Tuesday, July 29, 2014

YALI 2014

The Young African Leaders Initiative 2014 - #YALI2014 kicked off this week in Washington DC. Speaking at a meeting with 500 of the first class of YALI fellows, President Obama said that it will be renamed the Mandela Washington Fellowship (& doubled to have 1,000 fellows by 2016) and that four regional leadership centers would set up in Africa.

The regional leadership centers will be established in Senegal, Ghana, South Africa and Kenya and will offer courses on leadership, support for entrepreneurs through mentoring and access to capital and a networking forum. 

The Center in Kenya will have a robust training curriculum with direction from a partnership that brings together Deloitte’s global management and strategy skills, the established curriculum and capacity of Kenyatta University, the public administration training of the Kenya School of Government, and Africa Nazarene University’s youth engagement and outreach.

USAID is investing $38 million in the new YALI centers with support from the MasterCard Foundation ($10 million), Microsoft ($12.5 million), Intel ($5million) and Dow Chemical ($4 million). Others are McKinsey, IBM, General Electric, Procter​&​​G​amble and the Mara Foundation. (More at the YALI site). 

In a Q&A session, Obama also spoke about AGOA and the on-going  for renewal of the the trade partnership between the US & Africa; He said, they have learnt lessons from the previous phase of the partnership and will work to lower other export barriers (such as transport & trade finance), and, starting with Uganda, Kenya and Tanzania, take steps to see how AGOA can work with effective trading bloc for intra-Africa trade.
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The YALI Summit events will lead up to the the first US-Africa Leaders Summit, which, with over 50 presidents & prime ministers expected, is the largest gathering of African Leaders ever hosted by a US president.

Kenya's President Kenyatta is to participate in two events next week - a doing business in East Africa session and a presidential dinner, both organized by the Corporate Council on Africa (CCA) who have events for several other African leaders and nations like Ethiopia, South Africa, Ghana Liberia Congo  Mozambique and Tanzania among others.

Thursday, July 24, 2014

New Credit Cards from NIC and Equity banks

This week, NIC Bank launched a platinum credit card and Equity Bank formally announced their expanded their impressive card portfolio that now includes American Express

The NIC Bank Visa Platinum credit will be offered to a select few clients like professionals, senior government employees, business leaders, and entrepreneurs. The card comes with a variety of privileges in terms of shopping discounts, priority pass access to 600 VIP airport lounges in 100 countries (with complimentary snacks, free internet at many, and card holders can bring in companions), a portfolio relationship manager, and purchase protection for 90 days. 

For frequent travelers around the world, it also provides useful facilitation in emergencies like payment of hospital deposits of up to $2500,  and arranges for emergency evacuation, legal advice, transport of companions or children.  

The annual fee is Kshs 6,000 (~$70) and there is no joining fee. NIC will also have a rights issue and a bond issue that shareholders will kick-off next week at an EGM.

Equity Bank is signing up merchants to now accept American Express cards - for which they are the exclusive card issuer in Kenya. They have already signed on Nakumatt,  ArtCaffĂ©, Heritage Hotels, Best Westernm Laico Regency, Leopard Beach, Boma and some other hotels.

Speaking when he confirmed the development, Equity Bank Managing Director, James Mwangi, said the bank is now a partner for American Express, Visa, MasterCard, PayPal, Google, China Union Pay, SWIFT, JCB, VFX (Equity Direct) and Diners Club.

As per Central Bank stats, Kenya had about 162,000 locally issued credit cards as at February 2014, compared to 114,000 three years ago.

Wednesday, July 16, 2014

Lady Lori & FastJet?

The latest round of airline license applications has a curious addition with Lady Lori previously known as a successful helicopter charter company applying for a variation of their current license.

Lady Lori are seeking to introduce domestic flights between Nairobi and Mombasa as well as to obtain rights for international routes from Nairobi to Dar es Salaam, Juba, Kigali, Entebbe, Maputo and Lusaka.

Across the border is successful FastJet who have not been shy about their ambitions for Kenya. But their license to operate which they intended to obtain via an investment in Kenya's Fly540 airline has been stuck somewhere in the government red tape while their Tanzania business has thrived and they are now the leading airline there. Recently, FastJet came to a settlement with Fly540 ending their acrimonious relationship. 

Could Fastjet now be starting afresh with an established and licensed operator? Lady Lori is applying for the above routes with the intention to fly Airbus A320 aircraft - which happen to be the only aircraft flown by FastJet.

FastJet, as a low cost operator has made the A320 the only airline in it's fleet and one that made a few people wondered how Fly540 with a mix of ATRs and Bombardiers would integrate.  Lady Lori offers a fresh start in this regard.

Tuesday, July 15, 2014

Fin4Ag14

All this week, Nairobi plays host to a conference called Fin4Aag14 which has the theme of Revolutionising Finance for Agri-Value Chains.

It started with plug & play session in which 18 companies got to introduce their platforms linking agriculture to finance across Africa. This is the second edition of the session that was introduced at the conference in Kigali last year and proved to be quite popular.


