Wednesday, January 20, 2010

Kenya-Singapore sign co-operation pact

Kenya and Singapore Monday signed an agreement that will ease air connections between the two countries.

The agreement, witnessed by Prime Minister Raila Odinga will allow Kenya Airways and Singapore Airlines to operate in the two countries.

In the air services agreement, the two countries granted their designated airlines rights to operate in either or both countries.

Under the agreement, air carriers from Singapore and Kenya have the flexibility to operate any number of air services between and beyond both countries.

The agreement also grants the airlines of the two countries the right to make stops in each other's territory. It also grants them the right to operate between the territories without any limitations or restrictions on capacity, frequency or aircraft type.

The agreement was signed by Kenya's Minister for Transport Mr. Ali Chirau Mwakwere and his Singaporean counterpart Raymond Lim.

The signing ceremony was witnessed by Prime Minister Raila Odinga and his Singaporean counterpart Lee Hsien Loong.

The two countries also signed another agreement on technical cooperation.

On the technical agreement, the government of Kenya, in its efforts to enhance the development of its infrastructure to support vision 2030 expressed the desire to share Singapore's developmental experience and expertise.

The government of Kenya agreed to engage Singapore Co-operation Enterprise (SCE) in the planning and implementation of affordable and sustainable public housing system.

SCE was also asked to conceptualize, implement and manage three special economic zones in Mombasa, Kisumu and Lamu.

The technical agreement was signed by Kenya's High Commissioner Festus Kaberia and Mr. Alphonsus Chia, the CEO of Singapore Cooperation enterprise.

Earlier Mr. Odinga and Mr. Lee HsienLoong held talks at the latter's palace where they explored various areas of economic and technical cooperation between Kenya and Singapore.

Prime Minister Odinga said there was need to increase Kenya's economic portfolio in Singapore to address the imbalance which is currently in favour of Singapore on the ratio of 1:10.

Noting that Kenya was open to trade and investment, the PM asked the Singaporeans to invest in Kenya's technical and infrastructure fields especially in ports, communications and tourism.

"We have also prioritized the development of energy sector and we are making investments in the production of geothermal, wind, solar, biomass and ethanol."

He assured his host that Kenya was ripe for investment adding that the government had embarked on reforms to address concerns raised by international investors notably corruption, bureaucracy ,insecurity and poor infrastructure.

Noting that Kenya could be the entry point for Singapore into the East African region, Mr. Odinga pointed out that the East African community was a large market of 170 million people.

Mr. Lee Hsien Loong lauded the signing of the two agreements saying his government will quickly follow up on the signing by increasing its technical and economic presence in Kenya.

Earlier, Mr. Odinga was accorded an official reception at Istana palace in Singapore city during which he inspected a colourful guard of honor mounted by detachment of the Singaporean forces.

Mr. Odinga visited the Singapore Housing Development Board, the Singapore Mass rapid Transport (SMRT) and Changi International airport.

The PM is accompanied by the Minister for Industrialization Mr. Henry Kosgey, the Minister for Transport Mr. Chirau Ali Mwakwere, the Minister for Housing Mr. Soita Shitanda, the Minister for Trade Mr. Amos Kimunya, the Minister for Information and Communications Mr. Samuel Poghisio and an Assistant Minister for Finance Dr. Oburu Oginga.

Source:kbc.co.ke/

What can Kenya learn from post-crisis banking policies abroad?



Studying the debates that currently wrack most developed countries on post-recession financial regulations, led by Britain and the US, the arguments suggest that this frontier could be the next big fight in economic policy if not monetary theory.

In case you haven’t followed, the issues provide interesting analogies with Kenya’s perennial banking problems in which we have operated behind the curve, lacking traction with monetary policy and effective strategies to pilot economic recovery. Taking the US, one would be forgiven today for thinking that in his regular approaches to complex economic issues, President Obama was addressing policies in his native Kenya.

Let us start with Britain. As a lead global financial services centre it faced high stakes in the recession, and dropped nearly 5 per cent of GDP. It earns a relatively high percentage of GDP from the financial sector and led in bailing out banks as well as in tightening regulatory oversight, with substantial leadership in ideas from Chancellor of the Exchequer Alistair Darling and Prime Minister Gordon Brown.

In the US, Obama led the intellectual and critical thinking on monetary/fiscal policy from the top, steering the economy to recovery and gathering the best economists.

