Once upon a time, Africa alone was home to 26 million elephants. The giants roamed the continent knowing not what lay in store, that their habitats would dwindle and so would their majestic numbers.
From millions, they are now in their thousands, falling faster than trees – all for their ivory tusks.
Approximately 97 elephants are gunned down daily by poachers for their tusks. This means by 2030 there could be no elephants left in the wild.
According to the International Union for Conservation of Nature (IUCN), the African elephant population dropped from 550,000 in 2006 to about 350,000. In East Africa, the decline is far more alarming – from 150,000 to about 100,000.
Other parts of the world have also seen a drastic decline of the elephant population. In Asia, it’s estimated less than 50,000 elephants still roam the region; more than half of them in India.
These figures are frightening – what deforestation and poaching can do.
Jeffrey Gettleman of The New York Times said: “Like blood diamonds from Sierra Leone or plundered minerals from Congo, ivory, it seems, is the latest conflict resource in Africa, dragged out of remote battle zones, easily converted into cash and now fueling conflicts across the continent.”
It’s hard not to notice the mammoths disappearing.
<div id="attachment_34014" style="width: 510px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-34014" class=" wp-image-34014" src="https://www.forbesafrica.com/wp-content/uploads/2017/10/Paula-Kahumbu-e1509005131550-300x214.jpg" alt="" width="500" height="357" />Paula Kahumbu. (Photo supplied)</div>
Dr. Paula Kahumbu, the CEO of WildlifeDirect, a Kenyan conservation NGO, is currently leading a campaign, Hands Off Our Elephants – civil society, corporations, government agencies as well as other conservation organizations in a unified approach towards ending the poaching crisis in Kenya.
Born in Nairobi, Kenya, to an English mother and Kenyan father, Kahumbu is one of eight siblings. Being out in the wilderness as a child interacting with animals made her the committed eco-warrior she is today.
“My mother was often home alone and because we were so many, mother would literally tell us to get lost and we would do just that,” says Kahumbu.
“We’d go exploring – catching anything you can imagine; birds, mice, snakes, frogs. We’d go fishing and swimming in the rivers, make our way through to forests and swamps. We spent our entire childhoods in the wilderness.”
“We did the kind of stuff you would never allow children to do today actually but it was very safe at that time,” she continues.
Soon, these trysts led to an encounter with Richard Leakey, a Kenyan paleoanthropologist, conservationist and politician.
“We didn’t know all that much about wildlife so we would visit our neighbor, Richard Leakey, head of the Kenya Museum Associates. He was someone who knew a lot about animals and whenever we would spend time with him he would teach us about their ecology, behavior, and the like.”
Between the 1960s and 1980s, elephant poaching was at a dramatic high, according to the Convention of International Trade and Endangered Species (CITES).
“When I finished high school, it was very difficult at that time to get into university. My parents could not afford to take us to the local university,” says Kahumbu, who then, just as she had done countless times as a girl, returned to Leakey.
She knocked on his door, which at the time was at the National Museum, and said, “I want to be a ranger”. That got her in.
“There was one particular place I wanted to go to, Kora National Park, best known for the lions and George Adamson who is famously known as Baba ya Simba, which translates to ‘father of lions’. My dream was to be his ranger. And Richard Leakey said ‘are you sure about this’? I was 17 years old and that’s all I wanted to do. I ended up in a research facility which focused on monkeys and that’s when I realized the importance of science in studying animals,” says Kahumbu.
That was the motivation for years of study. Kahumbu was the first in her family to attend university.
“My mum was not keen on the idea of a career in animal conservation… She sent me to secretarial college because she thought that the safe [career] option is to be a secretary because everyone needs a secretary. I detested it and the day I ran to Richard Leakey’s office was the day I ran away from secretarial college.”
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Kahumu did a lot of field work early in her career.
“I went to some of the remote corners of the country, some really dangerous areas to study this wildlife. This left my mother very anxious.”
Her “conservative” mother always threatened: “I am going to speak to this Richard Leakey because it’s unacceptable that a young woman can live in the bush for months on end counting monkeys on her own.”
Her father, on the other hand, encouraged her. Kahumbu clearly broke boundaries.
“I remember my male colleagues were very angry with me because it was very uncommon for a woman, particularly a Kenyan woman, to be working in the forest usually by herself, so they would beg me to stop but of course I never did,” she says.
That did not deter her from her course.
“My son was actually born when I started working on my PhD and he was two-and-a-half years old when I had to spend extended periods of time in the wilderness conducting my research. I worked in a rainforest on top of a mountain with huge trees.”
Kahumbu and a small team of researchers were studying trees, a main source of nourishment for the elephants.
“We wanted to gauge how elephants living and eating in the forest was changing the landscape of the forest. My son was still so small, I would sit him on a mat, give him some toys to play with and go on measuring trees.”
“One day, the trees started moving as though they were being consumed by strong winds, it was actually a herd of elephants calmly making their way through the forest… But we were so busy we had not noticed they had moved in around us and I hadn&#8217;t really realized they were around us until I was about to measure what I thought was the trunk of a tree and then I realized it was the leg of an elephant,” she laughs.
“When I did [realize], I slowly tiptoed backwards and picked up the baby.”
<div id="attachment_34015" style="width: 512px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-34015" class=" wp-image-34015" src="https://www.forbesafrica.com/wp-content/uploads/2017/10/Paula-Kahumbu-elephants-e1509006154685-300x214.jpg" alt="" width="502" height="358" />Paula Kahumbu observes elephants. (Photo supplied)</div>
Kahumbu was persuaded to study elephants after her bachelor&#8217;s degree and “was offered an once-in-a-lifetime opportunity to lead the stocktake of ivory in 1989 in Kenya”.
“I had to measure every single tusk, which is a great source of information about the sex of the elephant and age. We gathered data from about 3,000 tusks and drew a timeline as every tusk had a marker of when and where it was seized.”
What the timelines showed was alarming. The tusks got smaller and smaller. This showed poachers were going for smaller elephants, calves essentially.
“Juxtaposing the data with the demography of animals, we saw there were no adults left, the species was basically finished because there were no longer breeding individuals; poachers are going for any kind of elephant, even if it had half a kilogram of ivory.”
Following that, Kahumbu decided she was not going to study the pachyderms, not only because they were virtually extinct but also because there was the threat of her becoming a target for poachers in the area.
“So, for my master’s degree, I decided to study monkeys and even from time to time, when we were out doing research in the wilderness, we’d hear gunshots and subsequently come across dead elephants on our trail and I remember thinking, ‘thank goodness I’m not studying elephants’ because every single day, I would be heartbroken.”
For three years, she refused to study them.
After her master’s, she became a senior scientist at Kenya Wildlife Service. While there, the organization hired 30 young Kenyans to conduct research on elephants.
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The ban on poaching was now in place so their task was to work out how to save the remaining elephants as well as replenish the population. This formed the thesis of Kahumbu’s PhD.
When she became CEO of WildlifeDirect, she led a campaign exposing the poaching crisis in Kenya, leading to major reforms in the laws and practices against ivory poachers and traffickers.
Poaching dropped by 80% in three years. Kenya burned her entire ivory stockpile of 105 tonnes in April 2016, an event that garnered global attention.
“The world was very surprised – how was it that a country suffering economically would forego millions of dollars’ worth of a payout to prove a point?” says Kahumbu.
It was a start, and conservation continues.
“Even after decades of working in this area, I still can’t understand the inhumanity and greed of poachers. The elephant is an extraordinary animal. They can live in any habitat except the ocean. They can climb close to the ice on Mount Kilimanjaro, they can live in deserts as they do in Namibia and northern Africa. They can live in forests and in savannahs. Elephants can also eat almost anything.
“They are a lot like humans in that way because they can easily adapt to an environment. Their brain is three to six times larger than the human brain, designed to store vast amounts of information. Further, elephant families are actually governed by females because the male leave the herd at an early age and only return to mate.”
The trade of ivory is inextricably linked to the trading of slaves. Kahumbu explains, in the late 1800s, the British could not take ivory out of Africa without the help of slaves because they did not have the means to carry it. Ivory was stolen from the homesteads of people in the Congo.
“In those days, Africans did not see the monetary value poachers saw; they would use the tusks as fence posts around their homesteads and the British would raid these villages and steal all the ivory and ship it to Zanzibar and Mombasa and then it would be taken to Europe. It was so valuable, 100 tons a year were being shipped out to be used as billiard balls.”
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And then ivory found its way to America; the volume of ivory coming into one part alone gave birth to two cities on the back of ivory trade and slavery. Business boomed. Technology was developed to transform ivory into how we know it today – thin veneers used as piano keys and hair combs.
“That was a major driver. And by the end of the 1800s, there was about 1.2 million elephants – a drastic decline. In Japan, ivory was a symbol of luck, pens and stamps were made with ivory and of course this caused the trade to skyrocket in the region.”
At the moment, various species of the elephant are on the World Wildlife Fund’s (WWF) list of critically endangered, endangered, vulnerable and threatened animals, sharing the list with another dwindling animal – the rhinoceros. The illegal rhino horn trade has decimated the world’s rhino population by more than 90% over the past 40 years.
But has the world awakened to the plight of these animals?
According to research, the common strategy adopted by many countries is to destroy stockpiles of ivory. An article in The Guardian quotes WWF: “This has been the case not only for African countries but also some developed countries that have intercepted ivory originating from Africa. The idea is to remove the ivory from the market and thus reduce the incentive for people to engage in smuggling. In Kenya, the problem of elephant poaching has spiraled out of control and destroying ivory has become the common practice in dealing with the stockpiles.”
The torching of stockpiles of ivory has not been the only way governments have tried to mitigate the poaching of elephants. Countries such as France, China, the United States, and the Philippines have destroyed ivory worth millions of dollars. However, South Africa, Botswana and Zimbabwe oppose the destruction of illegal ivory; this according to an article published in National Geographic in 2016.
But does destroying ivory translate to less poaching? The Conservation Trust, a nongovernmental organization sites that in 2015, elephant poaching was at its highest level in more than three decades.
The ornaments made from the tusks form part of a billion-dollar industry – prevalent and as dangerous as ever.
Kahumbu’s Hands Off Our Elephants has generated unprecedented public and political awareness and support for wildlife conservation in Kenya.
According to WildlifeDirect, the most severe financial penalty for convicted poachers was $400, and fewer than 4% of convicted offenders were going to jail, a safe haven for poachers. Since then, the Kenyan government has allocated $20 million for anti-poaching activities.
In January last year, Kahumbu partnered with media and wildlife authorities to launch Kenya’s first wildlife documentary series, NTV Wild. It shines a light on issues of poaching and the very real prospect that in the near future, the world may be without elephants.

