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IKO NINI BWANA SEED

Girlfriends compete wives in receiving diaspora millions

A trader counting money.
Girlfriends are competing wives in receipt of monies from Kenyans living abroad, a Central Bank of Kenya survey has shown.
The survey that put mothers as the top recipients revealed that Kenyans are sending money to their female friends almost as frequently as their wives.
Though 57 percent of respondents were married, they first send money to their mother, then wives and girlfriends.
The CBK survey shows that four percent of the respondents said they send money to their girlfriends while 5 percent send money to their wives mainly on a monthly basis.
“Majority of the respondents sent remittances to support recipients in the purchase of food and household goods, said the CBK report.
“The cash is also used in offsetting medical expenses, meeting education expenses, for payment of rent and household utilities, payment for the costs associated with ceremonies, for clothing needs of the recipient and to meet farming needs.”
The survey shows that 20 percent of Kenyans abroad send money to their mothers followed by sisters at 15 percent while brothers sit at 14 percent.
It comes days after the government increased oversight on money being sent home by foreigners. In recent months, the government intercepted more than Sh210 million from a Belgian boyfriend sent to a 21-year old girlfriend on suspicion that it is proceeds of crime.
The survey which was conducted between March and May 2021 reveals that 11 percent send money to support religious activities, debt repayment and real estate.
Five percent remit cash to families and friends for farming while one percent did for recipients to travel abroad.
In 2021, Kenyans living abroad sent home Sh420 billion ($3,718 million) reaffirming the sector’s dominance in earning the country foreign currency.
The sector is in line to beat horticulture which had booked Sh145.4 billion in revenue in the 11 months to November last year and tourism which earned the country Sh146 billion.
“A large proportion of remittances are through formal channels. However, a small proportion of the respondents personally carried the cash, sent through friends or relatives used operators,” said the CBK.
Mobile money operators topped the list of preferred channels to send cash at 32 percent, overtaking money transfers (31) which came second and banks (22).
The respondents revealed their most preferred service provider was M-Pesa by Safaricom which was selected by 20 percent of the respondents, followed by banks World Remit, Wave, Sendwave and Western Union.
“A further inspection reveals that respondents used banks, money transfer companies and mobile money operators mainly because of convenience, ease of access and prompt/efficient/speedy service.”
On most dominant service providers, the cost of sending funds was in the range of 4-5 percent of the amount remitted.
The report showed that the use of courier companies was the most expensive channel of sending money in 2019, costing 29.2 per cent of the value remitted.
Respondents cited that their main challenge in sending money to their relatives and friends was the cost of remitting which included hidden charges, fees and transfer time.
Transfer time was a challenge as many of the respondents were sending money to meet basic needs such as food, rent and medical expenses.
The respondents also cited fraud, fake and misleading information, slow and unresponsive institutions made it difficult for them to invest in Kenya.
Inasmuch as the pandemic disrupted several economic activities across the globe, 76 per cent of the respondents were still able to send remittances in 2020, remitting an average of Sh452,000 (Usd 4000) in same period. – businessdailyafrica.com