Having had the Federal Reserve raise credit and lower interest rates to virtually zero and having bailed out collapsing banks while guaranteeing others through the Troubled Assets Relief Program (TARP), he combined this with allocation of a two-year stimulus package of $800 billion.

A third went to tax cuts (to stimulate consumer spending); a third to roads, schools, power, and other infrastructure; and a third to federal transfers to state and local governments for health care, unemployment insurance, school salaries, etc. The main thrust on the fiscal side was a two-punch impetus on consumer and investment spending.

On Monday December 14 with major banks and again this week with community banks, Obama checked figuratively whether his bananas had ripened. They were still raw. Just as is the case in Kenya where the CBK’s lowering of the cash ratio from 6 per cent to 5 per cent last December pumped about Sh10 billion into the economy, the US Fed’s billions in TARP are hardly traceable.

Productive lending that can create jobs (in agriculture, industry, tourism) or the expansionary stance intended remain weak in both countries. Note the differences.

While the US and Kenya’s financial systems are awash with liquidity, the US enjoys low rates as the Fed intended. Kenya’s high rates defy CBK influence. Banks keep more than twice their minimum required liquidity ratio of 20 per cent in their coffers, lending mainly to government in domestic debt.

US banks used TARP to re-capitalise what they could of their losses. They began to make profits partly from a surge in government borrowing. But non-financial private borrowing plunged. Where did the money go?

In an offsetting development, some financial players are exploiting monetary policy by borrowing cheap money short-term, and using it to buy long-term bonds-, the so-called ‘carry trade’. But as if taking a cue from Kenya, US banks are not lending to productive private sector borrowers where jobs and growth can be revitalized.

Economists define Kenya’s case as a liquidity trap where monetary policy becomes powerless to influence interest rates and thus can do little to deliver loans to investment. Of course, this derives from the profit-making strategy of the leading Kenyan banks.

In contrast, the US problem is that of perverse incentives that persist in the financial sector. They lead to a composition of lending that snubs non-financial lending. In his high-profile plea to banks to support the fledgling economic recovery by opening their wallets to productive private sector borrowers, Obama was unusually candid on December 14. He termed the banks ‘fat cats’ that ‘still don’t get it’

What is ‘it’ that they don’t get? It is the seething anger and calls for reform by an American public bamboozled by banks through a chain that began with greed in mortgage lending, collapse and bailout of major banks with public tax dollars (in TARP), and a recession.

With many out of work and homeless from housing foreclosures, a staggering 8 million jobs disappeared. Unemployment figures still rise while some 100,000 jobs are needed just to keep up with population growth.

Source:businessdailyafrica.com/

Kenyan insurance sector growing

NAIROBI, Kenya, Jan 19 - Players in the insurance sector say there is a growing demand for political violence, terrorism and sabotage cover thus the need for firms to provide them.


African Trade Insurance (ATI) Acting CEO Stewart Kinloch called upon insurance firms to protect their clients by coming up with innovative products that guard against potential losses emanating from such events.

“As the financial crisis bites deeper into pockets, there is a trickle-down effect that has impacts on fuel, food shortages and it doesn’t take a lot to turn fuel shortages and food shortages into political unrest and malicious damage,” he said.

Pointing to the events that led to the 2007 general elections, he pointed out that the need for this cover could not be overemphasized and underscored the need for property owners to take some precautionary measures.

Speaking after ATI signed a Sh31 billion political violence, terrorism and sabotage reinsurance agreement with APA Insurance, Mr Kinloch said the demand for such covers in the East African region was growing, a move which called for such insurance.


APA CEO Ashok Shah said they had moved to fill this gap in the market and even make it accessible to policy holders with modest incomes.

“The insurance industry in Kenya has been accused of shying away from non-traditional insurance leading to great suffering by the public in terms of loss of property by calamities,” Mr Shah said.

Premiums for policyholders with lower than Sh2 million would not be increased, he said.

“By doing this, APA is realy standing up for its customer base, the man on the street,” he added.

Under the reinsurance agreement, ATI will act as APA’s re-insurer by absorbing over 90 percent of the risk underwritten on any resulting claims. The arrangement increases APA’s capacity to insure an individual property or that of an SME of up to a maximum of Sh265 million. Higher value properties will be covered under a separate agreement

The APA Political Violence reinsurance cover is the third such cover provided by ATI to Kenyan-based insurer. ATI is already in partnership with Jubilee and UAP insurance agencies offering similar covers

ATI expects to announce additional political violence reinsurance deals in 2010 with insurance companies in Kenya and Uganda as well as other markets that have experienced civil unrest in recent months.

