It featured a delegation led by Finance Minister Amos Kimunya and hosted by the Kenyan Embassy. The big Thursday dinner event at the JW Marriott Hotel in Washington DC was graced by at least 500 people, mainly diaspora Kenyans: diplomats, professionals, students, businesspersons, and visitors.

It was earlier announced that the entourage expected to attend the gathering as part of a four stop US promotion and showcasing of investment opportunities in Kenya for diaspora Kenyans, was to comprise a large delegation of key business-persons, educationists and government officials who were expected to provide a broad overview of Kenya's economic situation. The delegation was expected to unveil a range of investment vehicles and products in line with future expected economic growth in the country. The opportunities comprised buying properties, investing in the NSE, and especially the upcoming Initial Public Offerings (IPOs) on the Nairobi Stock Exchange.

Coming to the actual event, I must acknowledge that the event was well organized which probably means that a lot of money from Kenya's public coffers was infused into it's planning towards traveling and accommodation costs for all these dignitaries, a check for the dinner luncheon host, the JW Marriott, Washington DC, and a thorough public relations overdrive by the embassy to reach out to the wananchi (most embassy staff and their families were in attendance). The result of course was a lavish gathering that proved to be a meeting place of Kenyans where good food and all sorts of alcoholic beverages were served. It should however be noted that not of the announced or planne3d high-profile speakers and representatives actually were present, with only about half of them ultimately making the trip.

A number of great presentations were made, and I was particularly impressed by the Permanent Secretary for Information and Communication, Dr. Bitange Ndemo, a former Minnesota based Kenyan whose efforts to ensure completion of both undersea and terrestrial broadband infrastructure development are already on course. His concurrent efforts to initiate call center and data processing hubs in Kenya are commendable examples of vision translated into action and results. Keen followers of Kenyan news will recall Dr. Bitange's recent brush with the Justice Ministry, particularly the Solicitor General Wanjuki Muchemi, over procurement procedures. The PS must have convinced many that he is indeed focused on bringing positive change in this sector, despite the well known interference by contract-hungry colleagues with vested interests in the Justice Ministry.

Susan Kikwai of the Kenya Investments Authority also gave a good presentation on opportunities for business and investments as did the US representative of PostaPay Kenya - a recently launched money sending company.

Enter Amos Kimunya and his rosy economic growth figures which were carefully juxtaposed with KIbaki re-election campaign-rhetoric and opposition-bashing. Granted, the man articulated economic gains achieved under the current regime, carefully avoiding the touchy subjects of poverty (close to 60% of Kenyans live below the poverty line according to latest UNDP figures), and corruption.

What came out significantly during the event was Kimunya's hyping of election-year rhetoric which was akin to the old phrase "I(we) will transform your lives if you elect me(us)". Such talk brings false hopes and leave people chasing mirages, which is why it must be searched out for substantive and objective messages. His political maturity was in full display when he made a strong effort to tie the policy paper "Kenya Vision 2030 : Transforming National Development" into a political pledge dependent on President Kibaki's 2007 re-election, giving projections of 10% economic growth rates for the next 23 years. These projections, it is expected, would ultimately transform Kenya into an African economic tiger. Pulling out his gun he threatened, "in the unlikely event that Kibaki loses re-election, all these economic gains will go up in smoke".

Confounding his audience by mixing policy and politics, making it difficult to separate wheat from chaff, reality from fantasy, and facts from rhetoric, he seemed to sway lay folks with economic figures, estimates and projections that could easily draw undecided voters towards Kibaki. It was only when the questions started flooding the podium, that the hypnotized were brought back to reality with the glaring fact that poverty was not anywhere near Kimunya's concerns, and corruption was neither a priority or a problem in his perception and mind. For this reason, Kimunya and his boss Kibaki ought to be judged not on the basis of the visions they promise, but through their record which is right there for all to see.

His failure to address questions regarding massive corruption, the 50-plus billion shilling Anglo-Leasing scandal, Nakumatt & TuskerMattress tax evasion scams running into 18 billion shillings, the Uchumi fiasco, money laundering claims at CharterHouse Bank, claims of illegal procurement cartels, and irregular public assets acquisitions by one investment company which has shown interest in all of Kenya's parastatals set to be privatized, left one wondering whether he approves or condones these outrages.

As though to make the case for the charge of complicity, he failed to explain his failure to propose legislation against money laundering or his role at the CBK including whether he had a hand in Jacinta Mwatela's removal as Governor. It was not expected that he would address the twin issues of corruption and tribalism (raised by someone in the audience) nor how these contribute towards poverty. He did not try, even though these are all record-based realities that can not be wished away through choreographed showcasing of economic "successes" that only profit the already well-off upper classes.