Unclaimed assets hit Sh55bn as owners keep off

Unclaimed Financial Assets Authority (UFAA) Chairman Richard Kiplagat.
Unclaimed assets have hit Sh54.8 billion, turning the agency into another financial black hole that is aggressively collecting billions of shillings every year but failing to find its owners.
Latest data shows the Unclaimed Financial Assets Authority (Ufaa) is sitting on the billions in idle cash, shares and dividends and is struggling to reconcile the growing haul to its legitimate owners.
Ufaa revealed that it only received 2,315 claims between October and December last year worth Sh270 million.
Since 2014, the authority has received 23,134 claimants seeking Sh1.5 billion as investors, including tycoons, show disinterest in claiming the idle assets.
Kenyans remain disinterested in pursuing funds legally belonging to them or their families despite the tough economic conditions made worse by the coronavirus pandemic.
“Claims amounting to Sh1.5 billion from 23,134 claimants have been received to date. Out of these, 13,940 claims (valued at Sh989 million), 23,920,854 units of shares, 35 safe deposit boxes and 15 Unit Trust have been reunited,” Ufaa said in an email response.
The value of the idle assets grew from Sh50.9 billion in June last year to Sh54.8 billion in December.
The money is largely held by insurance companies, banks, pension schemes, law firms, mobile phone money wallets and Saccos, among others.
The majority of the funds is held in stocks of a billion shares worth Sh30 billion and 9.8 million unit trust portfolios worth Sh55 million.
The Authority is also holding Sh23.1 billion in cash and Sh120 million in foreign currency which it can invest in government securities, meaning the government is the biggest beneficiary of the idle money.
Surrendered safe boxes that are believed to contain jewellery, title deeds, share certificates and Treasury bills rose to 2,949 units from 2,873 in June.
This is a small portion of what is estimated to be held by private and public players mainly because Ufaa has not been able to cover all institutions.
A baseline survey commissioned in 2018 estimated that Sh241 billion in unclaimed financial assets was still unreported to Ufaa by public agencies and private firms.
The report further showed that approximately 477,112 public and private entities hold these assets in their books.
Ufaa recently announced a partnership that will see the auditor general Nancy Gathungu’s office conduct audits on public sector agencies on compliance with unclaimed financial assets reporting and surrender.
Currently, the authority hires private firms and conducts 10 public sector audits each year.
Unclaimed assets include money in bank accounts that have been dormant for more than five years, bankers cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.
Billionaire business owners, former powerful government officials and prominent politicians are on the long list of individuals whose shares have been surrendered to the Treasury.
Reporting and surrender of unclaimed financial assets by all holders is mandatory and is due on or before November 1 every year. Holders are encouraged to file nil returns if applicable.
The law allows Ufaa to charge any entity that fails to surrender unclaimed assets a penalty of 25 percent of the assets held.
Besides, the authority levies a penalty of between Sh7,000 and Sh50,000 for each day that the assets stayed before being submitted.
The law requires the holding company to search for the rightful owners before declaring it unclaimed and forwarding it to the Ufaa.
Most of the unclaimed assets are attributed to failure by the deceased to inform the beneficiaries of the assets besides the absence of a Will.
Wealthy Kenyans are also shying away from claiming the billions of shillings in idle assets surrendered to the State.
The Ufaa reckons it is struggling to link the cash with their rightful owners or beneficiaries, claiming some are being turned off by the worth of assets under the Treasury’s custody. – businessdailyafrica.com

