Michael Mundia Kamau
P.O. Box 58972
00200 City Square
Nairobi
Kenya

11th December 2005

          KIBAKI’S COUNTRY

The drama and intrigue in the aftermath of the Kenyan
constitutional referendum of November 21st 2005, is
drawing to a close, with balances tilted in favour of
President Mwai Kibaki and his administration. Power
games have once again taken precedence over National
advancement in what must be regarded as another wasted
year of widespread opportunity in Kenya.

Against expectation, the Kenyan economy has registered
significant growth in the year 2005, and the drive
must be towards consolidating and strengthening these
gains. Independent and reputable projections,
including one by the AIG Global Investment Group,
estimate that the economy will grow by between 5.5%
and 6% in the year 2005. In the Central Bank of Kenya
weekly bulletin of 2nd December 2005
(http://www.centralbank.go.ke/downloads/weeklypress/latest_weekly.pdf),
tax collection increased by 13.5 per cent to US $ 1.46
billion between 1st July 2005 and 25th November 2005
as compared with the same period in the year 2004. In
September 2005, the largest and most profitable Kenyan
firm, telecommunications giant, Safaricom, hit the 3
million active subscriber mark, 15 years ahead of its
initial growth targets
(http://www.safaricom.co.ke/2005/default2.asp?active_page_id=334&id=249).
The report announcing this breakthrough, further
states that “Safaricom also ranks high among the
leading corporate taxpayers in Kenya having paid a
total of US $ 405 million as total duties, taxes and
license fees in the past four years. Last year
Safaricom, invested more than US $ 165 million in its
capital expenditure programs raising the total capital
expenditure in the past four years to US $ 506.6
million”. Kenyan corporations, including Celtel,
Safaricom’s main rival, continue to have massive long
term Corporate Bond issues of between US $ 50 million
and above, at the Nairobi Stock Exchange.

There have even been significant share price
improvements of publicly listed companies at the
Nairobi Stock Exchange over the past year, with Kenya
Airways, the Kenya Power and Lighting Company and East
African Cables, taking the lead. Market activity
slowed down considerably in the period prior, during
and after the November 21st 2005 constitutional review
referendum, though the figures remain astounding: at
the close of trading on Thursday, 8th December 2005
for instance, 108, 098 shares of Kakuzi were traded at
a mean value of US $ 72,065, 921,171 shares of Kenya
Airways were traded at a mean value of US $ 982,582,
375,569 shares of Kenya Commercial Bank were traded at
a mean value of US $ 545,827, 450,663 shares of
Bamburi Cement were traded at a mean value of US $
841,238, 240,100 shares of British American Tobacco
were traded at a mean value of US $ 656,273, 1,147,634
shares of Sameer Africa Limited were traded at a mean
value of US $ 336,639, 161,000 shares of the Kenya
Power and Lighting Company were traded at a mean value
of US $ 298,387, and 1,027,980 shares of Total Kenya
were traded at a mean value of US $ 589,375. There is
no way that small time Kenyan speculators can raise
such sums of money, meaning that the source of these
funds are probably Kenyan Fund Managers and Kenyan
Custodians, very likely acting on behalf of foreign
investors. Fund Managers and Custodians do not
speculate, meaning that these are long term
investments. Added to this is the fact that there are
intended new listings in the coming months by the
Kenya Electricity Generating Company, Pan African
Paper Mills, Equity Bank and regional advertising
giant, Lowe ScanAd. Towards creating incentives for
further Initial Public Offerings(IPO), the Nairobi
Stock Exchange is in the process of reviewing and
relaxing it’s stringent IPO requirements, and is due
to adopt electronic trading on it’s floor by mid 2006.

President Kibaki’s war on corruption over the past
year, has not been convincing as the gains on the
economic front, but it is encouraging to note that he
has taken the cue, and dropped a key albeit
blacklisted ally, from his reconstituted cabinet.
Related to this, are reports that petty crime in Kenya
has dropped by 31% in the year 2005. There is still an
enormous amount of work to be done on the social
front, as half the Kenyan youth continues to be
perpetually stoned on drugs, many of which, like
“Muguka”, are purely and simply, potent and lethal
poisons.

By any measure, Mwai Kibaki must surely be the least
popular and most detached president that Kenya has had
so far, even by the standards of his very own Kikuyu
ethnic community. He led a coalition once known as the
National Rainbow Coalition (NARC), which has been the
source of extreme pain and disappointment. NARC has
collapsed, but the country remains intact and hopeful.
1.5 million jobs are yet to be created, 450,000
housing units are yet to be built, and numerous
by-passes and corridors, northern or otherwise, are
yet to be constructed , but after three disappointing
years, there is a rebirth of hope. Just as many of us
were about to throw in the towel, there appear these
flashes of light and brilliance at the end of the
tunnel.

President Kibaki used the word “development” five
times in the speech he gave prior to the
reconstituting his cabinet on Wednesday evening, 7th
December 2005. Another important part of his said
speech, was the following key acknowledgement: “During
my country tours and the recent meetings with the
people over the referendum, the common message from
the people is that they want better services, more
employment opportunities for the youth and enhanced
development for all the people and their regions”.
Little more captures the mood and expectations of the
general populace.

Whether or not we like it or want to admit it,
President Mwai Kibaki has kept hope alive in the year
2005, as supported by the above figures. Big business
and the European Union (EU), are even throwing their
weight behind him and his government. This
notwithstanding, President Kibaki’s rule is under
severe test, the same way that President Kenyatta’s
was in 1966, 1969, 1971, 1975 and 1976, and the same
way that President Moi’s was in 1978, 1982, 1990, 1992
and 1997. To his advantage, President Kibaki lived
through all these times and experienced the happenings
first hand. The year however is 2005 and the
situation, a highly polarised Kenya, and any
initiative to oust President Mwai Kibaki and his
government from power, must be accompanied by a
detailed and convincing blue print of how his
designated successors, intend to outdo and outmatch
the record above. Any probable vote of no confidence
in President Kibaki’s rule, must also be accompanied
by a detailed and convincing plan of reconstruction,
otherwise the momentum in place should not be
disturbed and should be supported in pace,
enhancement, growth and extent.



Michael Mundia Kamau