tag:blogger.com,1999:blog-12811314523132552852024-03-13T10:00:48.571-07:00Sufuria EconomicsSufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1281131452313255285.post-42994859594244968052012-02-02T07:33:00.000-08:002012-02-02T07:33:31.723-08:00My un-educated Sufuria is sick<div class="separator" style="clear: both; text-align: center;">
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">If you ask me, the real cancer of successive Kenyan governments has been the reliance on the philosophy of reactive management. It seems to me that with almost everything in our great country the KE government is always acting after the event. <span style="mso-spacerun: yes;"> </span>It’s almost as if there are no statistics, no intelligence no rumors , nothing to help people plan for things. It’s just amazing.</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">I mean if you look at any sector across our economy you are likely to find myriad situations where the KE government is caught absolutely flatfooted. The annual flood and drought famine issue are the best example for this, but the hardest hit sectors are surely without a doubt education and healthcare.</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">You may remember that the doctors went on that now infamous strike last year demanding a raft of things and paralyzing the KE health system for days on end. The confusion by which the Government handled this was appalling. What was worse was the facts that the strike unearthed. </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">For one the Doctors claimed that there are only 2,300 doctors employed by the GoK (down by 700 since Jan 2011). Contrast this with the 40 million odd Kenyans and you quickly realize that the issue here is really NOT salaries. I mean how in the world do we expect 2,300 guys to treat us all?? It’s preposterous. Off course we must take a minute to add that this 2300 is not the total number of doctors in Kenya but the only the total number of those employed by the GoK. <span style="mso-spacerun: yes;"> </span>Then after that we must ask ourselves this: to what extent should healthcare be left to private hands? </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">According to some estimates (sources below) there are 4,700 healthcare facilities countrywide and only 51% of these are run by GoK. This means that GoK is hoping to treat 4,210 people per heath facility at best and 8,510 per facility at worst. God help us if we get an outbreak of anything. </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Now, please note that these statistics do not even take into account wear and tear, healthcare professionals per facility, morale levels, population growth etc etc.? Fellow Kenyan (in Obako voice) at best, we are a country of sick sufuria owners. </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Now let’s turn to education. The 2009 census put the total number of school going children (age 7-18) at a little over 13million. Contrast that against a total number of schools in Kenya being rumored to be at 15,367 (nursery to secondary school, public and private). Next, add that the teacher to student ratio in Kenya in 2010 was 1:48.9 and now you will see that changing the number of subjects or reverting to 8-2-2-2 or 4 -4-2-4 doesn’t really matter.</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">The infrastructure available for education in our country is way below our needs and this is our main problem. The 2011 performance (and the annual decline) is just a symptom of what is really ailing us. </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Given all this I can confidently predict here that kids will continue to fail for the foreseeable future. As long as the discussion focuses on number of hours in class or whether or not kids should do exams then we are doing absolutely nothing to help them out. And contrary to popular thinking, taking your kids to private school is akin to clutching two straws as opposed to one; we are still drowning.</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">But, maybe I am wrong and it’s my sufuria that is uneducated. </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><a href="http://www.nation.co.ke/News/Education+Major+changes+revealed/-/1056/1318256/-/ckck1hz/-/index.html"><span style="font-family: Calibri;">http://www.nation.co.ke/News/Education+Major+changes+revealed/-/1056/1318256/-/ckck1hz/-/index.html</span></a></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="mso-spacerun: yes;"><span style="font-family: Calibri;"> </span></span><a href="http://www.education.gov.uk/rsgateway/DB/SFR/s000927/sfr11-2010v2.pdf"><span style="font-family: Calibri;">http://www.education.gov.uk/rsgateway/DB/SFR/s000927/sfr11-2010v2.pdf</span></a><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><a href="http://www.knbs.or.ke/docs/PresentationbyMinisterforPlanningrevised.pdf"><span style="font-family: Calibri;">http://www.knbs.or.ke/docs/PresentationbyMinisterforPlanningrevised.pdf</span></a><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><a href="http://www.nationmaster.com/country/ke-kenya/edu-education"><span style="font-family: Calibri;">http://www.nationmaster.com/country/ke-kenya/edu-education</span></a><span style="font-family: Calibri;"> </span></span></div>Sufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.com1tag:blogger.com,1999:blog-1281131452313255285.post-51862499341922744912011-11-09T02:15:00.000-08:002011-11-15T04:07:17.556-08:00Solutions for The Matatu<div class="separator" style="clear: both; text-align: center;">
