Professional Documents
Culture Documents
THE
Kenyas Bold Newspaper
Tuesday, May 27, 2014
No. 29601
www.standardmedia.co.ke
KSh60/00 TSh1,500/00 USh2,700/00
By BERNARD SANGA
Kenya Wildlife Service uncovered what is be-
lieved to be a multi-billion shillings international
syndicate involving the endangered rosewood at
the Mombasa Port.
The seizure of 34 containers of the precious
timber estimated to be over Sh584 million is a
major victory against the rampant logging trade
that threatens to wipe out the species.
According to copies of the manifest, the pre-
cious timber was docked and ofoaded as ordi-
nary wood from Zanzibar but according to in-
telligence sources within KWS rosewood is only
grown in Madagascar.
The timber is among the endangered wood
protected under the Convention on the Inter-
national Trade in Endangered Species (Cites).
KWS ofcials promised to liaise with their coun-
terparts in Madagascar to establish whether the
consignment had a permit. Rosewood is targeted
for making high-price furniture, musical instru-
ments, chess pieces and ooring.
Uhuru, Raila teams plan
parallel showdown rallies
Multi-billion shilling rosewood ring busted at KPA
Security chiefs
meet CJ over
terror cases, P.8
Kenya Wildlife
Service Coast
Region director
Arthur Tudor dis-
plays rosewood
timber from
Madagascar in
one of the 34 con-
tainers seized at
the port in Mom-
basa soon after
it was off-loaded
from a ship. The
consignment was
in transit to Hong
Kong from Zanzi-
bar and is worth
of millions of
shillings. [PHOTO:
GIDEON MAUNDU/
STANDARD].
SEE STORY ON PAGE 26 CONTINUED ON PAGE 2
By GEOFFREY MOSOKU
The Opposition and the ruling coalition
will test their popularity on Friday with paral-
lel rallies in Nairobi.
CORD has planned a rally for the same
day to be addressed by its co-Principal Raila
Odinga.
This will be a day after launching a mass
movement to force out Mr Ahmed Issack Has-
san and his team at the electoral commission,
and block more payments to Mr Anura Perera,
the face of the Anglo Leasing contracts.
According to the Coalition for Reforms and
Democracy (CORD), the movement dubbed
Okoa Kenya (Save Kenya), will be launched
in Mombasa just 24 hours before the coali-
tions co-Principal Raila Odinga arrives from
the US.
But the ruling Jubilee coalition is wary of
the timing of the CORD rally and now plans to
mobilise its supporters for a rally at a yet-to-
be-decided venue in the heart of the capital on
Ahead of former
PMs return, CORD
plans for welcome
rally at KICC grounds
as Jubilee settles for
another one to rival
its opponents
By CYRUS OMBATI
Nairobi Senator Mike Mbuvi Sonko
was last evening grilled over gun dra-
ma at a city club with Woman Repre-
sentative Rachael Shebesh.
Police said they were still expect-
ing Shebesh to record her statement
at Kilimani Police Station. Shebesh
had visited the station on Saturday
evening but did not record her state-
ment. Sonko was grilled at his Kenyat-
ta International Convention Centre
ofce for hours after he requested the
ofcers to go there instead of him go-
ing to the station.
Kilimani CID boss George Ojuka
said they are looking for Shebeshs
bodyguard for questioning and dis-
arming.
The investigations are ongoing
and we will take further action with
time including charging the individu-
als involved in this fracas, said Oju-
ka.
CONFRONTATION
In a statement, Sonko said the gun
drama erupted over a Sh8.5 million
Range Rover he is alleged to have
bought Shebesh a few years ago. Po-
lice had summoned the duo and their
bodyguards for grilling following the
confrontation.
Shebeshs bodyguard was forced to
shoot in the air two twice to disperse
what he called an angry mob that
wanted to attack his boss.
Shebesh could not be reached for
comment.
By STANDARD REPORTER
Kenya Power has said a generation
system breakdown at the Coast region
caused a major power blackout affect-
ing Nairobi, Mount Kenya and Coast
regions.
The fault has caused system dis-
turbance triggering a power outage
affecting most parts of the country ex-
cept North Rift and West Kenya
(Kisumu, Eldoret and Kitale), Kenya
Power said in a statement yesterday.
The companys engineers are
working to restore normal supplies in
the shortest time possible. Kenya
Power regrets the inconvenience to
customers, the company said.
Page 2 / NATIONAL NEWS Tuesday, May 27, 2014 / The Standard
Rivals in bid to show their might
the same day.
We are meeting today evening
(yesterday) to decide on the venue,
but I want to assure you that we are
not political cowards. We shall hold a
major rally for our supporters in Nai-
robi on Saturday, National Assembly
Majority Leader Adan Duale told The
Standard last evening.
He claimed that CORD is planning
to spoil the party by raising political
temperatures during their rally at
KICC, so that Government leaders
would be forced to react to their alle-
gations during the national day
speeches.
President Uhuru Kenyatta, who
will ofciate his second Madaraka
Day, is expected to outline measures
to deal with insecurity following ter-
ror attacks by suspected Al-Shabaab
sympathisers.
Last year, CORD leaders led by
Raila skipped the countrys Jubilee
(50th) Madaraka Day celebrations.
Duale claimed CORD is planning
violence and said security agencies
should be fully alert.
It is on record that CORD rallies
are marred with violence and incite-
ment, security agencies should ready
to avert a situation where the rally
would affect the peaceful daily lives of
Kenyans, Duale alleged.
The title of CORDs movement is
themed to resonate with CORDs
claim that the Jubilee government is
on the wrong path, and must urgent-
ly convene a national dialogue confer-
ence to tackle the Independent Elec-
toral and Boundaries Commission
(IEBC), Anglo Leasing payments, ris-
ing insecurity and the high cost of liv-
ing.
CORDs plan is to receive Raila at
the Kenyatta International Conven-
By ISAAC MESO
The National Cohesion and Inte-
gration Commission has admitted
that it was facing challenges in con-
ducting investigations and recom-
mending prosecution of individuals
believed to propagate hate speech.
NCIC assistant director of the
compliant, legal and enforcement de-
partment Kyalo Mwengi said the com-
mission was being discouraged from
fully pursuing individuals accused of
propagating hate speech since the af-
fected parties were not willing to
lodge formal complaints.
The ofcial spoke yesterday when
Moses Kuria, Political Analyst and a
Pubic Relation Consultant, appeared
before the commission over alleged
inciting statements made on social
media.
We are ready to conduct investi-
gations and recommend prosecution
of any individual whos speech or
statement may be detrimental to na-
tional cohesion but currently we are
facing the difculty of taking up mat-
ters of ethnic hatred and hate speech
because nobody is willing to lodge a
formal complaint, said Kyalo.
Mwengi said they had not sum-
moned former Vice President Kalonzo
Musyoka since the journalist offend-
ed by his remark was no longer inter-
ested in pursuing the matter.
He said they will only follow up the
matter once the journalist les a for-
mal complaint.
Kalonzo had declined to answer a
question from the journalist, respond-
ing instead that his name betrayed
it .
Kuria was summoned over a Face-
book post concerning terror. He was
summoned to appear before the com-
mission following his Facebook post
that Mwengi noted was a threat to na-
tional cohesion as it incited Kenyans
against a particular ethnic group.
tion Centre in Nairobi, with the kind
of political passion accorded to for-
mer Opposition leader Kenneth Mat-
iba when he arrived from the United
Kingdom in 1991, at the height of the
battle for multiparty politics.
Siaya Senator James Orengo and
Suna East MP Junet Mohamed trav-
elled to Mombasa on Sunday to con-
sult with Coast leaders on the rally to
be held at either Khadijah or the fa-
mous Tononoka grounds.
The Mombasa rally will be preced-
ed by one in Nairobis Mathare Con-
stituency tomorrow, the third by
CORD in Nairobi in the last seven
days, as part of the build up to Railas
return on Saturday.
CORD appears to be planning be-
yond Railas return for mass action
last witnessed in the push for consti-
tutional reforms in the 1990s.
Yes CORD is planning a rally in
Mombasa. Whether it portends some-
thing bigger than just preparing to
welcome its leader we cannot tell at
this moment. The politicians will
make public their intentions at the
rally, Junet Mohamed said.
On Saturday, fellow CORD co-
principals Kalonzo Musyoka and Bun-
goma Senator Moses Wetangula will
receive Raila, who is expected to ar-
rive in the morning.
Raila and his entourage will ride
on an open bus through parts of the
city from Outering, Jogoo, Haile Se-
lassie and Moi Avenue roads to KICC
where he will address his supporters.
We are pleased to go receive our
coalition leader who has been away
for some time to give us direction. Ke-
nya is undergoing serious challenges
of insecurity, corruption, high cost of
living and poor governance that need
urgent solutions, Senate Minority
Whip Janet Ongera said.
According to Ongera, CORDs na-
tionwide rallies are meant to put pres-
sure on the Government to deliver on
its pre-election promises.
ZERO TOLERANCE
The cost of living has gone up,
corruption is back and you can see
Sh1.4 billion paid to ghosts and an-
other Sh3 billion about to be paid in
the Anglo Leasing scam even as Ke-
nyans suffer and that is what we want
to remind Kenyans, she said.
We want to remind Jubilee that
they campaigned on the platform of
zero tolerance for corruption and re-
ducing the cost of living among oth-
ers.
Makueni MP Dan Maanzo said the
rallies are meant to reinvigorate CORD
in the face of criticism by Jubilee that
they were asleep, adding that they
would use all legal and constitutional
means, including peaceful street pro-
Cohesion
body facing
hurdles probing
incitement
Police probe Sonko for hours following Saturdays gun drama
Kenya Power
explains blackout
Continued from P1
tests to drive their point home.
We want to show Jubilee that we
are not asleep and are a formidable
force that will tell Kenyans where the
Government is erroneous and pres-
sure it to pull up its socks, Maanzo
said.
By yesterday, CORD was asking its
supporters to avoid going to the Jomo
Kenyatta International Airport to re-
ceive the former Prime Minister, but
instead wait in town due to the pre-
vailing security situation, as only MPs
and other dignitaries will be allowed
in at the airport.
MOBILISE SUPPORTERS
We want to give Baba a grand re-
ception betting a stature of a presi-
dent. You will see a sea of humanity in
Nairobi on Saturday, said ODMs Nai-
robi branch chairman George Alad-
wa.
Aladwa, the immediate former
Mayor of Nairobi, said CORD had mo-
bilised supporters from across the
country to throng in the city adding
that they will meet by Thursday to -
nalise the programme.
But Duale said it is too early for
CORD to condemn Uhurus govern-
ment.
It is not the right time for the Op-
position to call for mass action when
the country is under attack from the
Al-Shabaab militants. Kenyans should
be more united now than never, said
Duale.
Elgeyo Marakwet Senator Kip-
chumba Murkomen called CORD ir-
responsible, saying its actions were
meant to sabotage Kenyas economy.
People must differentiate be-
tween opposing the government of
the day and opposing your country.
The acts by the Opposition do not
demonstrate patriotism for our coun-
try, claimed Murkomen.
Aden Duale Kipchumba Murkomen Janet Ongera
BIG BOYS FIGHT
CORD and Jubilee will hold
separate rallies on Friday
CORDs plan is to receive Raila
at the Kenyatta International
Convention Centre in Nairobi,
with the kind of political pas-
sion accorded to former op-
position leader Kenneth Mat-
iba when he arrived from the
United Kingdom in 1991, at the
height of the battle for multi-
party politics
On Saturday, fellow CORD co-
principals Kalonzo Musyoka
and Bungoma Senator Moses
Wetangula will receive Raila,
who is expected to arrive in the
morning
It is on record
that CORD rallies are
marred with violence and
incitement, security agencies
should ready to avert a
situation where the rally
would affect the peaceful
daily lives of Kenyans
They now want
court to set him free
on a technicality,
arguing Scotland
Yard illegally
co-operated in probe
Man convicted of tourist kidnap
in 2011 innocent, UK activists say
By WILLIS OKETCH
Claims have emerged that a
man on death row for kidnap
of a British woman and murder
of her husband in 2011 may
have been wrongfully convict-
ed by a Lamu court.
Human rights activists in
UK claim that Ali Babito
Kololo, who was sentenced to
hang by a Lamu court last year,
could be the wrong suspect.
They are now challenging the
conviction in British court.
The UK activists want the
court to set him free on a
technicality, arguing that
Scotland Yard illegally cooper-
ated in an investigation and
trial leading to the death
penalty.
WRONG SUSPECT
According to Daily Mail on
Sunday, the activists say
Scotland Yard detectives who
investigated Kololos involve-
ment in the killing of David
Tebbutt and kidnap of his wife
Judith on September 10, 2011,
wrongfully linked him to the
crime.
Kololo had no lawyer for
most of his trial in Lamu and
was sentenced to hang on July
29, last year.
He has appealed against the
sentence and the case is
pending before the Court of
Appeal in Malindi.
The conviction is deemed
so unsafe, it faces a High Court
challenge in London, led by
Lord Macdonald, a former
director of public prosecu-
tions, reported the Daily Mail
on Sunday.
According to the newspa-
per, the action brought by a
human rights charity wants the
court in UK to rule that the
involvement of UK authorities
was unlawful because Kololos
trial was an abuse of natural
justice. And because he faced
death sentence, it was also a
breach of guidelines that say
British police may only offer
limited assistance when a
suspect faces such punish-
ment.
The case is set for hearing in
a UK high court on June 4.
DEATH SENTENCE
The Daily Mail on Sunday
quoted Maya Foa saying thus: I
fail to see what assurances they
can have been given when he
was facing what amounted to a
mandatory death sentence, and
a farce of a trial.
Judith, who was kidnapped
by pirates during a raid at a
hotel in Kiwayu and her
husband killed, said in Kololos
trial via video link that she
never saw Kololo during the
attack, according to the
newspaper.
She said she could only
remember that her husband
David turned off the lights and
got into bed.
Then, she eventually told
detectives, they held hands as
they drifted off to sleep. Three
hours later, her nightmare
began.
Judith was set free from
captivity after close to a year in
Somalia.
Ali Babito Kololo, a
former worker at Ki-
wayu Safari Lodge,
being led to court
last year during the
hearing of his case.
He was sentenced
to hang after being
found guilty of
abduction in which
British tourist
David Tebbutt was
killed and his wife
Judith taken to
Somalia. [PHOTO:
MAARUFU MOHAMED
/STANDARD]
The kidnap sparked Kenyas
invasion of Somalia in October
2011.
The accused, who was tried
for 16 months, declared he had
been subjected to a sham trial
and proclaimed his innocence
as the sentence was read out
and translated to him from
English to Kiswahili.
The magistrate declared
that: After a careful consider-
ation of the evidence, I have
found that the accused was
responsible for the crime of
murder and kidnap meted
against the couple, referring to
the kidnap by suspected
Al-Shabaab militants.
I hereby sentence him to
hang, rst for robbery with
violence as prescribed by the
law, and sentence him to serve
another seven years in jail for
the crime of abduction, the
magistrate declared after
rejecting his defence that he
was also a victim of abduction.
Kololo, who was unrepre-
sented for most of the trial,
never stepped out of jail after
his arrest as he was unable to
raise a Sh1 million bond.
UNFAIR TRIAL
I am innocent and this trial
was unfair. You are the judge
but I have been oppressed. We
shall all die, declared Kololo,
who was shocked and de-
pressed by the sentence.
The kidnap brought the
tourism industry to its knees
and forced the US and Europe-
an Union to issue travel
advisories.
The magistrate said Kololo
was positively identied and
rejected his defence that he was
forced by the abductors to lead
them to the Kiwayu Safari
Lodge where the crime took
place.
The accuseds defence that
he was also a victim of the
abduction does not hold water,
said the magistrate.
Speaking after the verdict,
Kololo said I do not harbour
any bitterness against the
magistrate and I surrender my
fate to the Almighty God.
The magistrate said Kololo
knew the scene of the crime
well and other hotel workers
positively identied him soon
after his arrest.
LIFE
TODAY
Tuesday, May 27, 2014 / The Standard NATIONAL NEWS / Page 3
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PART 2
Tuesday, May 27, 2014 / The Standard Page 4 / NATIONAL NEWS
BY TITUS TOO
Deputy President William Ruto
and National Assembly Majority
Leader Aden Duale, who also belongs
to the United Republican Party (URP)
are in the crosshairs of disgruntled
Rift Valley MPs.
Mr Rutos situation was triggered
by his defense of besieged Devolution
Cabinet Secretary Anne Waiguru
while Mr Duale waded into trouble
when he made disparaging remarks
against controversial Nandi Hills MP
Alfred Keter.
Rutos statement that he and
President Uhuru Kenyatta were re-
sponsible for recent changes at the
National Youth Service (NYS), which
have sparked a storm because of the
removal of Kiplimo Rugut as director,
has apparently done little to calm the
rising tide.
Duale, who was nominated by
Rutos URP for the leadership post in
the House, has infuriated fellow party
lawmakers for belittling remarks tar-
geted at Mr Keter.
Yesterday, MPs who spoke to The
Standard said it was disrespectful of
Duale to refer to his fellow MP as
bubu (dumb). Duale had said that
Keter, who has become too critical of
the ruling coalition at public rallies,
avoided debates in Parliament.
The MPs asked Duale to apologise
to the Nandi Hills electorate and their
MP for the remarks he made in Ker-
icho during a function that was also
attended by Ruto.
The MPs Julius Melly (Tinderet),
Elijah Lagat (Chesumei), Stephen
Bitok (Mosop), Zakayo Cheruiyot
(Kuresoi South), Alex Kosgei (Emg-
wen) and William Kisang (Marakwet
West) told Duale off for disrespect-
ing them.
But Bowen Kangogo (Marakwet
East) said Duale had nothing to
apologise for, arguing that it was
Keter who should seek forgiveness
from the Jubilee coalition for being
disrespectful to the Government.
Mr Cheruiyot accused Duale of
disrespecting Kalenjin leaders. Du-
ale should understand Kalenjin poli-
tics are dynamic and stop playing
games, he insisted.