Banks risk Sh27bn as mortgage, matatu loan defaults jump 60pc

Busses and Matatus at Nairobi Bus Station terminal on September 17, 2021.
Car and home owners defaulted on loans totalling Sh27.8 billion in the 12 months to September last year, giving a peek into the nightmare that the two sectors have become for banks amidst the Covid-19 pandemic.
The Central Bank of Kenya (CBK) quarterly economic review shows the transport sector, which was affected by Covid-19 curbs including curfews and cross-border lockdowns, saw a 60 percent jump in bad loans of Sh16.4 billion from a similar period in 2020.
This is after bad loans rose from Sh27.5 billion in September 2020 to Sh43.9 billion in 2021.
On their part, home owners’ defaults rose by 20 percent or Sh11.5 billion, after the defaults increased from Sh57.7 billion to Sh69.2 billion, as workers servicing mortgages from their pay checks and businesses lost their incomes as a result of the pandemic.
The data showed that the two sectors recorded the highest jumps in defaults and explains why several banks with exposure to real estate and transport have turned to auctioning properties and vehicles as default surged.
“There has been an increase in the number of vehicles and houses being put on auction due to loan distress. This is despite having more auctioneers sharing the business, you might have noticed in the papers there are now very many players,” said CEO Garam auctioneers Joseph Gikonyo.
Mr Gikonyo said despite the surge in the number of properties under distress uptake has been dismal as buyers have also been hit by the ravages of Covid-19.
He said some had also taken a wait-and-see approach, holding off investments in real estate ahead of the August elections.
By September 2020, the sectoral distribution of bad loans showed that trade remained with the biggest stock of bad debt at Sh99.1 billion followed by personal (Sh70.4 billion), manufacturing (Sh65.5 billion) and agriculture (Sh19.6 billion).
The data reflects the impact of Covid-19 pandemic on businesses especially the matatu and taxi operators after the government imposed a night curfew and restrictions on movement into Nairobi, Mombasa and Mandera leading to grounding of some vehicles.
At the height of the pandemic, many motorists turned their private cars into hawking vans as they sought an extra source of income. Some that had commercial cars on loan decided to give them up to lenders after they ran out of funds to repay the loans.
The government also imposed capacity limits on public service vehicles that also pushed some players out of business.
Lenders which had partnered with drivers to finance purchase of Suzuki Altos to operate ride hailing business under Uber Chap Chap were some of the most hit by defaults during the pandemic.
The cars became very popular when Uber introduced the affordable option in 2018, attracting scores of drivers with flexible purchase terms from local banks.
When the pandemic hit and curfews were put in place most drivers could not keep up with payments, resulting in repossession and an increase in auctions.
The Covid-19 pandemic has also hit the home ownership market, sending back property owners to rentals as Kenyans lost their jobs and concentrated on basic needs rather than repaying loans.
Kenya’s mortgage market saw a decrease of 1,022 mortgages or 3.7 percent, mainly due to repayments and fewer loans advanced due to the effects of the Covid-19 pandemic.
There were 26,971 home loans in the market in December 2020, down from 27,993 in December 2019.
The CBK blamed the drop on the impact of Covid-19, high cost of housing units, high cost of land for construction, low level of income and limited access to affordable long-term finance.
Massive job losses in 2020 at the height of the pandemic saw 737,500 workers lose jobs, including those in the informal sector.
Formal jobs in 2020 year contracted for the first time in two decades, with 187,300 positions lost as the economy shrank for the first time since 1992.
This affected borrowers’ ability to repay loans across sector, with gross bad loans increasing to Sh435.7 billion or 13.6 percent of total loans in the third quarter of last year.
The defaults saw a third of Kenyan loan accounts listed at credit reference bureaus (CRBs). TransUnion CRB said 4.6 million loan accounts are currently negatively listed against the total 15 million. – nation.africa.

KRA amnesty nets Sh5.8bn as tax cheats rush to comply

Times Tower in Nairobi, the headquarters of Kenya Revenue Authority (KRA). Picture taken on Thursday, October 15, 2020.
The taxman netted Sh5.89 billion in the first full year of an amnesty programme that cushions tax cheats from penalties and legal suits.
The Kenya Revenue Authority (KRA) Thursday disclosed that 1,311 firms paid Sh5.76 billion by December 31, with the rest coming from individual taxpayers.
The taxman said firms and individuals declared Sh8.572 billion under the amnesty programme dubbed Voluntary Tax Disclosure Programme (VTDP) in the period under review.
KRA started the three-year programme on January 1, 2021, and is betting on the amnesty to shore up revenue collections and bring more individuals and firms to the tax bracket in the war on evasion.
“Total payments received from the processed applications for the period January – December 2021 amount to Sh5.892 billion,” KRA said in responses to Business Daily yesterday.
KRA documents show that 711 businesses and 600 individuals applied for the amnesty last year with more expected to come forward and declare their unpaid taxes before the programme lapses in 2024.
Under the programme which will run up to 2023, those who declare pending liability and pay within one year shall enjoy 100 per cent interest and penalty waiver.
Businesses and individuals who disclose and pay the pending tax liability within the second year of the programme will receive remission of 50 per cent while payments that come in the third year will have 25 per cent relief.
The taxman targeted Sh5 billion in the first year of the amnesty programme that hopes to entice Kenyans to disclose undeclared taxes for the period between 2015-2020.
Businesses and individuals who are under investigation or who had cases before the tax appeals tribunal or courts before January 1 when the programme started have, however, been locked out of the amnesty window.
Individuals and firms are not eligible to apply for relief under the programme if under audit, compliance verification or investigation.
They will also not be eligible if they have been served with a notice of intention to investigate or carry out an audit or compliance check for the undisclosed tax.
KRA opened the amnesty window a year after its intelligence gathering team revealed some 1,309 firms and wealthy individuals with an estimated tax loss of Sh259 billion, highlighting the dire effects of tax cheats in revenue collection.
VTDP will see businesses and individuals shielded from stiff penalties that include travel bans, collection of duty directly from their suppliers and bankers and prosecution— the penalties for tax evasion.
KRA automated the amnesty programme in July last year allowing tax defaulters seeking reprieve from heavy penalties to apply through the iTax portal.
The automation ended a six-month period of a tedious manual application process that was said to be slowing down efforts to rope in more businesses and individuals.
KRA raised Sh1.67 trillion in the period ended June last year and is banking on the amnesty to collect Sh1.9 trillion in the current financial year.
The amnesty programme marks KRA’s latest onslaught on tax evasion, a war that is pegged on increased intelligence gathering and roping more businesses and individuals into the tax bracket.
High-net individuals whose flashy lifestyles do not match their meagre tax filings and landlords form another key plank in the onslaught on tax evasion.
The taxman is flagging wealthy individuals that have been hiding their sources of income while engaging in luxury spending and accumulation of property, including the purchase of homes and big cars.
KRA has been using various databases to pursue suspected tax cheats, among them bank statements, import records, motor vehicle registration details, Kenya Power records and data from the Kenya Civil Aviation Authority (KCCA), which reveal individuals who own assets such as helicopters.
The taxman is also beefing up the Intelligence and Strategic Operations unit of the KRA— tasked with detecting tax evasion schemes — will get 110 additional staff in the three years to June 2024 in efforts to raid tax cheats. – businessdailyafrica.com