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Here’s the thing. There is no country in history that has grown their economy without having a highly efficient transport system. <span style="mso-spacerun: yes;"> </span>Kenya will not be the first. For the avoidance of doubt, the matatu <span style="mso-spacerun: yes;"> </span>is actually the antithesis of a transport system. It’s unreliable, extremely inefficient, overly susceptible to the weather, energy intensive and quite simply unsustainable. Don’t get me wrong I have nothing against the idea of the matatu being an important urbane cultural symbol that should be preserved and revered, I just think that when it comes to transport, form MUST follow function.</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Several years back, Mir Michuki had a crack at sorting this mess out and in my humble opinion he did quite well for himself. Too bad he was clueless and his analysis of the problem was intrinsically flawed. You see, public transport is really just about efficient movement, comfort is a secondary concern. The second reason Michuki’s plan failed to hold was that he assumed the matatu situation was unique to Kenya. It’s not. Every other country that has an economy similar to ours has the same problems. Bogota, Columbia’s most populous city is however the first to actually transform the matatu into one of the most efficient transport systems in the world.</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">How did they do it? </span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 1: Market Research</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">So we need to do market research and figure out the specific transportation needs of our country’s various destinations with specific attention to: </span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">The number of people we need to ferry daily</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">The destinations (analyzed by popularity)</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">the most efficient routes to use</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Financial projections including cost and revenue numbers </span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Growth rate of the sector</span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">In Bogota they figured out all this data including how much each vehicle generated for the owner daily. With this they had the ammo to sweet talk the owners.</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 2: Take control AWAY from private hands</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">I know this will anger many capitalists out there, but the honest truth is that a transport system is one of those things that works best when you apply a “big picture needs over wants” approach. Private companies simply cannot provide that. Think about it this way, the vehicle owners are not in this as a form of public service, they are in it to make money. For this reason any improvements or changes you propose will be viewed, by them, through the prism of a cost benefit analysis. If the changes you propose result in decreased revenue or increased cost then they will not support it. They have no logical reason to. This is what killed the Michuki system. I suggest we pass a law that makes the provision of transportation exclusively a function of the state or local authority then make it lucrative for vehicle owners to be involved. It worked for Bogota. It can work here.</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 3: Public Private Partnership (but dictate rules)</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">This is the genius of the Bogota solution. They took over the provision of transportation but did not say that the government would actually therefore drive the buses. That would be foolish. Armed with the data of daily revenues and potential of the market they offered vehicle owners a chance to operate on behalf of the state. A deal they couldn’t refuse. This achieved two things. It gave the owners an economic reason to support the changes because it offered them similar if not better daily returns than before. Secondly, because the use of the vehicle is now a commercial service to the state, it allowed the state as sole consumer of the service, to dictate the terms. </span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 4: Set the standard</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Owners are awarded the tenders to provide transport service subject to strict conditions including:</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Provision of a certain type of vehicle (shape colour and form)</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Provision of competent driver and conductor</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Installation of a GPS</span></span></div>