Source:capitalfm.co.ke/

Kenya: Kkk Alliance Plans Simama Rally Hijack

Nairobi — THE Kikuyu-Kalenjin-Kamba alliance is planning to hijack a rally of Simama Kenya scheduled for January 31in Bungoma.

The KKK alliance wants to make Eugene Wamalwa its point man in Western province because it believes he can check the influence of Deputy Prime Minister and Deputy ODM Leader Musalia Mudavadi.

The plan has been hatched is to "test the waters" in western Kenya where Prime Minister Raila Odinga's ODM party still enjoys significant support, according to two key ministers in the KKK alliance.

"We are determined to build support for our alliance even though our opponents want to brand us tribalists. We want Eugene to join us so we will be in Bungoma to tell Kenyans that we have a national outlook," said one minister.

Agriculture Minister William Ruto is likely to attend the rally.

"I will be attending that meeting myself and all plans are on to have the minister attending but this is subject to confirmation at a later date," Cherengany MP Joshua Kutuny, a close confidante of Ruto, said yesterday.

The KKK alliance came to light last year with Vice-President Kalonzo Musyoka, Deputy Prime Minister Uhuru Kenyatta, Agriculture Minister William Ruto and Tourism Minister Najib Balala as its leading lights.

The two ministers said yesterday that all four had yet to discuss the issue but there was a general consensus among their supporters that KKK people should make its presence felt at the Simama rally.

"If you won't see us, you will hear from us. I ask you to look at those who will attend and what interests they will be representing," said one of the ministers.

Simama Kenya was started last year by Jimmi Kibaki, son of the President, to mobilise the youth before 2012.

For more send your comments to radioshabelle@ymail.comThe Simama rally was organized by to declare Saboti MP Eugene Wamalwa a presidential candidate but has caused controversy with some local MPs threatening to disrupt it.

Jimmi Kibaki is expected to attend the meeting.

Kamukunji MP Simon Mbugua, a close associate of Uhuru, warned Jimmi to stop holding rallies in constituencies where he was not invited.

"Who is Jimmy Kibaki? He is an imposter. He is hanging on his father's clothes and some of us are not happy about his maneuvers. We would rather Wamalwa takes keen interest on this," Mbugua said.

Wamalwa is battling for Ford Kenya chairmanship and has already declared he will run for President in 2012.

MPs allied to Kalonzo, Uhuru Kenyatta and Ruto are being encouraged to attend the rally.

"We have been asked to grace the rally in Bungoma. I have however decided that I will remain in my constituency to attend to other serious matters but I wish those who will be headed to Bungoma success," said Keiyio North MP Lukas Chepkitony.

Eugene Wamalwa traveled to Uganda this week with Vice-President Kalonzo Musyoka on an official visit.

"Why do you think the VP flew to Uganda with him? I can tell you for sure that Eugene is part of the bigger KKK plan to penetrate western Kenya," said an MP close to Kalonzo.

Wamalwa denied that he was part of the KKK alliance and insisted that Simama Kenya is going to make an alliance with Ford-Kenya, a party he hopes to take over later this year.

"We do not want to be dragged into alliances we are not part of. What we are seeking to do is make an alliance with all young Kenyans so that we can achieve smooth generational change," said Wamalwa.

Jimmi has in the past denied that his father is grooming Deputy Prime Minister and Finance Minister Uhuru Kenyatta as his successor.

But analysts say the President has strategically placed Uhuru at a vantage position to take over the central Kenya mantle once he retires in 2012.

Yesterday Tony Gachoka, Simama's spokesman, said they would not allow anyone to hijack their function.

"Simama Kenya is going to Bingaman to launch our National Campaign for Generational Change in the leadership of Kenya come 2012. No amount of threats or doomsayers will deter us from doing so," stated Gachoka.

"All our supporters will be heading to Bungoma on that day. We are going there to show solidarity with Wamalwa and from then onwards we shall stand side by side each other all the way to 2012," Kutuny said.

He said that plans were underway to ensure as many MP as possible from the Ruto camp attend the function to show their support.

Kutuny said they supported Ruto's presidential bid but will be in Bungoma to support Wamalwa before the two negotiate on whom to support in 2012.

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"Wamalwa is a good man, we are looking forward to working with him and so I will be very much willing to be in Bungoma on that day," Konoin MP Dr Julius Kones said.