State to gazette power substations as restricted areas in fight against vandals

Energy Principal Secretary Gordon Kihalangwa during a media briefing on ongoing reforms in the energy sector, at Kawi House, flanked by sector players on January 21, 2022.

 

The government will designate select electricity transmission substations and power infrastructure as restricted areas in a fresh fight against vandalism.
Utility firm Kenya Power and the Kenya Electricity Transmission Company (Ketraco) have come under pressure in recent weeks following a spate of power outages blamed on the collapse of transmission towers due to vandalism.
Just last week, the entire country was plunged into a blackout following the collapse of four pylons along the Kiambere-Embakasi high-voltage transmission line in Imara Daima.
In a statement, Kenya Power said the towers collapsed due to vandalism. Vandals chip off big chunks of metal from the towers for sale as scrap metal.
This week, government officials including Energy Principal Secretary Gordon Kihalangwa toured parts of the Olkaria-Lessos-Kisumu transmission line in Navisha, where six pylons had been vandalised.
The government has now said it will gazette select power substations and infrastructure as protected areas that will see them heavily guarded by security forces.
Speaking at a press briefing on Friday, PS Kihalangwa said the move will reduce cases of vandalism and deliberate sabotage of critical power infrastructure.
Blackout was intentional
He said the government will ramp up monitoring of these installations including by use of helicopters, security agencies, community groups and individual citizens to secure the power infrastructure.
“We are going to designate power substations and some of the power lines as restricted areas to limit access for their protection,” said the PS.
“We are going to engage with other security agencies who will help (to secure the facilities) in addition to the equipment that we will be using to monitor these facilities.”
This comes as the government tightens screws on nine senior workers at Kenya Power who have been accused of economic sabotage, a serious crime, following last week’s countrywide power outage.
The court heard that the blackout was intentional and could have been avoided given that they were informed of the vandalism on December 9 but never acted.
Kahawa Senior Principal Magistrate Boaz Ombewa this week allowed police to detain Mr David Kamau, Mr George Kipkoech, Mr Julius Karani, Mr Geoffrey Kipkirui, Mr Anthony Gathii, Mr Martin Musyoki, Mr Joshua Wasakha, Mr Raphael Ndolo and Mr Peter Musyoki for 21 days.
The Protected Areas Act, 1949, which has been amended several times, gives the Cabinet secretary, through a gazette notice, the powers to designate areas or premises as protected areas to prevent unauthorised entry.
“If, as respects any area, place or premises, it appears to the Minister to be necessary or expedient in the interests of public safety and public order that special precautions should be taken to prevent the entry of unauthorized persons, he may, by order published in the Gazette, declare such area, place or premises to be a protected area for the purposes of this Act,” says the Act.
Some of the gazetted protected areas are the State House, State lodges, military barracks, police stations and police training centres, which are under heavy security protection. – nation.africa.