RESPECT LEADERS
Mr Lagat warned: Duale should
talk to us with respect not with con-
tempt and insults. Every leader de-
serves to be respected. Nobody
should accuse us when we speak the
truth. Duale is not a roll-call keeper
in Parliament. Keter has made contri-
butions.
Referring to the recent crackdown
on terrorism, Mr Melly argued,
Kalenjin leaders are not dumb and
we will not be stopped from raising
BY FAITH RONOH
A section of Rift Valley resi-
dents have differed with Dep-
uty President William Ruto
over his remarks on the trans-
fer of Kiplimo Rugut as the
National Youth Service (NYC)
director.
On Saturday, the DP, said
President Uhuru Kenyatta and
himself should take responsi-
bility over Mr Ruguts transfer
and leaders should not blame
Devolution Cabinet Secretary
Anne Waiguru.
But yesterday, residents
from his political bedrock took
to Kass FMs Lee Nee Emet
morning show and lashed on
the DP for what they termed as
outright betrayal, of the
Kalenjin community.
We thought the DP was
not aware of what was happen-
ing but we were shocked to
hear him saying he was among
those who made the decision,
Tecla Rono from Uasin Gishu
County said.
Another caller accused Ruto
of failing to: stand by the very
people who mentored and -
nally brought him to power.
The listeners hit out on Na-
tional Assembly Majority
Leader Adan Duale for insinu-
ating that the vernacular radio
station was being used to di-
vide members of URP.
Abel Rop insisted that Mr
Duale must apologise to the
radio station as well as the
Kalenjin as soon as possible.
If Duale has an interpreter
then he must know that what-
ever is discussed in this pro-
gram is not in any way hate
speech or is meant to divide
this (Kalenjin) community. We
are one, Mr Rop said.
The residents further
thanked outspoken Nandi Hills
MP Alfred Keter for speaking
his mind and urged him to
continue pointing out what he
feels is not right in the party.
However, in a bid to quell
down the angry residents, po-
litical adviser in the ofce of
the President, Joshua Kuttuny,
sent a text message to the sta-
tion saying: I stand with all
Kass FM fans on any allega-
tions labelled against them. We
hope Kalenjin leaders will nd
time to iron out their differ-
ences.
DP defence on Waiguru
stirs debate in region
concerns touching on our people.
When Duales people had problems
recently, he came out strongly and
nobody accused him.
Melly said Duale was insensitive
towards Keter, the electorate and
people with disabilities, and should
apologise. As an independent leader,
I did not like the remark by Duale. He
stooped too low, Melly said, adding
that Ms Waigurus impeachment pro-
cess was going on.
Waiguru is in trouble with MPs
over the NYS replacement with Nel-
son Githinji as Director General.
The Deputy President has de-
fended Waiguru, asking the report-
edly more than 100 MPs who have
signed a petition for the censure Mo-
tion against the CS to stop targeting
junior people and take him and the
President head on.
But Rutos remarks have not gone
down well with leaders from the re-
gion and were the subject of a popular
regional radio talk show.
Yesterday, Cheruiyot questioned
why Ruto told MPs off over the issue.
When you say you are in Govern-
ment, who are your trusted lieuten-
ants? You have a small window to re-
consider your political leadership
style, Cheruiyot warned.
Cheruiyot challenged the DP to
come out clean on the issues raised
by the MPs if he intends to maintain
support from the community.
You cannot tell Kalenjin MPs to
stop asking questions. Those are
petty intrigues and will lead us no-
where, Cheruiyot said adding: If
Ruto was sent by the President to
Kericho for damage-control, then its
wrong.
Mr Songok said the electorate in
Nandi Hills elected Keter to represent
them in the National Assembly and it
was therefore regrettable that Duale
made disrespectful remarks against
him.
Mr Bitok said every elected leader
has a right to express his or her opin-
ion about what is happening but
emphasised that politicians should
respect one another.
We should be moderate in how
we handle issues so that we dont
cause disunity. We need to sit and
solve issues in a friendly environment
as leaders, he said.
Bitok said the dispute should be
handled amicably and challenged
URP leaders to protect the party and
the Deputy President as their party
leader.
Bomet Governor Isaac Ruto asked
URP to call an urgent meeting to sort
out issues that are threatening to tear
the party apart. I want to ask URP to
call a meeting urgently so that we can
sort out issues affecting it at the mo-
ment if it wants to stay on as a party
and see tomorrow.
He added: Everyone is free to
speak his or her mind and some URP
leaders should stop their harassment
and chest-thumping.
Additional reporting by Patrick
Kibet and Gilbert Kimutai
DUALE CLAIM ON KETER
Duale had claimed Keter
makes no contribution on seri-
ous issues in Parliament. Aki-
ambiwa kuna hoja kali bun-
geni, huyu mtu anaitwa Alfred
Keter ni bubu, anajifcha kwa
choo (When told there is a seri-
ous debate in Parliament, this
person called Alfred Keter is
dumb; he hides in the toilet)
Alfred Keter is just being
used by those against the Gov-
ernment to give the Jubilee
administration trouble
Alfred Keter: We were
elected as leaders and we
have the right to speak on
issues of concern and raise
questions where neces-
sary
Julius Melly: Kalenjin lead-
ers are not dumb and we
will not be stopped from
raising concerns touching
on our people
Zakayo Cheruiyot: You
cannot tell Kalenjin MPs
to stop asking questions.
Those are petty intrigues
and will lead us nowhere
Isaac Ruto: Everyone is
free to speak his or her
mind and some URP lead-
ers should stop their ha-
rassment and chest-
thumping
Ruto, Duale
under fre from
Rift leaders
They accuse the two
of belittling MPs
who criticise Jubilee
government on
important issues
Page 5
Tuesday, May 27, 2014 / The Standard
Principal Secretary
Ministry of Sports, Culture and the Arts
P.O. Box 49849-00100, Nairobi, Kenya
For more information visit www.kenyamambopoa.com
For more information
Kenya Mambo Poa @KenyaMamboPoa
Website: www.kenyamambopoa.com E-Mail: info@kenyamambopoa.com
Smithsonian Folklife Festival
Kenya Mambo Poa!
25
th
June to
6
th
July, 2014
WASHINGTON DC
KENYA MAMBO POA! KEEP OFF OUR ELEPHANTS ICONIC CENTRE PIECE FLAG OFF
Kisii, Kenya - 26th May 2014: The Ministry of Sports, Culture and The Arts and
the Deputy Governor of Kisii County agged off the centre piece that will
be showcased at the grounds of the Kenya Mambo Poa at the Smithsonian
Folklife Festival in Washington D.C. It is a tradition that each country featured
at the festival develops a work of art that acts as the centrepiece of the
countrys exhibition. Kenyan soapstone carver Elkana Ongesa, has curved
the 10 tonne Sculpture with the strong message, keep off our elephants. The
center piece is arriving in Nairobi on Wednesday May 28, 2014 and it will be
handed over to the Nairobi County Governor and senior Ministry ofcials by
Kisii County Governor to be airlifted to Washington DC.
The 48th annual Smithsonian Folklife Festival will be featuring presentations and
performances from Kenya starting on 25th June to 6th July 2014. The Program
is titled Kenya Mambo Poa! and it will present the ways in which the people
of Kenya are balancing protection of their valued cultural and natural heritage
with the challenges and opportunities for change in the twenty-rst century.
Kenya Mambo Poa! will be a massive
showcase featuring Kenyas uniqueness as
a nation of diverse people; displaying the
complex conuence of prehistoric culture,
modern traditions, cultural expressions,
art, technology, sports, work, culture and
habitats.
All this will increase Kenyas visibility by making it top of mind-choice
for tourists and investors.
Caring Elephant in wood Our Wealth in wood Prophet at The National
Museum
Enyamchera(Bird of Peace)1978
UNESCO Hdqs. Paris. Soapstone
Dancing Birds, 2010 in Kisii granite.Visit by schools
to view the 30-ton gift for the people of Kenya &
America
Other famous sculptures by Elkana Ongesa in Kenya and overseasp
Elkana Ongesa is a soapstone sculptor. His philosophy is, Art is the Bond between Humanity,
Nature, and The Creator, God. Through art he tries to appreciate and share what God has already
made perfect. He borrows and uses them to tell his story of where he has been, where he is and
each new piece he makes is a revelation of the long journey a head, ever unnished, tune to
eternity. Ongesa is one of the most admired and prolic contributors to art in Kenya, having
taught art in several schools and Colleges in Kenya and currently a freelance Fine Artist
Sports Ministry and Kisii County Ofcials agging off
the centrepiece in Kisii
Tuesday, May 27, 2014 / The Standard
Page 6 / NATIONAL NEWS
By GATONYE GATHURA
Widowed women may soon be
able to donate their late spouses
bodies or organs to research institu-
tions if they die without writing a
will.
In addition, it may soon be lawful
for one to receive payment for the
trouble of donating a body organ to
another party.
The proposal also makes it legal
for the Cabinet Secretary to donate
unclaimed bodies or parts of bodies
to research and training institutions
or medical use.
The controversial proposals are
part of the new Health Bill 2014. It
says that in the absence of a will indi-
cating how the body should be dis-
posed of when the person dies, close
relatives, number one being the wife,
will have the right to donate the body
for research, training or replacement
purposes.
Although the Bill makes it clear
there should be no commercial har-
vesting body organs, it allows a donor
to be paid for unspecied costs and
the trouble involved in the exercise.
The Billl does not say the amounts
that would be involved, but suggests
donors could be legally compensated
for things like transport costs or time
away from gainful employment.
This open-ended clause may be
interpreted to mean surrogate moth-
ers would be able to claim for pay-
ments, and even resort to court for
arbitration in case of a dispute. This
could also be true for other organ
donations.
It is an offence for a person who
has donated organ to receive any
form of nancial or other reward for
such donation, except for the reim-
bursement of reasonable costs in-
curred in the donation exercise, says
the proposed law.
Just to make sure poor people are
not lured to backstreet clinics to have
their organs harvested for money, the
Act says such an operation can only
be carried out in a duly licensed facil-
ity by qualied medical personnel.
However, any expert authorised to
harvest an organ cannot be the lead
doctor in the transplant of the same
to another individual.
This is expected to check unscru-
pulous medical workers becoming
middlemen in a possible body parts
trade. It is possible to create a false
By GATONYE GATHURA
The long-awaited Health Bill has
nally been drafted, with proposals to
retain old structures, create many
new plum jobs while keeping most of
the power in Nairobi.
The draft Health Bill 2014, nalised
on Friday, proposes the establishment
of a powerful post of the Director
General of Health, a raft of new direc-
torates at the headquarters and the
creation of more than seven new
agencies.
The draft also proposes the estab-
lishment of the Kenya Health Service
Commission (KHSC).
The creation of such a commis-
sion, similar to the Teachers Service
Commission, has been one of the
major demands by health workers
during their recent strikes.
Early in the year, Devolution Cabi-
net Secretary Anne Waiguru had said
this was non-negotiable as it would be
unconstitutional.
A report prepared in January by
the Health Professionals and Health
Stakeholders Consultative Forum for
input into the proposed law, had also
advised against the creation of such a
commission.
MAKE RECOMMENDATIONS
The proposed draft says the com-
mission, to be established through an
act of Parliament, would be respon-
sible for the recruitment, promotion
and assignment of health workers in
public hospitals.
The commission shall have all the
powers necessary for the performance
of its functions, reads the draft signed
by Health Cabinet Secretary James
Macharia.
In any case the commission, it is
indicated, can only make recommen-
dations to the national and county
public service commissions and, the
Salaries and Remuneration Commis-
sion. The proposed commission has
a singular function of advisory role.
Therefore, the commission will be
ineffective, said the stakeholders
forum.
The Bill proposes the establish-
ment of a Kenya Health Professions
Oversight Authority, which in an ear-
lier proposal was supposed to collapse
more than eight professional bodies
into one. For a long time, investors in
the sector have complained of the
many regulatory bodies they have had
to deal with and wanted them re-
duced.
For example, currently a pharmacy
or hospital has to deal with inspectors
from as many as seven different regu-
latory agencies: the nurses council,
the dentist or pharmacy boards, the
radiation board, the nutrition council
and several others.
The new draft proposes to retain
all the current seven regulatory agen-
cies but also create a new entity to
oversee all the others.
The draft also proposes creation of
the Kenya National Blood Transfusion
Service as well as the National Re-
search for Health Committee. Further
good news for top medical profes-
sionals especially in Nairobi, is the
creation of a single body for the regu-
lation of health products and tech-
nologies.
demand as happens with the lucra-
tive market of C-section births, says
Mr Abote Akoko, a lab technician in
Kisumu.
Breaking the law would attract a
jail term of ve years and a ne a mil-
lion shillings or both. The Bill also
allows the Cabinet Secretary for
Health to draft more laws dening the
type of facilities that can harvest or
transplant body organs in the coun-
try.
A boon for the many medical
training institutions coming up is a
suggestion that people who are com-
petent to make a will can donate their
bodies or specied parts to be used
for research, training or other medi-
cal purposes after their death. Such a
will can be made in writing or ver-
bally in front of witnesses, but the
donor must specify to which institu-
tion the donation is being made.
Also for the rst time the country
attempts to legally address the emerg-
ing issue of ethical use of stem cell
research.
CLONE HUMAN BEING
In a chapter that proposes to re-
peal the current Human Tissue Act,
the words stem cell research for the
rst time are introduced in to Kenyas
legal lexicon. Anyone wishing to
carry out such research in Kenya
would have to get express permission
from the Cabinet Secretary for Health
as well as the person donating the
cells.
In the chapter, which seems to
give most of the powers to the Cabi-
net Secretary, no person can clone
another human being without the
written permission of the CS.
One provision that could put CS
Macharia on a collision course with
genetically modied food (GMO) lob-
byists and companies says that no
person shall be allowed to manipu-
late any genetic code, including that
from human tissue. This could be
used to block genetic manipulation
of crops to, for instance, produce
disease-resistant or high-yielding
varieties.
Kenya is already under pressure to
lift the ban on GMOs placed in 2012
and the Health ministry largely de-
pends on US funding for its
programmes.
In March, a posting on the minis-
trys website asked Kenyans to send it
their views on GMOs to be included
in new legislation for the sector.
What Bill says on body parts donation
Though proposal
warns on commercial
harvesting, it allows
donation for research
and proposes payment
Seven health
agencies in
proposed law
Ministry drafts new law
to change sector HEALTH REFORM
The Bill says in the absence of a will indicating how the body should be dis-
posed of when the person dies, close relatives will have the right to donate the
body for research, training or replacement purposes. [PHOTO: FILE/STANDARD]
>>
Other
stories
inside
As Mideast
trip nears
end, Pope
navigates
mineeld of
symbols
p49
NATIONAL NEWS / Page 7 Tuesday, May 27, 2014 / The Standard
Medics who turn patients away face jail term
Bill drafted by Health
ministry proposes that
emergency cases be
handled regardless of
patients ability to pay
been met with strong resistance from
the private sector wanting it accom-
panied by a clause explaining who ex-
actly will be meeting the cost of treat-
ing such people.
With the increasing number of
armed robberies, terrorism, general
By GATONYE GATHURA
Any health worker or hospital
which turns away a patient on emer-
gency visit may be inviting hefty pen-
alties in nes and even jail time.
A proposed Bill drafted by the
Health ministry and which has par-
tially been a cause of recent strikes,
wants it made mandatory that all
emergency cases be attended to im-
mediately regardless of a patients
ability to pay.
The Health Bill 2014 proposes that
any health service provider who turns
away a patient on emergency visit be
ned or sent to jail.
Any clinician who fails to provide
emergency medical treatment while
having the ability to do so commits an
offence and is liable upon conviction
to a ne not exceeding Sh1 million or
imprisonment for a period not ex-
ceeding 12 months or both, proposes
the Bill. The proposal also includes in-
stitutions which are to be ned about
Sh3 million.
In the past, this suggestion has
violence and backstreet abortions, the
Health Professionals and Health
Stakeholders Consultative Forum said
health emergencies are on the rise
and require a rational approach.
The forum, which includes players
from faith-based organisations and
private health providers, had advised
the drafters of the Bill to propose the
establishment of an Emergency Med-
ical Services Fund.
Such a fund, the forum said, would
reimburse costs to private facilities
which render services during emer-
gencies.
Without such or a similar mecha-
nism to reimburse private facilities,
then the forum said the good inten-
tions of the punitive law would only
fall at on their faces.
The draft Bill suggests the estab-
lishment of an emergency medical
treatment fund to provide for what it
says are unforeseen situations. It how-
ever is non-committal on whether the
same would be used to reimburse the
private sector for emergency cases
treated. The Health Bill 2014 also be-
comes the rst legal document to
spell out the details of who, where and
under what circumstances in Kenya a
procedure to terminate a pregnancy
can be performed.
A trained medical ofcer, nurse,
midwife or a clinical ofcer with skills
to carry out an abortion will be legal-
ly covered by the suggested Bill to car-
ry out the procedure if they have a val-
id practicing licence.
FREE MATERNITY
The Bill, which gives Parliament
another chance to have a go at the
controversial abortion debate, would
also require that public hospitals ac-
quire minimal infrastructure and hu-
man skills that allow for deserving
women to get abortions as well as
post-abortion services.
These suggestions seem to contra-
dict the recent action by the Health
ministry to suspend national guide-
lines for abortion services sent earlier
to all health workers.
In December the ministry, under
pressure from pro-life groups, sus-
pended the guidelines for what the
Director of Medical Services Dr Fran-
cis Kimani said is to allow for further
consultations.
Conspicuously absent is any men-
tion of whether the free maternity
policy adopted by the Government
last year would be ingrained in the le-
gal document.
THE CONTROVERSY
In the past, this suggestion
has been met strong resis-
tance from the private sector
wanting it accompanied by a
clause explaining who exactly
will foot the cost of treating
such people
The Health Professionals
and Health Stakeholders Con-
sultative Forum proposed the
setting up of an Emergency
Medical Services Fund which
would reimburse costs to pri-
vate facilities which render
services during emergencies
The Ministry of Health has drafted a Bill proposing that any health worker who
fails to attend to an emergency case should pay a ne not exceeding Sh1 mil-
lion, be jailed or both. [PHOTO: FILE/STANDARD]
Ministry drafts new law
to change sector HEALTH REFORM
Tuesday, May 27, 2014 / The Standard
By CYRUS OMBATI
The Judiciary and some members
of National Security Council (NSC)
met last evening to discuss violent
crimes, terrorism and administration
of justice.