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<span style="font-family: Symbol; font-size: 13pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: "Times New Roman";"> </span></span></span><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Adherence to a timetable and route plan controlled and remotely monitored by GPS </span></span></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">The state then runs a Transit center that has all the data of transport needs fed into it as well as specific GPS codes of each vehicle. The system then generates the routes and these are passed to owners whose responsibility it is to ply the route according to the timetable. The GPS system monitors all this and payment is made on the basis of adherence to rules and timetable. It results in a timetable focused system as opposed to a jaza gari focus. Over time we can make the rules tighter. In Bogota they are now even using environmental data to evaluate vehicles before they are allowed into the system. If a car is emitting too much pollution then it is barred.</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 5: Re-duce cash in the system</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">This was another stroke of genius. Fares are paid directly to the Transit center that sets up offices at all destinations and give tokens to passengers. This allows the proper and just control of fares and insures the system from economic shocks (e.g. rain). It also increases the security of the matatu because the driver is no longer carrying wads of cash in his socks. There is therefore no more need for gangs to provide security at stops and along routes. Payment is made monthly to the owner based on his vehicle’s adherence to the GPS monitored timetable and other rules. Just like that, we can achieve a matatu system that runs on a timetable.</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 6: Provide a Bus Lane</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">The timetable will NOT be achievable without a dedicated path for the buses to follow. Now this will be very painful just as it was for Bogota . In the KE case I would suggest creation of specific bus only routes that are closed to private vehicles. On major highways they can dedicate one side of the road to the buses. It will make driving private vehicles very painful but it’s a necessary step. Hefty fines for infringements on bus lanes should be levied for offenders. In the long run off course we should build bus lanes along every major road. Baby steps. It worked for Bogota. It will work in Nairobi.</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">Step 7: Face the Facts</span></span></b></div>
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<span style="font-size: 13pt; line-height: 115%;"><span style="font-family: Calibri;">We need to get the sentimentalism out of this thing. No matter how much we improve the matatu and make is sensible it needs a train system to support it. There isn’t a major city anywhere in the world that relies exclusively on road transport. A train system for Nairobi is sine qua non if we want to develop. <span style="mso-spacerun: yes;"> </span></span></span></div>
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<span style="font-family: Calibri;">Read this too: </span><a href="http://129.3.20.41/eps/urb/papers/0508/0508005.pdf"><span style="color: purple; font-family: Calibri;">http://129.3.20.41/eps/urb/papers/0508/0508005.pdf</span></a><span style="font-family: Calibri;"> </span></div>Sufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.com13tag:blogger.com,1999:blog-1281131452313255285.post-14787271069716560732011-11-02T01:47:00.000-07:002011-11-02T01:53:20.322-07:00PRESIDENTIAL SUFURIAS SSn 1<div class="separator" style="clear: both; text-align: center;"><a href="http://www.nation.co.ke/image/view/-/1194576/highRes/275668/-/maxw/600/-/ia5d44z/-/gado050711.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ida="true" src="http://www.nation.co.ke/image/view/-/1194576/highRes/275668/-/maxw/600/-/ia5d44z/-/gado050711.jpg" /></a></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">10 things Kenya’s next president MUST do (In my humble opinion,)</span></span></div><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Forget his mother tongue</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Seeing that successive Kenyan governments have governed the country in “mothertongue”, this will be his hardest task. <span style="mso-spacerun: yes;"> </span>That said, if Kenya wants to move away from this ethnic cocoons that we are building the new president will have to very vocally and boisterously govern from the middle.</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><a name='more'></a><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Restore the pride of being Kenyan. </span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Over the past few years we have lost the sense of ownership of our country. We now prefer a village polytechnic in England to a University here and not because of quality. We act as if we have another better Kenya outside there that we will emigrate to when we are done killing this one. Why is it the president’s problem? Because he is among the three things that define our nation along with our flag and national anthem. He has to think, talk, look, eat and feel 100% Kenyan.</span></span><br />
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</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Fix our Balance of Trade</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">We import too much. Any supermarket now stocks upto imported water. It’s sheer madness. Nobody needs this kind of thing and it’s not socialist to protect your market even USA does that. It’s ok to say No to things that we already produce or that we have the ability to produce e.g eggs and toilet paper. No one needs imported toilet paper to be happy. </span></span><br />
