Baringo County Thug Of War Uneconomical

After past weeks’ wrangles over the head quarters of this county, sought the in-depth meaning of the name Baringo, the answer I got was a shocker, in the local language; Bar (Kill) and Ingo (a brother), in short the name Baringo means kill a brother. The wrangles which nearly got physical at some point between to Mps, Hon. Cheptumo and Hon. Sambili reflects how volatile the ground rily is, cattle rustling and killings at its best.

Baringo county is located at the heart of the rift valley, it has a rich history and holds a special place in the annals of not only Kenyan politics but also economy. From the political angle parse, it produced a record serving president who ruled Kenya from 1978-2002 (24 years), while in the economic arena, its terrain and amazing scenery contributes billions to the exchequer each financial year through tourism. However despite this massive contribution to the national coffers, it’s ranked among the poorest region with hunger killing hundreds each year, cattle rustling also adds to this death toll.

The motherland of honey, aloe vera,sisal and diverse culture is at the cross roads in finding a suitable administrative centre to the newly established county which covers 5 constituencies(Baringo central,Baringo east,Eldama ravine,Baringo East and Mogotio) .It’s heartbreaking that politics is taking a centre stage in the issue instead of a feasibility study to ascertain a ‘prime’ location and one is left with more questions than answers in the ‘contentious’ issue, Why do we have evaluation officers?, why do the county leadership fear a county mass survey? And is political muscle the first and last option?.Kabarnet or marigat?, the voting might skew to the later but is this feasible?.From my point of view, marigat is a food basket and a tourist attraction region with the location of 2 lakes; Lake Baringo and Bogoria (with glaciers).

Environmental economists will concur with me that its infeasible to construct an industrial town near a lake without environmental impact assessment and cost benefit analysis, due to pollution and relatively poisoning of aquatic.Tourism ought not be used as a reason to crowd marigat because these persons need some privacy and therefore need a vicinity outside a commercial centre. In short commercial(industrial center) and tourism are two sides of the same coin, they add value to the coffers of the county,yes,but you have to differentiate them if maximum revenue is to be derived.Marigat therefore needs road expansion, tourist amenities and conservation if the county is to flourish.Kabarnet which is relatively established, with an estimated infrastructural value of 20 billion should be kept for administrative purposes and resources from the central government channeled to revenue generating activities but not mere administrative infrastructure.

Is The Central bank of Kenya to blame?

I must admit it ain’t easy at any time to be a policy maker, an individual or corporate decision affects millions of people whether positively or otherwise. Political instability, oil crisis and weak government policies are to blame for the current economic phenomena. It’s therefore apparent that several factors are to blame for the weakening of the shilling and the runaway inflation. In my today writing allow me to single out government policies (both Fiscal and Monetary) which have brought us to this ugly state.

I woke up to peruse the business news as usual and was disappointed to see inflation has it a rapid high of 6.54 %.It’s disturbing to see the local investor unable to thrive in forex due to the daily souring of the shilling. An importer in Kenya today equals a speculator, with the fluctuation of the local currency. Many economists will argue that inflation is good for economic growth but what about a runaway one? .In the short run inflation might increase the GDP but that also affects the welfare of the general population negatively in accordance with the domestic consumption. Families moreover will channel more of their resources in purchase of basic consumption good and missing out on investment because of the savings dent.

When the regulator (CBK) reduced bank rate to 6.5% it was apparent that the economy would flood with liquid money. To highlight how this comes about let me illustrate it with the mushrooming infrastructure and growth of commercial banks portfolio. The additional currency in circulation is due to the rapid developments engineered by government (Fiscal policies),i.e. the channelling of resources to improve the road and housing network throughout the country, the profits released recently by commercial banks doesn’t amuse me either, when I see a commercial bank add a shilling from her final output,i see an extra shilling in circulation which demand an extra quick policy. With the public having a lot of liquid money (due to fiscal and monetary policies) in their coffers, demand for ‘needs’ highten, affecting the supply (due artificial shortage of goods). This therefore in line with the principle of demand and supply subsequently increases prices.

The Kenyan shilling hitting a high of 86 per dollar is a plus to the external economies, who are now able to import our good and services cheaply while it gags our forex players. The central bank of Kenya bonds with a coupon rate of 12% are indeed okay in mobbing some of the excess money in circulation but why drain a dam when it still has other tributaries to feed it?, With this reality hitting the public, its time policy makers rush to save the hoi polloi and investors from this crisis through rapid but feasible policies.