Immigration department extends e-passport deadline to November 2022

An immigration staffer holds an e-passport at Nyayo House

The Immigration Department has silently extended the December 31, 2021 deadline for the phasing out of the old generation passport.
The Interior Ministry on February 4, 2021, extended the deadline to December 31, citing the Covid-19 pandemic that forced the Immigration department to scale down its operations.
In its statement announcing the extension of the process to phase out the old passport, the ministry said the extension would be the last and advised Kenyans to acquire the electronic passport to avoid travelling inconveniences.
The Interior Ministry said starting January 1 this year, the old dark blue passport would be null and void, and no Kenyan would be able to travel internationally without a valid EAC biometric e-passport.
However, responding to queries on the status of the old passports, Immigration Director-General Alexander Muteshi indicated the old passports will continue being in use.
“EAC changed the deadline for all EAC countries to November 2022,” Muteshi said in a message.
Kenya is rolling out the e-passport as part of the binding commitment by the EAC to move to the new biometric e-passport.
The decision to have the e-passport was arrived at during the 17th Ordinary Summit of the EAC Heads of State.
The issuance of the e-passport was to start by January 1, 2017, to phase out the current machine-readable East African and national passports from January 1, 2017, to December 31, 2018.
When this failed — due to lack of preparedness — the 35th EAC Council of Ministers directed member states to start issuance of the e-passport by January 31, 2018.
According to the East African Community, the new passport is expected to boost the free movement of people across the region and it will be in line with the implementation of the Common Market Protocol, which guarantees the right to move freely between EAC member countries.
Article 9 of the protocol on travel documents provides that, “A citizen of a partner state who wishes to travel to another Partner State shall use a valid common standard travel document; 2. The partner states which have agreed to use machine‐readable and electronic national identity cards as travel documents may do so”.
The partner states that have agreed to use machine‐readable and electronic national identity cards shall work out modalities for the implementation of the aforementioned provision two. – the-star.co.ke

Car & General shifts gears into electric vehicles business

Power supply for electric car charging. 

Car and General (C&G) will start selling electric vehicles and tuk-tuks as part of a plan to diversify into the ‘green’ mobility business that is expected to grow amid a push to address climate change and pollution.
The Nairobi Securities Exchange-listed firm has been selling motorcycles and three-wheelers with internal combustion engines for decades as part of its diversified operations that include consumer credit.
“We will now be focusing more energy on electric vehicles and we intend to launch electric three-wheelers in February. We are working hard with our suppliers to develop fit-for-market two-wheelers,” C&G said in a statement.
“With our symbiotic relationship with Watu Credit, we can play a significant role in transforming the two-wheeler and three-wheeler market towards electric. This will play a positive role in alleviating climate change over the coming years.”
The global shift to electric mobility is expected to impact local motor vehicle dealers and motorists, with scores of automakers and governments announcing they will completely phase out diesel and petrol-powered vehicles by 2040.
Kenya does not manufacture vehicles or motorcycles and only assembles some of the models. This means that dealers and consumers will automatically join the shift to electric transport.
Besides the promise of clean transport, the transition could also reduce the cost of operating vehicles and motorcycles as charging batteries will be the key cost item.
Internal combustion automobiles have additional costs such as service where several consumables including oil, filters and other fluids are changed depending on the frequency recommended by the manufacturers.
Kenya has already attracted several start-ups seeking to ride the anticipated electric mobility wave. They include BasiGo, Kiri, and Opibus.
Ride-hailing firm NopeaRide runs a fleet of fully electric cars in the capital Nairobi where a few malls and private parking operators have installed charging zones.
Electricity distributor Kenya Power has also announced plans to target the shift to electric with charging points across the country. – businessdailyafrica.com

