bankelele

• KFC is here, so what?

  Posted: September 28, 2011, 8:11 pm by bankelele

  My article on the opening of a new Nairobi KFC restaurant that appears in the current issue of Up, a free magazine on interesting things happening in Nairobi. It was edited by Bikozulu.

• What Can We Do?

  Posted: September 22, 2011, 8:02 pm by bankelele

• Urban Inflation Index: September 2011

  Posted: September 21, 2011, 3:59 pm by bankelele

  One year after the euphoria of a new constitution, the direction of the economy is uncertain as seen in the weakening Kenya shilling, tangles in implementation of the constitution, and rising food prices. It has been a year of some price controls in the fuel, and possibly in the food sector whose parliamentary price control bill was signed into law last week by the President.
  
  Comparing prices to six months ago and last year. On to the index
  
  Gotten Cheaper: Nothing really.
  
  About the same:
  
  Communication: All Kenya’s mobile phone companies have call rates of about Kshs 3 shillings ($0.03) per minute to call across networks. It is unclear what will happen with call rates, as the smallest company in the market, Yu, launched free daytime phone calls, Airtel Kenya lost a CEO, and Safaricom has indicated that they may raise their call rates, as has happened in Uganda with MTN . The real battle is in data, where prices have not really dropped but companies are offering more speeds for less. The market here is divided between the companies with 3G (Orange & Safaricom) who compete on speed, and those without 3G(Airtel & Yu) who offer cheap internet rates of about Kshs 50 (~$0.5) per day for unlimited use.
  
  Another communication developments that, in a way, lower the cost of business include the launch last week at G-Kenya of GKBO, which encompasses free website creation tool, domain registration, and site hosting for small companies by Google in Kenya.
  
  Utilities: The bill on pre-paid electricity is still at about Kshs 2,000 ($21) per month, and getting about 30 – 35 units per buy via M-Pesa. However that is expected to go up after notice was issued for rates to go up 22% per kwh unit. So what alternatives are there? In a somewhat timely move, Samsung launched the NC215, a solar powered netbook laptop last week. It gives 1 hour of power for every 2 hours of charge in the sun, has a 15-hour battery life, and is able to charge other devices by USB even when it is off.

  Also got a gift of a solar phone charger (T2126 Hemera from Hirsch) that works quite well; it takes about 12 hours to charge in the Sun or 2 hours via USB, has a flash light and can charge a variety of phone models.
  
  But when you look at the rapid advances in laptop batteries and cell phone batteries over the lasts decade, you get the feeling that there has been a lag in the pace of solar devices, and that more solar based solutions and advances should be emphasized.
  
  More Expensive
  
  Fuel: A litre of petrol fuel, which is regulated by the Government, now costs 117.75 (~$5.6 per gallon) in Nairobi. Regulated fuel has proven to be more expensive than unregulated fuel, and while this can be attributed to the weaker shilling and fluctuating oil prices, the formula used to arrive at the price remains vague, and the limit on margins (stipulated buying and selling price of petrol, diesel, kerosene in each town) appears to have hurt small oil industry companies, more than large ones. However, among the listed companies, Kenol appears to have weathered the regulatory regime better than Total, by having diverse operations in other countries in East and Central Africa that remain unregulated.
  
  Staple Food: Maize flour, which is used to make Ugali that is eaten by a majority of Kenyans daily. A 2kg bag which cost Kshs. 80 six months ago, and Kshs 65 a year ago, is now Kshs 119, the highest it has been in the short history of this index.
  
  Other food item: Sugar : A 2 kg. Mumias pack which has hovered at about Kshs 200 for the last years, now costs Kshs. 385 (90% more than last year) and . The sugar sector has really gone full circle causing many to questions its relevance, recurring shortages shortage (why all factories close at the same month for maintenance), why sugar is grown in a food producing area and how many items we can consume without having to use sugar as a sweetener e.g. tea without sugar, or use of honey as a substitute.
  