Next was the matter of investment, especially that of Kenyans abroad. However much investment opportunities are paraded, investors, whether Kenyan or foreign, always have the same questions about the local environment with regard to; bureaucratic bottlenecks, regulatory climate, corruption, and insecurity.

What regulatory bottlenecks will be faced, what conditions must be met? Must you bribe to complete the process? What is the current state of security? Will pre-tax conditions be imposed, and so on. These questions were part of the concerns of a diaspora-based Kenyan who has tried, unsuccessfully, to get started in the telecommunications sector during the Kibaki years. John Maina (who intends to vie for Kamkunji's parliamentary seat) sent these questions along with his personal experience. But again, the Finance Minister refused to answer.

Ironically, long-long before Amos Kimunya's Ksh 100 million PR exercise was dreamed up, this John Maina and a group of patriotic Kenyans, calling themselves KTIG, came up with a brilliant investment idea and applied for a wireless telecommunications license in Kenya. Here in a nutshell is what they met: insurmountable bureaucratic walls, overtures for bribes, and massive corruption. Before they blinked an eye, high-ranking officials in the Kibaki government had cheated them out of their proposal, instead awarding the license to what was described by many as a "briefcase" entity called Econet. The rest is history.

Amos Kimunya, finance minister and head of the delegation promoting investments in Kenya, and no doubt well aware of this case, deliberately ignored John Maina's questions, regarding the deterring if not outright hostile investment climate on the ground, bureaucratic thuggery, the hostile take-over of investment ideas, and corruption. In a flash, the whole trip became an exercise in futility, a waste of tax payer resources. Kimunya and company had come to the USA to explain how the government would have made it easy to invest in Kenya. Refusing to address such a specific case-example is exactly not how to court investments, but rather how to create fear among other prospective investors. He thus failed badly in convincing anybody that their potential investments might not suffer similar consequences as KTIG.

That the finance minister was not interested in dialogue was also proved by his failure to grasp the conceptual benefits of dual citizenship with regard to investments that was well articulated by Mkawasi Mcharo, the president of Kenya Community Abroad (KCA). A citizen of both the USA and Kenya for example, enjoying local status in both countries, is unencumbered in his investments by laws decreeing specific local shareholding. This is especially important in heavily regulated sectors like the telecommunications one. The dismissive attitude of the minister, summarized as "it took the same path as the Wako draft and died", is extremely unhelpful if Kenyans abroad are to take a greater part in nation-building. If the Ministry of Finance is serious about promoting investments by Kenyans abroad, it must soon integrate calls for dual citizenship into the minimum constitution reforms that Kibaki has agreed to support.

I also took issue with the minister's wild claim that "it would be retrogressive for the government to keep pursuing past corrupt individuals". No wonder then that corruption proceeds unabated under Kibaki's government. A strong signal is being sent out, to make people believe that they will be forgiven from robbing public coffers, ostensibly because past culprits were also "forgiven". This clearly exposes the lack of political will in this administration to fight corruption and one wonders why we have to pay exorbitant salaries to the likes of Aaron Ringera if it's all just a PR stunt.

The vicious cycle of theft and protection of corrupt public officials must be terminated once and for all by a regime that is willing to take the heat on behalf of its suffering impoverished citizens. This regime, as Kimunya has made clear, is definitely not Kibaki's. In this bizarre world of the finance minister's the government has no business chasing after the Goldenberg looters and the beneficiaries of past economic crimes.

Kenya has opportunities of investment as was enumerated by Susan Kikwai, but until such problems as were met by John Maina and KTIG are addressed, uncertainty will persist in the minds of potential investors. The proper conduct of the nation's financial affairs also demands that the finance minister address poverty, corruption, tribalism especially in the Finance Ministry itself (including Kenya Revenue Authority), inflation and the escalating costs of basic commodities like Unga, sugar and paraffin, all which have either tripled or doubled under Kibaki's four year regime.

Finally, better use of scarce resources in addressing Kenya's poverty concerns should become a priority for the finance minister rather than exorbitant spending in useless politically motivated overseas trips by huge delegations of loyalty-pledging public officials.

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written by Amir Ibrahim , March 25, 2007

Amos does not look like a name bearing good omens for any public official, now does it!

The reason why the Kibaki government pays scant regard to corruption, is primarily because it consists itself of individuals with very questionable histories. Suffice it to say that the President of Kenya did not get wealthy by moonlighting as an economist while working in government.