A statement from the Judiciary
said Chief Justice Willy Mutunga was
to host top leadership of key security
organs as well as the Director of Pub-
lic Prosecutions for a meeting at the
Supreme Court.
The meeting is preliminary to the
two-day conference for judicial of-
cers, security ofcials and experts to
discuss counter-terrorism in the con-
text of the Constitution and interna-
tional human rights law, the state-
ment read in part.
Interior Co-ordination Cabinet
Secretary Joseph ole Lenku, Inspector
General of Police David Kimaiyo, the
Director-General of the National In-
telligence Service Michael Gichangi,
and the Chief of the Kenya Defence
Forces Julius Karangi were also ex-
pected to attend the 5pm meeting.
CJ hosts counter-terrorism meeting
Follow-up forum
to discuss security
responses within
context of Constitution
and international
human rights law
Another meeting is scheduled for
Thursday to discuss appropriate se-
curity responses within the context of
the Constitution and international
human rights law.
Ofcials said the meeting aims to
explore international human rights
and counter-terrorism, which some-
times seem to be at cross-purposes,
and demonstrate that they should be
properly viewed as complementary as
envisaged by the Constitution.
This followed a request by the
Chief Justice in April who wanted a
meeting between the Judiciary and
the NSC at the Judiciary Training In-
stitute (JTI) in Nairobi.
The request came at a time when
Deputy President William Ruto
seemed to blame the Judiciary for
some of the terror attacks in the coun-
try after magistrates and judges re-
leased terror suspects on bond.
In a letter to Interior Co-ordina-
tion Principal Secretary Mutea Iringo,
the Chief Registrar of the Judiciary
Anne Amadi said the proposed meet-
ing should exclude both the President
and his deputy and is aimed at dis-
cussing the interface between nation-
al security and the administration of
justice.
The Judiciary believes that the
discharge of its constitutional man-
date is better served by a greater un-
derstanding of the broader social con-
text within which it operates, the
statement partly reads.
This is what informs Judiciarys
constant engagements with govern-
ment agencies, business, civil society
Adan Mohamed alias Haro Kare at the Milimani Law Courts yesterday where he
was charged with being in possession of electronic photographs intended for
instigating a terrorist activity. [PHOTO: FIDELIS KABUNYI/STANDARD]
By RAWLINGS OTIENO
A union for civil servants has vowed
to protect 52 ofcials interdicted by In-
terior Cabinet Secretary Joseph ole
Lenku.
Union of Kenya Civil Servants
(UKCS) castigated the move to interdict
ofcers over the recent killer brew that
claimed the lives of 86 people.
The union, instead told Lenku to
take political responsibility and re-
sign and demanded the interdicted
ofcers be reinstated with immediate
effect.
The interdiction was irregular and
an abuse of fundamental human rights.
How do you interdict a police ofcer in
Embu or Kiambu for a lethal drink that
was packed in Nairobi. It is Lenku and
John Mututho who should have taken
political responsibility, said Tom Ode-
ge, the unions secretary general.
The union said it had led a petition
in court and would make sure that the
interdicted civil servants do not lose
their jobs.
The union said the Kenya Bureau of
Standards should have rst been inves-
tigated as the lethal drink had its trade-
mark quality.
The interdicted ofcers included
two CEOs, deputy county commission-
ers, OCPDs and heads of intelligence in
ve counties most affected by the killer
brew.
Union tells off
CS over action
on 52 ofcers
and academia mostly through the
mediation of the Judiciary Training
Institute, it continues.
Amadi said it is important for judi-
cial ofcers to understand the imper-
atives and challenges of the national
security and the proposed meeting
will afford the other two arms of gov-
ernment an invaluable forum to share
perspectives on the critical issue in
public interest.
The letter was copied to Cabinet
Secretaries for Interior, Defence, For-
eign Affairs, Chief of Defence Forces,
National Intelligence Service, AG
Githu Muigai, IG, Head of Public Ser-
vice Joseph Kinyua and Director of JTI
Joel Ngugi.
Page 8 / NATIONAL NEWS
Page 9
Tuesday, May 27, 2014 / The Standard
Page 10 / NATIONAL NEWS Tuesday, May 27, 2014 / The Standard
Terror blast
suspects
denied bail
BY FRED MAKANA
A Nairobi court has been asked
not to release on bond two men
suspected to be behind the ter-
rorist attack at Pangani Police Sta-
tion over a month ago.
The court informed Chief
Magistrate Hannah Ndungu that
Abukar Mohamed and Omar Ab-
dullahi who allegedly obtained
registration by false pretenses two
years ago are said to have com-
municated with the terrorists be-
hind the incident, which claimed
two police ofcers.
Prosecutor Eddie Kadebe, op-
posing the release of the two on
bond, asked the court to take ju-
dicial notice of the recent spate of
terror attacks that have caused
deaths and maimed thousands of
innocent Kenyans.
He further said investigations
by Anti-Terrorism Police Unit
show that there was a link be-
tween the two and the events that
led to the Pangani blast.
Police investigations into the
Pangani incident indicate that the
accused through mobile phone
communication were in contact
with those who carried out the at-
tack, Mr Kadebe said.
JUMP BAIL
The prosecutor urged the
court not to release the accused
on bond, saying they are a threat
to witnesses and the ongoing in-
vestigations.
He noted that the grounds
highlighted in the afdavit by the
investigating ofcer Emmanuel
Tinega are enough to warrant the
court to deny the accused bail.
He said once the accused are
out, they are likely to execute such
attacks or interfere with prosecu-
tion witnesses. Kadebe also told
the court that the accused were
likely to jump bail to escape the
harsh penalty pronounced upon
conviction.
He said the prosecution is will-
ing to have the trial of the two ex-
pedited and concluded in the
shortest time possible.
According to the charge sheet
produced in court, Mr Mohamed
was accused that on April 13, 2012
at the Registrar of Persons ofce
in Wajir Central, he willfully and
by false pretense procured regis-
tration as a Kenyan, which en-
abled him to obtain an identity
card.
Governors visit
Kajiado
Governor David
Nkedianye (left)
with Kiprono
Kittony, the
Kenya National
Chamber of
Commerce and
Industry
chairman
(centre) when
he visited the
governor in his
ofce over the
weekend.
Looking on is
County
Executive in
charge of
Industrialisa-
tion Florence
Mutua. [PHOTO:
PETERSON
GITHAIGA/
STANDARD]
See what others are saying,
join us Online:
www.standardmedia.co.ke
Duale calls for
discussion around
gender equity
BY MAUREEN ABWAO
and JOSPHAT THIONGO
The National Assembly Majority
Leader Aden Duale has asked Mem-
bers of Parliament and the public to
start discussions around the imple-
mentation of the two-thirds gender
equity rule.
The constitutional principle pro-
vides that not more than two-thirds of
the members of elective public bodies
shall be of the same gender.
Majority Leader
says Parliament
will be considered
unconstitutional in 2017
if rule is not refected
DUALE ON TWO-THIRDS GENDER RULE
The constitutional principle provides that not
more than two-thirds of the members of elec-
tive public bodies shall be of the same gender
Parliament, National Assembly and Senate,
will be considered unconstitutional after the
next General Election if the membership of
both Houses does not refect the requirement
Kenya has made signifcant strides towards
achieving gender equity and inclusion in its
legislation
Political leadership is the main problem, not-
ing that key decisions lay with the politicians
Parliament, National Assembly
and Senate, will be considered uncon-
stitutional after the next General Elec-
tion if the membership of both Hous-
es does not reect the requirement.
In December last year, the Su-
preme Court ruled that the two-thirds
gender principle should be imple-
mented progressively. It added that a
roadmap for enforcement should be
in place by August 2015.
Failure to have the law in place will
see the 2017 Parliament termed as un-
constitutional. The landmark ruling
then provided that the current Na-
tional Assembly and Senate will not
be illegal if it had less than one-third
of women.
Yesterday, Mr Duale said: We need
to have discussions on the same as
members of the National Assembly
and the public so that we can have
equal representation in terms of the
number of women in authority and
also in terms of those who are consid-
BY KIPCHUMBA KEMEI
The Kenya Wildlife Service (KWS) and
the management of Tanzania National
Park (Tanapa) have introduced anti-
poaching lessons in 10 secondary schools
bordering Maasai Mara National Reserve
and Serengeti National Park.
The lessons that will later be included
in the teaching curriculums to sensitise
communities neighbouring the two wild-
life sanctuaries on the importance of con-
serving the wildlife.
Ofcials said the students will in return
reach out to their communities and edu-
cate them on issues of wildlife conserva-
tion to curb poaching and expose those
behind the menace.
We decided to introduce lessons on
wildlife conservation to these schools to
sensitise communities that neighbour
Mara and Serengeti parks on the need to
end poaching. The students will visit vil-
lages to educate locals on the dangers
posed by the menace, said Nick Murero,
the Mara-Serengeti Ecosystem Coordina-
tor. Students from Moi Naikara, Olchekut
Supat, Aitong, Siria Boys and Siria Girls on
the Kenya side and Machochwe, Kisangu-
ra, Ikoma, Natta and Nagusi in Tanzania
will benet from the exchange pro-
gramme.
Mr Murero said KWS personnel would
visit all the schools on the Kenya side to
teach conservation lessons while ofcials
from Tanapa will do so in their jurisdic-
tion, adding that the lessons have already
started in Siria Boys and Siria Girls.
The lessons that will cover all aspects
of conservation will take ve months. The
two countries decided to start this on re-
alisation that poaching has the potential
of killing the multibillion tourism industry
that is a major foreign exchange earner for
the two countries, he said.
BY CAROLINE RWENJI
The State has been ordered to
pay Sh200,000 in damages to a
victim of police brutality.
Joseph Njoroge will be paid
the money after High Court Judge
Justice David Majanja found that
his rights were violated.
Mr Njoroge told the court that
he was arrested alongside three
of his friends while on their way
home from a cafe at around 9pm
on March 11, this year.
On the way, he said, they met
four men who ordered them to
stop, to which order they com-
plied.
They realised they were police
ofcers as two of them had ries.
They were handcuffed and on
asking the reason for the arrest,
one of the ofcers started beating
him.
When I asked why we were
under arrest one of the ofcers
started beating me while telling
me not to instruct him on how to
do his job, he said.
Police abuse
victim gets
Sh200,000
ered marginalised.
Speaking during a forum organised
by the Kenya Alliance of Resident As-
sociations (Kara), Duale said there
cannot be equality without equity.
Rwanda as a country is growing
socially, politically and economically
because they have been able to main-
stream the gender equality issue in
their national policies, he said.
He pointed out that Kenya has
made signicant strides towards
achieving gender equity and inclu-
sion in its legislation.
Kenya has had its share of chal-
lenges in terms of gender issues. The
systems in place have been tilted in
favour of men thus discriminating
against women, youth and the dis-
abled, said Duale.
Duale cited political leadership as
being the major problem noting that
key decisions lay with the politicians,
majority of whom are men.
Chairperson of the National Gen-
der and Equality Commission Winnie
Lichuma noted that the gender equity
issue has been observed in some
quarters.
In the National Assembly and the
Senate, gender equality has been ad-
dressed but the threshold of the two-
thirds majority rule has not yet been
achieved, she said.
On the appointments of women as
parastatal heads, Ms Lichuma said
there should be inclusion of more
women as currently there are only two
women parastatal heads out of the 36
posts available.
Statistics from the commission
shows that the number of persons
with disabilities has also increased by
nine in National Assembly.
Anti-poaching lessons introduced in schools
Tuesday, May 27, 2014 / The Standard NATIONAL NEWS / Page 11
Hope as 300 tourists arrive in Mombasa
Two KDF soldiers killed in Al-Shabaab ambush
By STANDARD TEAM
Armed militants suspected to have
crossed from Somalia have killed two
Kenyan soldiers during a night raid
deep inside the Kenyan territory in
Lamu.
This has raised fresh fears over the
effectiveness of Kenyas counter-ter-
rorism operations in Somalia.
The soldiers are missing following
Sundays attack on a truck as it was
heading to deliver supplies to Kenyan
forces stationed at Ras Kamboni in-
side Somalia.
It is unclear if they were abducted
or got lost in the nearby Dondori for-
est where the attackers are believed to
have ed and are possibly still holed.
A statement from the Kenya De-
fence Forces headquarters did not ac-
knowledge deaths on its side.
Last night (Sunday) KDF soldiers
operating in Kiunga agged down a
vehicle. But its occupants instead
opened re. Our soldiers retaliated,
killing one of the shooters. KDF is in
hot pursuit of the other assailants
who ed following the shootout, read
part of a statement yesterday. But lo-
By PHILIP MWAKIO
Two airplanes with close to
300 tourists from Western Eu-
rope landed at Mombasas Moi
International Airport (MIA)
early yesterday, a gesture hailed
by stakeholders as a sign of un-
dying faith in Kenyas tourist
destinations.
One of the worlds leading
leisure airlines, Condor, has
announced it will increase its
ight rotations to the Momba-
sa airport beginning end of Ju-
ly to four ights a week.
The airline announced yes-
terday when it ew in 200,
mainly German tourists, who
are en route to Zanzibar at a
time when Kenyas tourism
sector at the Coast has taken a
beating due to terrorism fears.
Condor has an annual
transportation capacity of
more than 6.7 million and over
75 destinations in Europe, Af-
rica, Asia and the Americas.
TUI-D Resident Manager in
charge of the German and Pol-
ish markets in Mombasa Tim
Remberg told The Standard at
MIA yesterday that the current
two ights per week on Mon-
day and Saturday will increase
to three from next month.
Remberg said a fourth char-
tered ight will be deployed
from end of June from Frank-
furt, Germany.
The German visitors arrived
on a Condor ight 7265 from
Frankfurt at 5.45am. German
tourist Sebastian Glau and his
partner Eileen Grossmaur are
on their rst visit to Kenya.
Local police have said
soldiers were attacked
by about 10 militants
but the army has not
admitted the deaths
KDF soldiers in Somalia. [PHOTO: FILE/STANDARD]
Some of the more than 100 German tourists who arrived at the
Moi International Airport on board a Condor chartered ight
from Frankfurt, walk to board buses headed for various tourist
destinations. [PHOTO: GIDEON MAUNDU/STANDARD]
cal police disclosed the deaths, with
sources within the military intelli-
gence corps indicating the Kenyan
soldiers were attacked by an Al-Sha-
baab force of about 10 militants.
The success of the attack on a KDF
Land Rover has embarrassed the Ke-
nyan military but also uncovered the
possibility of major intelligence fail-
ures and possible inltration by mili-
tants.
It is puzzling how close to a dozen
militants could inltrate the Kenyan
territory, bypassing a KDF base at
We are upbeat and looking
forward to an eight-day Safari
to Kenyas idyllic wildlife and
sceneries, which we have only
heard of before heading off to
Zanzibar for beach holiday,
Glau said.
TRAVEL ADVISORIES
Earlier on, a Turkish Air-
lines ight with 50 tourists
touched down at 3am from Is-
tanbul via Kilimanjaro, Tanza-
nia.
The recent travel advisories
issued by the United Kingdom,
France and the US followed by
evacuations created a dent in
Kenyas travel and tourism in-
dustry.
The UK-based all-inclusive
tour company, First Choice,
and Thomson Airways can-
celled all ights and vacations
to Kenya until October.
They transported about
200 vacationers to London a
fortnight ago.
By the end of the evacua-
tions night all 400 visitors were
moved from Kenya to the UK.
Most of the tourists had ex-
pressed disappointment over
the evacuation.
Ishakani on Kenyas border with So-
malia unnoticed and disappear with-
out a trace or pursuit by reinforce-
ments from nearby military camps or
Air Cavalry helicopters.
LONELY ROAD
It is also not clear what else was on
the KDF vehicle besides food and the
military has claimed one militant was
killed but failed to explain why the
soldiers were travelling on a lonely re-
mote road alone. And the sense of
anxiety and shock has been exacer-
bated by the fact that the attackers,
armed with light weapons including
AK47 but possible Rocket Propelled
Grenade or RPG-7, inltrated 45 kilo-
metres into the Kenyan territory to kill
KDF soldiers at a place called Mili-
mani, less than three kilometres from
the supposedly secure Manda Bay na-
val base.
The soldiers were from Lamu and
were on their way to Ras Kamboni to
deliver foodstuff when they were at-
tacked at night. Their lorry was stuck
in the mud following heavy rains,
Leonard Omollo, the Lamu County
police commander said yesterday.
According to the army, an ex-
change of re erupted after KDF sol-
diers agged down a vehicle but
Omollo said the gunre started when
militants ambushed the soldiers from
nearby bushes.
The police boss said the Kenyans
vehicle was stuck in mud due to heavy
rains but the KDF statement made no
reference to this.
The exchange of re resulted in
the death of two soldiers. The military
lorry was sprayed with bullets after it
was stuck in the mud, said Omollo.
Sources in Lamu said suspended
Al-Shabaab elements ambushed the
soldiers as they struggled to pull out
the lorry at Milimani, 45 kilometres
from Ras Kamboni.
Meanwhile, independent sources
in Lamu informed The Standard that
militants from Somalia were pursuing
a Kenyan police patrol car that was
holding two Tanzanian jihadists that
had sneaked into Lamu through Ki-
unga when they bumped into the Ke-
nyan military men and opened re on
them. Omollo said the soldiers were
from Lamu and on their way to Ras
Kamboni to deliver foodstuff .
Sources in Lamu said the soldiers
were from the 15th KA Batallion of the
Kenya Army and were delivering the
food ration from Manda Base in La-
mu. But The Standard has learnt the
truck(s) ferrying the supplies moved
from Nairobi late last week.