  Foreign Exchange: 1 US$ equals Kshs 95.6 compared (now 96.8) to Kshs 80.8 a year ago (and 83 in June 2011) - a loss of almost 20% in a year. It’s unclear of this has been a concern to the Central Bank which has made other confusing policy moves as related to interest rates at a time of mounting government debt and their laxity has enabled banks to spot and take advantage of an arbitrage opportunities to trade with government money.
  
  Beer/Entertainment: A bottle of Tusker beer is Kshs 180 ($1.9) (at a local pub) a slight increase from compared to Kshs. 170 a year ago. However beer has become out of reach for many poorer Kenyan who have resorted to drinking unsafe local brews, which in some unfortunate cases have resulted in blindness or even death.

• Are Kenyan Engineers Capable of Building Thika Road?

  Posted: September 20, 2011, 1:37 pm by bankelele

  Yesterday’s post at the Thika Road Blog sparked a response from @BridgeMkr
  
  Having grown up in Kenya then gone to the US for college and worked there ever since in bridge design, I would say that the Kenyan education system was more than adequate in preparing me for engineering school and a career as bridge engineer.
  
  Based on that, I would say that the civil engineering graduates from Kenyan Universities have the basic tools to succeed as engineers in this world.

  
  

  I read a comment that Kenyan universities are preparing students for 1980’s style construction – and if that is true, then I would say that is a good thing. If one clearly understands how to design structures built in the 1980’s then they understand the basics of design and construction.
  
  There are buildings and bridges built in the 1900’s that are still standing. Over the years, the basics in design & construction have remained the same, with the difference being how well/accurately we calculate the design loads, and how well we design the structure to withstand these loads, the safety factors we apply to them, and the materials we use to construct them. If one understands the basic principles, then the next step of understanding modern design factors, codes, and materials is very simple.

  I would rather have an engineer that can design a bridge using the old code by hand, than one who can only design the bridge using modern software packages, (and who does not know how the program comes up with the solution).
  
  China has over a billion people therefore they will have way more engineering graduates. The way forward for Kenya and Africa, is to continue to produce civil engineers who clearly understand the basics in design and construction. Some of these graduates can then go to universities aboard to get their masters and post-graduate degrees, and who can later transfer this additional knowledge back to Kenya and Africa. The graduates that remain in Kenya upon graduation should go work under the direction of more qualified engineers, who can give them guidance on how to design various basic structures at first, with the complexity of the structure increasing as their career progresses. In engineering, like most things, experience, with the ability to learn, counts the most. Those graduates that went abroad, on return to Kenya can start out designing more complex structures based on the experience gained, but should still work under the guidance of more experienced engineers.
  
  It may surprise a few people but today in the US, there is a debate raging on whether a master’s degree in civil engineering should be the minimum qualification for someone to be a registered civil engineer. It is felt that the current undergraduate programs are not adequate, especially if the pay for civil engineers is to go up.
  
  In order for Kenyan and African engineers and companies to compete for, and design, major construction projects like the Thika Road Project, there needs to be a requirement that Kenyan and African engineers and companies be involved in the design and construction of these projects. This can be done by requiring some portions of the project to be designed and constructed by local engineers.
  
  Another requirement, which would add to the cost of projects, but would ensure the transfer of knowledge, is to have independent designs done by local engineers. This means, having Chinese /European/American design firms design the complex structures but at the same time have local engineers and companies independently produce designs of the same complex structure. The local firm’s designs can then the compared to those produced by the foreign firm. Another problem with design & construction in Kenya and Africa is having adequate QA/QC procedures in place to ensure that structures are designed correctly and constructed according to the engineers design using the specified materials.
  
  Through this process, current local deficiencies (if any) would be revealed, and at the same time the local firms would learn how things are done differently by foreign engineers/firms. This design exercise cost is very small, compared to the actual construction costs and I have been involved in projects where two independent designs have been produced.