Will There Be Any Elephants Left In 2030?

Globally, it is a rarity for courts to nullify presidential election results; in Africa this was totally outlandish – that is until the Supreme Court in Kenya on September 1, 2017 annulled the re-election of Uhuru Kenyatta.
The shock that followed the Supreme Court verdict reverberated across Africa and is unlikely to die anytime soon, especially in Kenya where successive general elections have been dogged by concern of vote rigging and political instability, as highlighted by the violence that followed a disputed 2007 election when more than 1,200 people were killed.
“The Supreme Court decision for a repeat of the presidential election means Kenyans have an opportunity to truly elect a leader through the ballot  as per the Constitution and without manipulation of votes,” says John Mwandu, a political analyst in Nairobi.
The Independent Electoral and Boundaries Commission (IEBC) has tentatively scheduled the rematch between President Uhuru Kenyatta and Raila Odinga for October 17, 2017.
But as campaigns for the new election got underway, the fear of violence that has characterized recent Kenyan elections has only intensified as both sides rallied their supporters.
“While one could understand the initial euphoria and outrage that greeted the ruling, sobriety should have taken over as the dust settled and the reality of the ruling sunk in. However, each day has brought a new barrage of threats, insults, half-truths and ethnic slurs that do not augur well for a peaceful outcome in six weeks,” Gabriel Dolan, a Catholic priest based in Kenya’s second-largest city of Mombasa said in a commentary.
“In fact, the country appears to be more polarized now than before last month’s general election,” he added.
Kenyatta’s campaigns for the new elections have dwelled on bashing the Supreme Court for allegedly going against the will of the majority by nullifying the August 18, 2017 election results in which he was declared the winner by a margin of 1.4 million votes against rival Odinga.
Just hours after the Supreme Court handed its decision, Kenyatta called the Chief Justice David Maraga, and the three other judges who supported the verdict, crooks. His successive campaigns have since taken on a similar pose of hard-stance politics and personal attacks both against the Judiciary and Odinga. Kenyatta has repeatedly called his rival a witch doctor, a perennial loser and one full of riddles.
Odinga has too adopted a similar fashion of campaigns and regularly made personal attacks against Kenyatta. The veteran opposition leader, for instance, accused the president of making a televized national address while drunk. He also called Kenyatta a thief who should be languishing in jail for stealing elections.
“It is unfortunate that the campaign messages have turned personal and animosity is getting to a fever pitch among the supporters of both candidates. It is no longer about policies but hate speech and insults which is dangerous as the country goes back to elections. There may be violence at the end of it all,” says Mwandu.
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Hate speech from supporters of Kenyatta and Odinga have spread to social media, where some of them openly insulted and threatened each other.
Analysts say the Supreme Court verdict offers an opportunity to streamline Kenya’s electoral system that has been synonymous with systemic cheating.
“What the ruling did was put temporary brakes on the rollercoaster of impunity that has characterized almost every election in Kenya,” wrote Rasna Warah in a column in Kenya’s largest newspaper, Daily Nation.
“The ruling may not end impunity in Kenya’s electoral processes but it will have a far-reaching psychological impact on the citizens, who have been led to believe that peace is synonymous with justice,” she added.
In 2013, Odinga filed a case in the Supreme Court against Kenyatta’s election but it was thrown out on technicalities – leaving many suspicious over the conduct of the IEBC. Dissatisfied with the court decision, the opposition held a series of demonstrations that forced the disbandment of the commission ahead of this year’s elections.
But, with the radical court action, this time there is hope of laying bare the activities of the IEBC and restore legitimacy to Kenya’s elections.
“If there have been crooks manipulating voting outcomes in Kenya then things may be different going forward because the Supreme Court has proved impunity and blatant disregard of the law is punishable,” says Mweni Matheka, a governance researcher.
Other sovereign institutions, including the Ethics and Anti-Corruption Commission (EACC), the Office of the Auditor-General and the IEBC itself, may want to borrow a leaf from the Supreme Court and assert their independence.
All these institutions have been subject to political pressures, especially when their work went against the whims of the government.
Just after the August 8 polls, Leader of Government Business in Parliament, Aden Duale, declared that the ruling coalition would use its majority in Parliament to oust Auditor-General Edward Ouko whose office has had run-ins with the executive over explosive audit reports that showed theft and misuse of public funds.
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The IEBC has not been spared the heat from both the executive and the opposition, especially after the bungled polls. Both sides have demanded to have a say in the composition of the IEBC team that will manage the repeat polls.
But in separate letters to the ruling Jubilee coalition Secretary-General Raphael Tuju and the opposition National Super Alliance Co-Principal Musalia Mudavadi, IEBC Chairman Wafula Chebukati on September 6 said the commission reserved the right to make changes without being directed by any of the political groups.
“Please note that the commission is an independent constitutional body, which as per Article 249 of the Constitution shall not be subject to direction or control by any person or authority,” Chebukati said in his letter to Tuju.
“It is therefore unacceptable for you to provide a list of staff that you direct us not to consider for the project team.”
The business community looks forward to conclusion of the elections to restore normalcy in the economy. The Kenya National Chamber of Commerce and Industry (KNCCI) estimates that the country’s economy has lost Sh21.3 billion ($210 million) since the Supreme Court ruling, as investors adopted a wait-and-see attitude. &#8211; Written by Allan Akombo

‘There May Be Violence At The End Of It All’

The Kenyan Supreme Court has found that the August 8 presidential election result is invalid. It blames the electoral commission, not the declared winner, Uhuru Kenyatta. Kenya’s leading newspaper praises the decision as a <a href="http://www.nation.co.ke/oped/Editorial/Supreme-Court-ruling-has-restored-rule-of-law-/440804-4079912-3cupekz/index.html" target="_blank" rel="noopener">step towards the rule of law</a>, but I am less sure about what this means for the ability of the political establishment to stick to the terms of the country’s constitution.
The Supreme Court has given the country 60 days to hold fresh elections. The time period is in accordance with section 140 (3) of the <a href="http://www.kenyalaw.org/lex/actview.xql?actid=Const2010" target="_blank" rel="noopener">Constitution</a>, but the court failed to tell the public exactly what the Independent Electoral and Boundaries Commission <a href="https://www.iebc.or.ke/">(IEBC)</a> had done wrong. This leaves Kenya with a compromised commission rerunning an election.
Chief Justice David Maraga <a href="https://www.youtube.com/watch?v=bLEQ72t2czs&amp;t=1216s" target="_blank" rel="noopener">noted that</a> the court had previously failed to provide a full judgment on the 2013 elections and this had not been received well. He then did exactly the same. Of course, the court had to provide a judgment on the opposition’s petition within 14 days, as stipulated by the Constitution. This is the period before the president-elect is inaugurated. The court would have sparked a constitutional crisis if it had not made any decision.
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But by not explaining how the IEBC has failed, the court has created a problem. It’s impossible to organize the next election and reform the commission in the time given.
<h2>Time pressure</h2>
The court gave itself up to 21 more days to deliver its full judgment. This would leave the country with only 39 days before the fresh election. Already, opposition leader Raila Odinga has <a href="https://www.standardmedia.co.ke/article/2001253339/raila-declares-fresh-war-on-iebc-lambasts-international-community" target="_blank" rel="noopener">declared</a> that his coalition will refuse to participate in presidential elections under the current leadership of the IEBC.
But, as a newspaper commentator <a href="https://www.standardmedia.co.ke/article/2001253324/why-it-s-not-feasible-to-replace-iebc-commissioners" target="_blank" rel="noopener">observes</a>, it’s just not feasible to remove IEBC commissioners without a tribunal, which is then reviewed by parliament. Complicating matters further, three citizens have filed a <a href="https://www.standardmedia.co.ke/article/2001253334/three-kenyans-want-iebc-commissioners-barred-from-polls" target="_blank" rel="noopener">separate petition</a> to ask the courts to remove certain IEBC officials over their wrongdoing.
Even once the full judgment is handed down within 21 days of the ruling, it probably won’t indicate criminality at the level of individuals. The Supreme Court was asked only to determine the validity of the election overall. Its full judgment can indicate how the process of the election must be improved.
The election was judged to be void because the electoral commission was at fault. This suggests it must change its procedures – and perhaps its personnel – if better elections are to take place. A new election must avoid the errors of the previous one.
Political scholar Gabrielle Lynch <a href="http://www.nation.co.ke/oped/Opinion/Key-lessons-for-election-team-as-Kenyans-return-to-ballot-/440808-4079934-roelpv/index.html" target="_blank" rel="noopener">explains</a> some of the corrections that have to be made. These include the process for transmitting results, the use of security forces and the uneven use of state resources.
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Few of these suggested corrections will be feasible within the allotted timeframe.
<h2>Serious problems</h2>
Indeed, the problems are serious. Months before the election was held, the courts <a href="http://www.nybooks.com/daily/2017/08/30/kenya-the-election-and-the-cover-up/" target="_blank" rel="noopener">ordered</a> the IEBC to stop printing ballot papers, because of <a href="http://www.theeastafrican.co.ke/news/Dispute-ballot-printing-tender-Kenyan-election/2558-3974504-2no9fv/index.html" target="_blank" rel="noopener">claims</a> that the Dubai-based firm Ghurair held too many links to Kenyatta.
The claim against Ghurair was <a href="https://www.the-star.co.ke/news/2017/07/20/nasa-loses-cross-appeal-on-uhuru-links-to-al-ghurair_c1600686" target="_blank" rel="noopener">dismissed</a> due to insufficient evidence. But part of the IEBC’s successful defence against the court order was the time pressure of having to hold an election in a few months’ time. If time pressure was a valid reason then, why would it not be now? Why would an even more rushed election be credible?
The <a href="http://edition.cnn.com/2017/08/03/africa/kenya-election-official-chris-msando/index.html" target="_blank" rel="noopener">murder</a> of the IEBC’s IT manager, Chris Msando, will now be under even closer scrutiny by the media. But even if the crime was directly related to the muddled tallying of votes, there isn’t time before the rerun to find individuals guilty. It is highly unlikely the full Supreme Court judgment will touch upon this tense topic. And that further reduces the credibility of the current IEBC.
<h2>Credibility concerns</h2>
The wider concerns with the IEBC date <a href="https://www.amazon.co.uk/Shadow-Kenyan-Democracy-Widespread-Expectations/dp/147246768X" target="_blank" rel="noopener">back to</a> the “Chickengate” scandal. A UK court found a UK firm had <a href="http://www.businessdailyafrica.com/How-UK-sleuths-unearthed-Kenya-scandal/-/539546/2527142/-/12a1fcrz/-/index.html" target="_blank" rel="noopener">bribed</a> the IEBC (then the Interim Independent Electoral Commission) to get the contract to print ballot papers for the 2010 Kenyan constitutional referendum.
The UK co-conspirators were <a href="http://www.bbc.com/news/uk-england-sussex-31444228" target="_blank" rel="noopener">found guilty</a>. But no-one from the Kenyan side was put behind bars by Kenyan courts. This created mistrust of the IEBC leaders. The current crisis will revive past anxieties like these, but leave no time for meaningful reform.
In Kenyan elections, local witnesses must sign the official forms to say the local tally is accurate. Central tallying organized electronically must then match with these local forms. The election is considered free and fair if this is done properly. The Supreme Court has ruled that both the IEBC as a whole and its chairperson, Wafula Chebukati, are responsible for the failure on 8 August.
Chebukati has <a href="http://nairobinews.nation.co.ke/news/chebukati-storm-not-quitting/" target="_blank" rel="noopener">refused to stand down</a>. His response doesn’t boost public confidence in the institution. If the public is to trust the rerun, he must go.
<h2>Asking for more time</h2>
The IEBC should then petition the Supreme Court to give it more time.
It was done before, when the 2013 election was <a href="http://www.theeastafrican.co.ke/oped/comment/Unrealistic-timelines-blame-for-Kenya-electoral-flaws/434750-3798034-ecoaogz/index.html" target="_blank" rel="noopener">delayed</a> because of the difficulty of implementing aspects of the new Constitution.
Section 86 of the Constitution requires the IEBC to collate the results of an election openly and accurately. At present, it can’t meet this requirement because it does not know what it must do differently from before. The IEBC should therefore depend on Section 86 when it asks the Supreme Court for more time. &#8211; Written by <a href="https://theconversation.com/profiles/dominic-burbidge-405209" target="_blank" rel="author noopener">Dominic Burbidge</a>, Postdoctoral Researcher, Faculty of Law, University of Oxford
Originally published in <a href="https://theconversation.com/africa" target="_blank" rel="noopener">The Conversation</a>
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Kenya’s Supreme Court has given an impossible deadline for the repeat election