However Kimilili MP Dr Eseli Simiyu warned Wamalwa to tread carefully.

"Wamalwa he is a young man but what befell Elijah Mwangale and recently Dr Mukhisa Kituyi is squarely coming to him. He is finished," Eseli said.

"This is a deliberate attempt by some people from Central Province to come and undermine the local leadership. We want to say to them, they can come, but they must know they are strange guests," Eseli said.

All MPs from Western Kenya have agreed to give the rally a wide berth, according to him.

Source:allafrica.com/

Kenyan tea prices ease slightly, volumes up

NAIROBI (Reuters) - The price of top Kenyan Broken Pekoe Ones (BP1s) eased to an average $4.20 per kg from $4.44 per kg last week, brokers said on Wednesday.





Best BP1s sold at between $4.55 and $3.85 per kg at the weekly auction in Mombasa, compared with $4.72 and $4.16 per kg last week, Africa Tea Brokers (ATB) said in their market report.



BP1 prices set a record of an average $5.45 per kg in mid December.



"There was fairly good demand for the 137,105 packages... on offer at easier rates with some teas remaining unsold," ATB said.



Brighter Pekoe Fanning Ones (PF1s) sold at between $3.28 and $2.96 per kg compared with $3.47 and $3.18 per kg at the last sale.



Kenya is the leading exporter of black tea globally. Prices hit record highs last year after a long spell of dry weather reduced supply.



ATB said 21,580 of the packages offered remained unsold. Last week 115,308 packages were offered, with 18,577 unsold.



Yemen, other Middle Eastern countries and Afghanistan bought more tea than last week, as did Pakistan Packers and Sudan, ATB said.



United Kingdom and the Egyptian Government Sector bought less tea than last week while Egyptian Packers, Kazakhstan and Russia bought similar amounts as last week, ATB added.


Source:af.reuters.com/

Kenya links Al Shabaab to Friday chaos


NAIROBI, Kenya, Jan 16 – The Kenyan government now says members of Somalia’s militant Al-Shabaab group were involved in Friday afternoon’s protest, that left at least five people dead.

Internal Security Minister George Saitoti said there were people waving placards belonging to the group and they may have taken advantage of the situation to cause mayhem.

He said that an inquiry will be set up “to thoroughly investigate the violence and stern action taken against those involved.”

He added: “We know that there are elements sympathetic to the Al-Shabaab and there may be some of them around here. We were watching very carefully since we knew that they wanted to create problems.”

“They wanted to create problems but our own people were on the alert and did the best they could. Those elements had planned much bigger mayhem than what you saw yesterday,” Prof Saitoti pointed out.

On Tuesday, January 12, the chairman of the Muslim For Human Rights (MUHURI) lobby applied for a permit at the Central Police Station to hold a demonstration against the government’s decision to deport Jamaican Muslim cleric Sheikh Abdullah Al-Faisal.

Prof Saitoti said that Intelligence information received had indicated that the demonstration would be infiltrated by people sympathetic to the Al-Shabaab, forcing the police to outlaw it.

He termed it unfortunate that the advice was not heeded and said that this led to the degeneration of the whole situation.

Among those who were killed were two victims who were taken to a clinic near the Jamia Mosque while three others died on the way to hospital.

Four other people who were stabbed during the demonstration were taken to hospital by motorists passing through the riot zone. Police confirmed they had arrested several suspects but declined to comment about the casualties.

As the riot degenerated, police appeared to withdraw after they seemed overpowered forcing angry members of the public to stone the demonstrators.

Several vehicles parked on Banda Street and other streets near Jamia Mosque were extensively damaged.

On Saturday, Prof Saitoti held a meeting with Muslim leaders where it was agreed that Al-Faisal should be deported as soon as possible from Kenya.

“The man must leave this country as soon as possible. It is a matter of great insult that a foreigner would come to this country and be the source of terrible misunderstanding among Kenyans and lead to destruction of property and injury of people,” he stated.

“Sheikh Al-Faisal entered the country on a tourist visa but attracted the attention of government officials when he started preaching inciteful messages.”

He described the cleric as an undesirable element after being jailed in the United Kingdom for five years for preaching racial hatred and religious intolerance.

“After serving a five year sentence up to 2007, he was subsequently deported to Jamaica. The preacher is on an international watch list of prohibited persons,”

Prof Saitoti pointed out that Al-Faisal has even been banned from preaching in his own country of origin.

