TED Radio Hour: What We Fear

Human beings have a fine-tuned sense of fear. But how do we distinguish between fear and danger? How do we decide which fears are rational and irrational?

In this hour, TED speakers explore what it means to be afraid, and how we calm ourselves down – or don’t – when we’re terrified.

1. Chris Hadfield: How Do You Deal With Fear Versus Danger?

2. Karen Thompson Walker: What’s The Difference Between Rational and Irrational Fears?

3. Joe Kowan: Is There A Cure For Stage Fright?

4. David Blaine: Is It Possible To Be Fearless?

5. Stephen Cave: Should We Be Afraid Of Death?

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How to successfully run alcohol beverages firm – EABL chief

Ireland also says that to create a strong brand that is at the same time unique, you need to have love and passion for your product which he says will propel the product forward into even the most stubborn markets/ALLAN MUTURI

NAIROBI, Kenya, Jan 29 – If you have flirted with the idea of starting an alcoholic beverage company and turn it into a success, you probably should take the advice of Charles Ireland, the Group Managing Director of East Africa Breweries Limited (EABL), for two reasons:

First, his company sells the most popular alcohol brands in the region. These include legendary beers such as Tusker, Guinness and Pilsner, and new comers such as Senator and Tusker Lite which seem to be giving older brands a run for their money.

Second, the business model that EABL uses is yielding profits. Just late Thursday, the company announced a total of Sh5.5 billion in profits during its 2016 half year results.

“First of all, you need a great team working with you. The team also needs to be very talented. You therefore need to scout for talent in all areas of your business. This will enable you build a brand because you cannot build a brand on your own,” Ireland, tall with a detectable British accent says.

This leads him to explore the issue of building and maintain a strong brand, such as that of EABL. According to Ireland, a strong brand needs a lot of financial investment. Money, he says, is one of the ingredients of having a strong brand.

Ireland also says that to create a strong brand that is at the same time unique, you need to have love and passion for your product which he says will propel the product forward into even the most stubborn markets.

“You also need to put in a lot of time. None of our brands is what they are without the time factor,” he says.

But most importantly, Ireland says that the customers should be at the core of your product. He says that whatever product you choose to put into the market, it has to have relevance among your customers and meet their desires.

True to his words, EABL has registered an 8 percent increase in its net sales and a double digit growth in five out of eight product segments. Such growth has been witnessed in Senator Keg and Tusker Lite among other brands.

What you need to know before you diversify

Ireland can also teach you on matters diversification. Although Kenya is EABL’s biggest market in the region, by three quarters, the company has a footprint in other East African countries such as Tanzania, Uganda and South Sudan. It also accounts for between forty five to fifty percent in market share in the region.

“One of the things I’ve learnt about taking a business into a new territory is that you need to understand cultural sensitivity and comprehend the specific dynamics for the place you want to launch your business into. These may seem superficially similar but under closer inspection, they are not. For instance, you may assume that Tanzania and Kenya are similar but they are not. What it takes to make it in Tanzania is not necessarily the same thing that will make you find success in Kenya,” he explained.

Ireland also advices that you need to understand that stability is not as guaranteed as it once was.

In EABL’s case, when they took their business to South Sudan, the country had just been formed and it was beaming with hope. Investors were looking at it as the next big place to invest in, until political issues that led to turmoil rocked the country which has in turn posed a great challenge to their business operations there.

In his words, Ireland confesses that EABL had plans to build a manufacturing hub in South Sudan which could have cost billions of shillings, but they did not.

“I am really happy that we did not because we would have spent up to US$200million into it and we would now be regretting doing so,” he says.

Hence he advises companies to trend lightly before putting a lot of money into new territories.

In his shoes, Ireland says that his personal goals are fine tuned with those of the company which include innovating at scale to meet new consumer needs, drive out costs to constantly invest in growth and win in reserve in every market among others.

“I’m very pleased that EABL has been recognized as the continent’s second best employer. I hope this continues to be so and that we can do much better and show our team work to the world,” he says in conclusion.

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Apple recalls wall plug adapters sold outside US

Apple announced a recall of 12 years’ worth of wall plug adapters it sold outside the United States, warning of the risk of electric shock.

The recall was sparked by the danger of the two-prong AC wall plug adapters breaking and shocking people who touch them, the California-based technology giant said in an online post.

Apple said that it was aware of 12 incidents worldwide involving the adapters.

The units targeted in the recall were designed for use in Argentina, Brazil, much of Europe, New Zealand and South Korea.

They were sold with Mac computers, Apple mobile gadgets and in an Apple World Travel Adapter Kit between 2003 and 2015.

Apple did not specify the number of adapters at issue, but it could be high given the 12-year span and the popularity of the company’s devices.

People were advised to stop using the adapters and bring them to an Apple shop for replacement.

The recall did not affect Apple power adapters tailored for Canada, China, Hong Kong, Japan, Britain or the United States, according to the company.