In a span of just two weeks, both Kenya and Tanzania made radical policy decisions that baffled investors in East Africa’s nascent mining sector.
Firstly, Kenya’s Parliament passed new operating rules that require all mining companies licensed in the past year to cede a portion of their business to the government for free. Companies awarded the mining licences much earlier, however, were exempted from the rules that handed the government the right to a 10% stake in all mining operations licenced after May 2016.
“The State right to a free equity participation shall not apply to any right that has been granted to a holder to mine or exploit a mineral before the coming into force of the Mining Act,” the Mining (State Participation) Regulations 2017 reads in part.
Furthermore, the law gives the Kenyan government the option of purchasing additional interest or share capital in the holder of the licence but only with the agreement of the licensee.
“Any additional interest that the State may acquire shall be agreed with the holder of the mining licence and the purchase shall be at a fair market value,” the rules further state.
Separately, in neighboring Tanzania, the National Assembly unanimously passed amended mining and tax laws to make it mandatory for the state to own at least 16% of mining projects, while also raising export royalties.
This came back-to-back with the passage of two other laws allowing Tanzania to cancel and renegotiate contracts for natural resources like gas or minerals, and removing the right to international arbitration.
&#8220;In addition to the free carried interest shares, the government shall be entitled to acquire, in total, up to 50 percent of the shares of the mining company commensurate with the total tax expenditures incurred by the government in favour of the mining company,” the new law stated in part.
The law also raises Tanzania’s royalties from gold, copper, silver and platinum exports to 6% from 4%. It further raises the royalty on uranium exports from 5% to 6%. The law also gives sweeping powers to the government to reject a company&#8217;s valuation in instances where it feels that the price is too low.
These radical decisions by Kenya and Tanzania have triggered anxiety among investors in the region’s mining industry amid fear of the unknown.
“Although they may be targeted at maximizing returns from the sector, the policy decisions have no doubt caused concern for many investors, both existing and potential new ones. Every investor out there is certainly asking what next,” says Peterson Njom, an investment analyst.
<blockquote>“Mining is a long-term venture that needs predictability in both the part of the government and the investor. If things suddenly change then the relationship will hurt one party,” he adds.</blockquote>
In Tanzania, the impact of the policy change has already borne full-blown anxiety among mining companies, especially given the ongoing feud between the government and the country’s largest miner Acacia.
Australia’s OreCorp Limited, which has operations in Tanzania’s Nyanzaga project, says it will review the subsidiary part of the regulations once they are published to gauge the impact they would have on the firm’s operations.
“The regulations, which will assist the implementation of the proposed legislation, are not yet available. The company will review the regulations once they are available,” says Matthew Yates, Managing Director of OreCorp.
The feud between Tanzania and Acacia has caught the world’s attention, rekindling debate on the frosty relation between governments and mining firms in Africa. The firm, majority owned by Barrick Gold, is now pushing for arbitration on behalf of companies that own its Bulyanhulu and Buzwagi mines, which have been hit by an export ban.
In an ongoing court case, Tanzania accuses Acacia of tax evasion in 2016 and operating illegally – accusations the miner has denied.
Analysts say the policy decisions by Kenya and Tanzania, and the feud between Acacia and President John Magufuli’s government, could shape the region’s long-term mining investment profile.
“Both Kenya and Tanzania should work to reassure investors that their respective policy changes are well meaning. Investors need predictability so that they can plan their operations and financing,” says Njom. &#8211; Written by Allan Akombo

What Next?

