Tuesday, November 21, 2006

Safaricom IPO Dilemma

The Capital Markets Authority (CMA) requires all companies floating shares for the first time to offload at least 25 percent of their shareholding. But Safaricom owners (the State, Vodafon, and a ‘ghost shareholder’) only want to float 9% of the East Africa’s most profitable company. In that regard, the state is in a tight dilemma. Should it

(a) push CMA to accepting a 9% floatation, or
(b) negate from the IPO altogether, or
(c) let go 25% of Safaricom.

I say they let go 25% of Safaricom. However, some government officials have argued that 25% floatation is too large for the public to swallow. But i bet Kenyans would easily oversubsribe the so-called Mother of All IPOs.

Thursday, November 16, 2006

Is Kenya Up for Grabs?

The government is set to privatize a large number of State Owned Enterprises (SOE), which is making some Kenyans think their country is up for sale. Check out a great discussion on this issue @ Odegle Nyang Investments blog. Well informed comments from Coldtusker, Gathara, Kenyanomics, and the host, Odegle Nyang Investments. Leave your thoughts.

Courtesy of Odegle Nyang Investments.

Monday, November 13, 2006

Bureaucratic Curse

Dr. George Ayittey (a prominent Ghanaian Economist) once wrote that African governments are good at creating bureaucracies. Kenya is a fine example of Dr. Ayittey’s observation. A look at our bureaucracies (what our government calls “Non-Gommercial State Organizations”) reveals how tax payers’ money gets wasted. It also makes me wonder how some of those organizations make Kenyans lives better. Check out the following list of fully operative bureaucracies and ask thyself two questions. What are their roles, and do their posh offices and gas guzzling cars deserve your tax Shillings?

Presidential Commission on Soil Conservation
Presidential Music Commission
Local Authorities Provision Board
Cost Development Authority
Central Agricultural Board
Pests Products Control Board
Radiation Protection Board
Film Censorship Board
NGO Coordination Bureau
Sisal Board of Board (Yes, that’s the name)

(Organizations’ names were borrowed from Privatization of State Corporations and Investments-- 2005 Sessional Paper)

Monday, November 06, 2006

Kenya Leads in Corruption Perception Index (CPI)

Transparency International just released its 2006 Corruption Perception Index (CPI). Once again, Kenya emerges as the most corrupt country in Eastern Africa, ninth in Africa, and twenty first in the world. Kenya’s Anglo Leasing scandal is mentioned as the new form of corruption, “which involves misappropriation of public funds through fraudulent contracts and sophisticated shell companies in Europe and other off-shore jurisdictions”. (See TI’s Press Release) It also emerges that corruption costs Kenya KShs 70 billion annually.

Kibaki’s government should consider incorporating the “Fight Against Corruption” in its Vision 2030. Failure to do so would cost the country over Kshs 1.68 Trillion between 2007 and 2030.

Sunday, November 05, 2006

Jaramogi’s Words of Wisdom

I just read Oginga Oding’s Note Yet Uhuru, a book that could be gathering dust on our politicians’ shelves. It struck me that governance issues, which Jaramogi was addressing 39 years ago are still rife today. The last Chapter, OBSTACLES TO UHURU, reads like an address to today’s breed of politicians. Following are quotations on how Jaramogi's Note Yet Uhuru address our current problems:

On distinctions between pre-independence and post-independence (current) politicians:

“To the early generation of leaders, politics meant struggle, keeping close to the people to maintain their confidence, building unity to overcome the powerful enemy. To the later generation of leaders, politics can mean public standing, handsome salaries, shiny motor cars, and the manipulation of party branch and government office to stay in power because it brings personal advantage” (p 250).

On “Kitchen Cabinets” that have led to economic disasters such as Goldenberg and Anglo Leasing scandals:

“A government by a small circle of leaders could too easily be influenced by forces against the national interest” (p 284).

On overdependence on Western aid and investment;

“If our aid and investment come from one source only we can banish the prospect of pursuing and independent policy, for we will be brought under control by the withholding of aid, or by some other economic pressure”. We must (therefore) break this predominantly Western influence, and develop relations with both east and west” (p 285).

“It would be an insult to our dignity that a foreigner should tell us what is right for us (p 295).

On hawkers’ suppression by the City Council:

"Failure to (let the masses) attain full economic freedom will rob Kenyans their political freedom" (P 285).

Jaramogi’s words of wisdom were written down in 1967 (39 years ago) but nobody listened. Maybe we bloggers could revive Jaramogi’s dream of agitating for accountability in our government and more personal freedom for Kenyans.