Details about which adapters are involved and how to replace them were posted online at http://apple.co/1NEZHjh.

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Sony swings to $1.95 bn net profit as PlayStation sales soar

Sony/AFP

Sony on Friday posted a nine-month net profit of almost $2.0 billion, as strong sales of its PlayStation video games console and image sensors found in mobile gadgets help it move past years of losses.

The once-iconic Japanese giant has been working to claw back to profitability under a painful restructuring that has included layoffs and asset sales, including its Manhattan headquarters and laptop division.

The company, along with rivals Panasonic and Sharp, has struggled in the consumer electronics business that built its global brand, including losing billions of dollars in televisions over the past decade.

The sector has faced fierce competition from lower-cost rivals from South Korea and Taiwan.

In a sign things are on the upswing, Sony said Friday its net profit came in at 236.1 billion yen ($1.95 billion) for the April-December period, reversing a 19.2 billion yen loss a year earlier.

Operating profit more than doubled to 387.1 billion yen, while sales edged up 0.1 percent to 6.28 trillion yen.

“This was primarily due to the significant increase in sales in the game and network services segment and the impact of foreign exchange rates, substantially offset by the significant decrease in sales in the mobile communications segment,” it said.

In November, Sony announced that sales of its PlayStation 4 video game consoles topped 30 million units worldwide.

The unit has seen the fastest and strongest adoption since the first generation of the video game console was introduced in late 1994.

On Tuesday, the company said it was moving its PlayStation business to Silicon Valley and consolidating its game console offerings under one roof.

Sony also bought Toshiba’s image sensor business which could boost its position as a global leader in the components which are found in smartphones and other mobile devices.

On Friday, Sony said it was still on track for a 140 billion yen full-year net profit.

“Sony is now on the final stage of its restructuring,” said Rakuten Securities analyst Yasuo Imanaka.

“The TV business is being revived as the company focuses on high-end products. Sales of image sensors and PS4 consoles also remain strong, offsetting losses in mobile phone businesses.”

But Yasuo Nakane, senior analyst at Mizuho Securities, warned that the company still has more work to do.

“Sony has been changing dramatically over the past couple of years,” Nakane added.

“However, its restructuring isn’t over. There is room for more change in mobile communications, the movie sector, at headquarters, and in its battery businesses.”

Sony’s businesses include a music label and Hollywood studio, while it also operates a profitable but lesser-known financial unit.

Rivals Panasonic and Sharp report their latest earnings next week.

Panasonic’s results have been improving as it focus on its lesser-known endeavours, including energy and an auto division that makes various products found in vehicles, from electrical components to car navigation systems.

Sharp, however, continues to struggle and has repeatedly appeared on the brink of bankruptcy in recent years.

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National Public Lighting project is on course – CS Keter

According to Keter, the programme was designed to enhance national security, sanitation and to stimulate a 24-hour economy in counties by providing modern street lighting infrastructure/FILE

NAIROBI, Kenya, Jan 28 – Energy Cabinet Secretary Charles Keter says that the National Public Lighting Project is on course and shall be completed by February 2017.

The project, which involves installation and repair of streetlights, lighting up public and informal settlements, was launched in July 2014.

According to Keter, the programme was designed to enhance national security, sanitation and to stimulate a 24-hour economy in counties by providing modern street lighting infrastructure.

“By the time the project is completed early next year, we expect 52 cities and towns around the country to be lit. Nairobi, Mombasa, Kisumu, Kwale, Kilifi and Nyeri and a number of other towns have already been covered,” he said.

The Government has estimated that the project will cost about Sh7 billion in its entirety, which Keter said, will be rendered by the government.

“Contrary to bizarre claims and propaganda by some sources, the National Public Lighting Project is fully funded by the national government and there are no donors involved,” Keter said.

At the same time, Keter also said that all public primary schools in the country are expected to be connected to electricity by January 31, 2016.

According to the Cabinet Secretary, Kenya Power and Lighting Company and Rural Electrification Authority received the necessary funding to enable them to meet the Sunday deadline.

“We have about 22,000 public Primary schools in the country. Already, 20,000 thousand have been connected. We are therefore not worried as we expect the relevant bodies to have met the deadline.”

Additionally, Keter said that the government was working towards increasing electricity connectivity to one million households by June this year.

He also said that the government is planning to have an additional two million households connected to electricity in 2017.

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Military man picked to head KRA border control

Kariuki will head the new Customs and Border Control department effective on the same date/FILE

NAIROBI, Kenya, Jan 28 – The Kenya Revenue Authority (KRA) has appointed Colonel (Rtd) James Wahome Kariuki as a Deputy Commissioner effective February 1.

Kariuki will head the new Customs and Border Control department effective on the same date.

“The appointment reflects the joint commitment of both the government of Kenya and KRA to professionalize border security enforcement operations with a view to better security in the country,” KRA Commissioner General John Njiraini said in the announcement on Thursday.