Kenya’s 2017 polls will be remembered as the election of minor gains and confounding contradictions.
In the run up to polling, public discontent appeared to have been largely driven by the unprecedented sophistication in <a href="https://www.standardmedia.co.ke/article/2000181261/corruption-tribalism-conspire-to-hold-kenya-to-ransom" target="_blank" rel="noopener">graft</a> and <a href="http://www.nation.co.ke/news/politics/Tribalism-Ethnicity-NCIC-Francis-ole-Kaparo/1064-2661730-6enm4cz/index.html" target="_blank" rel="noopener">tribalism</a> in the President Uhuru Kenyatta’s government.
But both Kenyatta and opposition candidate Raila Odinga demonstrated a <a href="https://www.washingtonpost.com/news/worldviews/wp/2017/08/08/who-are-the-two-men-competing-to-be-president-of-kenya/?utm_term=.12bf77ed5942" target="_blank" rel="noopener">weak</a> <a href="https://www.standardmedia.co.ke/business/article/2000030197/raila-s-family-was-involved-in-maize-scandal-claim-us-cables" target="_blank" rel="noopener">commitment</a> to tackling corruption. In fact, neither of them articulated a bold agenda to <a href="http://www.nation.co.ke/news/politics/Nasa-launches-manifesto/1064-3989916-fb7nmtz/index.html" target="_blank" rel="noopener">roll back</a> <a href="http://www.the-star.co.ke/news/2017/06/26/uhuruto-launch-jubilee-manifesto-ahead-of-august-poll_c1586475" target="_blank" rel="noopener">graft</a>.
As the grand finale of a <a href="http://www.newsweek.com/kenya-elections-kenya-president-uhuru-kenyatta-raila-odinga-647526" target="_blank" rel="noopener">dynastic struggle</a> between the Odinga and Kenyatta families, both candidates boldly manipulated the ethnic formula while their supporters once again demonstrated a stubborn fixation with traditional voting patterns. This is reflected in the <a href="http://results.ke.nation.news/kenya/president.html" target="_blank" rel="noopener">results </a>from the presidential candidates’ ethnic strongholds.
Despite these failings, the Kenyan people handed Kenyatta a comfortable second term.
On top of this, some of the blunders and disturbing <a href="https://www.hrw.org/blog-feed/kenya-elections-2017" target="_blank" rel="noopener">trends</a> witnessed in previous elections were repeated. These included social media <a href="https://theconversation.com/the-options-for-kenya-as-an-impending-election-fuels-fear-of-hate-speech-71913" target="_blank" rel="noopener">hate speech</a>; a high-profile <a href="http://www.the-star.co.ke/news/2017/08/04/probe-msando-murder-quickly-poll-observers_c1609972" target="_blank" rel="noopener">murder</a>; <a href="http://www.nation.co.ke/news/Kenya-presidential-election-results-2017/1056-4050770-format-xhtml-3s06wy/index.html" target="_blank" rel="noopener">poor communication</a> from the electoral commission when it came to relaying results; inadequate voter education; and <a href="http://www.the-star.co.ke/news/2017/08/09/video-raila-rejects-provisional-results-terms-them-fraudulent-fake_c1613061" target="_blank" rel="noopener">inflammatory statements</a> by leading figures when provisional election results were released.
<h2>Mixed results</h2>
At the national level, Kenyans seem to have repeated a monotonous script that suggests a resistance to learning from past mistakes.
At the micro level, the results were mixed, delivering both positive and negative outcomes. Promising candidates such as social-justice activist Boniface Mwangi, who campaigned on a platform of ethics and integrity, <a href="http://www.the-star.co.ke/news/2017/08/09/boniface-mwangi-concedes-after-jaguar-takes-lead-in-starehe_c1613123" target="_blank" rel="noopener">failed</a> to make the cut. But others, like Anne Waiguru, a former cabinet secretary implicated in <a href="http://www.capitalfm.co.ke/news/2017/04/waiguru-routs-governor-ndathi-kirinyaga-jubilee-primary/" target="_blank" rel="noopener">corruption</a> and Professor Anyang Nyong’o, whose nomination was <a href="http://www.nation.co.ke/news/politics/Tribunal-cancels-Anyang--Nyong-o-poll-victory/1064-3911590-12v5ncu/index.html" target="_blank" rel="noopener">contested</a> in the primaries, pulled through.
On the positive side, three women made forays into <a href="http://www.the-star.co.ke/news/2017/08/09/kenyas-first-women-governors-ngilu-laboso-waiguru-flying-high-after_c1613173" target="_blank" rel="noopener">governorships</a> thus paving the way for more women to join the fray in future. And in some regions like Eastern Province, people resisted major political party dominance by re-electing <a href="https://www.standardmedia.co.ke/article/2001250828/governor-mutua-re-elected-as-wavinya-ndeti-vows-to-challenge-results" target="_blank" rel="noopener">individuals</a> from minor parties, which is laudable.
At the same time, some regions such as Rift Valley province maintained their strong Jubilee Party leanings as seen in the punitive ouster of <a href="https://www.standardmedia.co.ke/article/2001250744/early-results-show-ruto-trailing-laboso-in-bomet-county" target="_blank" rel="noopener">Isaac Ruto</a> who ditched the Jubilee Party for his own Chama cha Mashinani.
These dynamics are suggestive of a palpable tension between progress and the status quo. It remains to be seen which will prevail.
<a href="http://www.forbesafrica.com/politics/2017/06/15/will-decide-kenyan-election-dose-faith-tribe-hard-cash/" target="_blank" rel="noopener">What Will Decide The Kenyan Election? A Dose OF Faith, Tribe And Hard Cash</a>
<h2>Only one winner</h2>
Ultimately, there could only be one winner between the two presidential choices. President Kenyatta was poised to clinch a <a href="https://theconversation.com/kenyatta-or-odinga-why-dynastic-politics-is-alive-and-well-in-kenya-80732" target="_blank" rel="noopener">second term</a> for obvious reasons. He is highly personable and seems to enjoy strong political chemistry with his supporters. He also boasts strong social media credentials – he skipped this year’s presidential debate, opting instead to directly engage his supporters on Facebook.
With the incumbency in his favour, he campaigned on the platform of his first term <a href="http://www.nation.co.ke/news/politics/Uhuru-says-Jubilee-track-record-good-for-second-term/1064-4041342-h77pbs/index.html" target="_blank" rel="noopener">track record</a> and projected the confidence to finish the job.
But there was also something more sinister that played in his favour. He has perfected the art of <a href="http://www.nation.co.ke/news/raila-links-uhuru-family-to-alleged-loss-at-health-ministry/1056-3433818-mklw4iz/index.html" target="_blank" rel="noopener">insulating himself</a> from the <a href="http://www.nation.co.ke/news/Uhuru-sister-firm-listed-in-disadvantaged-group/1056-3434656-5st40t/index.html" target="_blank" rel="noopener">controversies</a> that have rocked his government. His deputy, William Ruto has been the shock absorber that has taken the flak over <a href="http://www.nation.co.ke/news/politics/Ruto-fights-back-as-graft-fells-more-allies/1064-3095364-aavdffz/index.html" target="_blank" rel="noopener">alleged links</a> to various corruption scandals and political machinations.
The fact that Kenyatta has not been directly linked to corruption made him appear more trustworthy. Even though he has been sluggish in acting on graft and inefficiency, some of the minor cabinet shake-ups he stimulated seemed to have paid off.
Examples include Joseph ole Lenku’s <a href="https://www.standardmedia.co.ke/article/2000143316/interior-cabinet-secretary-joseph-ole-lenku-fired-as-inspector-of-police-david-kimaiyo-resigns" target="_blank" rel="noopener">exit</a> as cabinet secretary for interior and the <a href="https://www.standardmedia.co.ke/article/2000183163/devolution-and-planning-cs-anne-waiguru-finally-bows-to-pressure-and-resigns" target="_blank" rel="noopener">resignation</a> of the former devolution cabinet secretary, Anne Waiguru, to pave way for corruption investigations.
These actions helped him retain his 2013 strongholds while giving the impression that he can also act tough.
On top of this, his loyalty to his deputy who has often been portrayed as the <a href="https://www.standardmedia.co.ke/article/2001230917/the-incredible-rise-of-dp-william-ruto" target="_blank" rel="noopener">corrupt villain</a>, enabled him retain a sizeable chunk of Ruto’s <a href="http://results.ke.nation.news/kenya/president.html" target="_blank" rel="noopener">backyard</a> – the Rift Valley voting bloc.
After securing a comfortable win, Kenyatta is no longer a political hostage who is constrained by the appeasement of first term allies. Does this mean that he’ll develop a firm hand to tackle some of the issues that have dogged his government? If he does, he might just turn out to be the political pill that the doctor ordered for Kenyans.
<a href="http://www.forbesafrica.com/investment-guide/2016/10/01/kenya-crossroads-caps/" target="_blank" rel="noopener">Kenya At A Crossroads With Caps</a>
<h2>End of an era</h2>
Raila Odinga, Kenya’s veteran political stalwart, has a strong track record as a champion for political reforms, and is <a href="http://www.nation.co.ke/news/raila-odinga-olitics-kenya/1056-3945030-3vnfthz/index.html" target="_blank" rel="noopener">loved and disliked</a> in equal measure. This is the fourth time he has vied for the presidency and lost even though questions persist over the disputed <a href="http://www.nation.co.ke/news/politics/Raila-won-2007-elections--says-Macharia/1064-3506012-q12oic/index.html" target="_blank" rel="noopener">2007</a> and <a href="http://www.nytimes.com/2013/03/30/world/africa/voting-irregularities-in-kenya-election-are-confirmed.html" target="_blank" rel="noopener">2013</a> election results.
Odinga lost the 2017 elections for two reasons. Some voters buckled under the weight of “Raila fatigue” and <a href="https://www.tuko.co.ke/157874-raila-odinga-supporters-are-tired-of-voting-for-him-wetangula-video.html" target="_blank" rel="noopener">accompanying</a> <a href="http://www.the-star.co.ke/news/2016/07/23/wetangula-rubbishes-railas-2017-election-bid_c1391000" target="_blank" rel="noopener">disillusionment</a>. Both can be partly attributed to the fact that he has lost at every shot he’s made at the presidency.
Odinga <a href="http://www.nation.co.ke/news/politics/Uhuru-woos-Raila-for-State-job-/1064-1849700-ysiy7b/index.html" target="_blank" rel="noopener">missed the opportunity</a> to exit the political stage at the apex of his political calling.
Granted, several other issues worked against him such as a weak internal party democracy, allegations of corruption and a disorganised campaign machine. That said, he should now consolidate his legacy by nurturing other leaders who are passionate about social reforms.
For their part, the elections provide the Kenyan people with yet another opportunity to demand more accountability from the leaders they have voted into power. &#8211; Written by <a href="https://theconversation.com/profiles/yvonne-rowa-woods-347095" target="_blank" rel="author noopener">Yvonne Rowa Woods, </a>PhD Candidate in Politics and International Studies, University of Adelaide
Originally published in <a href="https://theconversation.com/africa" target="_blank" rel="noopener">The Conversation</a>
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Kenya’s 2017 poll: palpable tension between progress and the status quo

The inauguration of a $3.2-billion Chinese-funded railway, linking the port of Mombasa to the Kenyan capital Nairobi with future extension to the border with Uganda, promises to be a game changer. But only if sticky issues, such as harmonization of procedures and charges, in East Africa are sorted out.
Being part of China’s “One Belt, One Road” initiative that targets to upgrade maritime and land trade routes between China and Europe, Asia and Africa, the potential benefits of the railway are huge – not just for businesses in Kenya but the region as a whole.
With offers of haulage charges of $0.08 per ton per kilometer on Kenya’s new standard gauge railway (SGR), there is hope for bigger returns for businesses. For years they have had to endure the pain of costly road transport and equally expensive and unreliable service on a dilapidated railway system built by British colonialists more than a century ago.
“Today, the cost of transport along the northern corridor accounts for up to 45 percent of the goods and services in the region. The high costs make it hard for businesses to compete effectively on both the global and the local markets. We expect these costs to reduce significantly with the SGR,” the Kenya Private Sector Alliance (KEPSA) says.
Industry estimates show that hauling a 40-foot container from the port of Mombasa to the Ugandan capital, Kampala, by truck costs about $3,030 exclusive of handling and clearing fees – which captures why businesses long for cheaper options, such as an efficient railway.
Neighboring landlocked Uganda and Rwanda also plan similar SGR projects that would boost efficient haulage of cargo to the various sea ports in Mombasa or Tanzania’s Dar es Salaam and Tanga.
Nonetheless, authorities in East Africa must address all bottlenecks being experienced at the various gateway ports to the region if the SGR projects are to succeed. The challenges due to bureaucratic port procedures and conflicting charges have been a thorny issue for businesses and investors in the region.
Kenya and Tanzania that host the gateway ports have been under the spotlight for dragging their feet in the harmonization of their port procedures and charges to ease flow of shipment to landlocked states in East Africa.
A recent audit of operations at the Mombasa and Dar es Salaam ports confirmed hitches for
traders from Burundi, Rwanda and Uganda, which affected the overall performance of trade in the region. The matter was in fact formally tabled to the East Africa Community (EAC) leadership in 2015.
“The two ports could consider harmonizing their port charges, grace period and penalties, in view of the implementation of the EAC single customs territory,” Burundi said in a report to the bloc’s secretariat.
“The two countries should consider allowing clearing and forwarding agencies to go to work at Dar es Salaam and Mombasa ports.”
The two ports are the main gateways to East Africa and also service markets in South Sudan and the Great Lakes Region, handling key items including fuel, consumer goods and other imports as well as exports of tea and coffee from the region.
“Dar es Salaam and Mombasa ports, should establish one terminal for all transit containers for EAC countries. For example, you will see at the Jomo Kenyatta International Airport in Nairobi that there is a window for EAC citizens only,” Burundi further said in its submission.
The effects of these bottlenecks have stirred other challenges for businesses in these landlocked countries in that they often resulted in accruement in storage charges by port authorities.
Uganda traders have particularly expressed their disappointment with the cargo clearance procedures at the port of Mombasa and accused Kenyan authorities of imposing a harmful non-tariff barrier by “selectively auctioning” Ugandan goods held at the key port.
Uganda also raised concern over increased impounding of suspected counterfeit goods, meant for its market, at the port of Mombasa.
“Lengthy, restrictive and unclear administrative procedures of licensing Uganda-owned container freight stations and warehouses in Kenya are non-tariff barriers (NTBs),” Uganda said in a recent audit report to the EAC secretariat.
The availability of key inland infrastructure along the SGR, such as cargo collection and drop-off points will also determine the success of the whole project. The container drop-off or collection points should be located strategically to make the railway competitive. &#8211; Written by Allan Akombo

