Did you read this?
You may have missed this, but this comment by The Standard will go in history as the most candid, bold, fair and timely editorial by a Kenyan mainstream newspaper addressed to the highest office.
Read on
Budget speech or the World Cup?
This year’s budget Speech falls on the 15th of February and opinion is divided whether the national broadcaster should pause its football signals from Germany and instead air Finance Minister Amos Kimunya read his first budget speech.
In 2002, when the economy was in shambles, the national broadcaster KBC did not air the Budget speech and instead opted to satisfy the soccer hungry Kenyans.
Times have changed since then and Kenyans have become interested in the economy and a good number would love to watch Kimunya set their agenda at least for the next one year.
The soccer lovers says the World Cup is paramount since it comes once in 4 years and it would be a disgrace if they were to miss Ecuador face Costa Rica and miss a bit of England against Trinidad and Tobago.
The economist says the Budget speech should be given priority and we should give way for the minister to deliver his speech.
Which ever way, the national broadcaster which is receiving million of shillings from Celtel and other World Cup co sponsors seems to be opting for the World Cup instead of the Budget speech.
Budget Speech or the World Cup? The choice is yours.
INTERESTING QUOTES ON UCHUMI FROM THE KENYAN MEDIA
I found some interesting comments by the two Kenya’s leading newspapers on Uchumi and thought I would share with you. Havew a look…..
The firm’s sales were dwindling, as customers, tired of empty shelves and lack of variety, promptly voted with their feet (Nation)
In its re-launch after the right issue in which it raised Sh1.3 billion, it became more of a green grocer than a serious supermarket……(Nation)
In its zeal to open new branches in every nook and cranny of Kenya….. the firm had committed a schoolboy mistake, it had financed a longterm investment using short term funds (Nation)
Mr. Kirubi had cut his losses and run, he sold his shares in the firm and resigned from its board (Nation)
Uchumi has been in problem solving mode for the last five years (Nation)
Mr. Kirubi made his exit last year, yesterday, when told of the closure he exclaimed;”oh no!” (Nation)
Mr Kirubi, the flamboyant and intrepid businessman, had quietly become the lead shareholder at the chain… and in characteristic swagger, he was shoving his considerable weight around (Nation)
At the opportune time, Chris, or simply DJ CK, dumped his shares and walked away as Uchumi torpedoed towards the iceberg (Standard)
That is what demoralised employees do(Shoplifting) when they stare at retrenchment and have to wait for the 18th day of the next month to get their salary (Standard)
You got to know when to hold ’em, know when to walk away and know when to run. You never count your mony when you’re sitting at the table. There’ll be time enough for counting when the dealing’s done (Kenny Rogers) Standard
Bankrupt Uchumi closes down
Courtesy of the Nationmedia.com
Story by MUNA WAHOME Publication Date: 06/02/2006
The Uchumi supermarket chain closed down yesterday after finally admitting it was insolvent – throwing more than 1,000 employees out of work and leaving debts of hundreds of millions of shillings.
The stricken firm’s chief executive, Mr John Masterten-Smith, announced the Uchumi board had decided to cut the company’s losses.
The board had concluded it was unethical to continue trading when they could not pay their debts.
He said it would seek “financial solutions” from its lenders – and that his own resignation had been accepted by the company’s chairman, Mr Albert Ruturi. He became chairman little more than one month ago, having replaced Ms Eddah Gachukia, who herself replaced businessman Chris Kirubi only two years back.
Trading in Uchumi shares on the Nairobi Stock Exchange was suspended yesterday by the Capital Markets Authority), but not before around 1.6 million shares had been sold on Wednesday at Sh14.50. Investors could have lost some Sh23 million.
Affected by the closure are the company’s supermarkets in Nairobi – at the Sarit Centre in Westlands, Lang’ata, Mombasa Road Hyper and Ngong Road Hyper.
Others are at City Square, Adams Arcade, Jogoo Road, Nairobi West, Parklands, Westlands, Koinange Street, Kimathi Street, and Buru Buru. Also closed are branches in Eldoret, Karatina, Nakuru East, and Meru.
The company had franchised five of its branches to private firms: one in Kisumu and five in Nairobi, at the Railway Station, Market, Taveta Road, Temple Road and Kahawa Wendani.
Earlier, in a bid to streamline its operations, Uchumi had closed other branches, including those in Mombasa, Nakuru and Kisii.
The decision to close Uchumi was announced by the CEO, Mr John Masterten-Smith, at 11.30am, at the company’s Nanyuki Road headquarters in Nairobi’s Industrial Area.
After admitting Uchumi was insolvent and was closing down, he said: “The business has been encumbered by various hurdles day to day with trade and non-trade creditors.”
He was accompanied only by company secretary Waweru Mathenge. Other board members were not present.