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</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">4.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Restore (create) the idea of equality before the law</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">In our country, if you steal a loaf of bread you will be jailed for 4 years meanwhile Sam Ongeri who oversaw the loss of 4Bn still has a job. Tom Cholmodeley had to kill twice before we built him a special cell in Kamiti.</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">5.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Create a culture of Responsibility</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Leadership is responsibility. It may not be your fault but it’s your responsibility to solve the problem. If 4Bn shillings gets lost while you are in charge , you have two options: find the money and prosecute the thugs or get out so that we can hire someone who will.</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">6.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Reduce the Re-current expenditure</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">We have a very big government. It can surely be reduced. We also have a lot of duplicated functions. I mean, what do we need an entire ministry of Tourism if we have agencies such as Kenya Wildlife Service, Kenya Forestry Service, the Kenya Tourism Board and Brand Kenya. <span style="mso-spacerun: yes;"> </span>In my humble opinion this country only needs four ministries, the rest can be done by agencies.</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">7.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Quit his day job</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Being president is not easy at all. So I have no idea why we like to complicate it much further by adding other odd jobs to it. Mr Moi was even footballer/mkulima namba moja while President. We can’t have our president as a patron of a Golf Club. It’s against the law of tort and quite simply un-presidential.</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">8.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Sort out our Energy Sector</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Only 1.4 million households and businesses are connected to the power grid. This is approximately 20%. Our Oil refinery is operating 35% below capacity and the the pipeline is a further 15% below capacity. How we are getting by is a miracle. If we want to develop we MUST have energy. The current situation is untenable. </span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">9.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Restore the rule of law</span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">The law of the jungle “mwenye nguvu mpishe” is not exactly what we are going for here. If you have ever been to Harambee Avenue at 4.30 pm when the high ranking GoK officers drive out then you understand what I am talking about. Do the rules change for you when you acquire a higher rank? </span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">10.</span><span style="font-family: "Times New Roman";"> </span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Buy a teleprompter </span></span></b></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; text-align: justify;"><br />
</div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Mr Kibaki is always looking down when reading statements. It makes him look unsure and dishonest. Technology can help. </span></span></div>Sufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.com5tag:blogger.com,1999:blog-1281131452313255285.post-67579678758503187302011-06-14T15:27:00.000-07:002011-06-14T15:27:05.923-07:00It's Vision 2030 OR KPLC. We can't have both.<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-tSEcH5Q6bWA/TfffggnB1RI/AAAAAAAAABY/sucuEi2PKsw/s1600/kplc-dr1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-tSEcH5Q6bWA/TfffggnB1RI/AAAAAAAAABY/sucuEi2PKsw/s1600/kplc-dr1.jpg" t8="true" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
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</div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Let’s put it plainly. In this century, at least in my own opinion, the key to success or failure in economic advancement is energy. Technology may come a close second, but with the advent of the “open source-open use” ideology and the growth in the relevance of social media in business, there is little or no chance that any one entity, or country, can have any kind of monopoly on technology. I mean, an innovation today in the US will land in Nairobi within a day or maybe two at the most. In fact in some cases we are actually ahead of the rest of the world when it comes to tech stuff. If you don’t agree then maybe you have never heard of a thing called MPESA. Still, this is another discussion altogether.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">This great country has the biggest economy in the region and the most potential to achieve the much touted “African Tiger” status but we run literally on air. Between KPLC and the ERC we have designed the perfect system for failure. In fact, things are so bad that KPLC themselves have a stand-by generator. (!) It’s not that they are on a mission to frustrate us but rather that they are completely incapable to deliver. <span style="mso-spacerun: yes;"> </span>That’s just it.