Rapid Railway Yet Slow Ports

After accepting his <a href="https://www.standardmedia.co.ke/article/2001237873/raila-odinga-it-is-nasa-unveils-flag-bearer" target="_blank" rel="noopener noreferrer">nomination</a> as the presidential candidate of the main opposition coalition recently, Raila Odinga <a href="http://www.the-star.co.ke/news/2017/05/10/nasas-joshua-raila-prays-at-israels-wailing-wall-ahead-of-election_c1558553" target="_blank" rel="noopener noreferrer">likened himself to Joshua</a>, the biblical figure who led the Jews to the Promised Land.
Odinga was appealing to people disaffected with the performance of the Jubilee government. But he was also appealing to the religious sensibilities of the Kenyan electorate where Christianity has a strong presence.
Religion is omnipresent in Kenya. The line between religion and politics is often thin. This is well illustrated by the fact that gospel music serves as an important vehicle for political mobilisation. Most of the <a href="https://www.cnbcafrica.com/news/east-africa/2017/01/12/nasa-new-party-on-kenyan-political-scene/" target="_blank" rel="noopener noreferrer">National Super Alliance’s</a> campaign rallies feature a rendering of the popular gospel song “Mambo yabadilika” (things are a-changing).
https://www.youtube.com/watch?v=ROY5KeXRkPA
Odinga, as well as President Uhuru Kenyatta who is seeking re-election under the Jubilee Party in the August 8 polls, have sought to endear themselves to the main religious communities. Kenyatta even had members of the Supreme Council of Kenya Muslims, the National Muslim Leaders Forum and the Jamia Mosque visit State House where they <a href="http://www.capitalfm.co.ke/news/2017/05/muslim-leaders-vow-rally-community-behind-president-kenyatta/" target="_blank" rel="noopener noreferrer">pledged their support</a> for his re-election bid. Religion and politics are entwined, each to some extent complicit in the providential authority of the other.
Odinga and Kenyatta aren’t alone. In their quest for the votes of the religious constituencies, all political aspirants have sought to present themselves as people of faith.
But other equally important dynamics shape political relationships in Kenya. Religious symbols operate cheek by jowl with what political scientist Jean Francis Bayart has referred to as the <a href="http://spire.sciencespo.fr/hdl:/2441/9labe9r4se65i789685q56i9p/export/cv/Leguil-Bayart-Jean-Fran%C3%A7ois-resume.pdf" target="_blank" rel="noopener noreferrer">“politics of the belly”</a>. A third factor makes for an even headier mix – ethnic affiliations. Combined, these three factors distort democracy, and the way in which elections are run in the country.
<h2>Eating campaign money</h2>
On a recent visit to western Kenya during the party primaries I was struck by how voters’ actively sought cash handouts from politicians. And there is no shortage of candidates ready to offer money to the electorate as an inducement to vote for them. A young man who gave me a ride on his motorcycle taxi spoke with pride about his busy schedule these days – “eating campaign money” by night and working by day.
Elderly men and women were seated along village lanes looking out for election candidates who might offer them “something small.” They were open to offers from whichever politician turned up. The amounts they got ranged from around 100 shillings ($1) to 1,000 shillings ($10), often not enough even to feed a family for a day. But the money counts for a lot in the context of extreme poverty.
I also attended an election campaign rally in which a candidate presented what seemed to be a well-thought-out blueprint for the development of his local ward. At the conclusion of the presentation, one person in the audience broke the silence with a bold demand for more tangible results:
<blockquote>That is enough speech-making, can you now talk to us?</blockquote>
“Talking to us” was easily understood to mean that it was time to give cash gifts to seal the bond.
Demands like this are not unusual during election campaigns in Kenya. They have been a regular feature of elections as long as anyone can remember. One can only imagine what this year’s campaign will be like on the back of a severe drought that has <a href="http://af.reuters.com/article/investingNews/idAFKBN17U1Z3-OZABS" target="_blank" rel="noopener noreferrer">deepened inflation</a> and led to <a href="http://www.nation.co.ke/newsplex/2017-kenya-drought/2718262-3872970-vniwqd/index.html" target="_blank" rel="noopener noreferrer">economic hardships</a>.
Building a democratic culture in the context of extreme hardships is a big challenge. As in many African countries undergoing democratic transitions amid conditions of high poverty, economic circumstances hinder or dissuade people from participation in the political process.
<h2>Politics of the belly</h2>
So what’s the relationship between religion and handouts? They interact and influence each other in myriad ways. Politicians distribute goods for the bellies of their clients in return for political loyalty. In this context, democracy as a competitive process in which citizens freely elect their leaders is thrown out of the window.
The Kenyan Muslim leaders’ assurances of support for Kenyatta needs to understood against this background. The leaders – hint, hint – expressed gratitude to the president for appointing the highest number of Cabinet secretaries and Principal Secretaries from the (Muslim) community.
A common pattern of religious accommodation in post-colonial East African states has been <a href="http://14.139.206.50:8080/jspui/bitstream/1/2400/1/Haynes,%20Jeffrey%20(ed.)%20-%20Routledge%20Handbook%20of%20Religion%20and%20Politics.pdf" target="_blank" rel="noopener noreferrer">documented</a>. Reflecting trends in Kenya, various religious groups have worked with governments and parties, irrespective of their political philosophies and ideologies.
It is also important to locate religion and politics in Africa within the broader context of ethnicity which has been sustained, and even strengthened, through the political distribution of goods and wealth.
The logic here is not based on universal ideas of human rights and citizenship but rather on networks of tribal patronage and clientelism. Politicians offer their ethnic clients certain material and symbolic gestures such as invocation of tribe, money, jobs in exchange for political support. It is an insecure means of organising support, admittedly, and one that is constantly at risk of corrupt indulgence in order to fund private benefit.
Thus <a href="http://africasacountry.com/2014/05/the-politics-of-the-belly/" target="_blank" rel="noopener noreferrer">Bayart’s politics-of-the-belly </a>casts a long shadow on the deployment of culture in African states. It demonstrates that religion has followed patterns established by the politics of ethnicity in which merit and common good does not matter.
The current campaign confirms these various forms of symbolic and symbiotic relationships within Kenyan politics. Religious services and rhetoric, money tokens and ethnicity are an integral part of the political system. They will likely again be the main influence in the coming election.
Kenya’s political elite has historically been formed in mission schools, mostly within their ethnic groups and subject to ethnic expectations. Thus it’s an elite formed by – and crippled by – ethnic pride. Religious actors have not escaped a similar elite formation. Thus Kenya’s children of God are rarely Kenyans at large. &#8211; Written by <a href="https://theconversation.com/profiles/joseph-wandera-338843" target="_blank" rel="author noopener noreferrer">Joseph Wandera</a>, Senior Lecturer in the Department of Religious Studies, St Paul&#8217;s University
This article was originally published on <a href="https://theconversation.com/africa" target="_blank" rel="noopener noreferrer">The Conversation</a>
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What Will Decide The Kenyan Election? A Dose Of Faith, Tribe And Hard Cash

Over the past decade, Kenya has taken considerable steps towards deepening financial inclusion. This is reflected in the 2016 FinAccess Household Survey which shows that slightly more than three-quarters of Kenyans are now formally included by the financial system, which is a 50% increase over the past 10 years.
According to the report, the percentage of Kenyans relying on informal services providers decreased from 32.11% in 2006 to 7.2% in 2015. Thanks to technology, 18% of Kenyans now use new mobile banking services such as M-Shwari and M-Pesa, a scenario that has pushed the proportion of bank account users to 38%, up 10% from 2013, while traditional bank accounts have decreased.
Despite the significant progress seen towards enhancing financial inclusion, there is much less success in the use of investment products, such as shares, mutual funds and treasuries. The study showed that the use of investment products decreased to 10.6% in 2016 compared to 11.6% in 2013. Findings by the same survey also revealed that the number of Kenyans familiar with the Nairobi Securities Exchange (NSE) stood at only 38%. It seems that a lack of awareness could be why less than 30% of daily market transactions at the NSE are attributed to local individual investors.
But there is hope. Mobile phone platforms are being used to increase awareness and participation. Data shows that 26% of Kenya’s adult population own a smartphone or other smart devices. The uptake of mobile banking services has led to an increase in the banks’ penetration in the past 10 years, from 14% in 2006 to 38.4% in 2015. Investment managers, stockbrokers and insurance companies will also be buoyed by market studies that show that 71% of the population uses financial services provided by mobile financial service providers. This is a clear sign that mobile phones are the best way to encourage investments.
In light of this, the Kenyan government is launching the mobile-traded government security, M-Akiba. Kenyans with as little as $30 will be able to bid for the upcoming five-year income tax-free bond using their M-Pesa accounts. Investors will rejoice; M-Akiba returns are expected to be better than the current fixed deposit rates and most money market accounts. Stockbrokers have not been left behind either – at least three of them have recently launched mobile apps aimed at retail investors looking to buy shares, monitor their portfolio holdings and check account balances via their mobile phones.
But, the road ahead is not without obstacles. One is the low incomes among Kenyans. According to household survey, 75% of adults earn less than $150 per month. This may hinder most Kenyans from taking up financial products. A lack of trust among women towards formal financial institution is another major challenge. According to the latest quarterly report by the Capital Markets Authority (CMA), women account for merely a third of the total number of investors. Low levels of education in the country are also an issue, with 60% of the population not completing a secondary level of education. With this in mind, it could be daunting when it comes to selling sophisticated financial products, such as derivatives and exchanged traded funds. Even among the educated, stakeholders will have to fight to shake off the persistent fascination with real estate.
At least Kenya is showing resolve to deal with the challenges. There is a big chance to make real changes to how people invest; all that is needed is a phone.

More Phones more finance

The long delayed signing of a new trade agreement with the European Union further exposes the chaotic state of integration within the East African Community (EAC) bloc.
The pact, known as the Economic Partnership Agreement (EPA), was originally set for ratification on October 1, 2016, but, five months later, that is still to happen.
The impasse has split the EAC bloc. While Kenya and Rwanda signed the agreement in September last year, Tanzania, Uganda and Burundi are yet to do so, citing the need for more time to analyse the deal.
The stance taken by Tanzania, Uganda and Burundi means that the pacts signed by Kenya and Rwanda are inconsequential – a new agreement with the EU must be endorsed as a bloc.
Tanzania’s President John Magufuli and his Uganda counterpart l have remained vocal against a rushed deal with EU, even as Kenya’s frustrations deepened given the risks of not concluding a deal with Europe.
“It is better if the signing of the deal is shelved until further consultations are made,” Museveni told a media briefing while on a state visit in Tanzania at the end of February.
Kenya stands to lose the most if the deal falls through. The other EAC member states – Tanzania, Burundi, Uganda and Rwanda – would continue to get duty- and quota-free access under the EU’s Everything But Arms (EBA) initiative, since they are classified as the least developed countries.
This whole quandary shows how shallow the EAC integration has been, despite the bloc attaining the critical customs union status way back in 2005 and a common market in 2011. Integration goes beyond just having such structures; other aspects, such as trust and solidarity, are critical to moving things forward.
A review of recent key events in East Africa reveals massive levels of negative rivalry and mistrust which doesn’t augur well for the bloc. Things have not been well since 2013 when Tanzania fell out with Kenya, Rwanda and Uganda following the formation of their short-lived ‘coalition of the willing’, ostensibly to push for faster integration.
The now collapsed initiative was a terrible diplomatic mistake by Uganda, Rwanda and Kenya because it weakened the spirit of consensus and teamwork in the bloc. Since then, the chaos and mistrust triggered by this wild experiment has been evident in key issues involving the bloc. For instance, a new infrastructure and energy partnership between Tanzania and Uganda has left Kenya frothing at the mouth, especially after Kampala pulled out of an initial deal to build a joint crude pipeline with Kenya in favor of a route through Tanzania.
Kenya clearly feels slighted by the latest dalliance between Dar es Salaam and Kampala as was shown during the recently held election of a new chairperson of the African Union Commission. When Kenya’s candidate in the elections, Amina Mohamed, was defeated, Nairobi promptly pointed accusing fingers at Tanzania and Uganda for allegedly sabotaging its efforts to clinch the position it had highly campaigned for. Both Tanzania and Uganda denied the claims.
“Uganda wishes to state categorically that our support to the candidature of Amina before and during elections was unequivocal. Uganda wishes to reassure the government and the people of Kenya, and Amina in particular, that we remain a reliable ally and partner given our warm and close relations and our commitment to the EAC integration,” Uganda’s Foreign Affairs ministry said in response to Kenya.
Tackling the mistrust and clandestine power rivalry will be critical in putting the EAC back on a clear path to full integration which would help address challenges such as those being experienced in the elusive EPA deal. The big brother syndrome has no place in regional integration and all partners must inculcate a spirit of comradeship to excel.
Kenya and Rwanda must not been seen to be bulldozing the rest to sign a pact with Europe. Their decision to sign the deal ahead of the rest sent the wrong signal to other EAC partners who read mischief in the whole process.
Concluding the deal with Europe is critical for the EAC as it would help settle anxiety among investors. Business loathes a vacuum and efforts must be made to clear all hurdles to find a deal that would be favorable to all.