I am not particularly sure why these leaders continue to court Kenyans abroad. You people out there are not going to vote, or do you campaign by telephone and email on their behalf? The ODM-K crowd have also embraced the Vision 2030, at least Raila has, although how useful it will be for Kenya is another matter entirely.

Were you talking about Trans-Century?

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What to expect from an account
written by emmo opoti , March 25, 2007

By nature industrious but unimaginative people, there is little likelihood that Kenya will take a turn for the better under this government.

I am not persuaded that any substantial reforms have taken place that should change the constitution and trajectory of our economy in the long run. Efforts like Ndemo's are to be lauded although it is obvious that they run parallel to the prevailing winds.

Every Kenyan and his uncle seems persuaded that the sale of public firms in the NSE is good for the country. That it boosts our economic growth. I have seen no evidence of that, they are truly an exercise in futility. However, to prevent the likes of Trans-Century gobbling everything up, I guess we better take a piece of the pie.

I keep hearing about this John Maina fellow. Does he have a case he could take to court? To the best of my recollection, Econet is not a briefcase company. They were rewarded close to $ 1 bn in compensation after their Nigerian adventure ran into Arun Sarin and Vodaphone, weren't they? I am thinking they really took the Kenyan affair to heart, their website still lists Kenya as one of their operations!!

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No business, we are Kenyan!
written by aeichener , March 26, 2007

Please tell me why any foreign business(wo)man should be as STUPID as to invest money in Kenya.

The notorious and prevalent "No business, we are Kenyan!" attitude is what characterizes not the individual wananchi (who are hard-working, even the men :wink: ), but government and society alike. Not to speak of corruption.

Anybody pumping money into the country for honest business purposes must have lost hir reason. With crooks however it's different; they are always invited - by government and ODM alike! - to fleece Kenyans, and will find promising opportunities.

Alexander

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written by emmo opoti , March 26, 2007

I wondered why this thread was not getting much attention from the public. Then I remembered just how much we love to be employed, just how few of us care to start their own businesses.

Too little innovation, too few entrepreneurs. The great curse of Kenya. The country burns while the accountant fiddles.

There is no action on corruption because corruption is the fuel that burns our politicians ambitions, it is what takes them to high office and what keeps them returning every year.

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written by kendirangu , March 26, 2007

The minister's presentation is not available online but White African has a pictorial here

I think most people simply miss the point when it comes to investing back home.

This remittances are not meant to fund your CDS account so u can buy shares or government bonds rather it's simply to help your folks back home start businesses or improve their livelihood.

It's a simple way of increasing the money in circulation in the economy. Regardless of the politician in place, this cash doesn't benefit them directly and trying to look for conspiracies from anythin well put by a politician is becoming boring.

Kimunya is more interested in you sending over some cash home for school fees, a small business for your jobless kin, a local savings account or unit trust and initiating small business projects that will reduce the number of people currently nagging the banks for loans. This way, the government's domestic borrowing wont crowd out local investments.

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Huh?
written by Alexander , March 26, 2007

Ken:

what do you MEAN ?!

Please express your thought and intention clearly.

Alexander

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ignorantio elechi
written by Tim Norwood , March 26, 2007

8) n->n

Nyway, here is a red herring if ever I saw one.

No Kenyan I know of needs to be persuaded by the Finance Minister to send money to his family to start businesses or to improve their livelihood. Poor Kimunya, if that is what took him around the world, he must have altogether too much time on his hands.

Is Ndirangu defending the indefensible? Yes.

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On Ndirangu\'s point Yes & No
written by pndiangui , March 26, 2007

I think the issue of remmitances or the diaspora is complex. I say this because we are doing an article on this issue with Emmo and the research so far reveals alot of untapped knowledge and capital from the diaspora.
Infact proactive policies aimed at the diaspora would work in synergy to transform the Kenyan economy.
Mere micro-remittances will do so much , and will do exactly what Ndirangu is saying. But FDI sort of large-scale investments and Knowledge sharing can change the face of our economy. It is unfortunate that Kimunya hasnt pursued policies aimed at this, rather he's concentrating on the micro-remittances.
In my case , Taiwan owes much of its transformation to its diapora working in carhoots with the government , as does China plus Ireland's information economy.
India's wippro and Infotech owe their beginnings to diaspora network whose critical mass made Bangalore what it is today. India's diaspora is currently at the centre of the government policy. Of the 48 billion dollars FDI that found its way into China in 2002 , half was from the Chinise diaspora. The Chinise government has also been engaging in proactive policies aimed at the diaspora since 1980's. India's concern at the moment is what I have stated above; That Chinise is getting the bulk of FDI , large-scale remitances for huge investments while India's diaspora only leads in micro-remittances. Which do the short-term poverty alleviation thing but large-FDI type remittances solves the joblessness problem in the long-term. India's strategy is to increase this.
India already lists Infrastructure bonds aimed specifically for the diapora; the famous NRI (Non-Resident Indian Bonds) which pay a premium over the prevailing rates in US and Europe.
In 1998 Non-resident India's (NRI) bonds after Nuclear technology launch were a successes and cushioned India from the economic sanctions imposed after the nuclear tests. These have been repeated further in 2003 and 2005 raising over USD 3 Billion.