</span></span></div><a name='more'></a><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">My prodding of the @kenyapower twitter account representative reveals that at last count KPLC has approximately 1.4 million customers. Compare that number with Oparanya’s mathematics that set the total population of Kenya at 38 million. Sad isn’t it. Now off course, KPLC customers are more likely than not to come in “households” which in the Kenyan situation of 4 babies per woman, would need for us to divide the total population by 6. This means that KPLC has a possible market of slightly over 6 million. The @kenyapower twitter handler mentioned that about 300,000 of their customers are in industry or are otherwise purely “business” users which leaves 1.2 million “households” connected to KPLC. Given that Oparanya’s mathematics puts the potential at 6million, KPLC are the proud owners of 20% market share in a market where there’s no competition.(!)</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Naturally the numbers I have presented above should not be taken straight out of the bottle because there are many other socio-economic factors at play. And at the end of the day this is just “sufuria Economics”. Nonetheless, fact is that KPLC has 1.4 million customers in the same market where Safaricom has 17Million. Now, no matter how removed the two businesses are from each other <span style="mso-spacerun: yes;"> </span>this disparity is quite damning, especially considering that, at least in my book, mobile telephony would be considered a luxury service while electricity supply is under the basic needs category. </span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">But wait, there’s more. KPLC at current has approximately 7,000 employees. This means that they have one employee to every 200 customers. This is the reason why they have such hopeless customer care service and probably a big reason why they make such big profits. They are grossly understaffed. Indeed in recent times KPLC has turned to outsourcing. Tragically, in their wisdom, they have chosen to outsource the technical work (the very heart of KPLC) to independent contractors. Needless to say the results have been disastrous.<span style="mso-spacerun: yes;"> </span></span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Firstly, because of the lucrative contracts being offered for the technical work, KPLC is hemorrhaging engineers and technical staff who find it more profitable to set up private companies to do the work. Secondly the quality assurance system has completely gone berserk. After all, private contractors are not known for their dedication to corporate values or customer service. So, KPLC now have an entire army of people out there who are wearing their colours but are not necessarily fighting from their corner. It’s a corporate image nightmare. The long and short of all this is that what happened to Telkom and to KANU is not far away where KPLC is concerned.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">In their defense, KPLC are talking about a lot of behind the scenes investments and work that will begin to bear fruit in 2013. I don’t buy it; and going by the pyramid scheme that they call pre-paid billing, I will only believe it when I see it. </span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Then there’s the architecture of the whole system. You see, KPLC do not actually generate power, they are merely distributors. KenGen is the company that generates power and according to the Energy Act 2006, they more or less have a monopoly too because no one else is allowed to generate power in excess of 3000kw. The same law gives a virtual monopoly to KPLC. Consequently, KenGen have no choice but to sell to KPLC which means that KPLC dictate the terms. We the consumers have no choice but to buy from KPLC which (again) means that KPLC can dictate terms. The set up makes all of us slaves to KPLC.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Still, there’s hope because as sure as even Moi one day stepped down, nothing last forever and one day the MoE will trash that rubbish Energy Act and write a new one. When that day comes, we will finally have taken control of our destiny. Until then, the choice is very simple keep KPLC and the ERC and forget about Vision 2030.</span></span></div><div class="separator" style="clear: both; text-align: center;"></div>Image Courtesy of @disasporadicalSufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.com3tag:blogger.com,1999:blog-1281131452313255285.post-52395663722053088402011-02-15T18:08:00.000-08:002011-02-15T18:21:52.617-08:00Privatisation of Energy is like a sufuria on my head<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Generally, if you have lived in Kenya at any time in the past 25 years, then you are aware that the GoK has probably the worst imaginable record as far as management of any kind (and of anything) is concerned. We appoint our houseboys to lucrative parastatal jobs, and regularly use any revenues accrued from these parastatals to buy socks for our children who are enrolled in “proper” schools abroad. Any losses are simply written off, or offset by printing more money. Needless to say that our energy and communications sectors are among the worst hit by this cancer, that had reached the highest stages during Moi’s latter years in power. As a response to this, we have a new found fanaticism for privatization, which in my opinion, is intellectual poverty of the highest degree. Don’t get me wrong, privatization is great, but as America showed us over the last few years, the free market can be extremely brutal and unforgiving. <span style="mso-spacerun: yes;"> </span></span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"><a href="http://4.bp.blogspot.com/-qgmn3v4MagY/TVsxBieIdMI/AAAAAAAAAA0/31cXoNYRbqs/s1600/elect.