The Elusive Trade Deal  that split east africa

“War isn’t pretty. Neither is sexism or racism. Mutu’s genius has been to make them too gorgeous to turn away from,” says Lori Waxman, a special contributor of the Chicago Tribune, referring to Kenyan-born artist Wangechi Mutu’s art.
Mutu, who lives and works in Brooklyn, New York, and is known for her thought-provoking signature collages and artwork, was in Johannesburg in November last year when she exhibited some of her collection at the Goodman Gallery as part of its Africans in America exhibition.
Mutu has a packed schedule and FORBES WOMAN AFRICA is fortunate to get a few minutes of her time at the gallery where we get to see both the artist and her work in a single setting.
In reference to her collage painting, I’m too misty, she starts to explain how the process of mixing the supplies was so fulfilling.
“I used ink, water and paint to create this work, and it is really satisfying for me because things are happening in the making of things – in the ink and color you won’t see in a bottle,” she says.
She is vocal on issues of identity and says when she moved to America from Kenya to study art, thoughts of her being an immigrant occupied most of her thinking.
Mutu brought one of her thought-provoking films called Eat Cake to the month-long exhibition.
The short film is black and white and has a lanky woman with long nails sitting on the ground and eating a big, chocolate cake. Mutu describes the woman in the video as a primal creature.
She says during her pregnancy she was fascinated with urges of eating earth and rock, as compensation for the need for iron.
Other artists who were a part of the exhibition were Ghada Amer, Paulo Nazareth, Alfredo Jaar and Theaster Gates. The exhibition formed part of the In Context series launched by the gallery’s director, Liza Essers, in 2010.
Essers, along with artist Hank Willis Thomas, conceptualized Africans in America, which displayed the “flows, exchanges and continuities between the continent of Africa and the United States”.
“Things are not as simple or as precise or surface as they may come across from the outside. I try to express that to other people – that it is my story,” says Mutu.
The expressive African artist agrees one’s biography in itself is inspirational.
“I think the simple stories about who we are and where we come from, is very inspirational. There is no woman who can look up and say there is no female artist from Africa… we are all here now,” says Mutu, who clearly lets her art speak volumes about her story.

MUTU_Credit-Malin-Fezehai-Left

Her Story In  Ink And Paint

Kenya is rallying behind Ambassador Dr Amina Mohamed to be the next Chairperson of the African Union (AU) Commission, and Africa has warmly received her nomination. Elections were set to be held on January 31.
With a stellar diplomatic career of over three decades, Mohamed, a Kenyan, is known as an excellent strategist with proven negotiation and managerial skills, having demonstrated solid leadership in every domestic and international post she has held.
She is the serving Chair of the 10th World Trade Organization (WTO) Ministerial Conference which is the topmost decision-making body of the WTO.
Mohamed rose through the ranks in Kenya’s diplomatic service from legal advisor to the Ministry of Foreign Affairs and Kenya’s Missions to Geneva and New York, to the highest level of Ambassador/Permanent Representative, Kenya Mission, to the United Nations (UN) in Geneva from 2000 to 2006.
She served as Director, Europe and the Commonwealth and Director Diaspora from 2006 to 2007 and was Permanent Secretary, Ministry of Justice, National Cohesion and Constitutional Affairs in 2008.
In July 2011, she joined the UN as Assistant Secretary General and Deputy Executive Director of the United Nations Environment Programme (UNEP) based in Nairobi.
In April 2013, she was appointed by Kenya’s President Uhuru Kenyatta as Cabinet Secretary (Minister) for Foreign Affairs and International Trade of Kenya.
Weeks before the AU Commission elections, Mohamed spoke to CNBC Africa. Excerpts from the interview:
Q: You’ve had many firsts as a woman in leadership in Africa; just walk us through your journey?
&nbsp;
A: The first time I did something that I guess laid the road-map for whatever else came after was when I was elected to chair the International Organization for Migration Conference which is a council for migration. At that time, Kenya was actually the only African country that was a member of the International Organization for Migration. And when I was approached, I told them that the only reason I would agree to be put up as a candidate for the chairmanship would be if they would open up the organization for Africa, and would be able to attract more countries into the organization.
So we reached an understanding and I chaired it and during my chairmanship, that one year, I brought in a few African countries, and the rest is actually history, because now I think the largest group of countries that are members of the IOM are African countries, and from then on, I think in especially the kind of job that we do as ambassadors, you are called upon to show your commitment to the continent by agreeing to chair different bodies.
And so I was fortunate, I was privileged that the African group in the cities that I served in saw it fit to elect me over and over again, and so it’s something that I enjoyed doing, I was committed to doing and I think the record is not a bad one.
Q: You are now running to be chairperson of the AU Commission, tell us about the drive behind this decision?
&nbsp;
A: Kenya has put up my candidateship for the position of Chairman of the African Union Commission. Why am I running? I think we have a lot of value that we can bring to the table; we are also at a good time in the history of this continent. The first thing that comes to mind is the framework that we have. We have a framework that was agreed on by all African countries that needs a faithful implementer to put in place.
It’s a framework called Agenda 2063, for inclusive growth and sustainable development and it has a number of amazing aspirations for the continent. I think it’s actually time for East Africa because of the track record we have also set as a community, as an East African Community in what we have done.
We created a model for others to emulate and so there’s just a feeling that it was time for us to run for this position and I would be a good candidate for that because again I can bring people together, I have never come across a challenge that cannot be resolved, I look at challenges actually as opportunities. And I believe that we all know what we need as a continent to move us forward. One should look at the leaps we have made.
We are a young continent, we have done amazing things, we – many of us – have come up with new constitutions, constitutions that are based on our own realities, not on realities that come from elsewhere, also we look at our own specificities, our own individualities as countries.
For us as a continent, it’s actually excellent that we have such a young population.
It’s a young population that’s creative and innovative that are drivers of the economy and they are also the future and the present and therefore whatever they do, they know what they would like to put in place, for themselves and for their own children and for posterity I guess.
So we actually are in a situation where we can lead and not follow, because the problem is ours, the challenge is ours and it’s a wonderful opportunity to use, to propel the continent to the greatest possible heights.
&nbsp;
Q: Briefly take us through what an AU Commission led by you will focus on, looking at the challenges Africa is facing…
&nbsp;
A: I think industrialization, without any doubt. It is the only one that has the ability to reduce poverty, create the jobs that we need and to move the continent [forward]. And I think following that, trade, because trade brings us together, which is a unifier if you like.
We need to make sure that our infrastructure, whether it’s land, sea or air, is seamless. It doesn’t take a day, it’s a process but we need to get on with it. We need to remove the obstacles that are low-lying fruit… they can be removed easily.
One of those is allowing the easier movement of people, business people, of capital, services and goods. There is no reason why Kenya should import; and I am using as an example, if we did not have the dairy sector and we needed butter, milk or cheese, there is no reason why we should import that from 10,000 miles away; if we can just go across the border, into the next country and import from our neighbors.
The only reason why that has been difficult is because of the infrastructure deficit that we are faced with and we need to address that and address it quickly.
In this country we have tried to do it, in the region we have tried to do it with the SGR, with the road infrastructure that we have put in place, with the modernization with the port that has been done over the last few years, with the modernization of our airport, so those are the things we need to do across the continent so that our young people can move from one country to another, bring ideas, bring creativity, bring innovation, but also find jobs.
So apart from industrialization, and obviously there you have to address the infrastructure deficit, trade and the need to trade amongst ourselves; the intra-Africa trade is at 13%, and there is no reason for that. It should actually be at least at 30%; we should, eventually have 60% of trade within the continent.
This is where the population is, this is where the fastest growing middle-class is, and obviously with that, you have a consumer market, so this is where most of the trading should actually take place.
&nbsp;
Q: The outgoing AU Commission chairperson Nkosazana Dlamini-Zuma has been very vocal about peace and security. Share with us your vision…
&nbsp;
A: She’s also been very passionate about agriculture, because agriculture has the ability to transform communities and societies very quickly and there’s a need therefore again as a reason of the youth to make agriculture trendy and productive for the youth.
But you know you cannot undertake development unless you actually have a peaceful, stable and predictable environment. You must have peace and security, without it you can’t have growth.
And so it’s been actually a rallying call of Madam Zuma, to silence the guns and we’ve agreed that we would try to do that at least by 2020, if we can’t do it sooner. I believe that if we all came together and are always committed as she is, we should be able to do that before the 2020 deadline.
Africa does not manufacture ammunition except for a few countries. Africa is resolving most of its conflicts and there are very few countries today, of the 54, that are still engulfed in conflict, in fact there are probably less than five that are engulfed in active conflict, and therefore we are at a place where we should be talking about a peaceful Africa, a secure Africa, a growing Africa, a resilient Africa.
So it’s one of the priorities. We actually addressed most of the issues that were connected to decolonization, that peace and security became a big issue and we started addressing it.
I think if we are focused we can actually deal with it, it’s been successful in the majority of countries and of course there will be hiccups, back and forth, but I think a majority of the countries have gone beyond the stage where conflict is a daily affair, so we need to continue working on it and I think we should be able to get it done.
&nbsp;
Q: What’s your vision on
driving governance?
&nbsp;
A: We have a very comprehensive and all-inclusive agenda. And that is also an issue that is in our Agenda 2063; we are more transparent, we are more open. Again, we are a young continent, the youth is very demanding, we are involving more and more people in leadership – apart from the youth, the women that are coming in jobs now.
So I think today Africa is at a better place, in terms of the rule of law, in terms of governance than it has ever been, and I think the only way forward is to keep improving that.
And as I said before, we [Kenya] enacted our constitution in 2010. Immediately after its enactment – I was in Justice, Permanent Secretary there – we got a dozen requests from countries that wanted to come and look at our constitution and see whether there was anything they could borrow from there that would fit their own circumstances. Because at the end of the day, the instrument is only as good as its implementation.
And you will only implement something that you are really comfortable with, and so the whole purpose of coming to study and look at what we are doing is, ‘will this fit into my own circumstance, is it something I can do now, is it something that can be delayed a bit’.
As you know, our own constitution had transitional clauses, what we needed to do now, what we could a little later; some of the provisions could only actually be fully implemented in five years, six years, and 10 years. So we had actually time periods in the constitution for implementation of different provisions.
So I think it’s the same everywhere, but the governance situation on the continent is better than it’s ever been and I know it’s going to continue improving.
&nbsp;
Q: Your bid has been warmly
accepted across a good number of countries, over 25 African countries. What are your expectations as we head towards January 2017?
&nbsp;
A: We are campaigning, I was told by one of our leaders that campaigns are personal, you must ask for a vote and that if you don’t ask for a vote, even your own brother can vote against you, so we are going across the continent asking everybody for their support and trying of course to obviously convince them that we have a good candidate. They have been very receptive, very warmly received, wonderful arrangements put in place for us… we are encouraged by the reception and the support that seems to be coming across as well.
&nbsp;
– Gitonga is a news producer at CNBC Africa and interviewed Mohamed at the CNBC Africa studios in Nairobi in November, Kenya; for the full text of the interview, visit
www.cnbcafrica.com.

