "Students Demonstrate...Thugs (and politicians) Riot" to find out what happened.
Friday, March 6, 2009
Kenya's grey haired brigade score five more years
Kenyan's aging civil servants received a shot in the arm from Public Service Minister Dalmas Otieno who announced yesterday that the retirement age in the civil service has been raised to 60 years from the current 55.
This flies in the face of Kenya's socio-demographic statistics. For instance, 94% of the population is under 55 years old.
On the other hand, youth unemployment (that is citizens well under the current retirement age of 55) account for 3 million of the population.
Somehow the mathematics don't quite add up.
Or is it that the coalition government is more interested in keeping their cronies employed and only pay lip service to youth employment?
Monday, February 23, 2009
When to say goodbye
Just this week, my mailing list service run by an American startup went literally belly up. There I was wondering why I couldn't send out my newsletter when I received an email saying that due to the financial meltdown the company (which incidentally went to great lengths to get my custom in the first place) had to close IMMEDIATELY.
Just like GTV there was absolutely no notice given.
I have also previously had the misfortune of having both my broker and bank also go the titanic way.
So is this what is to be expected as a normal occurrence?
Today's Business Daily in an article "Watch out for tell-tale signs that a company is going bust" writes that the right time to assess the business credibility and sustainability of who you deal with is now.
"The best time to be spotting the signs of mounting risk is before the juggernaut goes off the road." - Business Daily, Feb 24, 2009
Unfortunately, very often we witness rapid expansions of our banks, brokers and even supermarkets. However, there is also the excuse we tell ourselves, that if they run out of liquidity, they will be propped up, preety much in the same way the US government is propping up American industry. However, while Kenya is grappling with financial crisis of its own, I think we need to re-assess that supposition.
Read "Watch out for tell-tale signs that a company is going bust"
Postscript: Finally, it seems that Kenya's new Finance Minister Uhuru Kenyatta is hearing the cries of "UNGA" from Kenyans. Yesterday, while introducing a new budgeting mechanism, Mr. Kenyatta said that the days of large Kenyan delegations flying across the globe are over. More importantly he said that the government should in turn be more accountable to the people of Kenya. As the Daily Nation editorial says: "Uhuru is a new broom; let him sweep clean". We at Yipe couldn't agree more.
Thursday, February 12, 2009
Accountability: its about time!
This week Nigerian Agency for Food and Drug Administration and Control (NAFDAC) drug regulators announced they arrested 12 people in connection with the poisoning of 111 babies with a tainted teething medicine. If convicted NAFDAC says the 12 face upto 15 years behind bars or a US$ 3,500 fine.
The teething gel, ironically called "My Pikin" (my baby in pidgin) which contained a chemical substance, diethylene glycol that is commonly used as engine coolant, has already claimed 84 children’s lives.
On this side of the continent, impunity seems to be the name of the game as exhibited in the “trashed” report on defunct Nyaga Stockbrokers. By far in its time one of the more popular stockbrokers (as evidenced by long queues outside its Nation House headquarters in Nairobi), the report outlines a long standing fraud by the brokerage firm on unsuspecting investor clients.
Yesterday’s editorial in the Business Daily also pointed to further collusion in not pursuing the fraud. The paper’s journalists, as reported in the editorial, were dissuaded from investigating the Nyaga forensic report by industry insiders on the pretext that reporting on the Nyaga Stockbroker report “would erode investor confidence in the stock market”.
This burying of heads in the sand for the sake of keeping things “sawa” is what has led to the perpetuation of fraud and impunity in our society. When regulators and colleagues in the brokerage industry collude to hide evidence of fraud from the public, in the mistaken belief that “confidence” is at stake - of course it is at stake!
To allow the unsuspecting public to continue to invest in shams, when one knows the real story behind them, makes the abettor just as liable as the fraudster themselves.