Information Technology must embrace ‘informal’ trade to make an impact

Science and technology has promised to bring prosperity for more than a decade now,but little progress has been made.Ecoke has largely established that Kenya and African way of making and trading is largely informal.
The word “informal” may conjure images of black market activity or harmful economic practice —the darker, rarer side of informality.But the informal economy which are legal businesses that are largely unregistered and unprotected always known as ‘Jua kali’ in Kenya— comprises a much broader spectrum of activity, from piecing together scrap materials in makeshift workshops to extending credit to loyal customers. Most products are simple goods like furniture and kitchenware but a select group of advanced craftsmen has developed complex agricultural and tooling machines.
In Kenya, the latest survey of microenterprises, published by the National Bureau of Statistics in 1999, suggests that over three-quarters of non-agricultural employment occur in the informal economy.If technological interventions are to have impact, they must adapt to this informal mode of making and trading.The informal spirit, known in Kenya as jua kali, has produced clusters of economic activity throughout Africa’s cities and rural market centres.
Producers and traders set up shop in close proximity, attracting competitors, labour, customers and support services such as credit providers.This positive feedback loop has bred some of the largest manufacturing clusters in the world — Gikomba in Nairobi, Kenya, for example.These flourish due to three elements: the resourcefulness, relationships and reason (or knowledge) of the entrepreneurs.
Resourceful engineers make treasure out of trash — from oil lamps made of soup cans to grass cutting machines made of scrap sheet metal — and at the end of their useful life, these items are fed back into the web of production by scrap pickers.An understanding of the local context is deeply embedded in informal business.Engineers continuously adapt production methods to available materials and product quality to customers’ wallets — precisely the flexibility needed to thrive in that context, however frowned upon by regulators.
Despite the promise of informal clusters, little innovation has emerged in terms of new products that meet local demand — tools that boost agricultural production, for example.
What happens, for example, when governments or multilateral institutions introduce factories and corporate parks?.Not much. A factory might employ a dozen skilled workers, but the investment rarely trickles down to the “indigenous” economy.And enterprises may only import raw materials and export the resulting goods, creating a closed loop with no links to domestic industry.
The main barrier to innovation and growth for entrepreneurs is risk. We can reduce this risk by improving access to resources like credit, tools and skills.And we can increase the willingness to take risks by promoting a culture of innovation by using market intelligence, working with customers to co-create products and improving the design process.
But simply reducing risk is not enough: in Kenya, a UN Industrial Development Organisation (Unido) project provided power and equipment to rural jua kali business owners only to find that they used the new tools to make the same products at the same quantities.Maker Faire Africa, a festival for craftsmen, has sparked a social movement around informal innovation by rewarding those who demonstrate inventiveness and risk-taking.
This movement has incubated new technologies for local consumption, such as a machine for making rope and a tea maker activated remotely by SMS messages.Though resourceful on its own, the informal economy is inextricably linked with the formal economy.For example, factory waste provides materials, and the most reliable commissions are subcontracted from formal enterprises.And formal systems can have a broader impact.
The explosion of access to mobile devices and cloud computing is making a difference in Kenya — allowing small businesses to make payments more easily and securely using Safaricom’s M-pesa, for example.
Though the informal economy on its own may not yield prosperity for Africa, technological and scientific interventions that leverage informality will be more likely to succeed.

The financial crisis was a ‘stock market’ failure

The new year 2011 is here with us and with the number of financial resolutions Ecoke deemed fit to vividly look into the past year crisis which brought many economies to their knees, ‘The financial crunch’.Ecoke believes that the crisis was manmade and would have been avoided if all the stakeholders were involved. You are asking why?, Ever asked why these top firms were never affected by the global crisis?;
1. Primark
2. Pawnbrokers
3. BBC
4. McDonald’s
5. Ryanair
6. William Hill
7. Google
8. Wal-Mart
9. Exxom Mobil
10. Potential Entrepreneurs
At that moment, one could spot a common problem with Investment banks’ balance sheets, where you observed that on the left side nothing was right while on the right side nothing was left. The primary victims of the crisis were; the housing market which reported dramatic falls in activity as housing construction and buying collapsed in major economies, Secondly, the Bank and financial services which as the scale of ‘toxic debt’ and mortgage default unravelled, reported inevitable record losses and finally the Discretionary retail spending in particular the car industry, hotels, airlines and international travel sector in general. The US was at the receiving end, with many accusing it of making a new weapon that destroyed people ,but kept the building intact(The stock market).Its times like these when tremendous competitive success were achieved, Companies shifted positions in the market place, market leaders become followers and followers become leaders, because it was a period where everything was opening and unfreezing. Financial insecurity was real, a bank client in an interview once said... ‘What worries me most about the credit crunch is that if one of my cheques is returned stamped ‘Insufficient Funds’, I won’t know whether that refers to mine or the banks’. Do we have sound financial policies for this year and posterity?