• Tatu City & Vision 2030

  Posted: September 16, 2011, 3:28 am by bankelele

  Tatu City was endorsed as a Kenya Vision 2030 project and an event was held in Nairobi to celebrate the signing and also clear up some misconceptions about the project.
  
  The Future is Urban Mugo Kibati said urbanization is the future, the world over, and it will happen without proper planning, Vimal Shah said that while Kenya is currently about 30% urbanized, by 2030 Kenya (which is just 212 months away), this will have risen to an urbanized population of about 75% urbanized. Are they going to stay in poorly planned cities or better articulated developments?

  What is it? Dr. Gituro Wainaina, who is one of the Vision 2030 secretariat directors said that the message must get out that Tatu is not a gated community, it is where you work or where you sleep. Lter it was mentioned that it was a brand new city, that will complement, not replace Nairobi, and at completion will be worth $5 billion - the single biggest FDI injection. It looks new and different form other projects (every toilet in Tatu City will flush with recycled water. Every roof should harvest rainwater!) and the Ruiru Council has embraced the project, are building capacity to manage with Tatu and are are going to reap the benefits of the project, which might lead other municipalities and counties to do that.
  
  Vision 2030 is not about Government Projects: Mugo Kibati said that Vision 2030 is not about government projects and they envision that the majority of projects will be by private investmentors or government partnerships with the private sector. He said that the Government is only meant to be a facilitator that provides incentives - adding that with Tatu on one hand and the government’s planned technology city in Konza on the other, he is watching the race to see which will complete theirs faster – the public sector or the private sector?
  
  Nairobi needs 10 Tatu Cities: Tatu will do create 3,000 houses a year in a country that has an annual housing shortage of 35,000 to 40,000 per year. Nyagah said that Nairobi needs another 10 Tatu’s to barely satisfy the demand, and that they welcomed other mega housing developments that have been inspired such as Migaa, Thika Greens, and on other towns like Eldoret (Sergoit)
  
  Is Tatu is Destroying Farmland? At a time when the country can't feed itself adequately, this has been partly attributed to the use of land has been attributed to land use Mugo Kibati said that current 60% farmers in Kenya, are feeding about 80% of the citizens. In future, the government would have to make some harsh decisions about denoting land as agrarian, commercial, residential etc. (in a Land Use Masterplan). Having a 70% urban population in 2030 will still leave 30% in rural areas which is still high. The current subdivision of arable land is un-sustainable, and the government has to get more people out of farms and find them employment in other sectors; this will leave arable farming to farmers, who will mechanize, and invest in agro business; i.e. Farming should be done by professionals, as it is in developed countries like the US that are able more than feed their countries and export surplus with less than 5% of thir population being farmers.
  
  M-Tatu Mortgage?: Nyagah challenged James Mwangi, the absent chairman of vision 2030 (who's also the Equity bank CEO), to create to create a mortgage, where someone can be repay a daily amount e.g. kshs 500 per day and buy a house and name it M-Tatu.

• The Total Motor show took place this ...

  Posted: September 12, 2011, 12:24 pm by bankelele

  The Total Motor show took place this last weekend in Nairobi (Friday 9th to Sunday, September 11, 2011). It was interesting as usual, but this time it was at KICC unlike the last one that was at the Ngong Racecourse. With the weaker shilling, and higher petrol prices, there was a noted change in some vehicle prices and more companies offering more efficient vehicle management solutions.
  
  Some notable moments:

  Companies like CMC (Ford, jaguar, Volkswagen) and Toyota did not display prices, but it was a shock to hear that a Toyota Corolla 1.8, cost Kshs 3.3M ($36,000) which is about three times the price people pay for used import models.
  