‘Our Strength Lies In Coming Together’

&nbsp;
Kenya is rallying behind Ambassador Dr Amina Mohamed to be the next Chairperson of the African Union (AU) Commission, and Africa has warmly received her nomination. Elections are set to be held in January.
With a stellar diplomatic career of over three decades, Mohamed, a Kenyan, is known as an excellent strategist with proven negotiation and managerial skills, having demonstrated solid leadership in every domestic and international post she has held.
She is the serving Chair of the 10th World Trade Organization (WTO) Ministerial Conference which is the topmost decision-making body of the WTO.
Mohamed rose through the ranks in Kenya’s diplomatic service from legal advisor to the Ministry of Foreign Affairs and Kenya’s Missions to Geneva and New York, to the highest level of Ambassador/Permanent Representative, Kenya Mission, to the United Nations (UN) in Geneva from 2000 to 2006.
She served as Director, Europe and the Commonwealth and Director Diaspora from 2006 to 2007 and was Permanent Secretary, Ministry of Justice, National Cohesion and Constitutional Affairs in 2008.
In July 2011, she joined the UN as Assistant Secretary General and Deputy Executive Director of the United Nations Environment Programme (UNEP) based in Nairobi.
In April 2013, she was appointed by Kenya’s President Uhuru Kenyatta as Cabinet Secretary (Minister) for Foreign Affairs and International Trade of Kenya.
Weeks before the AU Commission elections, Mohamed spoke to CNBC Africa. Excerpts from the interview:
Q: You’ve had many firsts as a woman in leadership in Africa; just walk us through your journey?
A: The first time I did something that I guess laid the road-map for whatever else came after was when I was elected to chair the International Organization for Migration Conference which is a council for migration. At that time, Kenya was actually the only African country that was a member of the International Organization for Migration. And when I was approached, I told them that the only reason I would agree to be put up as a candidate for the chairmanship would be if they would open up the organization for Africa, and would be able to attract more countries into the organization.
So we reached an understanding and I chaired it and during my chairmanship, that one year, I brought in a few African countries, and the rest is actually history, because now I think the largest group of countries that are members of the IOM are African countries, and from then on, I think in especially the kind of job that we do as ambassadors, you are called upon to show your commitment to the continent by agreeing to chair different bodies.
And so I was fortunate, I was privileged that the African group in the cities that I served in saw it fit to elect me over and over again, and so it’s something that I enjoyed doing, I was committed to doing and I think the record is not a bad one.
<div id="attachment_32061" style="width: 692px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-32061" class="wp-image-32061 size-large" src="http://www.forbesafrica.com/app/uploads/2017/05/041©Thomsonphotography-Amina-WTO.jpg" alt="" width="682" height="1024" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/05/041©Thomsonphotography-Amina-WTO.jpg 682w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/041©Thomsonphotography-Amina-WTO-300x450.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/041©Thomsonphotography-Amina-WTO-600x901.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/041©Thomsonphotography-Amina-WTO-200x300.jpg 200w" sizes="(max-width: 682px) 100vw, 682px" />Dr Amina Mohamed</div>
<h3>Q: You are now running to be chairperson of the AU Commission, tell us about the drive behind this decision?</h3>
A: Kenya has put up my candidateship for the position of Chairman of the African Union Commission. Why am I running? I think we have a lot of value that we can bring to the table; we are also at a good time in the history of this continent. The first thing that comes to mind is the framework that we have. We have a framework that was agreed on by all African countries that needs a faithful implementer to put in place.
It’s a framework called Agenda 2063, for inclusive growth and sustainable development and it has a number of amazing aspirations for the continent. I think it’s actually time for East Africa because of the track record we have also set as a community, as an East African Community in what we have done.
We created a model for others to emulate and so there’s just a feeling that it was time for us to run for this position and I would be a good candidate for that because again I can bring people together, I have never come across a challenge that cannot be resolved, I look at challenges actually as opportunities. And I believe that we all know what we need as a continent to move us forward. One should look at the leaps we have made.
We are a young continent, we have done amazing things, we – many of us – have come up with new constitutions, constitutions that are based on our own realities, not on realities that come from elsewhere, also we look at our own specificities, our own individualities as countries.
For us as a continent, it’s actually excellent that we have such a young population.
It’s a young population that’s creative and innovative that are drivers of the economy and they are also the future and the present and therefore whatever they do, they know what they would like to put in place, for themselves and for their own children and for posterity I guess.
So we actually are in a situation where we can lead and not follow, because the problem is ours, the challenge is ours and it’s a wonderful opportunity to use, to propel the continent to the greatest possible heights.
&nbsp;
<h3>Q: Briefly take us through what an AU Commission led by you will focus on, looking at the challenges Africa is facing…</h3>
A: I think industrialization, without any doubt. It is the only one that has the ability to reduce poverty, create the jobs that we need and to move the continent [forward]. And I think following that, trade, because trade brings us together, which is a unifier if you like.
We need to make sure that our infrastructure, whether it’s land, sea or air, is seamless. It doesn’t take a day, it’s a process but we need to get on with it. We need to remove the obstacles that are low-lying fruit… they can be removed easily.
One of those is allowing the easier movement of people, business people, of capital, services and goods. There is no reason why Kenya should import; and I am using as an example, if we did not have the dairy sector and we needed butter, milk or cheese, there is no reason why we should import that from 10,000 miles away; if we can just go across the border, into the next country and import from our neighbors.
The only reason why that has been difficult is because of the infrastructure deficit that we are faced with and we need to address that and address it quickly.
In this country we have tried to do it, in the region we have tried to do it with the SGR, with the road infrastructure that we have put in place, with the modernization with the port that has been done over the last few years, with the modernization of our airport, so those are the things we need to do across the continent so that our young people can move from one country to another, bring ideas, bring creativity, bring innovation, but also find jobs.
So apart from industrialization, and obviously there you have to address the infrastructure deficit, trade and the need to trade amongst ourselves; the intra-Africa trade is at 13%, and there is no reason for that. It should actually be at least at 30%; we should, eventually have 60% of trade within the continent.
This is where the population is, this is where the fastest growing middle-class is, and obviously with that, you have a consumer market, so this is where most of the trading should actually take place.
&nbsp;
<h3>Q: The outgoing AU Commission chairperson Nkosazana Dlamini-Zuma has been very vocal about peace and security. Share with us your vision…</h3>
A: She’s also been very passionate about agriculture, because agriculture has the ability to transform communities and societies very quickly and there’s a need therefore again as a reason of the youth to make agriculture trendy and productive for the youth.
But you know you cannot undertake development unless you actually have a peaceful, stable and predictable environment. You must have peace and security, without it you can’t have growth.
And so it’s been actually a rallying call of Madam Zuma, to silence the guns and we’ve agreed that we would try to do that at least by 2020, if we can’t do it sooner. I believe that if we all came together and are always committed as she is, we should be able to do that before the 2020 deadline.
Africa does not manufacture ammunition except for a few countries. Africa is resolving most of its conflicts and there are very few countries today, of the 54, that are still engulfed in conflict, in fact there are probably less than five that are engulfed in active conflict, and therefore we are at a place where we should be talking about a peaceful Africa, a secure Africa, a growing Africa, a resilient Africa.
So it’s one of the priorities. We actually addressed most of the issues that were connected to decolonization, that peace and security became a big issue and we started addressing it.
I think if we are focused we can actually deal with it, it’s been successful in the majority of countries and of course there will be hiccups, back and forth, but I think a majority of the countries have gone beyond the stage where conflict is a daily affair, so we need to continue working on it and I think we should be able to get it done.
&nbsp;
<h3>Q: What’s your vision on driving governance?</h3>
A: We have a very comprehensive and all-inclusive agenda. And that is also an issue that is in our Agenda 2063; we are more transparent, we are more open. Again, we are a young continent, the youth is very demanding, we are involving more and more people in leadership – apart from the youth, the women that are coming in jobs now.
So I think today Africa is at a better place, in terms of the rule of law, in terms of governance than it has ever been, and I think the only way forward is to keep improving that.
And as I said before, we [Kenya] enacted our constitution in 2010. Immediately after its enactment – I was in Justice, Permanent Secretary there – we got a dozen requests from countries that wanted to come and look at our constitution and see whether there was anything they could borrow from there that would fit their own circumstances. Because at the end of the day, the instrument is only as good as its implementation.
And you will only implement something that you are really comfortable with, and so the whole purpose of coming to study and look at what we are doing is, ‘will this fit into my own circumstance, is it something I can do now, is it something that can be delayed a bit’.
As you know, our own constitution had transitional clauses, what we needed to do now, what we could a little later; some of the provisions could only actually be fully implemented in five years, six years, and 10 years. So we had actually time periods in the constitution for implementation of different provisions.
So I think it’s the same everywhere, but the governance situation on the continent is better than it’s ever been and I know it’s going to continue improving.
&nbsp;
<h3>Q: Your bid has been warmly</h3>
accepted across a good number of countries, over 25 African countries. What are your expectations as we head towards January 2017?
A: We are campaigning, I was told by one of our leaders that campaigns are personal, you must ask for a vote and that if you don’t ask for a vote, even your own brother can vote against you, so we are going across the continent asking everybody for their support and trying of course to obviously convince them that we have a good candidate. They have been very receptive, very warmly received, wonderful arrangements put in place for us… we are encouraged by the reception and the support that seems to be coming across as well.
&nbsp;
– Gitonga is a news producer at CNBC Africa and interviewed Mohamed at the CNBC Africa studios in Nairobi, Kenya; for the full text of the interview, visit
www.cnbcafrica.com.