Source:capitalfm.co.ke/

Denis Ndiso of Kenya wins Mumbai Marathon

MUMBAI: Around 6 am in January, the streets of Mumbai are still dark. Walking through Bandra you can’t hear any birds, not even the roosters that
many people still keep, although a call to prayer comes from a mosque. The only others in the streets are newspaper boys, municipal sweepers and a few old ladies on their way to early morning mass at Mt Carmel’s Church. Quite absent are the runners who have been a constant feature in the past few months, practising for the Mumbai Marathon.

And then you turn the corner at Lilavati Hospital, and there they are. A most unusual traffic jam for this time of the morning announces the presence of the official starting point for the half-marathon in the ground in front of Rang Sharada Hotel. Autos driven by bleary-eyed drivers wrapped in shawls against the (for Mumbai) mild morning chill disgorge runners in skimpy shorts and vests, too charged to feel chilly. Some jog up and down on the spot to warm up, while others pin on their numbers, watched by the traffic police, friends and family and slum dwellers clutching lotas who look morosely at the starting point ground where, in true Mumbai fashion, they were used to relieving themselves a few days back.

In some ways this is the best place to see the impact the marathon has had on Mumbai. Proportionately, the number of runners of the full marathon has increased from 2,500 registrations last year to 3,500 this year, and the dream run always has the most runners, with 22,000 people puffing it out this year. Yet the full marathon remains the preserve of the hard-core runners, including professionals like the Kenyans who everyone knows are going to win, and spoken of with awe, almost like they’re a superior species. And the dream run, while it gets the most people, is really just a Sunday free-for-all.

To run all 21 km of the half-marathon though requires real commitment, yet it is not beyond the reach of most people. Given average health and adequate preparation, many people can finish it, and for the past six months many have been preparing to do just that. Last year, 10,000 ran it, this year 11,000 have signed up, and at these Bandra Reclamation grounds they are ready to start, kicking off with the biggest thrill of all — being the first large group of runners to cross Mumbai’s new Bandra-Worli Sea Link. Some are super fit, but many look just healthy and all look ready to go the whole way.

At 6.45 am, just as the sky starts lightening, the gun goes off, and the runners surge out of the gate. A pack of really serious runners quickly separate themselves, and then come the rest, trying not to push and shove, some running with friends, some striking out on their own. Here, this correspondent did the more regular Mumbai thing and went to the station to take a train to the finish line outside CST station, but a friend who did the run tells me of the exhilaration of getting on the Sea Link: “At one point there’s an incline down and as you look ahead you can see the whole bridge packed with the runners. And the sun is coming up over the city and above there’s a helicopter keeping track and as it went over, all the runners waved out to it!”

Source:economictimes.indiatimes.com/

Kenyan pilot dies in US plane crash

NAIROBI, Kenya, Jan 19 - A Kenyan student in the US has been killed after a single engine Cessna aircraft he was flying crashed in Southwest Michigan on Sunday morning.

David Otai, 23, was killed alongside his 20-year old female companion when the plane crashed in a snowy Michigan corn field

The cause of the crash was not immediately known.

The plane crashed in Allegan County's Manlius Township, about 5 miles south of the airport and about 155 miles west of Detroit.

Authorities in Southwest Michigan said the old Hope College second year student rented the airplane from Tulip City Air Service and sought emergency assistance from air traffic control, before crashing into the corn field.

"David apparently rented the airplane from Tulip City Air Service (Sunday) morning and sought emergency assistance from air traffic control at the Muskegon County Airport before crashing in a corn field," college President James Bultman said in a posting on the school's Web site.

Mr Otai had been renting planes from the service since early December, owner Ron Ludema told The Holland Sentinel.

He is reported to have been trying to get a commercial pilot's licence to serve as a pilot for the Africa Inland Mission in Kenya.

"He wanted to work for them. He had a purpose (for flying) that he had shared with others on campus," said Hope College spokesman Tom Renner.

According to information published on the school website, the parents of the students have been informed of the tragedy.

The deceased was in the plane with Emma Biagioni, 20, when it crashed in a corn field early Sunday morning.

During the flight which was characterized by poor weather conditions, the trainee pilot is reported to have made a distress call.

Preliminary investigation has shown the student was licenced and trained to fly under those conditions.

Mr Otai was a sophomore, and Ms Biagioni was a junior at the 3,200-student Holland-based liberal arts college, affiliated with the Reformed Church in America.

Source:capitalfm.co.ke/