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" h5="true" height="364" src="http://4.bp.blogspot.com/-qgmn3v4MagY/TVsxBieIdMI/AAAAAAAAAA0/31cXoNYRbqs/s640/elect.jpg" width="640" /></a></span></span></span> </div><a name='more'></a><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">In very pedestrian terms, economics theory is based on relationships between production and the market and a curious idea they call “scarcity.” “Factors of production” are those things that are necessary to produce goods and services, which are then, in a manner of speaking, taken to the market. Energy, land, people, infrastructure etc can loosely be described as factors of production, at least here, when we discuss economics to do with sufurias. It therefore goes without saying, that improper management of the factors of production, will lead to a poor economy. Historically, all the factors of production have been deemed to have equal value, but in the fast paced 21<sup>st</sup> century, and in the light of evidence to suggest dwindling oil reserves and global warming, energy is firmly at the top of the pile. </span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">When Kibaki took over in 2003, he moved swiftly to reform our energy sector through a document called the <span style="color: #333333;">Sessional Paper No. 4, of 2004, whose main aim was “to lay the policy framework upon which cost-effective, affordable, adequate and quality energy services, will be made available to the domestic economy, on a sustainable basis over a period 2004-2023”. Later in 2006, and as a result of the 2004 policy paper, the Energy Act of 2006 was passed by parliament. That was when the rain started beating us.</span></span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">First, we created a body called the Energy Regulatory Commission, whose mandate is to regulate the production, distribution and sale of electricity and petroleum. They are also supposed to protect consumers by ensuring that prices are “just and reasonable.” The act goes on to define “just and reasonable” as prices that:</span></span></div><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="color: #333333; font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: 'Times New Roman';"> </span></span></span><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Maintain the financial integrity of the company involved</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="color: #333333; font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: 'Times New Roman';"> </span></span></span><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Attract capital to that company</span></span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="color: #333333; font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: 'Times New Roman';"> </span></span></span><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Allow the company to operate efficiently and</span></span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="color: #333333; font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: 'Times New Roman';"> </span></span></span><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Fully compensates the investors of the company</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">There is nothing in there about “just and reasonable” also being about the prices that</span></span></div><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -0.25in;"><span style="color: #333333; font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: 'Times New Roman';"> </span></span></span><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">are commensurate to the goods and services provided or </span></span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -0.25in;"><span style="color: #333333; font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-family: 'Times New Roman';"> </span></span></span><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">are competitive enough to respond to market dynamics. </span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">But that is not the only problem. The ERC makes money for its upkeep by “charging levies on sales of electricity and petroleum”. This in my view presents a conflict of interest. How can you effectively regulate the industry that feeds you? It is very likely that the levies set by the ERC are determined by the ERC’s financial needs more than anything. The ERC are actually a cost to us the consumer. This is why the oil marketers ALWAYS blame the GoK for price increases.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Then, off course, we privatized KENGEN and KPLC, which was the twist of the dagger in our backs. These companies, which have virtual monopolies, are now controlled by private shareholders whose only concern is to achieve maximum returns on investment. <span style="mso-spacerun: yes;"> </span>They operate without competition, which is the only natural quality control and consumer protection system that the free market offers. So, is anyone surprised that KPLC did that ad in December, and sold shares when there was a blackout at my house? <span style="mso-spacerun: yes;"> </span>I mean, think about it, what’s more important, customer satisfaction or shareholder satisfaction? Consider the fact that the customer has no alternative while the shareholder, now that KPLC is listed at the NSE, can take his money elsewhere. No shareholder, no KPLC. In short, KPLC is now fully focused on making shareholders happy and not delivery of power as we would like to think. </span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">The petroleum section is worse. We have one refinery and one distributor. Then we have a silly system where every year we give out a tender to import