Rolls-Royce Motor Cars  record year for sales

Rolls-Royce Motor Cars sales figures are the best in its 117-year history thanks to being protected from the global chip shortage by parent firm BMW.
The chief executive of Rolls-Royce Motor Cars (RRMC) has told Sky News the company expects to continue to be immune from the global shortage of semiconductors holding back the wider car industry.
Torsten Müller-Ötvös was speaking after the BMW-owned but Goodwood-based luxury marque revealed a record set of annual sales figures for 2021 – the best in its 117-year history.
RRMC said it delivered 5,586 vehicles to clients around the world, up 49% on the same period in 2020.
It was around 10% higher on the pre-COVID year of 2019 and aided by strong demand globally – bucking a trend among major manufacturers that has seen production and sales knocked by the global chip shortage.
In his interview on Ian King Live, the CEO agreed that BMW had prioritised Rolls in terms of chip supply.
When asked if that arrangement was to continue during 2022, he replied: “That remains the case.”
The company’s sales data offered nothing in terms of value or profits but Mr Müller-Ötvös said the performance reflected, to some extent, a demand for luxury as the pandemic to date had badly hit international travel and driven up wealth because spending fell so sharply in 2020.
On BMW’s aid, he said: “We were able to allocate all the chips we needed for building the cars, to fulfil client demand worldwide and that helped a lot; to be part of what I call a very professional, big group, who helped us to acquire all our chips worldwide.”
RRMC said of its sales: “All Rolls-Royce models performed extremely strongly.
“Growth has been driven principally by Ghost, with demand surging further, following the launch of Black Badge Ghost in October 2021.
“This, together with the continuing pre-eminence of Cullinan and the marque’s pinnacle product, Phantom, has ensured order books are full well into the third quarter of 2022.” – skynews

Post-election violence ghosts emerging ahead of August polls

Deputy President William and Orange Democratic Movement (ODM) leader Raila Odinga at a past function.

The emotive land question, International Criminal Court (ICC) matters, claims of presidential vote rigging and power sharing are some of the 2007 issues already clouding President Uhuru Kenyatta’s succession race.
For instance, with some of the internally displaced persons (IDPs) yet to return to their land, Orange Democratic Movement(ODM) leader Raila Odinga has promised to address their plight, saying the era of internal displacements must end.
“Those who were uprooted from their homes because of political violence will be returned to their original homes,” he said in Nakuru.
“I will not allow this country to have IDPs (internally displaced people) again because of political violence if I’m elected the fifth president of Kenya. Every Kenyan should be allowed to live anywhere within our boundaries.”
Lawyer Gicheru case
On the other side, the ICC case has returned to haunt the country’s second in command, Deputy President William Ruto, who is leaving nothing to chance in his bid to succeed President Kenyatta after the prosecution, in the Paul Gicheru case in The Hague, forwarded “evidence” that implicates him in the witness corruption programme that sabotaged the case against him and radio journalist Joshua arap Sang.
The brief signed by Deputy Prosecutor James Stewart and submitted on November 22 says: “The evidence establishes that the pattern of witness interference was conducted for the benefit of, and in coordination with, William Samoei Ruto.”
It is the first time the DP is directly named as the coordinator of the plan that corrupted his case. Previously, Dr Ruto’s name was redacted, and unlike the co-accused — Mr Gicheru, Mr Walter Barasa and Mr Philip Bett — the prosecution has never indicted him.
The naming of Dr Ruto will put him in an awkward position as he campaigns to be Kenya’s next president.
The information will open a new battlefront between him and the ICC, if it proves its case.
Also: Raila Odinga revisits PEV, absolves his supporters from blame
University of Nairobi’s Prof XN Iraki argues that since the issues of 2007 are emotive, the presidential contenders will use it to whip up emotions at the expense of winning elections.
“Victims of 2007/08 post-election violence are still bitter and so are their brothers, mostly in Central Kenya. Raila knows that land is a sensitive and emotive issue and returning it to its owners, if it is still available, would be a vote winner,” said Prof Iraki.
“Raila knows as a politician that emotions win elections. He will touch more on emotional issues as campaigns hot up. My concern is if his key opponent does the same.”
The DP has also promised to address the issue of land and recently, while in Mombasa where issues of the land remain so dear to locals, promised to resettle all squatters in the region.
“We will not only conclude the issuance of title deeds but also ensure that every land issue that is outstanding is sorted out with a permanent solution,” he said.
United States International University’s Prof Macharia Munene is of the opinion that the return of the ghosts of 2007 is not a good idea as they are likely to create a hostile environment for electioneering ahead of the polls.
“Not good. People, with open minds, should expect more promises and subtle threats, and, therefore, prepare for hard political times,” said Prof Munene.