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Great idea, bad climate.
written by Job Obonyo , March 27, 2007

Ndiangui,

Your fundamental point about encouraging direct investments in Kenya is excellent and promising, but also ask your conscience just how much support you think the Kenya government will extend to co-operate in that regard.

The government may have facilitatory policies for such investments but the people occupying the same government offices may have other ideas. Very different ideas. You know the Kenyan way!

Take note that, like trail-blazers and missionaries, there already are a lot of Kenyans, like John Maina (mentioned in the article above) who were among the first to be seen sacrificing a lot by pumping lots of investment capital & other resources into local ventures (specifically in the telecommunications sector). They tell real but scary tales of lost millions.

The passion and bitterness with which he asked Kimunya his specific investment-related question and his chronicle about how they were cheated of their license by government officials, some as senior as Kimunya, was almost palpable.

John Maina's (and by extension many people's) attitude about the current government is not solely premised on its policies, but rather on many of its office holders whom Maina dismissed as outrightly corrupt.

What Kimunya needs to address is the issue of sharks and cartels masquerading as "venture capitalists" that collude with his own government to do the following; fleecing genuine investors, extorting massive bribes, impeding bureaucracy, politicizing licensing processes and even robbing investor ideas and proposals.

That is the first turn-off to serious investments, if one's own investment idea can be frustrated or stolen by government bureaucrats and insiders in such a hostile manner. This is a hard nut.

Maybe that's the same nut that Indians, Taiwanese, Irish, Jews and Chinese in the diaspora first had to crack before their investments were safe from local sharks.

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John Maina - clean huh?
written by Kamale , March 27, 2007

Job keeps popping John Maina's name as the victim of a corrupt Kenya.

John Maina expected preferential treatment as a Kikuyu and then Kenyan over the winners Econet for the TMO. He did not get the nod as he failed in his commercial bid after passing the technical evaluation. He went to court and lost and as a consequence, the TMO is yet to take off. The delays in the Kenya justice system meant that the financiers of the TMO consortium could not hold waiting for ever to provide the finances! It is not always corruption when you lose out on a deal!

But this is not just important as there are other Kenyans that have come back and invested.

My understanding of the trip to the US (which Job and a few others imagine is meant to counter Raila's bowl-in-hand trips) is that it was intended to change the present mode of individual remittances merely to finance the consumption needs of the folks at home. It was intended to encourage the Kenyans in the diaspora to see the need to also invest their money in their home country.

This investment potential was found in the participation of diaspora Kenyans in the IPOs issued last year. It is certain that there are lots of money held back by Kenyans abroad which could be used to trigger development activities in Kenya. For instance the proposal to issue development bonds through the Central Bank is just one initiative - and this is what Ndemo is looking for.

I am not convinced that the mere presence of corruption in government is a sufficient deterrent to want to invest in the country unless of course you are dealing with the government as customer where the problem is rife. Investing in Kenya is not equal to investing in the government!

Hopefully the delegation was emphatic enough on the steps they are taking to reduce the bureacracy involved in getting licenced to do business in Kenya.

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written by kendirangu , March 27, 2007

Ndiangui, I believe that every journey begins with a small step and after a few small investors have success stories then the bigger ones will follow. I'm glad Kamale has tried to shed some light.

I would like all to think/consider this scenario:
If you invested in Kenya and for example set up a small bakery for your folks or kin. 5 or 10 years down the line, with your experience, vision and input, you could grow that business into a regional supplier of foodstuf. Funded mainly from your pocket and with alot of your knowledge invested here plus having created jobs for your own folks and also creating an environment that makes it possible to go back home.
So why did Kimunya have to come and tell all you this stuff about GDP and blah blah ?
Kimunya's main point was that the interest rates, the exchange rates and inflation have either declined or stabilised. His is a plea to those who claim that the economic environment is hostile to take a look at the present situation and decide for themselves.