The 18 companies were: 

  • Tangaza Pesa: automates the value chain by doing KYC on farmers with bio data, crops produced,  and GPS  to build credit records
  • Ensibuuko (Uganda) helps (via web & mobile) to manage rural SACCO’s that can reach many of the rural unbanked farmers 
  • FarmDrive (University of Nairobi) enables small farmers to keep basic record by mobile phone and build a credit score 
  • Farmers Record Management System (FARMIS) aggregates farmers with financial institutions  to access finance and ensure loans are properly utilized 
  • Zoona's eVoucher platform: enables agri-business supply chain payments and insurance 
  • Credit Information Sharing: enables information sharing by credit bureaus for lenders to make decisions
  • Umati Capital: paperless solution that aims to shorten dairy farmer  payment periods from 6 weeks to 24 hours
  • Agrilife - enables farmers to access markets inputs, savings, and asset finance 
  • Musoni System: a core banking for SACCO’s and micro-banks, loans, and savings that can also integrate with m-pesa and tablet apps 
  • Farmforce (Sygenta) enables traceability of farm produce for quality and for farmers to access small loans 
  • e-Krishok: Online & mobile infer for Bangladesh farmers to access information, traders and finance 
  • Creditinfo’s Credit Bureau Solution - enables credit bureaus can collect info on farmers so they can access loans without need for collateral 
  • Craft Silicon have a platform can link to MFI’s, bank, SACCO’s (Elma?)
  • aWhere Platform: with over 1 billion data points collected, enable farmers to be aware of field risks to make smarter decisions. this includes weather data for all of Africa since 1999 and others they pull from mobile services
  • AgroCentral - uses ICT to buy produce from farmers
  • RiMFin (Ghana): enables rural famers to receive mobile payments and save them in their phones 
  • finFinancials (Fintech) core banking platform that can integrate with others for digital or mobile payments
They will be there all week presenting their platforms and engaging the attendees who are from across Africa, Caribbean and Asia and who include development specialists, financiers, policy makers and top bankers who hope to get youth interested in agriculture.

There was a brief session on warehousing that detailed both the challenges and the opportunities for warehousing. Commodity warehousing types include private, public and community. Examples were cited from Tanzania (community food stored in individual houses but linked to MFI’s ), Ivory Coast (large presence in Cocoa Rubber Cashew sectors), Madagascar (communities totaling 80,000 rice farmers in villages part guaranteed by DFI’s cover 2% of the national production but provide price stability), and Nigeria (massive 1.3 million ton silo capacity against  large formal sector demand of 1.9M tons), Burkina Faso and Uganda (2 successful warehouse companies). 

Challenges facing warehousing include high costs (leaving some empty of commodities) fraud, long value chains, and contract defaults (by both small farmers and larger organizations like WFP).

Fin4Ag14 is organized by the Technical Center for Agricultural and Rural Cooperation (CTA),  Central Bank of Kenya and African Rural and the Agricultural Credit Association (AFRACA), and is supported by the FAO, the Rockefeller Foundation and Afreximbank. 

Saturday, July 12, 2014

Countdown to REIT’s in Kenya

This week CFCLIfe and Stanlib managers held a media briefing on Real Estate Investment Trusts (REIT's) in Kenya and their possible impact on the local property scene.  REIT’s are common around the world, South Africa, Ghana, Nigeria have had legislation for them, and finally, there's a Kenya law on REIT's in place (July 2013) after many years of formulation and review.

Stanlib Kenya  plan to launch REIT's in Kenya in September 2014 - and the law allows for two kinds - Income REIT’s and Develoment REIT’s. Some unique features about REIT's (which will cost between Kshs 100 - 300 million to set up with a minimum of 7 promoters) include they must distribute about 80% of profits to investors, and investors can sign on to I-REIT's for as low as Kshs 5,000.

The speakers noted that many large landlords in Kenya are quite comfortable earning incomes of less than 5% on their assets, when they could be earning quite a bit more (10% - 20%) by signing up with REIT’s - which are tax exempt and offer diversification (can invest in strong properties prisons, hospitals, malls) with more liquidity for all investors who participate in the REIT. While there's saturation as the high end of the property market, and expensive land prices are still climbing,  there are still great opportunities at the mid- and lower- residential and commercial income segments. Also the Kenya UN classification was upgraded which means that from a previous 45, over 180 countries will now have officials accredited to the UN living in Nairobi. 

Also licensed as REIT managers alongside Stanlib in April, were CIC Assets and Fusion Investments.

Answers to @ColdTusker's questions:
  • The minimum amount of initial assets for an D-Reit is 100M and for a D-Reit is Kshs 300M
  • D-REIT in the act is defined as "a development and construction real estate investment trust" is for sophisticated investors e.g for property developers to put up properties. They have shorter lifespans - and YES they can convert to I-Reit's which are for income from established properties. D-Reit’s can borrow up to 50% of assets, and i-Reit’s only 35%, also i-Reit’s must have 75% of portfolio in properties, and D-Reits have to have sunk 30% of their funds into property within year 1 
  • Centum 2 Rivers was mentioned as the planned largest mall in Eastern Africa - with Carrefour as an anchor along with other foreign shops as main tenants (not the usual local supermarket and shops in the stores)..interesting as Carrefour seems to be withdrawing from emerging markets -  http://qz.com/231405/carrefours-india-exit-has-little-to-do-with-the-governments-reservations-on-retail/

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