ICC narrative

He argues that even though the matter is likely to influence the succession politics, it is too early to detect which of the two frontrunners is likely to benefit.
“It is going to have an impact on Uhuru succession, but it is presently hard to tell in which direction. There are two desperate men, each with a record of being very forceful, seeking Uhuru’s job,” he told the Sunday Nation.
Earlier on, the former Prime Minister had absolved his supporters from blame for the 2007 post-election violence in the country that resulted in deaths, displacement of persons and massive destruction of property after President Mwai Kibaki was declared the winner of the disputed presidential election.
Instead, the ODM leader appeared to point an accusing finger at the Deputy President with whom he is locked in a bitter presidential contest.
Prof Ken Oluoch, who heads the Political Science department at Moi University, argues that Mr Gicheru’s trial at the ICC could either benefit or hurt the DP.
“In 2013, the President and his deputy used the ICC narrative to their advantage and probably the voters at that time had just come out of 2007/08 and it worked effectively for them,” said Prof Oluoch.
“The same issue might not work effectively for Ruto come August because a good number of voters might not be in touch with the post-election mayhem…it can go either way, you cannot say that because it worked effectively in 2013, then it will favour him this year, 10 years is a long period of time… the matrices have changed, variable are no longer the same.”
With claims of rigging of presidential votes being the main cause of the 2007 skirmishes, allies of the DP have started whipping up emotions of their followers, alleging a scheme to rig the presidential election even as Dr Ruto says the deep state “cannot steal my victory”.

Presidential path

“We are determined to do a very rigorous campaign to defeat Raila by a wide margin so that the deep state cannot manage to influence the outcome. If we win by just a million or less, they can manipulate the outcome,” Bomet Senator Christopher Lang’at told the Sunday Nation.
On a campaign trail in Bungoma County early this week, Dr Ruto said he was ready to safeguard his presidential votes. The DP urged his supporters not to be worried, saying he will win with a landslide.
“They have been saying Ruto will not be on the ballot and since that propaganda has not achieved anything, they have embarked on a narrative that I will win but I will not be declared the winner. If you look at me, do you think my votes can be stolen?” he posed to a chanting crowd.
In Kenyan politics, the ‘system’, sometimes referred to as ‘deep state’, has come to refer to powerful bureaucrats, political operatives and tycoons bankrolling Kenya’s elections—a group Dr Ruto earlier last year said was working to stop him from running, or if he does, winning, in the 2022 presidential election.
In his boldest shot yet at the ‘system’, which is often said to be backed by the sitting government, Dr Ruto had likened the group’s roadblocks on his presidential path to a concerted effort to block him and President Kenyatta’s candidature in 2013.
“I just want to tell them: We are waiting for you. This system, this deep state we are being told about, we are waiting for it,” Dr Ruto.
“They (opponents) will come with the system, but we will be there with the people and God and we will see who wins.”
The issue of power sharing, which calmed the 2007/08 skirmishes, has also cropped up, with President Kenyatta insisting on the need to cure the winner-takes-all governance culture that has been blamed for dividing the country. – nation.africa

Airtel losses hit Sh6bn amid audit questions

Mr Prasanta Das Sarma, Airtel Kenya chief executive officer, during a past product promotion.