Reports by Patrick Beja, Benard
Sanga and Willis Oketch
ATHI WATER SERVICES BOARD
REQUEST FOR EXPRESSIONS OF INTEREST
(Consulting Services Firms Selection)
KENYA
WATER AND SANITATION SERVICES IMPROVEMENT PROJECT
ADDITIONAL FINANCE
CREDIT NO.: 5103KE
ASSIGNMENT TITLE: CONSULTANCY SERVICES FOR FINANCIAL,
TECHNICAL AND LEGAL AUDIT OF WASSIP AF PROJECTS UNDER
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REFERENCE NO. : 40
1. The Athi Water Services Board, a State Corporation under the Ministry of Environment,
Water & Natural Resources, invites eligible consulting rms (Consultants) to indicate
their interest in providing the Services. Interested Consultants should provide information
demonstrating that they have the required qualications and relevant experience to perform
the Services.
2. The full text of this Request for Expression of Interest can be accessed at http://awsboard.
go.ke/media/tender/ at no cost.
3. Expressions of interest must be delivered in a written form to the address below (in person,
or by mail, or by fax, or by e-mail) by 18
th
June 2014 East African time.
Attention: The Chief Executive Ofcer, Athi Water Services Board
Street Address: Africa-Re Centre, Hospital Road Upper Hill
Floor/Room number: 3rd Floor, Reception Desk
City: Nairobi
Country: Kenya
Telephone: +254 20 2724292/3
Facsimile number: +254 20 2724295
Electronic mail address: info@awsboard.go.ke
Web site: www.awsboard.go.ke
Page 12 / NATIONAL NEWS Tuesday, May 27, 2014 / The Standard
By KURIAN MUSA
The Mathare Constituency by-
election will be conducted within
90 days after the Supreme Court on
Friday upheld the declaration that
George Wanjohis win was uncon-
stitutional.
Judge Smokin Wanjala said the
Independent Electoral and Bound-
aries Commission (IEBC) was free
to announce an election date and
ordered that National Assembly
Speaker Justin Muturi be served
with the court decision to enable
the process of a by-election to be-
gin.
Supreme Court judges led by
deputy Chief Justice Kalpana Raw-
al nullied the election and direct-
ed that the people of Mathare
should brace for a by-election to
choose their own leaders.
IEBC was ordered to cater for
the legal fees of Stephen Kariuki of
ODM party, who successfully chal-
lenged the election of Wanjohi
(TNA). The highest court upheld
the decision of the Court of Appeal
which ordered for a by-election,
saying the election results were
marred by massive irregularities,
making it difcult to establish the
winner.
By LUKE ANAMI
A row is brewing between the
Commission on Revenue Allocation
(CRA) and the Mining ministry over a
proposed law that excludes a formula
for sharing proceeds from minerals.
CRA has accused the ministry of
disregarding its revenue sharing pro-
posals in the Mining Bill 2014, which
is pending before Parliament.
The Mining Bill 2014, which is be-
fore the National Assembly, lacks pro-
posals on how to share revenue be-
tween locals, county and the national
government, something that has
prompted CRA Chairman to raise is-
Cabinet Secretary
on the spot over
Mining Bill, which
does not have revenue
sharing formula
BREWING TROUBLE
Commission on Revenue Allocation has ac-
cused the Mining ministry of disregarding
revenue sharing proposals in the Mining Bill
2014, which is pending before Parliament
CRA Chairman Micah Cheserem wrote to
Mining Cabinet Secretary Najib Balala com-
plaining that the Mining Bill being debated by
the National Assembly does not include a rev-
enue sharing formula
Insisting on the formula, Cheserem cites the
principal function of CRA, which is to make
recommendations for equitable sharing of
revenue raised by the national government
between the national and the counties
sue with Mining Cabinet Secretary
Najib Balala.
The proposals were made and sent
to Mr Balala a month ago.
It has now been brought to our at-
tention that the Mining Bill being de-
bated by the National Assembly does
not include a revenue sharing formu-
la, CRA Chairman Micah Cheserem
said in a letter addressed to Balala,
dated May 22.
You will recall that I led two del-
egations from the commission to your
ofce to make recommendations on
the formula that could be included in
the Mining Bill. The purpose of this
letter is to request you to intervene
and reinstate the revenue sharing for-
mula that we had recommended to
you, reads part of the letter.
Mr Cheserem said the formula
must be included in the Bill because
minerals will in the coming years be a
major source of revenue.
The Energy Bill 2014, he said, must
also include a formula as the commu-
nities where the natural energy plants
are will require compensation as well.
By JOSPHAT THIONGO
and MAUREEN ABWAO
As the alternative government, the
opposition should offer solutions, Na-
tional Assembly Majority Leader Aden
Duale has said.
He said CORD leaders who have
been holding a series of rallies, where
they have criticised the Jubilee Govern-
ment, should stop the blame game and
instead offer solutions to the problems
facing the country.
Duale told the opposition leaders to
concentrate on development issues
that will benet wananchi and save pol-
itics for 2017.
Cord leaders should be account-
able for what they say as they have
formed platforms to propagate hate
speech messages against the govern-
ment of the day, which is in no way in
the interest of Kenyans, said Duale.
On regime change, Duale said: Cord
leaders should allow the Jubilee Gov-
ernment to serve its term, and resell
their policies ahead of the next general
elections.
He urged Alfred Keter to table any
grievances he had in Parliament where
answers would be provided.
Keter is just being used by a section
of those against the Government. He
needs to understand that the Jubilee co-
alition represents the interests of both
parties and those of the Kenyan citi-
zens, he said.
The legislator said Devolution and
Planning Cabinet Secretary Anne Waig-
urus impending impeachment was not
a collective decision of the Jubilee alli-
ance but an opinion of Igembe South
MP Mithika Linturi.
Duale said talks were underway to
ensure Mithika Linturi reconsiders his
stand over the Motion he had tabled in
Parliament on impeaching Waiguru.
Some 116 MPs have signed a peti-
tion to oust Waiguru, who is accused of
gross misconduct and gross violation of
the constitution.
She is also accused of intimidating
and threatening public servants under
her jurisdiction.
Duale tells CORD to offer solutions
Help tap talent, education stakeholders told
By FRED KIBOR
The government has advised education
stakeholders to help nurture talent among
learners instead of emphasising only on
academics.
Basic Education Director Leah Rotich
said learners have continued to exhibit tal-
ent in learning institutions and it is high
time these abilities were developed.
She said the Ministry of Education has
drafted a national educational sector plan
that will help encourage development of
various kinds of talent among children in
learning institutions besides emphasising
academic excellence.
We should look at a child as a whole
person, not just concentrating on academ-
ic excellence. We need to incorporate their
talents as they go on with class work, said
the director.
She said parents and teachers should
be able to identify different talents inher-
ent in the learners.
Apart from academics, learners have
continued to exhibit several talents which
need to be nurtured and which in the end
would benet them even if they fail to per-
form well in class, said Mrs Rotich.
CONTINUE EXPLOITING
She said the Ministry of Education
through its curriculum has encouraged
development of talent among learners and
urged other stakeholders to continue ex-
ploiting them.
Our learners have not disappointed
when it comes to displaying their co-cur-
ricular activities which if tapped would
help them excel in future, she said.
Speaking at Metkei Girls secondary
School in Keiyo South sub-county, where
she graced an educational day, Mrs Rotich
said her department has set programmes
that would help in nurture talent at a ten-
der age.
She said reforms were underway in the
education sector to help address untapped
talent.
These reforms will ensure our educa-
tion is competency-based to help develop
abilities such as critical thinking and com-
munication skills to explore their full po-
tential, she said.
Area MP Jackson Kiptanui who also at-
tended the education day urged teachers
to do their best to uplift academic stan-
dards in the area, saying that quality grades
posted over the years in the area were few-
er compared to other areas.
National Assembly Majority Leader Aden Duale
Court gives
nod to hold
mini polls
Micah Cheserem
The same applies to the Energy Bill
2014, he said.
In an interview with The Standard,
Cheserem said it is important for the
people of Kwale to know what is there
upfront from the mining of Titanium
instead of waiting for the time bomb
to explode.
The Turkana County people
should know what share they will get
from the mining upfront. There is also
Coal in Kitui, Soda in Magadi among
other mineral and natural resources,
he explained.
GOLD DEPOSITS,
We must have a formula because
in the next ve years, if we dont have
a formula, we will be opening a pan-
doras box, he added.
The discovery of oil and other min-
erals including gold deposits, natural
gas among others is likely to be a
source of conict within the regions
where the discoveries are made.
Turkana was in the news early this
year when the residents demanded
compensation from Tullow Oil Com-
pany.
It is therefore important that we
make good policy decisions upfront
to avoid conict and chaos that many
countries have encountered due to
their failure to share mineral revenues
equitably, he said.
Insisting on the formula, Cheser-
em cites the principal function of
CRA, which is to make recommenda-
tions for equitable sharing of revenue
raised by the national government be-
tween the national and the county
governments.
Further, the issue of minerals and
natural resources is governed by
Chapter Five of the Constitution,
which deals with Land and Environ-
ment.
With due regard to the provisions
therein, the Government is expected
to develop legal and institutional
frameworks that will guide the exploi-
tation, management, utilisation and
conservation of minerals; and, natu-
ral resources for maximum economic
benet of the country and local com-
munities, he explained.
Revenue body
hits out at Balala
over Mining Bill
Page 13
Tuesday, May 27, 2014 / The Standard
Page 14 / EDITORIALS
Tuesday, May 27, 2014 / The Standard
Swoops not best way
to address insecurity
The Standard is printed and published by the proprietors,
THE STANDARD GROUP
Newsdesk: 3222111
|
Fax: 2213108
Email: oped@standardmedia.co.ke
Group Managing Editor (Print): Kipkoech Tanui
Registered at the GPO as a newspaper.
Empower police service to bolster war on crime
WHAT OTHER MEDIA SAY...
A
s much as we appreciate police efforts to beat
back the wave of crime and terrorism in the
country, these efforts must be done within the
confines of the law to avoid antagonising the citizenry.
Police swoops in Mombasa are becoming the norm
even as they raise public outcry on the manner of their
execution. Hundreds of people were recently arrested
inside a nightclub that operates legally and faced
various charges in court yesterday.
These random swoops infringe on peoples freedom
of movement and assembly that the Constitution
upholds in the Bill of Rights. These blanket arrests can
be tolerated only under a state of emergency that has
not yet been declared.
The police must learn to act on targeted intelli-
gence, which should lead them to specific groups and
individuals either suspected or confirmed to be
indulging in subversive activities.
Experience has shown that the scattergun approach
is counterproductive and at worst, sets up the public
against the government. In truth, too many arrests
have been made at the coastal town of Mombasa in the
name of fighting terrorism, but none has led to
conviction. Lack of sustainable evidence has always
seen the suspects released by the courts. Instances
abound where suspects are released after the greasing
the palms of police officers.
This newspaper has insisted before that rapport
must exist between the police and the citizens if the
war on crime is to be won.
The opposite of this obtains where the police
officers assume the role of bullies. Lack of trust and
confidence in our police service, brought about largely
by the canteen culture, has seen even those who would
have volunteered vital information withholding it for
fear of harassment.
It was everybodys hope that the change from a force
to a service would make some difference. Now it seems
there is a long way to go.
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7 Pages of SizzIing Sport coverage!
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S You A1 NYAYo: 6er Mahia feIIewers. |lnOO: SlllOlL
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On Muy 22, Tuskef wefe uI home uguInsI Gof Mu-
hIu, buI InsIeud oI pIuyIng Ihe hxIufe In NuIfobI, de-
cIded Io Iuke Ihe muIch Io MumIus Io uvoId Ihe In-
IImIduIIng 'Gfeen Afmy` us Ihey hunIed Iof muxImum
poInIs Ifom Ihe muIch.
The pIoI dId noI wofk, us Ihe 'Gfeen Afmy` some-
how Iound IIs wuy InIo Ihe MumIus CompIex In u
muIch IhuI ended In u buffen dfuw.
ThIs IIme, Ihe bfewefs huve no opIIon us Ihey
come Iuce-Io-Iuce wIIh Ihe ufmy us Ihe Iwo sIdes
meeI In mIdweek Ieugue cIush uI Nyuyo SIudIum Io-
moffow evenIng.
The hxIufe Is cfucIuI Iof boIh sIdes, whIch seek Io
keep up Ihe chuse on Ieudefs Bungefs.
Gof MuhIu skIppef JefIm Onyungo hud no kInd
Saturday 8arcede
Suuday 8arcede
Saturday 8arcede
Suuday 8arcede
Download free QR Readers from
the web and scan this QR (Quick
Response) code with your smart
phone for pictures, videos and
more stories.
By OMULO OKOTH IN NASSAU, BAHAMAS
Kenya engraved a seal of invincibility in the Bahamas
with a second world record on the nal day of the inau-
gural World Relays Series on Sunday.
Asbel Kiprop, former 1,500m Olympic and twice world
champion (2013 and 2011), anchored Collins Cheboi, Si-
las Kiplagat and James Kiplagat Magut to a world record
time of 14:22.22.
United States came second in 14:40.80 and Ethiopia
were third in 14:41.22. The quartet won $50,000 prize
money and a similar amount for the world record which
they shared equally.
The dummy cheque was displayed to the stadium
crowd and cameras clicked, followed by a lap of honour
with the athletes draped in Kenyan ag. Then the nation-
al anthem belted as the few Kenyans in this Atlantic ocean
Kiprop steers team to gold,
sets new world record time
CONTINUED ON PAGE 63
WE DID
IT FOR
KENYA
7 Pages of Sizzling Sports coverage!
Asbel Kiprop celebrates as he crosses the
nish line to win the mens 4x1,500m
relay, setting a new world record in the
event during the IAAF World Relays
Championships in Nassau, Bahamas, on
Sunday. [PHOTO: REUTERS]
TEAMSTANDINGS IAAF WORLD
RELAYS BAHAMAS NASSAU
1. USA 60.0
2. Jamaica 41.0
3. Kenya 35.0
4. Great Britain & N.I 24.0
5. Australia 21.0
6. Trinidad and Tobago 19.0
7. France 18.0
8. Bahamas 15.0
9. Poland 14.0
10. Nigeria 13.0
11. Brazil 10.0
12. Spain 8.0
13. Saint Kitts and Nevis 7.0
14. Romania 7.0
15. Russia 6.0
15. Ethiopia 6.0
17. Barbados 5.0
18. Germany 5.0
19. Japan 4.0
19. Cuba 4.0
19. Switzerland 4.0
22. Mexico 4.0
23. Italy 3.0
23. Canada 3.0
23. Venezuela 3.0
26. Bermuda 2.0
26 Qatar 2.0
26. PR of China 2.0
29. Slovak Republic 1.0
DIGITAL PAYMENTS:
Matatus test cashless
units as July deadline
looms
PAGE 13
Where are the incentives for
tourists? PAGE 6
New bid to restore solar
sectors shine PAGE 3
Tuesday, May 27, 2014 / The Standard
Farmers cash in on tasty,
healthy crickets PAGE 10
PAGES 89
Kenyas
Sh8b
bailout
State
funds
E
F
Taxpayers burdened with extra debt load after
banks defer Sh52 billion syndicated loan by
three months over Governments lack of cash
2
By MARGARET KANINI
Jesse Moore, 42, has more than 10
years experience building emerging
market technology ventures. The father
of a two-year-old is co-founder of M-Kopa
Solar. In February, the rm closed its latest
round of funding, raising Sh1.7 billion to
grow its customer base from 50,000 homes
to one million by 2018.
Before M-Kopa, Mr Moore, a Canadian
by birth, was managing director at Signal
Point Partners and director at GSMA in the
United Kingdom.
How long have you been living in
Kenya?
For over a decade now.
But M-Kopa is in its fourth year
Yes I worked for various organisations
in Kenya before the idea of M-Kopa was
born. I have worked for Care Kenya and a
few other multinationals.
As managing director and co-founder of
M-Kopa, what does your job entail?
My job right now includes just running
the management tasks of M-Kopa Solar.
But four years ago, when the company
had just begun, I used to multi-task. I
was the engineer, the technician, the
communications ofcer, and many others.
Right now, M-Kopa employs over 300
people, so I do not have to multi-task.
Speaking of multi-tasking, you seem to
have knowledge on almost every eld,
what are your qualications?
I hold an MBA from Oxford University in
the UK and a BA from UNC Chapel Hill in
the US.
What inspired you to start M-Kopa?
I will not speak for my co-founders, but I
was looking for a business that would grow
and one that I would be able to sustain
over time. Kenya is a home for new, great
technology.
Who are the other co-founders?
We are three co-founders, the other
two are Nick Hughes, who is our strategy
director and also leads new product and
market activities he was previously
managing director of Signal Point
Partners, the advisory and venture rm
that started M-Kopa; and then theres Chad
Larson, our nance director.
What is your business about?
M-Kopa Solar was established in
2011 to provide affordable solar power
to low-income earners in the country.
Approximately 80 per cent of Kenyans
do not have access to the electricity grid
and rely on other forms of lighting, like
kerosene and charcoal. Some, if not all,
of these sources are dangerous to ones
health, expensive and not environmentally
friendly.
We provide solar appliances for
cheaper and healthier lighting, which
can be purchased from M-Kopa dealers.
Customers buy the solar home system
through an affordable payment plan, with
an initial deposit of Sh2,099 and daily
payments of Sh50 for up to one year. We
get 1,000 new customers each week.
What if I wanted to pay upfront?
You would have to part with Sh16,999.
Your greatest achievements so far?
M-Kopa was able to light up one per cent
of Kenyan homes just 18 months after its
launch. This means there is so much room
for growth, and I trust that by 2018, we
shall reach the one million mark.
What challenges have you had to deal
with in your efforts to reach one million
households?
Last years 16 per cent VAT levy on all
taxable products affected almost every
aspect of local business. That is why we
had to add customers daily payments for
the appliances to Sh50 from Sh40. There
are many Kenyans living below the poverty
line who cannot afford to part with this
amount daily, so it has slowed adoption of
green technology.
Advice for young entrepreneurs?
Pay attention to customer needs and
develop all your products and services
to meet these needs. Also, pay attention
to employee development and create an
environment where the staff are more
important than their job description.