crude oil to one of our oil marketers, who then sells to the refinery, and then buys the refined oil on the other side! This mean that the importer sells to the refinery at a profit; then the refinery sells to the marketers at a profit (or maybe break even); and then the oil marketer sells to you and I at a further profit. Now add tax. In a panic, the GoK, then suggested that they create the National Oil Company whose job is to control prices by offering competition to the other oil companies. That idea that has failed miserably, because the NOCK operates in the same market as the others, and so low revenues and small profit margins would make it unsustainable. I mean, why make 10 bob when your neighbor is making 100 bob and you are selling the same stuff? As a result the average difference between NOCK prices and others is 2 bob. </span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">So, in summary, we have effectively turned the most important factor of production of the 21<sup>st</sup> century into a product that is subject to that idea of “scarcity” and is captive to the laws of supply and demand. But that’s not all. We have also turned over control of the most important product in our economy to a bunch of capitalist pigs who are looking for quick returns on investment (ROI). Generally when you are in biashara and you realize that your ROI is not great, you do what they call “diversification;” Which would mean that you add products to your portfolio that perform better.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">All this means that, hypothetically speaking, one day KENGEN, KPLC, KPC could hold an AGM and make a resolution to stop dealing in energy and to venture into fast food. Then what? The shareholders of my sufuria may pass a resolution that I wear it as a hat.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="color: #333333; font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">(Sources; </span><a href="http://www.erc.go.ke/erc/regulatory_instruments/?ContentID=14"><span style="font-family: Calibri;">http://www.erc.go.ke/erc/regulatory_instruments/?ContentID=14</span></a><span style="font-family: Calibri;">, Wikipedia)</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><br />
</div>Sufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.com8tag:blogger.com,1999:blog-1281131452313255285.post-31675312531935225822011-02-09T14:54:00.001-08:002011-02-09T15:33:22.156-08:008 lanes to Thika is the same as taking the aorta to your shoulder<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">Every Kenyan loves tarmac. Indeed in our great land, you cannot prove to anyone that your area is developed, if you have no tarmac. It is the most complete sign of prosperity and development in these parts and especially in these times of CDF and LATF. Nevertheless, I have a theory that, some tarmac is a total waste of money, and further that some is ill advised. The Eldoret International airport, for instance, is a great example of tarmac that was sorely miss-placed, (but that is another article). My focus today is to share my thoughts on the Thika road project which to me is a painful reminder of the intellectual poverty that afflicts our policy makers.</span><br />
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<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-iyKgdXa7Y34/TVMhzpj4c4I/AAAAAAAAAAY/gr1n_8tGyfM/s1600/trafficjamcartoon.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" h5="true" src="http://3.bp.blogspot.com/-iyKgdXa7Y34/TVMhzpj4c4I/AAAAAAAAAAY/gr1n_8tGyfM/s1600/trafficjamcartoon.jpg" /></a></div><br />
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<a name='more'></a></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">As I mulled over this 27 billion shilling project, several facts came into consideration. These are:</span></div><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">Kenya’s economy relies on Agriculture</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">Coffee ranks highly among Kenya’s cash crops</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">The UK, the EU and Uganda, in that order, are Kenya’s biggest markets.</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">4.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">Tourism is our second largest economic activity after agriculture,</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">5.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">Mombasa is our second largest city and is the capital of our tourism sector.</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">6.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">Kisumu, our third largest city, is burning wit</span><br />
<span style="font-family: Times New Roman;"> </span>h untapped potential for both tourism and industry and is the gateway to Uganda.</div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">7.