  Public Service Vehicles: Companies like General Motors have their Isuzu's ready to ride on the Government’s plans for larger PSV vehicles and they had a pimped out matatu – the NPR that costs Kshs 4M ($43,000), and an Isuzu FRR model (Used by many Citi Hoppa’s operators and which costs Kshs 5.8M ($63,000) and an 62- seat bus that was Kshs 9.4M

  Trucks: These were a plenty, but the the truck king of the road is the Mercedes Actros; new models of these can be bought via D.T. Dobie at a cost of €93,500 (~Kshs 12.2 million) and each order is customized to the buyer’s requirements before it is built. The popular Mitsubishi FH215 is Kshs. 5.1M
  
  Luxury: Head to head in the luxury department were BMW (from Simba Colt) and perennial market leader Mercedes (from DT Dobie) who had a range of cars, priced with and without duty/tax (an option for diplomat’s, Government and NGO buyers). BMW had the X3 at €60,000 )Kshs 7.8M) while Mercedes had the ML350 for €110,000 (kshs 14.3M). BMW had the 3-series for €47,000 (~Kshs. 6.1M) while the C200 Mercedes was €60,000 (or €34,000 duty free), and BMW also had the 5-series on show for €60,000 while Mercedes had the E200 for €78,000 (~Kshs 10.1M) or duty free for €48,000 (~Kshs 6.25M)
  
  Pick-Up/SUV: DT Dobie has the Nissan NP 200, launched at the 2009 motor show at Kshs 1.2 million, but which now costs Kshs 1.87 million and CMC had a new Volkswagen pickup that was not priced. Mitsubishi had an L200 double cab at Kshs 4.1 million, an update of the popular Pajero at Kshs 6.5 million, while Mahindra had pickups ranging between Kshs 2.4 - 2.9 million.

  With rising fuel prices, fuel saving solutions on offer include Stoic (touting to save up to 40% on fuel prices) and Fuel max (sold by Kiprin Enterprises - and enticing with savings of up to 50%). Other energy savers were Solar powered lanterns called Total Sola from sponsor Total. Better driving solutions were offered by Glen Edmunds driving school for defensive driving while Scania had one for long distance truck drivers that are purported to save 6 litres per 100 kilometers driven (from the current average of 40 litres over 100 kilometers) and which also brings better tyre and break wear
  
  Other: Toyota also sell Yamaha motor bikes including a 106CC model which comes with a free helmet, reflect jacket, registration and one year warranty (or 6,000 km)
  
  Car Tracking : Companies included Rivercross tracking (who also install a fuel fuel monitor that warns when truck drivers may be selling diesel from their trucks) as were other companies like Retriever, and Cyber Trace.
  
  Online Classifieds: Car buyers and sellers had cheki and dealfish (which is free for buyers & sellers)
  
  Banks: Banks in the auto finance sector were represented at the show including NIC, KCB, Equity, Imperial, Co-Op, Chase and CFCStanbic. Co-op have PSV financing (aimed at Sacco’s) and school bus financing (unique application requirement are board of governor approval and minutes, and ID, fees structure of school.
  
  Apprentice: A motor show surprise was a twitter conversation with @karuoro and @mediamk on the prevalence of former D.T. Dobie mechanics who are specialists in Mercedes.
  
  - @bankelele: I know about 3 garages run by ex-DT Dobie mechs (it's like a badge of honour)
  - @mediamk: those mechs are amazing, I wish this was the case across different industries (as) apprenticeship is a good way to grow an industry.
  - @karuoro: "The industry leader is obliged to be a net supplier of talent to the industry" - Linus Gitahi (@LGTwits) ...I think quite a number are licensees

  .
  

  The D T Dobie apprenticeship mechanic program is open to all Kenyans, male & female, who are less than 22 years and obtained KCSE C+ in English physics and mathematics. Though subsidized it will cost Kshs 50,000 ($550)per year for three years after which staff will be bonded for 3 years. They also accept self sponsored applicants who will pay Kshs 140,000, and the application deadline is 30 April 2012.

Blah blah blah

Fish cakes

Alas a fish cake.

Yet more fish cakes

Guess what ... yeah ... fish cakes.

The end of the fish cakes