If you could start or co-own another
business in Kenya, what would it be?
This is the only business I have ever
wanted to start.
Any plans to launch new products?
Watch this space!
What Kenyan dish would you eat over
and over?
I would have mukimo (dish that includes
mashed potatoes, maize and spinach) any
time.
bizbeat@standardmedia.co.ke
Business Beat
2
Tuesday, May 27, 2014 / The Standard
Nothing is impossible, the
word itself says, Im
possible!,
AudreyHepburn
Published by: The Standard Group Ltd; Group Managing Editor Print: Kipkoech Tanui; Deputy Managing Editor Daily Editions: Peter Okongo; Production Editor: Richard Kerama; Business Editor: Hussein Mohamed; Weekend Business
Editor: Jevans Nyabiage; Supplements Editor: Julius Mokaya; Senior Sub-Editor: Kagure Gacheche; Sub-Editors: Andrew Watila, John Oyuke; Writers: Jevans Nyabiage, James Anyanzwa, Lillian Kiarie, Macharia Kamau, Frankline Sunday,
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publisher.
>> CORPORATE FOCUS
CorporateInterview
George W Ruba-
gumya has been
appointed senior
partner at MMC Africa
Advocates, with re-
sponsibility for MMCs
Africa-wide legal net-
work development. Mr
Rubagumya joins MMC
from Knutson Global
Inc, a US-based rm.
He boasts a career spanning more than 25 years in
international business and legal practice in the USA
and Africa, where he advised government and private
sector leaders. He was the co-founder of the Insti-
tute for Development Technologies, a public private
partnership initiative with the government of South
Sudan. He holds an LLM in international law from the
London School of Economic and Political Sciences,
and an advanced diploma from the Hague Academy
of International Law.
Stephen Mallowah
joins MMC Africa Advo-
cates as senior partner
and head of commer-
cial division. MMC is a
corporate law rm in
Kenya, with a develop-
ing regional footprint.
Mr Mallowah brings to
the rm more than 22
years experience in
commercial and corporate law, and international and
regional trade law, among other disciplines. Until
December 2013, he was the founder of the Kenya
Anti-Counterfeit Agency (ACA), specialising in intel-
lectual property law and enforcement. He has been
directly involved in signicant regulatory reforms of
the Kenyan nancial sector through the creation of
three regulatory agencies. He holds an Msc in public
policy and management, and an LLM in commercial
and corporate law from the University of London.
M-Kopa Solars Jesse Moore. [PHOTO:
WILBERFORCE OKWIRI/STANDARD]
OVER THE PAST two weeks,
the world has received sobering
news concerning the melting of
polar ice. Unexpectedly deep
canyons in Greenlands bedrock
mean that its retreating glaciers
will be in contact with warm
ocean water for longer, and will
therefore melt faster.
And in West Antarctica, a wall
of glaciers separating a vast
basin of ice from the sea is
coming apart far faster than
anticipated, suggesting that
quite a lot of sea level rise is
now unavoidable and will occur
faster and more dramatically
than anticipated.
For many readers, the sense
of anxiety no doubt melted
away like a chunk of polar ice at
media reports bearing the
qualication in coming
centuries.
That is a nasty complication
for economists trying to gure
out the most appropriate way to
respond to climate change.
Is it worth taking action now
to reduce the odds of a
civilisation-ending outcome?
But if one believes that
humanity should take drastic
action now, even though it
might slow economic growth,
one has to assume that future
costs will be very, very big. Or
that people living today place
signicant value on benets
realised after their children,
and their childrens children are
gone. And that strikes many
dismal scientists as implausible.
The Economist
Appointments
Climate change dilemma: Do we care
enough to take costly action today?
UpForDebate
What do you think? Email bizbeat@standardmedia.co.ke
Training project to restore solar sectors shine
Initiative: Programme launched to
improve quality of solar lighting
installations and increase uptake
By NICHOLAS WAITATHU
A
year ago, Mr Peter Mwangi
contracted a technician to
install a solar lighting
system in his elderly mothers
house in Muranga County.
He was hoping to spare her
the reliance on costly traditional
sources of lighting.
Mwangis mother is among
millions of Kenyans who have
never accessed power from the
national grid due to high
connectivity fees.
However, two short months
later, the solar panel system
broke down. It was later
discovered that the technician
Mr Mwangi had hired had made
a mess of the installation.
Mwangi was infuriated,
considering he had spent more
than Sh60,000 to procure the
panels and pay the technician.
On being contacted, the
technician turned on Mwangi
and accused him of tampering
RENEWABLE ENERGY <<
Many Kenyans have fallen victim to quack
technicians who only have a basic
understanding of solar lighting,
Francis Njoka
Tuesday, May 27, 2014 / The Standard
3
Business Beat
tively.
Through the regulations, we
have managed to tame the
prevalence of corrupt techni-
cians and traders. The number of
cases of failed installations being
reported to us now are fewer
than they were two years ago,
Mr Oimeke said.
Mr Cuxton Ngari, a trainee at
the Rwika Technical Institute,
Embu, said many solar techni-
cians are half-baked and often
work blind.
After this two-week training,
I now feel more condent ... I
have also noted there are many
things I wasnt doing right.
nwaitathu@standardmedia.co.ke
with the system.
Mwangis experience is not
unique, said Mr Francis Njoka, a
trainer and solar photovoltaics
(PV) expert at the Jomo Kenyatta
University of Agriculture and
Technology (JKUAT).
Many other Kenyans have
fallen victim to quack techni-
cians who only have a basic
understanding of solar lighting.
RURAL ELECTRIFICATION
Mwangi later found out the
technician worked with the
wrong panel accessories and
batteries, and installed them
badly.
Mwangis is a story you will
hear repeated in many other
counties, and such incompe-
tence has denied rural families
the opportunity to access cheap,
renewable power.
To stop further damage to the
solar energy sector, industry
players have stepped up efforts
to train local technicians on
photovoltaics, which converts
solar radiation into electricity.
JKUAT is working with the
Japan International Cooperation
Agency (JICA) and the Energy
Regulatory Authority (ERC) to
implement the Project for
Capacity Development for
Promoting Rural Electrication
Using Renewable Energy (the
Bright Project).
The four-year programme,
which targets training at least
1,000 technicians, has also
developed a curriculum on
modern solar PV systems that
training institutions can adopt.
This move was meant to
ensure that the quality and
standards of solar PV installa-
tions all over the country do not
disappoint consumers any
more, the JICA Bright Project
chief advisor, Mr Otake Yuji, told
Business Beat last week.
RENEWABLE ENERGY
According to ERC, Kenya
leads in Africa in exploiting
renewable energy sources. Solar
technology has been in the
country the last 35 years, with
industry sources saying more
than 300,000 PV units have been
installed, though several
thousand have failed to work.
To streamline the sector, the
Government in 2012 published
regulations requiring that all
technicians be trained on how to
install solar systems.
The regulations also require
that suppliers and distributors
be licensed by the ERC after
passing an industrial test
administered by the National
Industrial Training Authority.
The director in charge of
renewable energy at ERC, Mr
Robert Pavel Oimeke, said since
the operationalisation of the
regulations, more than 70
technicians and over 30 compa-
nies have been licensed to install
and supply the gadgets, respec-
Instructors
from
various
technical
institutions
during a
Bright
Project
training at
JKUAT.
They are
expected to
transfer
their newly
acquired
skills to
their
students.
[PHOTO:
COURTESY]
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Business Beat
Tuesday, May 27, 2014 / The Standard
4
By FRANKLINE SUNDAY
K
enyan Internet users are
slowly ceding their privacy.
They are also unknowingly
sharing their personal and
intimate data with more than
their small circle of friends and
loved ones.
Unknown to many, the
country is the stage of a covert
cold war pitting the US against
economic rival China. The prize:
your data.
Last week, reports leaked by
National Security Agency
whistleblower Edward Snowden
revealed that Kenya is among
ve countries where the US
intelligence agency has been
intercepting, recording and
archiving all phone calls for the
last one year.
The surveillance is said to be
part of a top-secret NSA
programme code-named Mystic
which has a backdoor to
Kenyas cellular telephone
network, enabling it collect
metadata on Kenyans phone
usage for up to 30 days.
Metadata, which loosely
translates to data about data, in
this case refers to information
revealing the time, source, and
destination of all phone calls
made in the country.
SPY OPERATION
By analysing this metadata,
authorities can develop patterns
based on a subjects daily
movements, location and
TECHNOLOGY:
>> INDUSTRY
The spy operation in Kenya is sponsored by the
CIA, which collects GSM metadata with the
potential for content at a later date,
Leakedreport
associates for up to a month.
The spy operation in Kenya
is sponsored by the CIA, which
collects GSM metadata with the
potential for content at a later
date, states the leaked report.
The argument that has been
advanced by security analysts is
that Kenya, which is the only
country in Africa where surveil-
lance of this magnitude is being
carried out, is of signicant
interest to the US.
It is believed the focus of the
local operation is to intercept
phone communication relating
to terror since the US works
closely with local security forces
in combating the militant
fundamentalist group Al
Shabaab, based in neighbouring
Somalia, the report states.
A fortnight ago, the US and
UK issued travel advisories to
their citizens to leave Kenya, and
proceeded to evacuate tourists
who were in the country over
what was termed as credible
information on an imminent
terror threat.
But Kenya is not sitting idly
by as Western agencies tap into
its citizens information.
A fortnight ago, the Govern-
ment revealed that Safaricom,
the countrys biggest telco had
won a tender to build a sophisti-
cated security communications
and information-sharing system
at a cost of Sh14.9 billion.
The state-of-the-art security
system will include a labyrinth of
high-denition spy cameras,
which will be networked to a
command station tted with
facial recognition systems for
isolation and tracking of wanted
suspects.
GO LIVE
The system which is being
installed to help curb the recent
spate of terrorism threats and
activities will go live in Nairobi
by the end of this year, and in
Mombasa in 18 to 24 months.
A similar system of surveil-
lance used by the US and UK
drastically aided in investiga-
tions into last years Boston
Marathon and the July 7, 2005
train bombings, respectively.
However, the key cause for
alarm locally has been the
involvement of China through
Chinese telecommunications
giant Huawei, which sources
close to the matter claim is the
main muscle behind the
proposed security system.
A tender award of a similar
system has seen Chinese rms
Huawei and ZTE lock horns in
the countrys High Court for
years, each accusing the other of
outing tender rules.
Huawei is the lead vendor for
Safaricom, providing up to 60
per cent of core network
equipment and infrastructure.
These include the anticipated
long-term evolution (LTE)
network, expected to be rolled
out in tandem with the new
security system.
LARGEST NETWORK
With $38.6 billion (Sh3.3
trillion) in annual revenues,
Huawei is the worlds second-
largest network equipment
supplier and third-largest
smartphone maker, with a
product portfolio that includes
wireless routers and ber optic
cables.
The company has, however,
been accused by US authorities
of creating backdoors in its
equipment that allow Chinese
state-sponsored hacking into
commercial and military
interests of the Western world.
If the allegations by Mr
Snowden are true, Kenya could
be stuck between a rock and a
hard place with the countrys
data from high-level security
communication to intimate
phone calls between cheating
spouses on sale to the highest
bidder.
In this regard, Kenya is not
being watched by just one Big
Brother, but two.
fsunday@standardmedia.co.ke
By JOE OMBUOR
A fortnight ago, 287 Kenyans, some
ying for the very rst time, got a
memorable treat from Kenya Airways
aboard the carriers newly acquired
Boeing B787-8 Dreamliner.
The two-and-a-half hours round-
about demonstration ight started at
the KQ hub in Nairobis Jomo Kenyatta
International Airport (JKIA).
The wide-cabin aircraft, touted as
the aviation industrys latest offering,
is imposing and technologically
advanced. And it is only Africas second
Dreamliner, after Ethiopian Airlines
acquired one last year.
On take off, the futuristic jetliner
nosed its way towards Thika before
taking a left to cruise towards Nakuru
in the Great Rift Valley.
Fifteen minutes later, Menengai
Crater panned out before us, and the
ight purser announced we were
overying Nakuru town en route to
Magadi and Lake Amboseli. The speed
reading on the ight-path screen was
847 kilometres per hour, and the plane
was 28,000 feet above sea level.
Frequent yers will notice the
subdued noise levels and mood lighting
in the Dreamliner.
Lunch was served as the plane ew
over the Amboseli National Park and
approached the Kenya/Tanzania
border.
Soon: To your right is the beautiful
view of Mount Kilimanjaro, came the
pursers voice through the loudspeak-
ers.
Many passengers with cameras,
tablets or smartphones clicked away at
the roof of Africa. It was truly a sight
to behold from that vantage position
above the clouds.
Another turn and it was a south-
ward glide to Mombasa. We ew over
this rst capital of Kenya, turned right
above the blue waters of the Indian
Ocean and headed for Malindi.
The crew and passengers, who
comprised travel agents, tour
operators, journalists, KQ staff and
corporate executives, had joined the
lucky few with birthdays falling on May
15 for a truly unique celebration.
The crew, including the pilot,
Captain Eugene Musundi, was all
Kenyan, and KQ Chief Executive Titus
Naikuni mingled with passengers
during the ight to get their opinions
on the carriers newest addition, which
takes its eet to 46 planes from about
20 when I took over 11 years ago.
From takeoff at 11.30am, the sleek
aircraft with wings spanning 197 feet
(60 metres) touched down smoothly at
JKIA at 2pm.
As for the cost of the aircraft, which
has 20 per cent more fuel efciency
than similar-sized competitors, Mr
Naikuni said it was anywhere between
$150 million to $170 million (between
Sh13.2 billion and Sh15 billion).
He said KQ has ordered nine such
aircraft, with six of them to be
delivered this year.
Naikuni said the Dreamliner is
poised to make its long haul debut in
early June with scheduled ights on the
Nairobi/Paris route.
Besides Paris, we are looking to
open Shanghai and Beijing routes this
year with the ordered Dreamliners. The
Bangkok/Hong Kong route has also
been identied for the Dreamliner, as
has a West African route, he said.
The ultra-modern plane of the
future landed in Kenya on April 5,
2014, after a 16-hour, 14,456-kilometre
non-stop ight from the Boeing plant in
Washington, USA. It was received by,
among others, President Uhuru
Kenyatta.
jombuor@standardmedia.co.ke
Sh15b Dreamliner offers yers unrivalled experience
Invasion: As State plans
Sh14.9b security system
with spy cameras, trends
in ICT indicate citizens
information is getting
easier to access
Kenya loses privacy war to snooping data spies
Inside Kenya Airways Boeing B787-8 Dreamliner. [PHOTO: JOE OMBUOR/
STANDARD]
Countries where USAs National Security Agency has been intercepting and recording phone calls. [GRAPHIC: THE INTERCEPTOR]
AVIATION:
Business Beat
Pension funds can, in fact, be the saviours
of the economy and stimulate growth
through an infrastructure-investing
revolution, MohamedWehliye
Tuesday, May 27, 2014 / The Standard
5
FUNDING GAPS <<
D
uring the opening of the
second National Confer-
ence on Energy about
three years ago, former Presi-
dent Mwai Kibaki directed the
ministries of Finance and
Energy to explore how pension
funds can be used to invest in
power and other infrastructure
projects. This would help
surmount challenges in
securing capital from interna-
tional financiers.
Unfortunately, to date, not
much has come out of that
directive, despite the fact that
there is still a serious funding
gap for economic infrastructure
such as energy, roads and ports.
The majority of infrastruc-
ture construction, maintenance
and upgrade work in the
country is currently publicly
funded. But with the Govern-
ment fiscally constrained, there
are question marks over
whether the public sector can
be expected to continue
dominating infrastructure
investment in the coming years.
INVESTMENT NEEDS
It is important, therefore,
that the Government taps into
pensions to offset growing infra-
structure investment needs for
the country to meet some of its
Vision 2030 targets.
Kenya currently invests less
than 10 per cent of its gross
domestic product in local
infrastructure. But the country
demands infrastructure
investments more than twice
the current levels if it is to
maintain sustained long-term
growth.
The countrys infrastructure
spending needs are high in
absolute terms and even
more so relative to GDP.
Meeting infrastructure targets is
estimated to cost more than
Sh400 billion per year.
The Government does not
have the resources to bridge this
gap and would usually have to
borrow this money.
But borrowing all this money
could endanger the fiscal
stability of the country, and
thus this gap needs to be
funded from elsewhere. But
where?
Commercial banks, which
are the traditional source of
finance in Kenya, face difficul-
ties in lending to infrastructure
projects that have long payback
periods they mostly lend
short-term funds, which creates
an asset liability mismatch.
Most banks are also subject
to Central Bank of Kenya
sectoral limits. Indeed, there is
currently limited capacity for
them to lend more to the
infrastructure sector.
Furthermore, tighter
regulations for banks means
they are facing the prospect of
needing to increase the amount
of capital they set aside to
support project finance
activities.
For these reasons, the
opportunities and need for
alternative financing sources
have never been stronger. That
is where pension funds come in.
The Government should look
to attract pension funds as a key
funding source for the infra-
structure sector. Using this
money to fund infrastructure
makes a lot of sense for a couple
of reasons.
RETIREMENT SAVINGS
First, pension funds, with
their need for long-term
investments to match their
long-term liabilities, are an
obvious substitute source for
such finance. They require
longevity of the assets and their
returns.
Second, the use of retirement
savings to invest in the future
of the country makes a lot of
sense and is a good selling
point, especially for public
sector pension funds such as
the National Social Security
Fund (NSSF).
The new NSSF Act is
projected to increase pension
fund contributions from the
current Sh10 billion to as much
as Sh100 billion annually in the
next few years. This is a lot of
money that would need to be
invested and can be used to
transform this nation economi-
cally.
As some of the largest
investors in the country,
pension funds should be
encouraged to allocate cash for
investments in infrastructure
projects.
Pension funds can, in fact,
be the saviours of the economy
and stimulate growth through
an infrastructure-investing
revolution. This has been quite
a trend in recent years in many
other countries, and there is no
reason Kenya should not follow
suit.