The misconception most people have is that the government is going to take your cash and invest it for you. It wont do this unless you are buying treasury bonds.

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Can the GOVT do no wrong
written by emmo opoti , March 27, 2007

Kamale,
I am looking through the whole of Job's article and see no reason for the ad hominem. While it is true that the whole story of John Maina is a mystery, you seem to know all the facts, Job Obonyo's piece seems to deal more with the fact that a Finance Minister on such a mission should be able to charm investors, to ward of such charges as KTIG would bring against the government and in general to persuade the potential investor that Kenya is a sound investment destination.

Your veering into ad hominem, plus the strawman you deftly introduce alleging that John Maina is 'clean' are not the subject here. Let's try to deal with whether Kimunya and his band did a good job selling the country. The fact that a suspect brought before a court is innocent does not automatically mean that he will be found innocent. His lawyer must make a good, persuasive case of it.

On the matter of whether it was a campaign trip or not. The question has dogged Kimunya through his ride in the USA. Will the DP continue to support its Vision 2030 when in Opposition, or will it then try to kill it. The fact is some of these dinners have had entry charges, much in the same fashion as Raila's gatherings have had, although I don't think the Lang'ata MPs name should be brought up in serious conversations regarding money. Unless of course you were planting a joke.

Ndirangu,
Good to see you have changed tack from yesterday's post which incidentally is as different from Kamale's as night and day. Maybe you want to go through it again.

The Finance Minister is asking Kenyans to invest in large projects, or largish projects. The culture of sending money home to buy a posho mill or a new bicycle or a matatu does not need encouragement, and certainly does not need the support of Susan Kikwai or Bitange Ndemo.

Again, no one is expecting the government to invest their shares for them. I am not sure you are reading from the same pages as anyone else. You are seeing things where they do not exist at all.

Just a question. Can the government do nothing wrong. At every last turn there are people coming out vigorously in support of the government even where it is clearly failing.

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re:
written by emmo opoti , March 27, 2007

..most people simply miss the point when it comes to investing back home.
...... rather it's simply to help your folks back home start businesses or improve their livelihood.

It's a simple way of increasing the money in circulation in the economy. ..... trying to look for conspiracies from anything well put by a politician is becoming boring.

Kimunya is more interested in you sending over some cash home for school fees, a small business for your jobless kin, a local savings account or unit trust and initiating small business projects that will reduce the number of people currently nagging the banks for loans. This way, the government's domestic borrowing wont crowd out local investments.

Again, I am not sure this is either true or a reflection of Kimunya's ideas. I contend, sticking my neck out on this one, that looked at as a whole the injection of money into the local economy purely for consumption is harmful. This is a driver for inflation (cash is just injected in from nowhere, all these people who are not producing anything are able to demand goods and services) and in my opinion even reduces our competitive and entrepreneurial natures. There are vast numbers of Kenyan families just sitting around waiting on pay checks from North America and Europe, doing absolutely nothing to grow the economy or better themselves. Those small businesses you have pointed out usually go bust, the money is used for something else, and the benefactor overseas has to keep shelling money out for more, more and more.

Laughable the idea that borrowing from wananchi for food would crowd out the government's domestic borrowing!! What very small percentage this must be.

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Great Insight
written by pndiangui , March 27, 2007

Obonyo
It couldn't have been put better.

That if Transcentury will get undue advantage over any investment opportunity just because of the political investors holding stake in it, is unfortunate and mind boggling.
Its actually the conflict of interest where public servants with investment stakes in such LBO's or congremates need more scrutiny and that information need to be out there in the public.
I understand the frustration of Maina , and that's why integrity in governance needs to take precedence, rather than investments for cosmetic economic growth. That's why I believe the following elections should be fought along integrity ideals even before perceived economic management competencies only displayed in public soundbites in professing economic growth data, that has only benefited rent-seeking politicians and their elite friends. (Read Kibaki and his ilk).

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Integrity in Economic growth
written by pndiangui , March 27, 2007

Obonyo's piece is just a call for integral governance where economic growth wont be based on some moguls taking undue advantage of the other investors. And to me that makes alot of sense not only in enancing the competition to better serve Kenyan customers better, but its just RIGHT.
Its principal based, and anyone thinking we can de-couple corruption from investors confidence is talking of phoney investors who dont believe in investing in the RIGHT causes. Many of them everywhere in the world but is that really what we want our economy to be built on?