As for the Capital Markets Authority where some of their officers did report anomalies in Nyaga and where nothing was done for five years, it is beyond comprehension how they have been allowed to sit on the forensic report since the end of last year on the pretext that they have to ensure its veracity! With such a slow pace in holding the fraud masterminds to account, it is such actions that do lead to “low investor confidence”. If our money will not be protected by the CMA who have dragged their feet in holding the wrongdoers to account, then why even be surprised when IPO’s such as Co-operative only subscribe upto 70%?
To know and not to do is not to know
Just yesterday in the UK, ex-HBOS bank chief Sir James Crosby quit as deputy director of the Financial Services Authority, after a memo was produced suggesting he’d sacked his head of risk back in 2005 for suggesting the bank’s strategy was too risky.
In China, 2 dairy company executives were sentenced to death, whilst the company’s board chairperson will spend the rest of her life behind bars for selling milk contaminated with melamine.
Nigeria has also started proceedings against the “My Pickin” poisoning culprits.
In Kenya, financial fraud scams have not taken any lives as yet. However, if we allow the Nyaga report to go unaccounted for, then we fully deserve to be scammed by the next Bernie Madoff that crosses our path!
Now, TODAY is the time to demand accountability – from our brokers, the regulators, our leaders, our managers, our employees, our friends, our family, and most importantly ourselves.
The teething gel, ironically called "My Pikin" (my baby in pidgin) which contained a chemical substance, diethylene glycol that is commonly used as engine coolant, has already claimed 84 children’s lives.
On this side of the continent, impunity seems to be the name of the game as exhibited in the “trashed” report on defunct Nyaga Stockbrokers. By far in its time one of the more popular stockbrokers (as evidenced by long queues outside its Nation House headquarters in Nairobi), the report outlines a long standing fraud by the brokerage firm on unsuspecting investor clients.
Yesterday’s editorial in the Business Daily also pointed to further collusion in not pursuing the fraud. The paper’s journalists, as reported in the editorial, were dissuaded from investigating the Nyaga forensic report by industry insiders on the pretext that reporting on the Nyaga Stockbroker report “would erode investor confidence in the stock market”.
“Many sources talked to in the run-up to publication of our report on the Nyaga Stockbrokers fraud on Tuesday have, for instance, suggested that we should not carry the story for the simple reason that it would erode investor confidence in the stock market.
In these people’s world, stealing investors’ money, forgery, and engagement in illegal activities such as margin trading do not have any impact on investor confidence so long as the victims do not find out that they are being fleeced.” - Editorial: Investors deserve better than a landscape of fraud and graft, Business Daily, February 11, 2009
This burying of heads in the sand for the sake of keeping things “sawa” is what has led to the perpetuation of fraud and impunity in our society. When regulators and colleagues in the brokerage industry collude to hide evidence of fraud from the public, in the mistaken belief that “confidence” is at stake - of course it is at stake!
To allow the unsuspecting public to continue to invest in shams, when one knows the real story behind them, makes the abettor just as liable as the fraudster themselves.
As for the Capital Markets Authority where some of their officers did report anomalies in Nyaga and where nothing was done for five years, it is beyond comprehension how they have been allowed to sit on the forensic report since the end of last year on the pretext that they have to ensure its veracity! With such a slow pace in holding the fraud masterminds to account, it is such actions that do lead to “low investor confidence”. If our money will not be protected by the CMA who have dragged their feet in holding the wrongdoers to account, then why even be surprised when IPO’s such as Co-operative only subscribe upto 70%?
To know and not to do is not to know
Just yesterday in the UK, ex-HBOS bank chief Sir James Crosby quit as deputy director of the Financial Services Authority, after a memo was produced suggesting he’d sacked his head of risk back in 2005 for suggesting the bank’s strategy was too risky.
In China, 2 dairy company executives were sentenced to death, whilst the company’s board chairperson will spend the rest of her life behind bars for selling milk contaminated with melamine.
Nigeria has also started proceedings against the “My Pickin” poisoning culprits.