Over the past decade,
pension funds in other coun-
COMMENT:
Why cash for infrastructure projects should
come from pension funds, not global lenders
tries have moved significantly
into infrastructure as part of
their alternative investment
category. Long-lived assets such
as toll roads, airports and
electric utilities are a good
match for the investment needs
of such funds long-term,
steady growth in revenues based
on providing an essential public
service.
One of the key consider-
ations, however, is how the
pension funds should invest in
infrastructure projects.
There are two options:
indirect or direct investments.
DIRECT OWNERSHIP
The first includes the
purchase of stocks and bonds
issued by privatised infrastruc-
ture companies, such as
electricity, transport and
telecommunications firms, and/
or purchase of Government
bonds that are used to finance
infrastructure.
The second is investing
directly in infrastructure either
through direct ownership of the
projects or through the spon-
sorship of dedicated infrastruc-
ture debt funds.
Local pension funds such as
NSSF already indirectly finance
public sector infrastructure by
investing in bonds issued by the
Government relating to
infrastructure projects or
activities. The great majority of
pension funds hold Government
and infrastructure bonds
through their normal portfolios.
In some way, pension funds
are, therefore, already financing
infrastructure investment in the
country, although repayment
and risk still rests with the
Government.
Pension funds also hold
stocks of companies such as
KenGen and other utility firms,
and thus provide the necessary
capital for these companies to
invest in infrastructure.
The current indirect
investment in infrastructure is,
however, not intentional. That
is, the investment is not made
with infrastructure in mind, but
is viewed like any other
investment in stocks and bonds.
For pension funds, especially
the big ones like NSSF, to have a
bigger impact on economic
development and also secure
better returns that are less
volatile for their trustees, they
must target and invest directly
in infrastructure.
They can make direct
controlling investments, in the
manner of private equity
investments, in companies
operating in infrastructure
where the fund becomes the
main owner, or one of the main
owners, of such companies.
This can be done by buying
stakes in traditional utility
companies or by becoming one
of the major shareholders.
They could also invest in
infrastructure through debt by
sponsoring or co-sponsoring
debt funds that will invest only
in infrastructure.
The Government, with the
help of domestic pension funds,
could do what the Indian
government did by promoting
the setting up of Infrastructure
Debt Fund (IDFs) that will raise
capital required to finance
infrastructure projects.
Pension funds could be
asked to sponsor or co-sponsor
the IDFs. Such a fund should
then be restricted to cover
roads, railways, ports, airports
and power projects that
typically provide for a compul-
sory buy-out by the govern-
ment.
An IDF can be set up either
as a trust regulated by the
capital market regulator, CMA,
or as non-banking financial
institutions (NBFI) regulated by
the CBK.
CREDIT RISK
While the credit risk
associated with the infrastruc-
ture project will be borne by the
company if the IDF is set up as
an NBFC, the risk will have to
be borne by the investors if the
IDF is set up as a trust.
A trust-based IDF would
normally be a mutual fund that
would issue units, while a
company-based IDF would
normally be a form of NBFC
that would issue bonds.
The development of proper
infrastructure is vital for the
economic growth of any
country. The Government
cannot do it all. To meet the gap
in the funding requirement of
the sector, it is imperative to
promote public private partner-
ships.
President Uhuru Kenyattas
administration should follow up
on Mr Kibakis call for pension
funds to finance infrastructure
projects as a matter that
requires immediate action in
terms of Government policy. It
should also put in place the
necessary regulatory reforms
required to achieve the same.
The writer is senior vice
president, financial risk
management, Riyad Bank,
Saudi Arabia.
bizbeat@standarmedia.co.ke
MOHAMED
WEHLIYE
With
the
Govern-
ment s-
cally con-
strained,
there are
question
marks over
whether
the public
sector
can be ex-
pected to
continue
dominat-
ing infra-
structure
invest-
ment.
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Email: classiedads@standardmedia.co.ke
Business Beat
Tuesday, May 27, 2014 / The Standard
OPINIONS <<
The truth is, we have done a good job
publicising the negative things about
Kenya, keeping off tourists,
XNIraki
6
W
hatever the political
sentiments, we need
more foreign tourists.
They are likely to spend more
and our tourist facilities were
built with them in mind. They
also improve our brand and
market the country.
It is unlikely that a Kenyan will
spend a week at Serena Hotel in
Nairobi or Sarova Lion Hill inside
Lake Nakuru National Park un-
less for a seminar.
Therefore, the Governments
measures to save the tourism
sector from disaster will help tour
operators it seems their
lobbying paid off but may not
bring in more tourists.
Even our biggest attractions,
like safaris, are not our cup of tea.
Ask your friends how many of
them have been to Nairobi
National Park. How often do you
see a van full of tourists who look
like me driving around a national
park?
If we have to focus more on
domestic tourism, we have
change many things; we need to
do an Equity and change the
rules of the game so that we can
attract the untravelled the same
way we attracted the unbanked.
Im not a pessimist, but going to
beaches and visiting national
parks is yet to catch up with most
of us.
Economists will point out that
tourism is highly elastic its a
luxury that can easily be done
away with, particularly if there are
competing priorities.
LIFES PREOCCUPATIONS
The other businesses driven
by tourists, like curio shops, are
unlikely to be patronised by us.
Who has ever bought a Maasai
shuka from one of these shops?
There is no doubt that
travelling is fun, going by the
number of new school buses on
Kenyan roads. But after high
school, most Kenyans stick to
their homes, trying to make ends
meet. We normally travel only for
funerals or weddings.
Educating children, getting
enough to eat are often the great
preoccupations of life. Travelling
for leisure is rare.
Lots of Kenyans have relatives
who live in places like Shamak-
hokho or Ekalakala, and have
never met them, though they
would love to. Lets accept that
travelling is expensive, whether
by private or public means.
Enough on Kenyans; who are
the foreign tourists who visit and
spend their money here? How can
we attract more of them?
Among the tourists are lots of
retired people who have plenty of
time and money. Not that they are
rich, but their pension and saving
habits are good. Retired people in
Kenya often chase their pension
in several ofces instead of
travelling.
The lesson is simple; we shall
become tourists when we have
surplus money. If we need more
domestic tourists, we need to
improve our pension and savings
culture.
The other group of tourists are
young men looking for adventure,
fun and positive mischief. If you
are keen, youll notice many such
tourists dont visit our country.
But they do so in droves else-
where. American students ock to
Cancun, Mexico, during school
breaks. Lots of young Britons
travel to Spain, and vice versa.
These students and young
men are often working and have
some disposal income. How
many students work and how
many get jobs after school in
Kenya? Young people generally
have plenty of time, just like the
pensioners. They are also curious.
Interestingly, we have plenty
of facilities for elderly tourists but
not young ones. Maybe the Kenya
Tourist Board has data that
proles the types of tourists we
get and what attracts them.
EXPLOITED TOURISTS
We have given incentives to
key players in the tourism sector,
but what of the tourists?
If you visit our national parks,
you will realise that foreign
tourists pay almost 10 times what
we pay, and they know it. Can we
further reduce that differential?
These tourists probably feel
exploited. Does that explain why
they spend so little money in
Kenya?
The other incentive we need
to give is freedom. Most foreign
tourists who visit us drive
themselves in their home
countries. Why cant they drive
themselves to their destinations
in Kenya or beyond so that they
can enjoy their freedom,
particularly with the East African
visa?
But back to the basics, are our
highways world class? I would like
to hear a Japanese or American
tourists experience of travelling
on Kenyan roads. How do they
deal with calls of nature when on
the road before getting to
Delameres? How come no county
has replicated Delameres?
The biggest incentive for
foreign tourists is the experience.
What do they remember long
after visiting Kenya? There is no
doubt national parks are a big
attraction. But we have not
diversied much, and a tourist
does not want to visit only
national parks, especially with the
diversity of animals reducing
instead of increasing.
We can package our different
cultures for them to experience.
Kenyas different ethnic groups
are a tourism jewel. Why not have
tourists stay in our homes and
see how we get water, rewood
and cook? Imagine a tourist
reporting how Maasais mix blood
with milk for food?
Throughout history, Kenya has
been occupied by Britons, the
Germans along the Tanzania
boarder, the Arabs and Portu-
guese along the coast, and
Italians to the North. Why have
we not packaged that history to
attract tourists?
We need to get creative. Dont
tourists go to see graveyards in
Egypt or what are pyramids?
Needless to say, we must make
tourists feel secure in Kenya and
they will spend more money and
drive our economy. The truth is,
we have done a good job
publicising the negative things
about Kenya, keeping off tourists.
Tourists who visit Kenya will
confess that what they see in the
media and what they experience
in reality are two different things!
The writer is a senior lecturer at
University of Nairobis School of
Business. xniraki@gmail.com
A story is told of Bela Guttman,
the coach of the all-conquering
Portuguese football club Benca of
1961 and 1962. When he asked for a
pay rise from his seniors and was
ungratefully rebuffed, he was so
infuriated that he quit and reportedly
delivered the (in)famous Guttman
curse: Not a hundred years from now
will Benca ever be European
champions.
Since then, Benca has played
eight European nals including the
Europa League nal two weeks ago
against Sevilla and lost each one. It
has been 52 years since Guttman left
the club, and it is frightening for the
fans to imagine the curse may yet be
lifted for another 48 years.
Ironically, at around the same
time, power was changing hands in
Kenya in the name of independence,
and we inherited our own curse from
the colonialist the white-collar
curse.
This white-collar curse, or the job
curse, has coiled itself around the
population of young Kenyans such
that one can glide into political ofce
simply by promising to create jobs.
The situation is so dire that people
are willing to leak professional exams,
parents think nothing of coughing out
hefty sums to get their children
employed, and university students
are willing to seduce their way to
good grades.
The grimness of the state our
society is in dawned on me as I
conducted interviews a couple of
weeks ago for a vacant position in my
company.
What will you do if you dont get
a job in the next two years? I asked
most of the candidates.
Keep in mind that it takes an
average of two years for a college
graduate to get a job in Kenya. Also,
on average, every home in Kenya has
one unemployed youth.
EXCEPTIONALLY GIFTED
Most candidates said that they
would look for something to do,
others said that they would not lose
hope and would continue knocking on
more doors and, of course, praying.
One of the interviewees struck me
as exceptionally gifted, but he was
unaware of it. In his free time, he
repairs computers and laptops,
mostly for friends and referrals,
charging an assessment fee of Sh500.
Last month, he had six clients with-
out any advertising or taking the job
seriously.
Yet, the only thing he had been
doing full time is looking for a job.
Most young people will decry a
lack of capital. In a basic business
class, the four factors of production
are taught. In Kenya, the assumption
is that capital is the ultimate factor.
Consequently, young people believe if
they had ShX, their life would
automatically be better they would
have a better job, better prospects,
and on and on.
I think the Government was trying
to solve the capital problem when it
created funds for women and youth in
groups. But a better solution would
have been to nance strong business
plans presented by both individuals
and groups. Entrepreneurship is the
missing factor of production, not capi-
tal.
There is no doubt entrepreneur-
ship is a tough, sometimes painful
journey for those who choose it; it is
not for the faint hearted.
The upshot is that the few who
succeed can employ those still
engulfed in white-collar malaise.
YOUTH EMPOWERMENT
But I am hopeful for a time when
more young people will look to start
their own businesses than spend
years looking for a white-collar job.
When that time comes, a degree
will not be a passport to the
workplace, but rather a form of
empowerment on the solitary journey
from entrepreneurship to nancial
independence. Cheating in exams will
be a lazy option and buying a
masters degree will not make sense.
I just hope we will not fall victim
to Bencas 100-year curse, or else
we will be forced to bear the tragedy
of the job curse for another 50 years.
The writer runs a lighting technol-
ogy company.
bizbeat@standardmedia.co.ke
Have an opinion to share on business
issues? bizbeat@standardmedia.co.ke
Tourism: Where are incentives for tourists?
ECONOMICINSIGHT
with XNIRAKI
BANTUKIVAI
The white-collar-job curse holding back Kenyas potential
We
need to get
creative.
Dont
tourists
go to see
graveyards
in Egypt
or what
are pyra-
mids?
Business Beat
7
Tuesday, May 27, 2014 / The Standard
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about your w
eight?
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Email your applications to weightloss@standardmedia.co.ke OR SMS your details to 22151 starting with the word weightloss
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WIN LOSE
Business Beat
Tuesday, May 27, 2014 / The Standard
8
By JAMES ANYANZWA
and MOSES MICHIRA
E
ven with the best of inten-
tions, governments can
get their policies wrong.
In many such cases, policy
makers will choose to go ahead
with implementation without a
proper cost-benet analysis.
The result of these mis-
guided policies can have
damaging long-term conse-
quences on a country.
Last week, the Jubilee
Government found itself in a
difcult bind when it was forced
to pay Mr Anura Perera, the
man at the heart of the Anglo
Leasing-linked procurement
Paying for time: Kenyas inability to
pay back Sh52 billion received from
international lenders brings home
reality of countrys funding crisis
STATE VAULTS:
The Sh8b question as banks bail out Government to help it repay loan
>> SPECIAL REPORT
With less than two months to go before the end of
the nancial year, the choice was either to cut back
on Government expenditure or to pay in order for
us to move forward, President UhuruKenyatta
petroleum are paid for in
dollars, and the State needs
maintain a healthy import
cover, just in case there is a
major interruption in new
foreign currency inows.
It is this situation that sent
top Government ofcials,
including President Uhuru
Kenyatta, into a panic to the
point of giving in to Pereras
demands.
The country then appealed
to the international banks to
give it more time to repay the
loan with money borrowed
from other lenders through the
Eurobond.
This deferral, however, cost
taxpayers an extra interest
payment of Sh652 million, in
addition to a commission fee of
Sh574 million.
The appeal for an extension
also exposed just how much of
a nancial crisis Kenya is in
after Treasury issued an order
shutting down procurement
spending in all Government
departments.
The order was lifted after
payment was made to Perera,
who owns First Mercantile and
Universal Satspace.
deals, Sh1.4 billion.
Mr Perera has since issued
fresh demands for an additional
Sh3.05 billion.
To many, paying the Sri
Lankan businessman off was a
prime example of Government
failure; a policy with good
intentions that failed to achieve
its objectives and caused a
much bigger problem.
The Government had said it
would be unable to oat the
much-talked about $2 billion
(Sh175.6 billion) without
settling the claim. Now, it is
unclear if Pereras new demand
will still affect the issuance of
the bond, which is scheduled
for June.
Part of the proceeds of the
Treasury Cabinet Secretary Henry Rotich.
bond are to be used to settle a
Sh52 billion syndicated loan
and fund infrastructure
projects.
It is this syndicated loan,
which was due this month, that
reportedly prompted the
unusual settlement of Pereras
claim.
Citi Bank Group, Standard
Chartered PLC and Standard
Group are the lead arrangers
and underwriters of the
syndicated loan.
An interview granted by the
bankers revealed for the rst
time just how much the loan
signed by former Finance
minister Njeru Githae on May
15, 2012, will cost the country.
Originally, the loan was
priced 4.75 per cent above the
0.23 per cent Libor (London
Inter-Bank Offer Rate), which is
the most widely used bench-
mark for short-term interest
rates.
Kenya would pay a total of
Sh5.2 billion in interest over the
two years an unavoidable
price to pay to shore up foreign
exchange reserves that had
come under pressure at the
Central Bank.
Mr Githae had also hoped
the loan would help ease heavy
borrowing from the local
market, where the State was
starving the private sector of
capital.
Arrangers of the loan, the
three international banks that
also insured the deal, would
earn Sh1.46 billion 2.8 per
cent of the principal amount.
COSTLY DECISION
What was unforeseen,
however, was that Kenya would
be unable to repay the loan on
the agreed date, May 15, 2014.
When that Thursday rolled
around, the vaults at CBK were
virtually empty, according to Dr
Kamau Thugge, the Treasury
permanent secretary.
Dr Thugge told reporters
that if Kenya had paid back the
loan, it would have been a very
costly decision.
The Government was
considering repaying the loan
with foreign exchange reserves
held at the Central Bank, a
decision that would dispropor-
tionately expose the economy
to a dollar crisis.
Crucial imports such as
President Uhuru
Kenyatta.
Business Beat
9
Tuesday, May 27, 2014 / The Standard
The Sh8b question as banks bail out Government to help it repay loan
SPECIAL REPORT <<
We could have gone to the market a year
ago and borrowed at four per cent.
Rwanda borrowed at four per cent last
year, Source
bonds issued by countries with
low credit ratings.
Fortunately for Kenya,
international credit rating
agencies retained a favourable
credit score for the country,
terming the extension a mere
debt and reserves management
strategy.
Ratings agency Fitch, for
instance, said Kenyas need to
extend the loan repayment
highlighted the renancing risk
inherent in African nations,
which are now turning to
international markets for
nancing, rather than relying
on concessional loans.
We understand that if the
Eurobond has not been issued
by August, the syndicated loan
will be repaid out of reserves.
It is not the case that
without the extension, a missed
interest or principal payment
would be likely. [The extension]
will, therefore, have no impact
on Kenyas sovereign rating.
AVOID DISRUPTION
According to the source, the
Government did have the
option of paying off the
syndicated loan because it had
enough shillings to buy dollars
from CBK, or it could have
utilised its foreign exchange
reserves at CBK
But acting on the advice of
its lead arrangers, Treasury
sought an extension of the loan
repayment by three months to
avoid disrupting the money
market.
National Treasury Cabinet
Secretary Henry Rotich and
Thugge believe that within this
period, the proceeds of the
anticipated June Eurobond will
be in the consolidated fund
the Governments main bank
account.
Treasury mandarins are now
crossing their ngers the bond
gets a full subscription.
However, taxpayers are
expected to pay a premium
prize for the cash raised.
With international lenders
waiting in the wings for their
dues, the Government has been
forced to tap into the interna-
tional debt market at a time
when interest rates are heading
north.
Economic activities are
picking up in Europe and
interest rates are likely to go
higher. Right now, the rates in
the international markets are
ranging between six and eight
per cent, and given that we are
issuing a long-term bond, the
rates shall be higher than
these, said the source.