‘Chasing A stolen Cow’ _ ODM Top Leadership Bear Great Responsibility in PEV

Oh Jesus! This is the epitome of the inexplicable, Kenyan Economic growth has more often been affected by the ICC cum Hague talk, and want to point out here at ECOKE on how Kenyan then opposition party flared emotions for selfish gains. We all know what the imminent indictment by ICC prosecutor Luis Moreno Ocampo is about, to hold those “most responsible” for the PEV” to account and its only befitting that the wheels of justice abound during this festive season, after all the injustices for which we desperately seek remedy were committed during the Holidays. Let me start with the PM, Raila Amolo Odinga; Odinga is a tenacious leader who unfortunately lacks tact and is a victim of his own missteps and impulsions, he has demonstrated over the years, time and time again, that he acts and says things without carefully thinking through first and in his position as a leader with such a national following, is dangerous. There are plenty of examples but for the purposes of the scope of the ICC, let me confine myself to 2007/208 PEV.
It is no secret that PM Odinga played a crucial role in Kibaki’s election in 2002 only to be betrayed shortly thereafter, be that as it may, so is politics. He was and still is a wounded man and when it became clear that the road to State House had narrowed considerably every passing day, he became ever more desperate and sought to whip up public emotions against the Kibaki administration way before the 2007 elections; it didn’t help matters that soon after taking office, Kibaki purged most of former President Moi’s staffers in government- most of them Kalenjin, and replaced them with what appeared to be his tribesmen, the Kikuyus. Subsequently, Odinga saw an opportunity in this turn of events and aligned himself with his erstwhile nemesis of the Moi era (the doctrine of the enemy of my enemy is my friend fit perfectly); this would have been perfectly legit but for the fact that at that moment the foundation for ethnic cleansing in Kenya was born.
Fast forward to the 2007 elections;- Odinga knew the results were a cliff hanger after Kalonzo had peeled away a sizeable number of voters from the original ODM; he had managed to turn a considerable electorate against Kibaki along ethnic lines; for example, William Ruto, clearly led the charge in Rift Valley of instigating prejudice against Kisiis and Kikuyus and so when the election results were announced, this anti Kikuyu/Kisii arsenal at his disposal was activated at a moment’s notice, he used it to his maximum benefit personally but unfortunately to the detriment of the nation as a whole. PM Odinga a.k.a. Arap Mibei explicitly called for MASS ACTION to protest the “stolen election” Odinga knew or should have known that such calls would result in violence but he did it anyway, repeatedly, and for that reason he must share the burden of the outcome of his calls. Paradoxically, the areas most affected by these protests were Rift Valley and Luo Nyanza, areas in which Odinga won handily almost to the last vote and therefore had the least reason or purpose to incite the public against fellow citizens (MADOADOA as they were referred to by ODM during the campaigns) unless of course to make a statement- it is premeditated!
There is clearly, at the very minimum, a case for “implied malice” on his part for which constructive criminal liability attaches for the purposes of the ICC. He and his estranged bed fellow William Ruto were on the same side of the battlefield, they campaigned and planned together, and they conspired together, before, during and after the general elections and I don’t get it now why and how Ruto would bear a higher burden in this than his friend the PM! I just don’t get it. Raila was the man running for President, not Ruto; besides his relatives and friends, the PM is the single greatest beneficiary of MASS ACTION, he wields executive authority; the same cannot be said of the dead, the raped many of whom contracted deadly diseases, the maimed, the displaced, the IDPs, Ruto, the PEV suspects in jail/remand- none of these people has anywhere near the rewards brought about by the calls for MASS ACTION as PM Odinga and therefore, truth be told, in balance and taking into account the Sum Total of his actions, before, during and after, PM Odinga bears the greatest responsibility for the 2007/2008 PEV in Kenya. The Prime Minister’s office in Kenya is drenched in innocent blood and it is a great thing it is going away.
Raila, Ruto, Balala, Kosgey, Kones, Larboso and many others are on record inflaming the public and when the dust settled, they strenuously defended the suspects, they said they didn’t do anything wrong because they were chasing their “stolen cows”, they tried to manipulate the ICC just as they did the Kenyan public; well guys- to those of you still around anyway, time is up- you can’t fool the world all the time. Time to pay is now.

The Exchequer Robbed of Sh275 billion per year, but the economy is okay.