Independent sources said the firm’s outlets had operated normally until 8.30pm on Wednesday. Then workers were told that they should not go to work yesterday, because they had been given a Madaraka Day rest.
Uchumi has been ailing since 2001, when its board, then led by Mr Chris Kirubi, engaged in an extravagant expansion programme that eventually pushed the company into a cash flow crisis and finally into the red.
Puzzled customers pass the closed gates of Uchumi Hyper on Ngong Road yesterday. The Once flourishing houselhold chain of supermarkets announced yesterday the closure of its stores country wide. Photo by George MulalaMany investors, however, failed to read the signs and sunk almost Sh1.3 billion into a rights issue that had been expected to herald the company’s turnaround. They were not even deterred by a Sh1.2 billion loss incurred by the firm in the year ending June 30, 2005.
And there are those who have only partially burnt their fingers in the Uchumi closure. The Industrial and Commercial Development Corporation (ICDC), Kenya Wine Agencies and ICDC Investment gave up some of their rights to new investors during the rights issue. ICDCI baled out completely.
Businessman Naushad Merali’s Sameer Group early this year snapped up 10 per cent of the stake before they quickly pulled out. It was reported that the Uchumi board had refused to grant him the number of board seats he wanted.
Mr Kirubi made his exit last year. Yesterday when told of the closure, he exclaimed: “Oh no!”
Apart from the investors, the company’s 1,200 workers in 17 branches were facing the future without jobs.
When making the announcement yesterday, the CEO said they were yet to be informed. “It will be a huge shock,” he conceded.
Mr Masterten-Smith, a South African who was hired in November 2004, said at the time: “I am aware of the task ahead of us. I am not saying it is easy.”
He now says competition made recovery impossible, in spite of the management’s best efforts.
CMA had been informed of the decision, and the company was awaiting a reply. The KCB Group and PTA Bank who are owed hundreds of millions of shillings have also been told.
Yesterday Mr Masterten-Smith seemed at a loss over what financial solutions the board was contemplating for its lenders.
“I cannot enlighten you as decisions have not been taken,” he said. “Anything is possible.”
Uchumi’s recovery strategy appears to have collapsed partly because of its failure to sell its fixed assets. The firm gained only Sh300 million out of the Sh955 million targeted from the sale.
Yesterday, Mr Masterten-Smith said most of the offers were “not suitable”.
Asked whether Uchumi’s much hyped turnaround was a hoax, he replied: “I do not think we have ever misled anyone in the Kenyan market. We thought the recovery was possible.”
The board had concluded it was unethical to continue trading with a negative balance sheet. On the franchise, he said a further decision would have to be taken on their operations. It emerged yesterday that the Kampala branch in Uganda would remain open, because it was a separate company.
Uchumi called television stations to the Press conference in the morning, but for unknown reasons, avoided the print media. Only the Daily Nation and two independent TV stations were present.
other realated links
Courtsey of the Nationmedia.com
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Kenya Airways posts Ksh 6.9 billion pre tax profits
Kenya Airways, East Africa’s most respected company has announced today a pre tax profit of Ksh 6.9 billion for the year ended March 31st 2006.
The after tax profit has risen by 24% from Ksh3.88 billion the same period last year to stand at Ksh 4.8 billion.
The airline has recorded a Ksh 52.8 billion turnover up from Ks 42.2 billion same period last year representing a 25% increase.
Earning per share before tax and minority interest stood at Ksh 15.06 up from Ksh 11.95 from the same period last year representing a 26% increase.
Earning per share after tax and minority interest stands at Ksh10.45 from Ksh8.40 representing an increase of 24.4% from last year.
Passenger growth went up by 17% to stand at 2.4 million, dividends went up 40% to Ksh 1.75 per share. Breaking the passenger increase into regions, Europe showed a 20% increase due to the success of the B777 aircraft, which currently number three in total.
The airline expects to take a delivery of a fourth B777 in early 2007 in addition to the three new B737-800 planes by the end of 2006.
The strongest growth was registered on african routes with West and Central Africa leading with 26% growth folowed by Southern Africa, Nothern Africa and Eastern Africa at 22%, 21% and 5% respectively.
During the same period, cargo volumes registered a substancial growth of 24% mainly due to more cargo space available on the larger B777 aircraft and increased frequencies of B767 in Africa.
Managing Director Titus Naikuni said the airline had manged to achieve sustained growth in profitablity despite increased competition and high fuel prices.
KENYA’S ECONOMIC SURVEY FOR 2005
The Kenya Economy survey for 2005 was released yesterday and as excepted the government was patting its back as it reported an impressive 5.8 % growth in 2005.
The performance as reported has not been experienced for the last 10 years.