</span><span style="font-family: 'Times New Roman';"> </span></span></span><span style="font-family: Calibri;">Thika is 40km away from Nairobi, has maybe 100,000 people and some pineapples </span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;"></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">In urban design theory, the human circulation system is used as an analogy for transit infrastructure. Thus, if we take our country to be like the human body, then roads, railways and waterways are like blood vessels; the traffic(people, goods and services) carried by them is the blood, and trade brought about by the traffic is the oxygen and nutrients that keep the body alive, and allows growth and development. The bigger the road is, therefore, the more important a vessel it is to the country’s ‘circulation,’ ergo its economy. In, architecture and urban design we call these major roads ‘arteries’. To further the analogy, transit assumes the same significance in an economy, as the circulation system assumes to the human body. Cut/block an artery and the body dies. </span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">If you agree with that, then, you will agree too that, if we are to develop our economy in any way, then development of our transit network is key. Faster, more efficient links between our products and our markets will go a long way in increasing the value and volume of our exports. Now, if we are selling sandy beaches, wildebeest migrations, coffee, and flowers, and our biggest markets are the UK, the EU and Uganda, then surely our biggest investment in infrastructure should go towards the development of improved links to these markets.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">Projects such as a second terminal at JKIA, a high-speed train that links JKIA to the Mara, Tsavo and Mombasa, a new port at Lamu, 10 more train lines to the Uganda border etc etc are all very good ideas that were never looked. 27 billion, yes 27 billion, (out of 110 billion budgeted for infrastructure nationwide) was sunk into Thika road in instead. For the record, I have nothing against Thika town and her people, and in fact, my love for pineapples is legendary. However, it is my considered opinion that this project is a waste of prestigious tarmac. </span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">When complete, Thika road will be the biggest, most sophisticated road that we have ever built in Kenya. But, even at its full force Thika road will only link a town of 100,000 people (exaggerated) to the capital city over a measly 40km. In my experience, roads of more than 4 lanes are used all over the world to link major organs i.e. cities. The autobahn in Germany, for instance, has 6 lanes and is 12200km long spanning the entire country. I dare say, Kenya will be the first country in the world (maybe), to link its capital to a Town of 100,000 people, 40km away via an 8 lane highway. Going back to my analogy above, 8 lanes (biggest road in Kenya) to Thika is the same as taking the aorta to your shoulder.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">If I may ask the question, honestly, considering all the above submissions, of what significance is Thika road to the economy of Kenya? What exports will we increase in value or quantity? What does this 40km link between Nairobi and 100,000 people, and some pineapples add to our economy? <span style="mso-spacerun: yes;"> </span>Does this addition warrant an investment of 27 billion? Please also consider the opportunity cost of building 8 lanes to Mombasa or 8 lanes to Kisumu instead. Or maybe a much needed second terminal at JKIA.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">Now, I have heard people say that the project will solve the traffic issues that Thika road currently suffers. I disagree and agree at the same time. You see traffic jams are not solved by big roads, they are solved by connectivity. In simple terms, traffic must go somewhere. Nairobi’s traffic issue has nothing to do with the size of roads, but the lack of proper continuity in the flow of traffic. <span style="mso-spacerun: yes;"> </span>It is true that, this project has some design considerations meant to improve connectivity and that Nairobi will definitely benefit from but, I feel it doesn’t go far enough.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">In any case, the only clear effect of this road, aided by an unashamedly dishonest real estate market in our country, is to immediately increase the value of all adjoining pieces of land exponentially. As you know, most of this land is currently classified as agricultural land, and in fact, is among the country’s traditional major coffee production areas. Needless to say, farmers are already uprooting their coffee in order to cash in on the inflated land values being offered by developers such as the guys doing TATU city. You may recall that as discussed above, coffee ranks highly among our cash crops and as such, uprooting of coffee bushes is not a good thing.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">In conclusion, therefore, my prediction is that in a matter of a few years all the land between Nairobi and Thika will be filled in by mostly residential areas. The net result of this will be an irreversible loss of arable land, and, the death of the promising urban center that is Thika town. What I am saying, is that in my opinion, because of Thika road, Thika as an urban center and will be swallowed by Nairobi. And if they achieve the 20minute drive from Thika to Nairobi as proposed, then Thika will be at the same level as Buruburu, South B, Loresho, Dagoretti, Karen, Donholm or any other generic Nairobi residential district. Even the pineapples will be quickly replaced by flats. </span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><span style="font-family: Calibri;">(Sources: </span><a href="https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html"><span style="font-family: Calibri;">https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html</span></a><span style="font-family: Calibri;">, Wikipedia)</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;"><br />
</div>Sufuria Economicshttp://www.blogger.com/profile/11964405719463011711noreply@blogger.com15