Ecoke has been looking at official economic data released by the KNBS in the past five years and wondered why they rily do not add up. For instance two years ago, as the bureau of statistics released data indicating that the Kenyan economy grew by a narrow margin of 1.6 per cent, I got even more interested in the art of measuring economic growth and what economic parameters were considered.Sales across our product range grew by more than 20 per cent yet some of the official data was showing that the economy expanded by a thin margin of less than two per cent. “There is certainly something wrong in the way we are measuring growth.” Hundreds of Kenyans have increasingly had to face junior economist predicament after failing to reconcile the level of economic activity they see in their neighbourhoods with what official data says.
Parliament’s Budget Office (PBO) says the answer lies in Kenya’s large and rapidly expanding underground or grey economy that is never captured in official data but now accounts for nearly half of the country’s Gross Domestic Product. Kenya’s underground economy has expanded rapidly in the past five years to become a mammoth Sh825 billion industry that is denying the government at least Sh275 billion in uncollected revenues, the PBO says. This means Kenya Revenue Authority (KRA) is tapping only half of the estimated Sh750 billion tax revenues potential, leaving those already in the tax bracket with the heavy burden of financing public services and ultimately economic growth and effectively means the national economy is nearly twice the current estimate of Sh1.6 trillion.The underground economy – commonly defined as commercial transactions that go unreported or unrecorded for tax purposes – has traditionally been made up of hawkers, small-scale farmers, carpenters, dressmakers, watchmen, construction workers and domestic workers (maids and gardeners).
In the past couple of years however, the real estate and agriculture sectors have attracted big money without a commensurate rise in tax revenues raising doubts on the effectiveness of the revenue collection machinery.
Economists say it is these underground consumers who are driving the growth of sales for companies like ARM without getting captured in the official data. The PBO says allowing millions of people to gain from the economy without contributing to the national revenues has become a major threat to wealth distribution and social stability in Kenya that the country must immediately confront.This is because evading taxes makes it harder for those who are being taxed to compete with those outside the tax bracket besides creating price distortions in the marketplace. It estimated that goods produced by those who pay taxes are, for example, 16 per cent more expensive that that from the tax cheats.
Though workers’ salaries have risen steadily over the past five years, high levels of inflation and the accompanying erosion of purchasing power has effectively offset the gains forcing millions to cut back on consumption.“The size of the underground economy reflects a lack of information by the Government that ultimately hampers policy choices,” the PBO says in a status report published last month. “It therefore becomes easier for the Government to continue taxing those who are easy to get and leaving the formal sector workers with the burden of sustaining the economy,” says the report.Growth in the number and volume of businesses outside the tax net has continued despite KRA’s heavy investment in new structures to expand its reach.
Since coming to power in January 2003, the Kibaki government has applied a mix of enticement and coercion to get the number of registered tax payers needed to finance a budget that has nearly doubled in the past seven years. In January 2008, for instance, the Government introduced a three per cent turnover tax targeting small and medium-sized firms with annual total sales of between Sh500,000 and Sh5 million.But tax experts say revenue leakage remains massive leaving the tax burden on the shoulders of the few players in the formal sector. “The situation is such that small businesses are not registering or the system is so weak to capture and follow them,” Its apparent that chasing small taxpayers is an expensive assignment but maintains that the cost could be significantly offset with the right compliance machinery.Treasury’s latest report indicates that cumulative revenues stood at Sh132.9 billion or 4.9 per cent of GDP at the end of September, against a target of Sh154.9 billion or 5.7 per cent of GDP, putting the government on a tight leash that points to spending cuts or heavy borrowing in the coming months.
It is expected that the resulting financing gap will force the government to scale back some of its investment plans or push Treasury further down the path of deficit financing beyond the Sh105 billion cap set for domestic borrowing the in the current financial year. “If the underground economy remains untaxed, the government will continue losing billions of shillings in revenue and as more people move into the informal sector to escape the burdensome taxation, it will become increasingly difficult for the government to hit its revenue targets,” .

Kenyas’ Safaricom,A bitter option _Finally I Was robbed

It was on Thursday 2nd dec 2010, i left the office early though with lots of unfinished business, and with lots of phone calls to make before the end of my busy schedule,as usual I bought a 100 shillings scratch card voucher from a nearby safaricom vendor, but to my surprise after topping up the network only updated 10 shillings out of the 100, where did 90 bob go?

For clarity
The Bamba 100 pin no. Was 426983888373 and its serial no. 1004698300057
-Upon petitioning the firm through their customer care executive, he implied that the serial number was for a bamba 100 while the pin number was for a bamba 10, but how is this possible if the two are contained in the same card?
-He further pointed out that the serial no. Had been used on wed (1st dec 2010) by another number, but my question is, how then is it possible for a card with the same serial number to be used twice without the system detecting?
Being a loyal customer for 8 years am rilly disappointed by safaricom antics.