"I am not convinced that the mere presence of corruption in government is a sufficient deterrent to want to invest in the country unless of course you are dealing with the government as customer where the problem is rife. Investing in Kenya is not equal to investing in the government."

To me this is a serious statement that portrays ignorance and the fact that businesses dont exist to just make a profit alone. A corrupt government will not attract many credible and lasting investors. Investors' consciousness (not confidence) will be in serious dilemma.

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re: Integrity in Economic gro
written by Kamale , March 27, 2007

"I am not convinced that the mere presence of corruption in government is a sufficient deterrent to want to invest in the country unless of course you are dealing with the government as customer where the problem is rife. Investing in Kenya is not equal to investing in the government."

To me this is a serious statement that portrays ignorance and the fact that businesses dont exist to just make a profit alone. A corrupt government will not attract many credible and lasting investors. Investors' consciousness (not confidence) will be in serious dilemma.

Did you actually say that businesses dont exist to just make a profit alone???

Show me a business that is in it for Charity....please!

It amazes me that there are still people who talk about corruption in Kenya in very abstract terms including how it stiffles business. This to me is contradictory as anything that stiffles the growth of business only leads the businesses to make losses. Unfortunately, the profitability shown by all firms on the NSE in each of the sectors is certainly not an indication that your conclusions are right! If these companies are making profits, then their money does not come from Timbuktu, but from business in Kenya!

Corruption is not the problem that is stiffling the growth of business - it is the infrastructure that is, if you asked me. The ready answer you will throw at me is that corruption is one of the contributors to the poor infrastructure. This is hardly true since it is not corruption that keeps the cost of communication high or production being high on account of expensive electricity. These two are not governance issues but if you asked me they perhaps are the key things that drive investment to south Africa! That is not to say that corruption is not rife in SA!

No government ever succeeds by listening to activists for these people rarely dwell on reality.

Whenever I meet a government functionary, my grouse with them is failing to provide enabling legislation and infrastructure to allow my business to grow. That is the only thing I need from this government. As to whether there is corruption in government, this hurts my business little apart from paying for taxes that donot provide a service to me!!!

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Kamale
written by Tim Norwood , March 27, 2007

Sorry to resort to ad hom. but one hopes you were as passionate in your defence of Moi's government as you are in supoort of Kibaki's.

Corruption kills economic growth primarily because it increases the incidence of unplanned expenditure, and in sum increases the cost of conducting business in a country. Whose to say those profitable businesses on the NSE would not be making triple their profits if

a)there was much fewer bribes they had to pay
b)they did not spend so much on combating crime
c)they were served by a better infrastructure

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...
written by Stephen Wanyama , March 27, 2007

Celtel bought Vivendi's stake in Kencell, hence the name change. Merali retains his 40% I think, but Vivendi shed their's off in the re-structuring after the ouster of Jean Marie Messier.

I think Merali has some different class of share or peculiar rights though, because he was the one who chose Celtel and rejected the South African MTN. Mohamed Amin of Celtel is Sudanese I think. The firm itself is Dutch.

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re: re: Integrity in Economic
written by pndiangui , March 28, 2007

"I am not convinced that the mere presence of corruption in government is a sufficient deterrent to want to invest in the country unless of course you are dealing with the government as customer where the problem is rife. Investing in Kenya is not equal to investing in the government."

To me this is a serious statement that portrays ignorance and the fact that businesses dont exist to just make a profit alone. A corrupt government will not attract many credible and lasting investors. Investors' consciousness (not confidence) will be in serious dilemma.

Did you actually say that businesses dont exist to just make a profit alone???
Show me a business that is in it for Charity....please!

Quote me within my context, Kamale. Profit is just about one of the many objectives that a sustainable business would be in this world to fulfill. Anything skewed towards just making a buck, will in the long-term be met with awkward growth. And this is a mindset you need to work harder to understand. Profit motives alone are unsustainable from a natural laws perspective and from a social context lense. I can expand further if you want me to.

