Much has been discussed about Africa being the next frontier, and kenya bring the beacon of democratic hope on the continent. I have tried to analyse the same on various parameters like internal politics, robust regulatory framework, security, social and physical infrastructure, and finally the track record of Indian pioneers in this country. I have largely concluded that 2008-2013 were the golden years of Kenya and the country seems to be slipping fast, unless urgent measures be taken to reign the factors in.
There are worrying signs that Kenya may be on the tipping point of a disaster in making... A rapid march back to the despotic reigns of tinpot dictatorial presidents of the past. Even as that happens there seems to be little will or even the aptitude to improve the living of residents or the ease of doing business for industry.
To start with, By systematically defeating the process of devolution of powers and careful destruction of institutions and governance structures, the Current government is attempting to concentrate absolute powers at the center.
Last week a new extra-constitutional governance structure was unveiled which ostensibly delegated Executive authority to new all powerful County Commissioners, directly appointed by and reporting directly to the President. It's the equivalent of an Indian union government creating Governors with absolute, executive and overriding power over states, across all ministries. From the power they derive from the proximity to Presidency, these county commissioners would make redundant the entire edifice of County Governors, Executive, Legislative and administrative arms of the counties that was painstakingly arrived at in a reformist constitution unveiled in 2010 by an all-party coalition government. The current President has definitely moved to neuter all other government arms so that he can recreate the one-man rule of years gone by.
These county commissioners, are out and out political appointments, which means their only quality is the proximity to the Power center. They would exercise absolute power over everything and anything across all portfolios, and indeed will make redundant even the Union cabinet secretaries, who were appointed and projected as technocrats. Because through these commissioners now, the Government will run its powers in each corner of the country, very similar to the colonial administrative structure that was long preferred by successive dictatorial streak presidents. The reformist constitution, it seems, has been short circuited, and the power centralized.
If one thought, as a silver lining, that a more authoritarian president can prove to be more responsible and decisive, then one stands disappointed by the past months' experience.
Case in point is the national security - both from the stand point of internal crime and terrorism. Tragic bungling and several needless deaths created such an environment of fear, that there are reports of foreign nationals starting to be evacuated, UN offices and embassies put on high alert, and upgrade security ... And all The premier had to offer was a statement to the effect that ... western nations, their tourists and FDI included, can go to hell, because now I have China!
Last week an unusual decree was issued to release payment on the controversial Anglo Leasing scamsters, in contravention to all established rules of financial management, workflow and structures in a Government. What is remarkable in the decree is the brazenness of an order that naturally is suspicious and of questionable logic! This government is appearing to be not just contravening the laws in ordering the Treasury to make out of turn payments, but also can be alleged to be aiding and abetting corruption.
It also needs to be mentioned, in this perspective,that none of the cabinet secretaries involved in the mega mix-ups in Internal security, or defence, or communication or even the legal cases of the Anglo-leasing scandal, have been taken to task by the president.
These are a sign of extreme arrogance and hubris, and when seen in context of the concentration of power and authority, presents us the spectacle of dealing with a Moi 1.2 regime. No, not even 2.0. That'd have been good progress!
My point is that the risk profile of this country has gone up many levels, and continues to deteriorate rapidly. It doesn't not make much sense for Indian corporates, especially as the market itself is small compared to established markets in Europe or North America or even a South Africa or Nigeria. Add to it the various challenges of insurmountable corruption, immaturity, lack of infrastructure, lack of security, racial tension and a latent anger with muhindi (Indian businessmen who flourished by taking advantage of the colonial systems oppressive to blacks, and therefore perceived as cunning, dishonest, blood-sucking employers - the archetypical 'bania' characterization). This market is not yet ready for the established Indian corporates who traditionally prefer orthodox and safe business models.
Indian corporates should wait and watch from a distance and if situation doesn't slide horribly out of control in next few years, they can then make a re-entry in the country. With the marked preference for Chinese goods and services and more importantly funds, this is a market which shall anyway not succeed until the Indian government decides to open its purse strings, and at terms friendlier to the Chines, which is a tall order!
To quote some recent Indian corporates reverses in Kenya:
Olive Telecommunications was disqualified, at the very last leg, from the list of companies competing to supply the Kenya government with laptop computers for schools. The reason of disqualification was thought up post-facto. Kenya Government has acquired a new found love for Original Equipment Manufacturers, which by and large locks out Indian companies and favour Chinese ones.
Essar Energy sold its entire stake in Kenya Petroleum Refineries, arguing that it was no longer feasible to continue investing in a facility whose technology is obsolete in an inhibitive regulatory environment.
Essar, also sold off it's telecom marketed in Kenya as yuMobile.
Essar Energy in October last year offered to sell its entire shareholding in the oil refinery to the government for $5 million (Sh430 million) or $2 million (Sh172 million) lower than what it paid to acquire the stake in 2009.
Corporate India’s problems in Kenya deepened last month after CfC Stanbic Bank placed Sher Karuturi, one of the largest Indian flower firm, under receivership after the latter defaulted on a Sh383 million loan.
Besides, Delhi-based Bharti Airtel’s Kenya business is yet to make a profit since the Indian corporate giant acquired it in 2010 from Kuwait’s Zain.