US-ECONOMY-IMF-WORLDBANK

‘Our Strength Lies In Coming Together

Anew mining act was introduced in Kenya, in May, which promises to usher a new era.
Among some of the new initiatives is the setting up of a National Mining Corporation, a Mineral Rights Board and a clear formula of how royalties are to be shared. Of the latter, the national government expects to keep 70% while the rest is distributed between the counties and the community in which the mining takes place.
The new law comes at a crucial time. Internationally, the country ranks poorly on mining matters. According to results of the Fraser Institute’s 2015 annual survey of mining and exploration companies, Kenya was ranked among the bottom 10. It is hoped that the new legislation will help catapult the country up the ranking. The government is eager to see the industry improve its contribution to the economy, from the current 0.9% to 10% by 2030. As at the end of June last year, overall value of mineral output stood at a mere $240 million.
In a bid to package its mining profile, the country is busy mapping out its mineral wealth through an aerial geological survey. This is an important step. For many years, investors have complained about the lack of extensive mineral data, which has resulted in less investment. The new survey is expected to unlock the massive potential in the industry, similar to its neighbors. In Uganda, an aerial survey in 2006 led to the discovery of 200 million tons of iron, five million ounces of gold and an updated estimate of the country’s vermiculite reserves to 55 million tons, up from just five million.
As Kenya embarks on this new direction, plenty of obstacles lie ahead. One key challenge is the obvious resistance to some of the clauses of the new law. Some industry figures have decried the requirement for license holders, whose planned capital expenditures exceeds the prescribed amount, to list at least 20% of their equity on the local exchange within three years after the start of production. Some have also taken issue with the government taking 10% of equity in large-scale mining operations and consider the forfeiture of unused exploration budgets to the state as a punitive provision.
It will be critical for the government to banish the notion of instability, particularly around security of tenure. Unilateral cancellations of exploration licenses will not augur well for the image of the sector. Moves such as last year’s cancellation of 65 mineral exploration licenses risk scaring away even the most committed investors. Current low prices also present a major hurdle. Poor commodity prices and an 11% decline in total mineral output last year, to 1.5 million tons, has led to some processing plants shutting down.
Be that as it may, the mining landscape is on the cusp of change. Under the Mining Strategy 2030, Kenya expects to earn up to $1.3 billion in royalties within 10 years. Gold mining alone is expected to fetch $3 billion in revenue. The mining department is also seeking to build an additional 10 to 20 mines in 15 years. The ministry expects to meet this target by expanding the small gemstone industry, developing a mining services industry and registering the tens of thousands of artisanal miners. Artisanal miners are estimated to account for over 60% of annual gemstone and gold production, according to the United Nations Development Program (UNDP).
Faster progress may come through the proposed national mining corporation which is set to act as an investment promotion vehicle, attracting foreign capital and bringing attention to the country’s vast mineral wealth. Kenya has an estimated three billion tons of titanium, 400 million tons of coal in Mui Basin in Kitui County, gold in western Kenya, gemstones in the coastal region and large deposits of fluorspar and limestone.
With all these initiatives, Kenya’s mining future is bright. The country’s humble start is set for a successful future.

Firing Up the future

That interest rate spreads have absurdly been high in Kenya has never been in question. Like in many other African countries, commercial banks in Kenya have over the years left their customers choking with the discomfort of unreasonably costly loans.
In fact, market data has shown that, whereas in many developed countries, spreads between average lending and deposit rates vary around 2%, they are often up to 10% or more in developing countries.
The average lending rates in Kenya have oscillated at about 18%, ranging between 17.2% and 19.2% for the six biggest banks.
But even with this in mind, a decision by President Uhuru Kenyatta to sign a new law imposing lending rate caps and deposit rate floor on banks leaves the financial sector at a crossroads. The new law sets an interest rate cap on loans of four percentage points above the base rate published by the Central Bank of Kenya and a minimum interest rate on deposits of 70% of the same base rate.
“Experience across the globe has shown that interest rate caps do not just not work, but they might actually do damage to the inclusion agenda that many policymakers, including in Kenya, are interested in,” says Thorsten Beck, a  professor of banking and finance at Cass Business School in London, who thinks it may affect financial inclusion in Kenya.
Perhaps partly due to the political heat on high lending rates and just a year away from Kenya’s next general elections, Kenyatta may have made a populist decision and even defied the Central Bank, the National Treasury and industry that have opposed capping for fear of market distortion.
Lowering interest rates was a core issue in Kenyatta’s election manifesto and ignoring the rate caps would have seen him play into the hands of opponents who have been vocal about the high cost of business and living.
“This is the third time that the National Assembly is attempting to reduce interest rates to affordable levels. In the previous two instances, dialogue and promises of change prevailed and banks avoided the introduction of these caps. In those instances, banks failed to live up to their promises and interest rates have continued to increase along with the spreads between the deposit and lending rates,” Kenyatta argued when he signed the new law.
“Despite having one of the most efficient and effective financial markets, Kenya has one of the highest returns on equity for banks in the African continent,” he stated. “Banks need to do more to reduce the cost of credit and ensure that the benefits of the vibrant financial sector are also felt by their customers.”
Though Kenyatta may assume cost of credit could come down with the new law, we will have to wait and see what impact the caps will have in the long term. There is concern that they may cloud the central bank’s monetary policy signals and even undermine efforts to keep inflation within the government’s target range.
The caps may also work against bank customers should banks resort to introducing fees to mitigate operational costs and risks.
“Another possible response will be rationing of customers, effectively excluding marginal borrowers and depositors, where the former will not receive any loans and the latter will be priced out of the market with high fees and documentation barriers. Neither of these reactions is favorable to the inclusion agenda nor fosters transparency and efficiency in the financial system,” says Beck.
The disclosure requirements contained in the new law are welcome because of the different types of costs included by banks in Kenya. Most financial institutions do not only charge interest rates on loans, but also fees. Similarly, they do not simply pay interest on deposits but some also charge withdrawal fees.
In some cases, these fees are as high as 2.5% of the total loan amount. Also, all of them charge withdrawal fees on at least one of their savings accounts.
With the new law, consumers will have clarity on what they are paying over and above a base rate, which is a positive step towards consumer protection.

Kenya At A Crossroads  With Caps

Kenya’s attraction of foreign direct investment (FDI) has no doubt been impressive in the past few years, buoyed by demand in consumer and real estate sectors.
East Africa’s largest economy for instance received an estimated $1.9 billion in FDI in 2015, a 65% climb from 2014, data by the African Development Bank (AfDB) shows, cementing its unique position among countries with no significant natural resources that are receiving significant FDI inflows targeted at their consumer-oriented sectors.
In its medium-term economic framework, Kenya actually aims to tap FDI proceeds to help boost its economic performance amid wobbly returns from agriculture that has for decades been its mainstay in terms of GDP contribution.
A new regulation sneaked through the East Africa nation’s Parliament requiring foreign companies to allocate 30% shareholdings in their operations in Kenya to local investors. This threatens to reverse gains in FDI attraction.
“It may be very expensive, if not impossible, for Kenyan individuals to purchase or invest at least 30 percent in a foreign company. The process of carrying out due diligence in a company in another jurisdiction to effect the share sale or allotment would not only be time consuming, but also expensive,” says a lobby of United States investors, the American Chamber of Commerce, in Kenya.
Investors who fail to comply with the fresh ownership rules will be slapped with a fine of KSh5 million ($50,000), so states clause 975(2b) of the Companies Act 2015 that was adopted last November.
“This requirement may do more harm than good to the Kenyan economy. To start with, this 30 percent rule flies in the face of Kenya’s goal of being a regional business hub. A major concern is the conflict between this rule and the fact that Kenya is a liberalized market economy which embraces the free-market ideology. This rule is a form of protectionism,” says Lois Musikali, a legal expert at the Nairobi-based Centre for Applied Research in Law and Policy (CARLP).
Several leading foreign firms, including Vodafone, Coca-Cola, Diageo, General Electric (GE), and Bharti Airtel, have operations in Kenya and authorities should strive to maintain a friendly and predictable business profile that would attract more investors.
“There are concerns that foreign companies will look elsewhere for an investment partner. It is also true that many Kenyans will find it almost impossible, in terms of cost, to acquire a 30 percent stake in a foreign company that wants to register in Kenya,” says Musikali, noting that the absence of guidelines for foreign companies on how or where to find these Kenyan citizens creates a loophole for rent seeking, whereby corrupt public officials could acquire stakes in foreign firms seeking registration in Kenya using taxpayers money thereby advancing crony capitalism.
These resentments are weighty and Kenya has no option but to expunge the regulations from its laws to prevent polarizing investment.
Kenya’s Attorney General Githu Muigai says the regulation will be repealed through the Finance Bill 2016 that is currently before Parliament.
“The clause was unilaterally inserted and does not reflect the investment policy of the Kenyan government. The rule will be repealed through the Finance Bill 2016 that is at the committee stage in Parliament,” he says.
Nonetheless it is baffling that the regulations were allowed to see the light of day because Kenya has previously unsuccessfully tried to introduce a local ownership rule in its telecoms industry after it emerged hat foreign firms were facing difficulties in securing local partners with the right expertise and financial muscle to support the business.
Under this rule foreign companies investing in the telecom sector were required to reserve at least 30% of their shareholding for local partners. This shareholding was reduced to 20% and eventually reviewed for discouraging foreign capital flows in the country.
Kenyan authorities must pull off this path or risk causing ripples among foreign investors given the realities of other outlier factors such as the prevailing global economic slowdown.
The International Monetary Fund (IMF) projects that Kenya’s FDI will fall by nearly a quarter this year, thanks to declining inflows into hydrocarbons exploration and an adverse global economy. According to the latest IMF update on the Kenyan economy, FDI could fall by 23.7% to $981 million.

Tag: Kenya

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