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Corruption in Economic Activit
written by John K , April 01, 2007

The matter of the third licence as articulated by John Maina is still very much alive in court with as many as 5 different cases still in progress. Indeed there are some who are clearly misinformed as is evidenced by some of the comments:

Econet was never awarded $ 1 bn, they lost that case, the former Econet Wireless Nigeria is now Celtel Nigeria. How could a company that never paid for its 5% shareholding even have legs to stand on? When auditors in New Zealand cite that the Econet New Zealand has only $ 6000 to its name, why it is that some still feel so strongly that they must fight a foreign entity's battles for it? Kamale, what indication and evidence do you have that John Maina expected preferential treatment? It were Econet cronies who sought to meet Kibaki in South Africa according to affidavits filed by its own insiders. Why is it that Econet sought to sue its former Kenyan Corporate Head of Finance and sought a court injunction to silence him just as he was being summoned by KACC to give evidence? The evidence of wrong doing in the matter of the third licence is in the public domain in hundreds if not thousands of pages.

Kamale, you need to do some digging around to find out the diverse nature of the Kenyans who sought out to participate in the economic reconstruction of the country's economy and met the worst one could wish for, rather than jump to needlessly draw out the tribal card.

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Kamale- this thing is deep!
written by Job Obonyo , April 01, 2007

Kamale,
Like it or not, Corruption in high offices and government inefficiency are the root problems responsible for slow economic development in Kenya.

Why is there poor infrastructure? Why are energy costs high?
Do you think Kenyans and other foreign investors can not invest in infrastructure and energy production?
Don't you think corruption and bureaucratic impediments would deter private investors from venturing into these very sectors of infrastructure and energy?

Or are you of the simplistic view that infrastructure and energy production are sole preserves and responsibilities of the government?

No wonder we will be waiting for generations before real development comes to Africa, if this is how we think.

Glaring examples have shown that the higher the value or the bigger the project magnitude of investment in Africa, and Kenya in particular, the more interested the corruption cartels, and political sharks become in those investments. Therefore investments in infrastructure or power production will remain a mirage in Kenya (& Africa) if we keep denying & dismissing what happened to akina John Maina.

I don't keep popping Maina's name as a victim of corruption for no reason. I will address this issue once more (below) since you don't seem to get the context of this argument.

You arrogantly dismiss this as
unimportant since you claim that other Kenyans have "invested" anyway,.....just cite me one example of a big investment? ( targetting profits in billions of shillings)?

To the best of my knowledge, Kenya has over 8 million mobile phone subscribers in a sector dominated by a duopoly of two firms;
Safaricom- owned by British Vodafone(30%) + Moi(5%) + Telkom(65%); and
Celtel- owned by Europe's Vivendi + Merali's Sameer + Kibaki's interests

This despite the liberalization of the telecommunications sector!

The benefits of granting a third MPO are numerous for Kenyans (competition lowers charges, increases affordability & service quality & expands phone access; this leads to improved communication, efficiency in businesses and contributes towards economic growth)

It would be an excellent idea if we break from the trend of domination of this sector by Foreigners, Presidents and ex-Presidents.

What would be wrong if indigenous Kenyans (local or diaspora based) able to integrate strategic and finance partners were to enter this market?

This is what akina Maina, Angaluki, Kagwe, Onyango, Mugo, and others in KTIG that put a meticulous and thorough plan wanted to do.

I am not fronting for KTIG's interests but I'm simply using this as a case-example of how investments by indigenous Kenyans with little political connections can get frustrated, and even robbed.

I will delve into some specifics to dispel Kamale's casual dismissal of a painful financial loss by patriotic Kenyans willing to help build the country as they develop themselves.

John Maina and KTIG's story unravelled many things and exposed why we will continue to remain backward. Their case probably led to; replacement of Kirui by Waweru as CCK's commissioner, sacking of the entire board of the CCK, switching of holders of this cabinet portfolio, and eventual use of the Judiciary to subvert justice and hold-up this issue away from public discourse under the pretext of subjudicial matters.

This goes to show how boards of regulatory bodies like CCK are filled by political appointees fronting business interests of certain "owners" of Kenya.

For instance, the CCK board literally holds keys that can allow potential business rivals of Moi(Safaricom), Kibaki(Celtel) and other Foreign interests to enter into direct business competition with them. Kamale knows this very well.

At the tendering stage for this case,
KTIG was the only 100 percent Kenyan-owned bidder for the third mobile licence.

That tendering process began in early 2003. Various companies placed bids, which were opened and three companies pre-qualified, including Econet Wireless Consortium and KTIG.

Econet placed a bid of US$ 27 million and KTIG placed one of US$ 55.5 million.

The CCK Board qualified Econet's tender for the service at less than one half the bid placed by the KTIG and the country consequently lost US$ 28.5 million.

Why? Because Econet colluded with CCK insiders who assured them that the locally owned KTIG would be disqualified no matter their higher bid. Sufficient "grounds" would be created.