One of the reasons attributed by the government is lack of localization in the employment of these companies, resulting in cultural fitment issues. Essentially, the adaptability to a hard geography is fraught with many dangers.
There are worrying signs that Kenya may be on the tipping point of a disaster in making... A rapid march back to the despotic reigns of tinpot dictatorial presidents of the past. Even as that happens there seems to be little will or even the aptitude to improve the living of residents or the ease of doing business for industry.
To start with, By systematically defeating the process of devolution of powers and careful destruction of institutions and governance structures, the Current government is attempting to concentrate absolute powers at the center.
Last week a new extra-constitutional governance structure was unveiled which ostensibly delegated Executive authority to new all powerful County Commissioners, directly appointed by and reporting directly to the President. It's the equivalent of an Indian union government creating Governors with absolute, executive and overriding power over states, across all ministries. From the power they derive from the proximity to Presidency, these county commissioners would make redundant the entire edifice of County Governors, Executive, Legislative and administrative arms of the counties that was painstakingly arrived at in a reformist constitution unveiled in 2010 by an all-party coalition government. The current President has definitely moved to neuter all other government arms so that he can recreate the one-man rule of years gone by.
These county commissioners, are out and out political appointments, which means their only quality is the proximity to the Power center. They would exercise absolute power over everything and anything across all portfolios, and indeed will make redundant even the Union cabinet secretaries, who were appointed and projected as technocrats. Because through these commissioners now, the Government will run its powers in each corner of the country, very similar to the colonial administrative structure that was long preferred by successive dictatorial streak presidents. The reformist constitution, it seems, has been short circuited, and the power centralized.
If one thought, as a silver lining, that a more authoritarian president can prove to be more responsible and decisive, then one stands disappointed by the past months' experience.
Case in point is the national security - both from the stand point of internal crime and terrorism. Tragic bungling and several needless deaths created such an environment of fear, that there are reports of foreign nationals starting to be evacuated, UN offices and embassies put on high alert, and upgrade security ... And all The premier had to offer was a statement to the effect that ... western nations, their tourists and FDI included, can go to hell, because now I have China!
Last week an unusual decree was issued to release payment on the controversial Anglo Leasing scamsters, in contravention to all established rules of financial management, workflow and structures in a Government. What is remarkable in the decree is the brazenness of an order that naturally is suspicious and of questionable logic! This government is appearing to be not just contravening the laws in ordering the Treasury to make out of turn payments, but also can be alleged to be aiding and abetting corruption.
It also needs to be mentioned, in this perspective,that none of the cabinet secretaries involved in the mega mix-ups in Internal security, or defence, or communication or even the legal cases of the Anglo-leasing scandal, have been taken to task by the president.
These are a sign of extreme arrogance and hubris, and when seen in context of the concentration of power and authority, presents us the spectacle of dealing with a Moi 1.2 regime. No, not even 2.0. That'd have been good progress!
My point is that the risk profile of this country has gone up many levels, and continues to deteriorate rapidly. It doesn't not make much sense for Indian corporates, especially as the market itself is small compared to established markets in Europe or North America or even a South Africa or Nigeria. Add to it the various challenges of insurmountable corruption, immaturity, lack of infrastructure, lack of security, racial tension and a latent anger with muhindi (Indian businessmen who flourished by taking advantage of the colonial systems oppressive to blacks, and therefore perceived as cunning, dishonest, blood-sucking employers - the archetypical 'bania' characterization). This market is not yet ready for the established Indian corporates who traditionally prefer orthodox and safe business models.
Indian corporates should wait and watch from a distance and if situation doesn't slide horribly out of control in next few years, they can then make a re-entry in the country. With the marked preference for Chinese goods and services and more importantly funds, this is a market which shall anyway not succeed until the Indian government decides to open its purse strings, and at terms friendlier to the Chines, which is a tall order!
To quote some recent Indian corporates reverses in Kenya:
Olive Telecommunications was disqualified, at the very last leg, from the list of companies competing to supply the Kenya government with laptop computers for schools. The reason of disqualification was thought up post-facto. Kenya Government has acquired a new found love for Original Equipment Manufacturers, which by and large locks out Indian companies and favour Chinese ones.
Essar Energy sold its entire stake in Kenya Petroleum Refineries, arguing that it was no longer feasible to continue investing in a facility whose technology is obsolete in an inhibitive regulatory environment.
Essar, also sold off it's telecom marketed in Kenya as yuMobile.
Essar Energy in October last year offered to sell its entire shareholding in the oil refinery to the government for $5 million (Sh430 million) or $2 million (Sh172 million) lower than what it paid to acquire the stake in 2009.
Corporate India’s problems in Kenya deepened last month after CfC Stanbic Bank placed Sher Karuturi, one of the largest Indian flower firm, under receivership after the latter defaulted on a Sh383 million loan.
Besides, Delhi-based Bharti Airtel’s Kenya business is yet to make a profit since the Indian corporate giant acquired it in 2010 from Kuwait’s Zain.
One of the reasons attributed by the government is lack of localization in the employment of these companies, resulting in cultural fitment issues. Essentially, the adaptability to a hard geography is fraught with many dangers.
No comments :
Post a Comment
Comments will appear on the post after moderation.