In Kenya, financial fraud scams have not taken any lives as yet. However, if we allow the Nyaga report to go unaccounted for, then we fully deserve to be scammed by the next Bernie Madoff that crosses our path!
Now, TODAY is the time to demand accountability – from our brokers, the regulators, our leaders, our managers, our employees, our friends, our family, and most importantly ourselves.
Wednesday, February 4, 2009
The football match will not be televised!
The same blank screen faced many bar and restaurant owners across East Africa last week. GTV the pay television network left many literally in the dark, wondering how they would explain to their patrons why they could not show them the live broadcast of the Manchester United and Everton match. Indeed the English Premier League generates as much if not more following amongst East Africans compared to say CECAFA. League fans have in turn boosted the earnings of many entrepreneurs in the hospitality industry, and thus the blank screen was not welcome to many.
The only consolation GTV could offer their customers was a short message that the company had ceased its operations. This was done without any prior notice. According to the parent company, Gateway Broadcast Services (GBS), the global financial meltdown had given the company no choice but to cease operations. In less than two years the company that changed the face of pay-TV was no more.
If anything GTV will be remembered for was that it challenged front runner DStv who in turn had to fight to woo middle income customers by lowering prices and offering numerous promotions. GTV had even-one upped DStv in its billing. In October last year the company unveiled an innovative payment system that enabled customers to pay their monthly subscription fees using scratch cards. Compared to the long queues faced by customers of its competitors this was revolutionary.
Then having the exclusive rights to broadcast English Premier League matches, the company seemed on its way to actually facing up to market leader DStv in a new way. This also paved the way for new entrants such as Zuqka as more people realised that a little extra money spent to get pay-TV could greatly enhance their choice of programmes and home entertainment experience. DStv even introduced a package with a few target selected channels that was competitively priced to reach the same middle to low income market.
But all that is water under the bridge. So what now?
DStv can now reclaim its customers. GTV’s fall has not quenched our thirst for football. The match must go on, and now restaurant and bar owners will have to fork out for super sports if they are to keep their custom. As for Zuqka, their market is still assured with younger and less well off consumers.
What about any new entrants?
The way GTV just closed without notice has made it an uphill task for any entrepreneur thinking of coming onto the market. How to convince those business owners, the scratch card distributors and the consumers to trust a new upcoming entrant will be an uphill task. However, with rights maybe to start airing local championships live, you never know. After all, the match must be televised, wapende wasipende!
The only consolation GTV could offer their customers was a short message that the company had ceased its operations. This was done without any prior notice. According to the parent company, Gateway Broadcast Services (GBS), the global financial meltdown had given the company no choice but to cease operations. In less than two years the company that changed the face of pay-TV was no more.
If anything GTV will be remembered for was that it challenged front runner DStv who in turn had to fight to woo middle income customers by lowering prices and offering numerous promotions. GTV had even-one upped DStv in its billing. In October last year the company unveiled an innovative payment system that enabled customers to pay their monthly subscription fees using scratch cards. Compared to the long queues faced by customers of its competitors this was revolutionary.
Then having the exclusive rights to broadcast English Premier League matches, the company seemed on its way to actually facing up to market leader DStv in a new way. This also paved the way for new entrants such as Zuqka as more people realised that a little extra money spent to get pay-TV could greatly enhance their choice of programmes and home entertainment experience. DStv even introduced a package with a few target selected channels that was competitively priced to reach the same middle to low income market.
But all that is water under the bridge. So what now?
DStv can now reclaim its customers. GTV’s fall has not quenched our thirst for football. The match must go on, and now restaurant and bar owners will have to fork out for super sports if they are to keep their custom. As for Zuqka, their market is still assured with younger and less well off consumers.
What about any new entrants?
The way GTV just closed without notice has made it an uphill task for any entrepreneur thinking of coming onto the market. How to convince those business owners, the scratch card distributors and the consumers to trust a new upcoming entrant will be an uphill task. However, with rights maybe to start airing local championships live, you never know. After all, the match must be televised, wapende wasipende!
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