ECONOMIC OUTLOOK FOR 2005
STATISTICS AT A GLANCE
EMPLOYEMENT
458,000 NEW JOBS, representing a 5.9% increase.
HEALTH
4,912 FACILITIES
EDUCATION
7.6 Million enrolled in school
TOURISM AND HOTEL.
Grew by 13.3% to earn Sh48.9 Billion in 2005 compared to Sh38.2 billion in 2004.
1.5 million tourists arrived in 2005 compared to 1.4 million in 2004.
AGRICULTURE
Grew by 6.7% compared to 1.4% in 2004. coffee production declined by 6.6% from 48,400 tonnes in 2003/04 to 42,200 tones in 2004/05.
Horticulture exports grew by 19.2% in 2005 injecting sh38.8 billion from 163.2 million tones compared to sh36 billion in 2004.
Maize production increased grew by 11.4% from 29 million bags 2004 to 32.3 million bags in 2005.
Wheat production grew by 45.8% in 2005 to net 128.7000 tonns
Tea production increased from 324.6,000 tons in 2004 to 328.5,000 tons in 2005.
Rise Production grew from 47.6 thousand tons in 2004 to 62.7 thousand tons in 2005.
Pyrethrum production dropped from 41.9 tons in 2004 to 16.4 tons in 2005.
MANUFACTURING
Grew by 5% compared to 4.5% in 2004. it created 5,500 jobs compared to 2,200 in 2004.
Leather and footwear sub sector declined by 4.3% in 2005 compared to a drop of 24% in 2004
BANKING SECTOR
Pretax profit by 47.8% to stand at sh20.1 billion in 2005 compared to Sh13.6 billion in 2004.
Interest income rose from Sh26.3 billion to sh39.7 billion.
Banks lending to private sector grew stood at 294.9 billion representing and increase of 18.5% in 2005.
Borrowing by manufacturers dropped to Sh62 billion from Sh63 billion in 2004.
Public sector lending dropped from Sh14.8 billion in 2004 to Sh13.5 billion in 2005.
Non interest income from fees and commissions grew by 17.85 to stand at sh19.9 billion compared to sh16.9 billion in 2004.
BUILDING AND CONSTRUCTION
Cement production rose by 10.9% in 2005 to stand at 1.5millom tones compared to 1.4 million tones in 2004.
TRANSPORT AND COMMUNICATION
Grew by 16.5% to earn the country sh329.9 Billion in 2005 compared to Sh283.2 billion in 2004.
Mobile phone industry subscription base grew by 56.9% to 5.6 million in 2005 compared to 4.3 million in 2004.
400 million sms’ were sent from the Kencell and Safaricom in 2005.
Newly registered motor vehicles rose from 42,482 in 2004 to 45,653 in 2005.
Its time China joined the Group of Seven
Two weeks ago, the Chinese government announced that it would be building more than 40 new airports and develop 10 new sea port facilities by 2010 in anticipation of a rapid demand for the transport infrastructure by its ever expanding manufacturing industry.
This news comes in the wake of reports that China has leap flogged Britain as the world’s fourth largest economy. China’s economy has been growing at a steady rate of 9.5% for the last two decades to stand at £1.13 trillion (R12.6 trillion), putting it a whisker ahead of the UK’s economy, which weighed in at £1.11 trillion according to official exchange rates used by the Bank of England.
Goldmans Sachs forecast they would enjoy strong growth over the next 30 to 50 years, by which time only the US would still be ahead on pure size.
In its analysis it says the leading economies by 2050 will be as follows in terms of GDP
1. China $44.5 trillion
2. US. $35.2 trillion
3.India $27 trillion
4. Japan $ 6.7 trillion
5. Brazil $ 6.1 trillion
6. Russia $5.9 trillion
7. Britain $3.8 trillion World’s largest economies in 2050
With these figures in mind, is it time for China to join the group of seven and replace the lesser country Canada? I guess its time we let the dragon in.
Click Here for more about China according to CIA
Its good news for Daima bank depositors
If news by the Central Bank of Kenya that depositors of the liquidated Daima Bank should collect claim forms in order for the liquidator to pay them the protected deposits, then there is light in the tunnel for the depositors of other fallen banks like Trust bank and Euro bank who have lost Millions of shillings.
Daima Bank which began operations in January 1993 then later put into statutory management in March 2003 under Simon Ngeny, had a deposit base of Sh709 Million with a gross loan portfolio of Sh934 million out of which Sh737 million of the total loan portfolio was non performing.
CBK says that payment is set to start on Monday next week and will run for one year till the last day of May next year.
Though CBK then said the Daima Bank’s loan portfolio was due to poor risks assessment and high interest rates that led to the massive default, one cannot rule out the malpractice that marred the banking sector in the previous regime.
We hope the government will look into the matter of other depositors who have lost their livelihood to the unscrupulous banking institutions
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