Airtel Kenya’s losses doubled in 2020 to Sh5.9 billion even as its auditors raised the red flag on the company’s financial health after the telco’s cumulative losses rose to Sh77.41 billion.
Airtel also saw its net liability position widen further to Sh43.7 billion in the full year to December 2020, up from Sh37.78 billion as of December 2019, pointing to its insolvent position.
The firm posted its highest loss in history in the financial year ended March 31, 2021, having halved the loss to Sh2.78 billion in 2019, up from Sh5.8 billion in 2017, but losses accumulated over the years and an increasing debt load pushed it into a precarious financial position.
“These conditions, along with other matters… indicate the existence of a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern,” warns Airtel’s auditors Deloitte.
The company’s weak financial position is in sharp contrast to market leader Safaricom, which posted a net profit of Sh68.67 billion in the financial year ended December 2020, a drop from Sh73.65 billion the previous year.
Safaricom’s profit drop came on the back of a decline in service revenue and increased costs in Covid-19 business environment, plunging the telco into the first full-year profit fall since 2012.
The firm’s directors say they have obtained a commitment from its major shareholder to obtain additional funding to meet its obligations as they fall due.
Airtel has a shareholder loan of Sh52.2 billion up from Sh46.6 billion the previous year, and its directors said with this, there is “sufficient liquidity to manage its operations.”
These loans are from its holding firm Bharti Airtel Kenya BV and are supposed to be payable ‘on demand’ and are unsecured, carrying an interest charge of three percent per annum.
“The directors are of the opinion that the company is a going concern on the basis of it generating cash flows of at least the management projections and also obtain additional funding from its shareholders required to meet its obligations,” states the board in a note accompanying the financial statements.
The negative asset position means Airtel would have been unable to meet its financial obligations maturing this year, even if it sold all assets that could be readily liquidated.
“The directors acknowledge that the continued existence of the company as a going concern depends on the outcomes of various strategic measures that the directors continue to pursue to return the company to profitability and continued financial support from the company’s shareholders and bankers,” the note says.
Airtel’s borrowings in the 2020 financial year jumped to Sh9.23 billion, up from Sh6.83 billion in 2019. Its net assets in foreign currencies rose to Sh8.89 billion in 2020, up from Sh6.19 billion the previous year, while its net foreign currency liabilities stood at Sh56.17 billion up from Sh49.85 billion in 2019.
In 2020, Airtel Kenya picked up Sh2.18 billion in new loans from JP Morgan Bank, but also had loans with HSBC-Mauritius (Sh1.64 billion), Citi Bank (Sh5.4 billion) and Sh1.7 billion in loan and overdrafts from Standard Chartered Bank. It cleared its Sh1 billion loan from Stanbic Bank. Its net borrowings as at March 2021 stood at Sh61.28 billion, up from Sh53.19 billion the previous year.
“The current borrowings from HSBC-Mauritius and Standard Chartered Bank are repayable within twelve months to December 2021,” it said, indicating that it retired them by the end of last year.
The overdraft facility Airtel has with Standard Chartered Bank bears an interest of 9.25 percent and as at December 31, 2021, the overdrawn balance was Sh702.7 million, having doubled from Sh361.3 million as of December 2019.
Airtel’s losses deepened on the back of increased operating, finance, administrative and distribution costs, gobbling close to Sh24.82 billion of the telco’s revenue. This was a rise from Sh21.27 billion in expenses the previous year.

Voice revenues

Its 2020 revenues rose by more than Sh5.1 billion to Sh26.41 billion driven by voice revenues that stood at Sh12.39 billion, up from Sh9.98 billion in 2019. Its data revenues also grew in 2020 to Sh7.79 billion, up from Sh5.84 billion. Its interconnecting revenues rose to Sh2.6 billion in 2020 up from Sh2.1 billion in 2019. Its roaming revenues recorded the biggest dip to Sh116.9 million in 2020, up from Sh281.74 million.
Revenue from the sale of goods (accessories and handsets) increased to Sh69.37 million, but way below the Sh677.2 million in 2017, pointing to either a struggling Airtel shops business model, or the firm’s shift away from that business line.
The country’s second largest telco also saw a rise in its employee expense benefits to Sh1.73 billion, up from Sh1.42 billion in 2019 driven by an increase of Sh101 million in salaries and Sh270 million in other related staff costs. – businessdailyafrica.com