We could have gone to the
market a year ago and borrowed
at four per cent. Rwanda
borrowed at four per cent last
year we could have done the
same.
In addition to prevailing
market conditions, credit
ratings also determine borrow-
ing costs.
A credit rating is used by
Business Beat has established
that the two-year loan, which
now matures in mid August, will
cost Kenyans no less than Sh8
billion in arrangement and
extension fees, and interest.
We are a commercial entity
and the extension has been
favourable to us. We are earning
interest, in addition to the
extension fee, a transaction
advisor, who asked not to be
named due to the sensitivity of
the issue, said.
SYNDICATED LOAN
Mr Kenyatta was forced to
explain his painful decision to
direct Treasury to settle the
Anglo Leasing debt, even
though he had always main-
tained that the money should
not be paid out.
The President said settling
the claim would pave way for
the issuance of the Eurobond,
which is the only realistic
avenue left for the State to repay
the syndicated loan, which is
now due on August 15.
He added that proceeds from
the proposed bond are also
expected to help plug a Sh329
Aug 15
Date by which Kenya is
expected to repay a Sh52
billion syndicated loan.
unenviable position.
While top ofcials could not
openly talk about their distress,
some of the small lenders who
provided the Sh52 billion loan
were worried about Kenyas
ability to repay the money, and
wanted out.
Business Beats source
reveals that as Treasury ofcials
pleaded for more time, the
underwriters were forced to buy
out edgy lenders.
DIFFICULT POSITION
Any lender who did not
wish to stay on was paid off, he
said, adding that the underwrit-
ers bought loans worth about
Sh17 billion ($200 million).
There are additional
interest costs that would be
borne; banks are not a charity.
In total, Kenya will now pay
a minimum Sh60.1 billion for
the syndicated loan.
The bigger concern,
however, was that the revised
repayment schedule would
affect the countrys creditwor-
thiness. Investors are wary of
putting their money in risky
assets, such as in sovereign
billion decit in the countrys
national Budget, while failure to
attract lenders could mean
cutting back on Government
services.
With less than two months
to go before the end of the
nancial year, the choice was
either to start cutting back on
Government expenditure, to
start cutting back on pro-
grammes and service delivery to
Kenyans, or to pay in order for
us to move forward as a
country, he said.
Cabinet Secretary Henry
Rotich also disclosed the
countrys desperation over the
funding crisis, telling Business
Beat there would be major
cutbacks in Government
spending in event the Euro-
bond, which is factored in
2013/14 Budget, is not success-
ful.
Kenya has put off issuing the
bond several times since
September last year, ostensibly
because of the legal challenges
presented by non-payment of
the Anglo Leasing claims. But
when the syndicated loan fell
due, Kenya found itself in an
Treasury Permanent Secretary Kamau Thugge.
sovereign wealth funds, pension
funds and other investors to
gauge the credit worthiness of a
country. The better the rating,
the more likely a country is to
pay back borrowed funds,
which enables it negotiate for
lower interest rates.
Standard & Poors credit
rating for Kenya stands at B+,
Moodys rating is B1 while
Fitchs credit rating for Kenya is
B+. In general, this means the
countrys economy is consid-
ered stable, and international
investors can expect Kenya to
pay its bond obligations.
Credit ratings are not based
on mathematical formulas,
rather, they rely on analyses of a
countrys history and its
long-term economic prospects.
bizbeat@standardmedia.co.ke
Farmers cash in on tasty, healthy crickets
By LILLIAN KIARIE
M
r Otieno Alula, a cricket
farmer in Bondo, is
accustomed to people
turning up their noses at his
trade.
In July 2012, when the
Kisumu Agricultural Show
opened its gates and gave
thousands of farmers a chance
to showcase their products, Mr
Alula was among them.
Though many thronged his
stand, he couldnt help but
notice how skeptical they were
of his products.
I have heard even paupers
say they would rather die of
hunger than try eating fried
crickets, but I dare anyone to
try them and see if they wont
smack their lips with relish
after biting into just one crispy
piece. How I wish people would
get over some stereotypes and
be open to diverse experi-
ences, he says.
EXPORT MARKET
Alula says one can start
breeding crickets with less than
Sh500, and earn as much as
Sh5,000 a day.
The middle-aged farmer
started rearing crickets when
looking for a meal that would
supplement his diet. Today,
cricket rearing is his main
activity.
There is a huge market for
crickets not only in Kenya, but
also in Europe and Saudi
Protable crunch: With just Sh500,
one can start breeding crickets for the
export market, or use them locally to
make cookies, cakes and sausages
INVESTMENT IDEAS:
There
is a huge
market
for
crickets
not only
in Kenya,
but also
in Europe
and Saudi
Arabia.
Arabia. What began as a
small-time side job has slowly
become my main hustle and I
now have thousands of
crickets.
During the show, there were
other farmers displaying
different items made with
crickets, which included
sausages, cookies, cakes and
biscuits. The insects can also be
used to make rich soups, or
bait sh.
Alula says crickets are easy
to trap and available all year
round. They are rich in zinc,
iron, copper and proteins.
FOOD SECURITY
A visit to Ugandas capital,
Kampala will expose you to an
interesting scene. Unlike most
Kenyan hawkers in Nairobi who
focus on selling smokies and
eggs, the streets of Kampala are
full of hawkers selling fried
crickets and grasshoppers.
Because of the huge supply,
the product is sold at low
prices, with a 30-gramme pack
of fried crickets retailing at
Sh10.
But Kenyan streets may
soon resemble Ugandas. Bondo
Universitys Department of
Food Security in Kisumu has
been training farmers to rear
crickets to enhance the
countrys food security.
Alula says farmers have
formed groups and rear the
crickets, dry them and work
with the university and other
Business Beat
>> WEALTH CREATION
Tuesday, May 27, 2014 / The Standard
10
I dare anyone to try fried crickets and see if
they wont smack their lips with relish after
biting into just one crispy piece,
Otieno Alula
stakeholders to access export
markets.
Crickets are easy to breed
and require minimal space. A
one-square-foot box can hold
about 1,200 crickets.
You can involve children in
breeding them, and even turn
the activity into a school
project, especially in kindergar-
tens and primary schools.
However, remember that
crickets chirp all night, so keep
them in an area where they will
not disturb you or your
neighbours.
Each female cricket lays ve
to 10 eggs a day in her lifetime,
which means the insects are
constantly available. They also
require little feeding and
attention.
Alula says the insects can
keep for more than three
months when dried and stored
in a cool place.
One of the most popular
ways to capture crickets is to
use large shiny iron sheets
lined up vertically into a
bucket, with a bright bulb
suspended between the sheets.
CONFINED SPACE
At night, the insects will be
attracted to the light and begin
to circle the bulb until they fall
onto the sheets and slide into
the bucket. It is hard for them
to escape once they are in the
bucket.
Alula, who got his training
from Bondo University, says he
rears his crickets in a small
bucket that has a source of light
to keep the insects lively. He
covers this bucket at the top
with a transparent mesh to let
in air.
Ensure the storage bucket
you use is large enough for all
your insects because if the
insects breed in a very conned
space, they may begin to eat
each other.
Crickets also require a
high-protein diet, so feed them
on things like dried sh or cat
food. You can supplement this
diet with vegetables.
Wait for the eggs to hatch,
which takes about a week, and
once they have done so, avoid
touching the baby crickets but
make sure you keep them
warm. They will mature in
about two to three weeks, and
at this stage, are ready for
market.
For more information on the
companies proled here, email
bizbeat@standardmedia.co.ke
OPPORTUNITY:
The GrowthHub, a Nairobi-based business accelerator, last week
announced that ve startups would receive $5,000 (Sh439,000) in
funding to launch their innovations in the market.
Business Beat covered the accelerators call for applications for
agribusiness solutions with national impact, and in February, 13
startups were accepted to be a part of a 16-week programme to
develop their ideas. The participants in the cohort got to interact
one on one with their peers, and GrowthHubs team of facilitators
and mentors.
From the 13 enterprises, ve high-impact startups that could
create the most employment and income-generating opportunities
for the youth and smallholder farmers, respectively, were selected.
This was incubators fth programme in Kenya. The GrowthHub
offers mentorship, advice and resources for early capable entrepre-
neurs and scalable-stage startups. In the last two years, 69 startups
and more than 110 entrepreneurs have successfully completed the
companys programmes.
The deadline to send in applications for the sixth programme is
May 31, with the amounts to be invested ranging between $50,000
and $100,000 (Sh4.4 million and Sh8.8 million). Find out more on
www.thegrowthhub.com/agribusiness.
The ve startups selected for funding are:
GARNET ENTERPRISES
Immediately after a bumper harvest, farmers sell their produce
at low prices due to low market demand and a lack of proper
storage facilities. To resolve this problem, Garnet Enterprises
started post-harvest management in arid and semi-arid areas. The
startup currently mobilises farmers, gives them proper storage for
their grain, and helps them market their produce locally and
abroad.
FARM LEASE
Land is a primary asset for development as it supports the
livelihoods of most rural people. Farm Lease mobilises idle arable
land for agricultural production and leases it out to smallholder
farmers to ensure more land is put to effective agricultural use. By
doing this, Farm Lease puts more arable land into production,
boosting food security in the country.
KIARA AGRO
Kiara Agro manufactures cassava our and starch, and plans to
venture into production of glucose syrup and alcohol from cassava
starch. The company sources its raw materials from Lower Eastern
region, giving farmers in Ukambani better prices for their cassava,
more income-generating opportunities and boosting production of
drought-resistant crops.
DALUC POULTRY
Daluc is a poultry hatchery, breeding, feed mill and chick
processing farm specialising in kienyeji chicken that works with
many smallholder chicken farmers. Although kienyeji chicken take a
bit longer to mature than broilers, they are cheaper to feed, fetch
better market prices and are more disease-resistant, making them
suitable for rearing in East Africa.
LAMACO
Lamaco makes machines for use in sisal bre processing and
also provides farm-gate processing for value addition before the
crop gets to the market. Lamaco mobilises sisal farmers to meet
export demand, and helps them access these markets, meet quality
requirements and get better prices for their crop.
bizbeat@standardmedia.co.ke
Startups receive Sh439,000 to solve agribusiness hurdles
Worlds oldest drug rm
outlines plans for Kenya
MARKETS:
German rm Merck, established in 1668, is the oldest
pharmaceutical and chemical company in the world. The
companys Kenya ofce is expected to serve as a hub for
East Africa, and in an interview with Margaret Kanini,
Merck CEO Karl-Ludwig Kley shed some light on the
rms plans for the region. Excerpts:
Since last year, Merck has shown
a sudden burst of interest in
Africa; why?
Early 2012, the executive
board of Merck took the decision
to further invest in Africa. Since
then, we have established new
operations in six countries in
sub-Saharan Africa. But we are
not new to this region: rst
certiable contacts to South
Africa date back to 1897, and
Merck opened its afliate there
in 1971.
We believe in the future of
this continent. Therefore, we are
now present in Kenya with all
our businesses. We have the
biopharmaceutical division and
consumer health division,
providing over-the-counter
pharmaceuticals like Seven Seas.
We also decided to set up our
two chemical divisions, selling
high-tech chemicals like liquid
crystals for TV displays and
smartphones, and effect
pigments for cosmetics and
coatings.
What is Mercks projected
investment portfolio in Africa?
We decided to provide two
things: access to health, and
transfer of know-how and
capacity building. This, I believe,
is a sustainable way of building
business in Africa.
HEALTH <<
We want to avoid a situation like the 1960s, where the
tobacco industry were saying there is nothing wrong
with cigarettes, they are good for our health, and 30 or
40 years later, millions have died, LukeUpchurch
Tuesday, May 27, 2014 / The Standard
11
Business Beat
We have provided market-
leading drugs like the diabetes
drug Glucophage, our hyperten-
sion treatment Concor, and
Gonal-F to ght infertility. We are
in the process of launching more
products from our pharmaceuti-
cal portfolio in Kenya.
Through research partner-
ships with institutions like the
Kenyan Medical Research
Institute and University of
Nairobi, and collaborations with
local pharmaceutical producers,
we also build up local capacities.
What was the signicance of
opening a Merck ofce in
Nairobi?
Kenya is the leading economy
in East Africa. Furthermore, the
countrys strategic location and
its well-developed business
infrastructure will enable us to
boost our business in the region.
Kenya is the entry point to
East Africa, and Merck has a lot
to offer, such as accessible and
equitable healthcare. We,
thereby, want to contribute to
the countrys social and eco-
nomic development.
How will Kenyans benet?
We are not here for the short
term. More than 90 per cent of
our staff has been hired locally,
including in general manager
positions.
higher return on investment
today and tomorrow, but we do
not invest for the next quarterly
report.
As mentioned earlier, Merck
came to Africa to stay because
we believe in the long-term
potential of the continent.
Are there any local materials or
inputs that you get from Kenya
or any of the African states
where you operate to service
your manufacturing needs?
Local partners and suppliers
provide a lot of benets: high
exibility, short lead times, good
understanding of the market and
customer needs, and local talent.
If we want to work with local
partners, we have to invest
mutually to achieve the stan-
dards that our products and
services require. This includes
know-how transfer.
How will the Merck Capacity
Advancement Programme
(CAP) contribute to improving
Kenyas healthcare system?
The CAP for diabetes is an
important part of our corporate
responsibility agenda. The
ve-year programme aims to
improve accessibility and quality
of diabetes healthcare in Africa,
and builds mainly on strong
stakeholder engagement and
long-term partnerships.
The goal of this initiative is
very simple: helping the
population to better understand
how diabetes can be recognised,
and enabling physicians provide
the most appropriate therapy.
This will not only help the
people, but also reduce the
long-term costs for the Kenyan
healthcare system.
What has been the experience of
doing business in Kenya
vis--vis other African coun-
tries, for instance, in terms of
policies and regulations?
Regarding regulatory bodies
and institutions in general,
Kenya took the right direction
when it voted for devolution in
2013. Increasing institutional
maturity will now be decisive for
Kenyas long-term economic
success.
bizbeat@standardmedia.co.ke
Governments urged to regulate food like cigarettes
By PIPPA STEPHENS
The food industry should be
regulated like the tobacco industry as
obesity poses a greater global health
risk than cigarettes, say international
groups.
Consumers International and the
World Obesity Federation are calling
for the adoption of more stringent
rules, including pictures on food
packaging of damage caused by
obesity, similar to those on cigarette
packets.
The Food and Drink Federation said
the food industry was working to
make healthy options for consumers.
The two organisations CI and
WOF said governments around the
world should impose compulsory
rules for the food and drink industry.
They said global deaths due to
obesity and being overweight rose
from 2.6 million in 2005 to 3.4 million
in 2010.
The new rules could include
reducing the levels of salt, saturated
fat and sugar in food, improving food
served in hospitals and schools,
imposing stricter advertising
controls, and educating the public
about healthy eating.
Articial trans-fats should be
removed from all food and drink
products within ve years, said the
recommendations.
Governments could review food
prices, introduce taxes, change
licensing controls and start new
research to make this happen, the
report said.
Luke Upchurch at Consumers
International said they were asking
for the same level of global treaty
as the tobacco industry faced.
He said: We want to avoid a
situation like the 1960s, where the
tobacco industry were saying there is
nothing wrong with cigarettes, they
are good for our health, and 30 or 40
years later, millions have died.
He said the new rules would be at
the highest level of global
agreement, meaning governments
would be legally required to
implement them, instead of being
able to opt out, which he said was the
situation at the moment. BBC
We also partner with various
institutions to work on state-of-
the-art medical innovations and
education.
Kenya is part of our Praziqu-
antel donation programme,
where Merck donates medica-
tion for school children to
eliminate the widespread
tropical worm disease schistoso-
miasis.
We work with local distribu-
tors as key partners in our supply
chain for pharmaceuticals,
chemicals and life sciences
products. Together, we invest to
ensure that local partners can
comply with global standards
and quality requirements in
storage and logistics.
You see, Merck has come to
Kenya to stay.
Has the entry of the rm made
drugs cheaper for Kenyans in
terms of pricing?
One of the big problems in
the African pharmaceutical
market is the large amount of
substandard and fake drugs.
These are creating problems in
public health.
At Merck, we do not believe
that the focus should be on
being as cheap as possible, but
on providing high-quality
medicine at the right price. And
Merck has been known for
centuries for its quality stan-
dards.
What we see is that non-
communicable diseases like
diabetes are progressing quickly
in Kenya, and also the rest of
Africa. With our long-standing
experience in ghting these
diseases, we believe we can bring
solutions to the country.
That is why we are fully
committed to partnering with
the Government, healthcare
institutions, academics and
other stakeholders to help
increase access to health
solutions.
We started our diabetes
awareness campaigns earlier this
year. And with our minilabs we
support authorities in the ght
against counterfeit medicines.
With the help of pre-dened
test kits, pharmacists or lab
technicians can identify inferior
and counterfeit medicines
rapidly and reliably.
How signicant is the local
market compared to other
emerging markets?
As a more than 340-year-old
family-owned business, we tend
to think in generations.
Investing in other emerging
markets like Russia or China
would denitely bring a much
OBESITY RISKS:
Merck CEO Karl-Ludwig Kley.
BIG BREAK:
By JACKSON OKOTH
O
ne morning seven years
ago, the price of a loaf of
bread hit one million
Zimbabwean dollars.
This economic meltdown hit
Mr Rob Nursten, then 58,
particularly hard. He had
thought he would be living out
his years comfortably in
retirement, not watching the
billions he had accumulated
become worthless.
Mr Nurstens entrepreneurial
journey had seen him rise to the
top of Zimbabwes corporate
ladder; he was a risk taker and an
enterprising businessman.
For years, he had owned of a
ourishing auto workshop that
carried out repair services on the
vehicle eets of all major
Zimbabwean companies.
He later sold off the business
and got into the building,
construction and telecommuni-
cations sector, and in 1994,
Currency crash: Rob Nursten found
lifeline in Nairobi after he was forced
out of retirement when his life
savings were rendered insignicant
FRESH START:
became a pioneer in Internet
services in Zimbabwe.
I nally decided to sell this
business to Econet Wireless and
retired from the corporate world
and took up shing, my favourite
pastime, said Mr Nursten.