How could unknown diaspora-based locals compete with presidents and ex-presidents of Kenya? That may have been perceived enough ground to invite future political complexities, hence it was safer to grant the licence to a failing foreign firm then hold future disputes in courts. Business would then resume as usual as the two firms Safaricom and Celtel continue raking in billions. That is exactly what continues to happen today, true or not Kamale?

KTIG was disqualified arbitrarily on the grounds that Econet, with its failure in all countries in which it has had operations, had better technical capacity than Detecon of Germany, the technical partner for KTIG.

In March 2004, Econet's qualification was announced and the public was invited to raise possible objections to grant a licence to the company.

Several companies including KTIG thus presented objections premised on the obvious facts that; the whole tendering process had been afflicted by corrupt practices, the tender documents had been prepared by CCK in collaboration with Econet, Econet had no financial or technical qualification to set up the network, Econet had failed in the telecommunications business in all countries in which it had operations.

But the worst to happen to KTIG was this: confidential information from the company's business plan suddenly had leaked out to other bidders. This information had only been given to the CCK Board. This situation, which only CCK could have facilitated, caused KTIG irreparable harm.

It means in Kenya, if you present a business proposal to a regulatory body, you are in fact giving some "waiting sharks" of the so called Trans-Century varieties, a proposal to hit-the-groung-running with. They quickly register rival "brief-case" entities and run with you very plan. That's intellectual and property theft or hostile take-over! by politically connected venturists

At the time the CCK Board granted the licence to Econet, Econet had been kicked out of Nigeria and denied the opportunity to buy a stake in Telikom PNG Limited, Papua New Guinea’s state owned telephone company, due to its tainted business character. Top officials of Econet were also facing criminal charges in Zimbabwe for offences of corruption and money laundering.
An example of Econet's problems in Nigeria.
http://au.news.yahoo.com/040617/19/pict.html

The CCK Board did not consider all these.

To come to CCK's defense was another appendage of the politically connected local tycoons and guardians of the business interests of the president & ex-president calling themselves, the Telecommunications Service Providers Association of Kenya (TESPOK), which has continued sabotaging efforts to truly and genuinely liberalize this sector. TESPOK Chairman Joseph Muchero had better stick to his internet-provision sub-sector instead of sabotaging keen entrants into the MPO market.

lastly Kamale, I will continue dispelling this notion that Kenyans can not be easily allowed to enter into business competition with firms owned by Presidents and ex-Presidents. CCK should work for the best interests of Kenya and not for cell-phone business interests of Moi, Kibaki, Merali, the British and the French.

Nimesema.
unedited
Job

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Believe words, not facts
written by aeichener , April 01, 2007

There is a lot of money, (wo)manpower and ink invested in Kenya's many investment promotion exercises, institutions and organizations.

Sometimes I doubt the seriousness of all that circus. I browse through the EPZA website (nicely done, informative), through the Export Promotion Council / CBIK websites (badly done, slipshod, neglected, amateurish and thoroughly outdated), and I see that sometimes these institutions do not even KNOW well enough what they try to sell to foreign buyers and investors.

Alexander

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...
written by a guest , April 01, 2007

Agree with Alexander...too much ink wasted.

By the way people, if you want ordinary folks to discuss this, please define your IPO's and TMO's. Not every Kenyan is an economist, some of us live by common sense, which clearly excludes such words. It is us Kenyans you are trying to explain to a point. If we are not communicating, only 5 of you will end up discussing the issue, 5 of you who are too smart for it, and for us who know not, we will not try.

PNdiangui gave an example of bakeries. I start a bakery?. I gotta be lunatic to start something like that in Kenya.

Tell Kimunya and his buddies to revive what was stalled first. I can name 10 bakeries that were started and raped dry in less than 10 years of start, in one single constituency.

All the sugar industries that have been on their knees should be put up, then we can genuinely help.
Otherwise, am one woman least interested in lining pockets of characterless people, starting from the Clerk to Kimunya himself.

This is my plan and 3 other Kenyans: move most our young kin out, and keep sending $100 a month to take care of grandparents. But of course we will retire in Kenya. Until then, Kenya can kiss our behinds.

The Likes of Kimunya need to rectify what is demanded of them before running arounnd the globe lying thru their teeth.

HOWEVER, I WILL GIVE RALLA'S GOVT A CHANCE.

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BOP
written by Manlikehim , May 07, 2007

Amos is all concerned about remittances to fix his balance of payments problem. Why call them remittances, no one owes the government any money. When we send money to pay school fees, we are paying bills, but Amos calls it remittance..

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