He retired condent he had
accumulated enough money to
cushion himself, his wife and
daughter, who currently lives in
South Africa, in his sunset years.
But his condence did not
last long.
DOLLAR CRISIS
On June 25, 2007, Zimbabwe
woke up to one of the worst
currency crises recorded in
modern times.
In a state of panic, Zimba-
bweans began switching to
barter trade and foreign
currencies, such as neighbouring
South Africas rand, to survive
the hyperination and economic
meltdown.
Zimbabwes currency was
ofcially pegged at Z$250 to one
US dollar, but the informal
market price was about
Z$100,000 to US$1. When the
local currency crashed, the rate
hit Z$400,000 against US$1.
All my life savings became
worthless because of the
Zimbabwean dollar crisis, said
Nursten.
Purses and wallets became
redundant as Zimbabweans
began using shopping bags,
suitcases, sacks and large
containers to carry cash.
And just when he hit a point
of deep despair, Nursten, now
65, got a lifeline.
I got a call from someone in
Kenya who wanted to hire me as
general manager at a local bus
company to oversee the
servicing of their vehicles.
He took up the opportunity,
eager to regain what he had lost.
And he is glad he did.
I like the people here and the
individual freedoms enjoyed,
which are far better than in
Zimbabwe, he said.
While working at the bus
rm, Nursten noticed the market
potential in Kenya.
I saw thousands of small
retail shops selling essentials,
and this is when an idea struck; I
needed to nd a product that
could be sold here. I eventually
By PAUL KARIUKI
There is a saying that life begins
at 40, and Mary Wangari Ndichu,
44, is a rm believer in it.
Up until four years ago, she and
her husband, James Ndichu, 48,
were struggling to get by. The
residents of Mzee Wanyama area
on the outskirts of Nakuru town
suffered innumerable sleepless
nights, worrying about how they
and their three children would
survive the following day on a
meager income.
Several times they went to bed
with just porridge in their bellies,
and sometimes they did not have
even that luxury.
Ms Wangari was a primary
school teacher for six years, but
Land deals lift couples pay from
Sh1,500 monthly to Sh300,000
got it popped maize.
I sent my plans overseas for
approval and then bought a
Sh400,000 hand-made machine
to process the product.
Soon, Yalika Ltd, a food
processing and packaging
company situated in Nairobi
along Mombasa Road, was born.
MAIN CHALLENGES
It was not easy to get started
as the machine had many faults,
which forced Nursten to replace
parts, and redesign, strip and
reassemble it into what it is now.
He also needed more funding
from his partners, who included
his brother who lives in the
United Kingdom.
But eventually, everything
aligned just right.
The Yalika plant currently
employs 12 people, split into
four groups of three each who
work in eight-hour shifts. The
machines processing capacity is
480 kilos of maize a day.
On the list of main chal-
Worthless billions:
Zimbabwean rebuilds
ruined empire in Kenya
Rob Nursten, 65, the founder of Yalika Ltd, a food processing and packaging
company based in Nairobi.
lenges facing this business is the
supply of good maize, a situation
that has forced me to use a third
party to grade and clean the
maize and for this I pay a
premium, said Nursten.
Cooking gas, used to preheat
the cooking machine, is also an
expensive input.
But the enterprising Zimba-
bwean is no stranger to chal-
lenges, and he is determined to
make Yalika, whose prices start
at Sh10, a household name.
On the day of the interview,
he was preparing to ship a
consignment of the popped
maize, which has nothing added
but salt, to the Nairobi County
Government and the mayor of
Denver, USA.
His advice to entrepreneurs?
Even when the walls come
crushing down around you, do
not look back step forward
and position yourself, and if you
are in the right place, you will
succeed.
jokoth@standardmedia.co.ke
Business Beat
12
Tuesday, May 27, 2014 / The Standard
Nowadays, land is a thorny issue. One
should be cautious with whom theyre
dealing with,
MaryWangari NdichuMaina
>> ENTREPRENEURS
opted to resign from the Govern-
ments payroll after being forced
to ee her home following an
outburst of post-election clashes.
It was not until 2010 when the
couple opened a general merchan-
dise shop that they kissed poverty
goodbye.
FEW OPTIONS
Back then, the couple lived in a
house with a shop front in Tabuga
village, which is along the busy
Nakuru-Lanet road. After a couple
of years of working odd jobs to get
by, they decided they had to do
something to stop living from
hand to mouth.
They did not have much by way
of savings, but they were ready to
start with what they had.
They pooled what they could
from Mr Ndichus income of
Sh1,500 a month as a daytime
watchman at a saw mill, and from
other sources, and opened a shop
with Sh5,000 in capital.
There were other well-estab-
lished shops in the area selling the
same things they were, so most
months they recorded depressed
sales. But with few other options
available to them, the couple kept
the shop open. With time, the shop
began to record prots.
Their big break came in the
form of an unusual customer early
last year.
The woman came by the shop
and asked Wangari if she knew
anyone selling plots in the area.
Wangari had heard of a man
selling land nearby and asked the
customer to leave her contacts
behind. She called the seller who
asked her to tell her customer to
be at the shop the following day.
The woman and the seller
sealed a deal a day later. To thank
Wangari for sending a customer
his way, the man stopped by her
shop and gave her Sh20,000.
DRAMATIC IMPROVEMENT
It turned out that the man was a
broker and had several plots he
was looking to sell in the area. The
couple entered a pact with him,
and their nancial situation
improved dramatically.
For every plot or property they
sell, the couple gets a 10 per cent
commission.
With their proceeds, they have
been able to purchase their own
plot and put up a house valued at
Sh1.2 million. They are also
constructing single and double
rooms for rent, as well as
self-contained units.
Further, they have got into land
brokerage, buying plots at low
prices, developing them and
selling them later at a prot.
The Ndichus also moved their
shop to a new location that has
more trafc, which has improved
its protability. But it still does
not top their earnings as brokers.
They can rake in anything
between Sh300,000 and
Sh400,000 on average in a month,
they said.
To cap their success, the couple
bought their rst car, which they
are still learning to drive.
However, they urge those
aspiring to get into their line of
business to be careful.
Nowadays, land is a thorny
issue. One should be cautious with
whom theyre dealing with and
verify that the land in question is
not a public utility, or at the centre
of a family or ownership dispute,
said Wangari.
Also, prospective buyers should
always make site inspections and
check land details with the
relevant authorities before
committing to buy property.
bizbeat@standardmedia.co.ke
By FRANKLINE SUNDAY
I
n just over a months time,
you might nd yourself
unable to board a matatu if
you do not have a Near Field
Communication-enabled card as
Kenyas public transport system
makes the nal shift to cashless
payments.
The National Transport and
Safety Authority (NTSA) deadline
requiring all passenger service
vehicles to exclusively use a
cashless fare system lapses on
July 1.
Matatu operators and the
respective Saccos are currently
doing test runs on their units
and eets, and we expect that on
the material date, a good
number of matatus will be able
to go live and continue normal
operations, Mr Simon Kimutai,
the Matatu Owners Association
(MOA) chairman told Business
Beat last week.
MAGIC BULLET
The directive is expected to
go live in the capital rst, before
being rolled out in phases
throughout the country.
Matatu owners are optimistic
that electronic modes of
payment of bus fare in public
transport vehicles will be the
magic bullet that streamlines the
chaotic industry, which is worth
an estimated Sh205 billion.
The late Transport minister
John Michuki is best remem-
bered for his efforts to reform the
Matatus test cashless
units as deadline nears
Final shift: New
system to help
reduce cases of
bribery on roads
REFORMS:
public transport sector by
introducing stiff by-laws.
The Michuki Rules were put
in place in March 2004 and
required that all PSVs be clearly
marked and tted with safety
belts and speed governors.
Matatu crews were further
required to have a standardised
uniform, with drivers directed to
display a photo of themselves in
their vehicles in a position
clearly visible to passengers.
The rules brought a new
dawn in the sector, with some
reports stating that road
accidents reduced by up to 70
per cent in the rst year of
enforcement.
This remained the best effort
to reform the sector, until now.
Matatu owners lose a lot of
money through extortion from
cartels, bribes to police or even
embezzlement by employees
since the sector is very liquid and
the crews are often in control of
large sums of money on a daily
basis, said Mr Kimutai.
With NFC, an operator will
be able to collate the payments
collected by his crew, who will no
longer carry cash, reducing
incidences of bribery on the
road.
FINANCIAL WOES
This, however, is not the rst
time that Kenya has tried
organising its public transport
system through digitising fare
payments.
Megarider, the earliest form
of a cashless fare system, saw
commuters buy monthly scratch
cards that were redeemable in
the then vibrant Kenya Bus
Services (KBS) vehicles.
The system, which was
popular in the 90s, enjoyed
success until it was quietly
phased out as a string of
nancial woes hit KBS and led to
its eventual collapse.
In 2009, Tata Motors and the
then ministry of Nairobi
Metropolitan Development
launched Smart Buses, an idea
that became stillborn after
large-scale deployment became
impractical.
This time, however, both the
Government and private sector
believe cashless payments will
work.
Google, through its product
BebaPay launched in partnership
with Equity Bank, leads a
growing list of telcos and
nancial providers including
Safaricom, Family Bank,
MasterCard and Visa keen on
tapping into the opportunities in
the sector.
fsunday@standardmedia.co.ke
DIGITAL PAYMENTS <<
Matatu owners lose a lot of money
through extortion from cartels, bribes
to police or even embezzlement by
employees, Simon Kimutai
Tuesday, May 27, 2014 / The Standard
13
Business Beat
Business Beat
14
Tuesday, May 27, 2014 / The Standard
By JACKSON OKOTH
B
ank customers who will not have
collected their new chip ATM cards by
May 31 could have their current
magnetic stripe versions disabled.
This is in an attempt to provide the
impetus some customers need to collect the
more secure Europay MasterCard Visa (EMV)
cards.
During a spot check last week at the debit
cards section at the City Hall branch of
Co-operative Bank, as well Equity and Kenya
Commercial Bank head ofces, which
normally have high numbers of retail
customers, Business Beat found just a
handful at people being served.
We are going to disable the old cards and
this is what will force those who have not
come to collect their cards to come forward,
said Mr James Kamau, an ofcer at one of
the leading retail banks in the city.
But even as the clock ticks towards the
deadline, the manual parts of the migration
to chip and pin cards are complicating the
process.
For instance, some banks are having their
staff manually sort out the cards, which has
seen some customers with similar names or
initials end up with the wrong card.
And if one is issued with the wrong
payment card, it is retained at the point
where the error was detected, forcing
customers to go back to their branch to sort
out the problem, a laborious and time
consuming undertaking.
LOGISTICAL NIGHTMARE
Further, customers have to pick the new
cards from the branches where their
accounts are domiciled, which can be a
physical limitation and logistical nightmare
for both banks and customers.
Mr Jabu Basapo, Visas country manager
for Southern and East Africa, earlier said he
expects the distribution of EMV cards to take
up to three months and will depend on the
availability of customers.
Ms Jane Mbogho, 30, is among those yet
to pick the more secure cards. She opened
her account when she worked in Nairobis
Upper Hill area, but now works in Kisumu.
I have heard that I have to pick my new
card from the branch where I opened my
account, but Im not sure when I will be in
Nairobi next, so Im forced to wait, she said.
Besides, I havent seen my bank advertis-
ing that the new cards are ready yet, so Im
assuming they are not. They havent sent me
an email or text either. I dont want to
commit to making the journey to my branch,
only to be disappointed,
Other customers have put off migrating
because they have underestimated the
importance of the shift.
I dont know what it is I know my
bank migrated a while back and has told its
customers to pick the new cards. I think Im
waiting for the last-minute rush, or for a
good reason to suffer the inconvenience of
going to pick my card, said Mr Reuben
Kariuki, 39.
But if it is true that my card will be
disabled, then of course Ill rush to pick it
and queue a whole day if I have to. I think its
just laziness, but as it is right now, I dont
honestly foresee myself going to change my
Pick new chip cards
Security: Some banks
are expected to disable
magnetic stripe cards
from Monday in a bid to
enforce move to more
secure payment cards
FIGHTING FRAUD:
>> EMV MIGRATION
70%
The percentage of cards in Kenya that
have been converted to pin and chip
technology.
Central Bank Governor
Njuguna Ndungu.
I know
my bank
migrated
a while
back and
has told its
customers
to pick the
new cards.
I think Im
waiting for
the last-
minute
rush, or
for a good
reason
to suffer
the incon-
venience
of going
to pick my
card.
EMV MIGRATION <<
We are going to disable the old cards and
this is what will force those who have not
come to collect their cards to come forward,
James Kamau
Tuesday, May 27, 2014 / The Standard
15
Business Beat
lest youre unable to make ATM withdrawals
card. After all, it still works.
The trouble with the magnetic stripe
cards, however, is that they are easy to
duplicate and can be used to make fraudu-
lent purchases. The EMV cards have better
data encryption, making them difcult to
copy.
Further, from June 1, banks will bear the
cost of any fraudulent purchases made using
a customers magnetic stripe card, which
may force them to take drastic action once
the liability shifts.
Mrs Alice Musau, 66, had her savings
stolen by fraudsters last year, and is still
battling with her bank to get a refund.
When I saw an advert from the bank
asking me to upgrade my ATM card, I did it
that day. Last year, I lost about Sh200,000
from my account after someone used a copy
of my card to withdraw funds. I never, ever
want to go through that again, she said.
PHASE OUT
According to the Kenya Bankers Associa-
tion (KBA), more than 70 per cent of the
cards in Kenya had been converted to chip
and pin technology, and certied EMV-
compliant by Visa or MasterCard. But it is
still too soon to know how many of these
cards are in customers hands.
Central Bank had set March this year as
the deadline for EMV migration before it was
postponed to May 31. By this date, all banks
are expected to phase out the magnetic
stripe cards in circulation.
KBA has attributed the non-compliance
by some banks to migrate payment cards to
the EMV standard to customers failing to
return their old cards to get those with the
new technology, and the stringent require-
ments institutions must meet to get
certied.
Notwithstanding the challenges, KBA has
promised to reinforce its commitment to
card security and customer protection.
Over the past couple of years, the
banking sector has increasingly fallen victim
to cybercrime and payment card fraud. With
the introduction of the new system, these
incidences are expected to decline, saving
the industry billions of shillings in losses and
restoring customer condence.
bizbeat@standardmedia.co.ke
Business Beat
>> NSE COMMENTARY
Tuesday, May 27, 2014 / The Standard
16
NSE 20 Share Index -0.8% Dow Jones +63.19 (+0.38%) Nasdaq +31.47 (+0.76%) S&P 500 +8.04 (+0.42%) Oil +0.63% US$ -0.03%
4,925.58 16,606.27 4,185.81 1,900.53 $104.39 1 EUR = $ 1.3630
Source: NSE, SIB
CIC Insurance was last weeks top loser. At the close
of the week, the insurer announced plans for a
rights issue, and set July 30 as the date for bonus
pay (1:5), StandardInvestment Bank
Stock Price % week on week % year to date
Safaricom 12.95 0.8% 19.4%
Equity Bank 39.75 1.9% 29.3%
KCB 46.75 0.0% -1.1%
EABL 279.00 -6.1% -3.8%
Stock Price % week on week % year to date
Express 5.70 14.0% 46.2%
Unga 29.50 13.5% 63.9%
Kakuzi 145.00 9.8% 52.6%
Longhorn 14.00 7.7% 3.7%
Stock Price % week on week % year to date
CIC Insurance 9.95 -11.6% 67.2%
Standard Group 32.25 -7.9% 24.0%
Carbacid 31.00 -7.5% -39.8%
Kenya Airways 11.85 -7.4% -9.2%
Kenya
Airways
lost 7.4 per
cent ahead
of its 2014
nancial
year results
next month.
The airline
received
a reprieve
following
measures
proposed
by the
Government
to assist
the tourism
sector.
The NSE 20 Share Index went down 0.8 per
cent last week, while the NSE All Share Index slid
a further 0.9 per cent (from -0.5 per cent
previously). Equity turnover declined for the
second consecutive week to Sh4.5 billion
compared to the previous weeks Sh5 billion.
Foreign investors turned net buyers despite
recording the lowest net inows in the year to
date at Sh38.4 million compared to last weeks
net outows of Sh130.2 million.
KCB was unchanged during the week as the
leading recipient of net inows. Safaricom
registered the highest net outows for the
second straight week, with local investors
providing support, leading the telco 0.8 per cent
higher from the previous week.
Having released rst half of 2014 results, Car
& General rose 4.5 per cent week on week (16.7
per cent year to date) despite issuing a slightly
negative outlook for the rest of the year. The
supplier of automotive and engineering products
recorded a 93.7 per cent annual jump in earnings
per share to Sh1.80. The performance was
supported by recovery in demand for products.
Shedding 11.6 per cent, CIC Insurance was
last weeks top loser. At the close of the week,
the insurer announced plans for a rights issue,
and set July 30 as the date for bonus pay (1:5).
Kenya Airways lost 7.4 per cent ahead of FY14
results next month. The airline received a
reprieve following measures proposed by the
Government to assist the tourism sector.
This week, Kakuzi and NBK will close their
books for dividend pay on May 30, while TPS and
Co-op Bank will close theirs on May 28 and May
29, respectively. Standard Investment Bank
Top Gainers
Top Movers
Top Losers
NSE 20 Index 149.80
Equity turnover Sh482.2 million
Shares traded 13,587,000
Market capitalisation Sh2.086
Statistics as at May 23, 2014
Friday 30
th
May
RADIO MAISHA IKISHIRIKIANA NA
KENYA MAMBO POA INAKULETEA....
SIKILIZA RADIO MAISHA KWA FURSA YA KUJISHINDIA TIKITI ZA KIINGILIO.
DJ MARTO SIBUOR
BURUDANI KUTOKA
Nairobi 102.7 | Nyeri 105.7 | Meru 105.1 | Nakuru 104.5 | Kitui 93.8 | Kisumu 105.3 | Mombasa 105.1 | Kericho 90.5 | Edoret 91.1 | KISII 91.3