Col. Kariuki, a career security professional, joins KRA after serving in the Kenyan Military in varied roles including his latest posting as Colonel in charge of operations at Kenya Defence Forces(KDF) headquarters.

Among the priorities identified for enhancing the new Customs Enforcement and Border Control capacity include developing a dedicated and well trained border security enforcement cadre and implementing a national scanner management platform with centralized command and control capabilities.

Other developments will include upgrading scanning resources at Kilindini Port, taking over One-Stop Border management, improving passenger clearance operations at Jomo Kenyatta International Airport(JKIA), among others.

“Once the various programes are fully implemented, the landscape for Customs and Border Control Department is headed to become different within the next 18 months as compared to what prevails today,” Njiraini said.

Read more here >> Capital Business

Kenya, Nigeria investors heighten discussions on non-tariff barriers

While addressing the forum which included the business community from the two countries, President Buhari noted the need to hasten and deal with all the non tariff barriers/PSCU

NAIROBI, Kenya, Jan 28 – While growing up, Sidi Aliyu from Nigeria thought all that existed in Kenya was animals and parks. Nothing close to any serious business like manufacturing.

“But I was shocked when I came to Kenya for the first time and got to realize what actually Kenya is all about. The diversity here is amazing. I mean, you have a lot of products being manufactured and spread across the East African region and it’s high time they start being sold more in Nigeria. Nigeria is a heavy importer,” says Aliyu who is the Director of the Nigeria Export Promotion Council.

I speak with him on the sidelines of a business forum in Nairobi, attended by President Uhuru Kenyatta and his visiting Nigerian counterpart Muhammadu Buhari.

And just like he was, many Kenyans and Nigerians don’t understand what business potential the other country holds but have lived to stick to beliefs.

“A lot of us still rely on the stereotyping that has been made to create a sort of a hindrance to our common unity in terms of economy. But for the few businessmen from Kenya who are in Nigeria you can hear a lot of success stories, and vice versa. A lot on barriers can be dealt with and I believe these conversations will take us to the right direction,” Aliyu says.

While addressing the forum which included the business community from the two countries, President Buhari noted the need to hasten and deal with all the non tariff barriers adding that it was time to start benefiting from the already passed crucial bilateral trade agreements.

“Although I am in the land of Uhuru, I doubt if it is yet Uhuru for our prospective business people who still encounter some business restrictions as well as registration of their businesses,” President Buhari said amidst laughter from the audience, “Our business people should be allowed to operate under the ambience of law.”

President Kenyatta on his part pledged to work with the private sector and deal with their challenges and help open the markets.

He mentioned that it was time the two countries helped connect businesses not only between Kenya and Nigeria but West and East African continent.

“We hope that following your engagement with the Kenyan business community during my last visit to Nigeria in 2014 and during this event, there will be tangible benefits that translate into real business. It is important that private sector plays its rightful role while the government delivers on policy,” Kenyatta said.

Kenya and Nigeria have agreed to establish the Joint Trade Committee, which will address issues affecting the trade relations.

Kenya’s exports to Nigeria in 2014 were worth Sh2.4 billion ($26 million) while imports were worth Sh698 million ($7.4 million) in the same period.

It exports to Nigeria include tea, soap, jute, medicaments, automatic data processing machines, paper and paper products, textile, Electrical machinery and medicaments.

Read more here >> Capital Business

Central Glass Industries sale boosts EABL half year profit

Central Glass Industries sale boosts EABL half year profit/file

NAIROBI, Kenya, Jan 28 – East African Breweries Limited (EABL) has posted 67 percent growth in net profit for the six months period that ended December 31, 2015 to Sh7.7 billion compared to Sh4.6 billion reported in the previous year.

The profits are attributable to the disposal of one of its subsidiaries – Central Glass Industries Limited (CGIL) – to South Africa’s Consol Glass Proprietary valued at Sh4.5 billion.

The sale also included a Framework Supply Agreement which will ensure continuity of supply of glass bottles to EABL and its group for a term of five years and in which Consol Glass Proprietary agreed to pay EABL a success fee of Sh420 million.

READ: EABL sale of glass subsidiary valued at Sh4.5bn

Excluding the sale, the firm’s net profit stood at Sh5.5 billion which represents a 16 percent increase from the previous year. The management attributes the growth to double digit growth in five out of eight product segments and recovery in Senator Keg, after duty remission review in Kenya.

Senator Keg and spirits performance drove Kenya’s growth that delivered 22 percent of net sales with innovations led by chrome Vodka, Kenya Cane Coconut and Allsopps Stout contributing to the growth.

However, net sales in Uganda and Tanzania remained flat in local currency terms. Volatile environment in South Sudan negatively affected the firm whose export markets declined.

South Sudanese pound devaluation made the firm lose Sh1 billion. CGIL sale improved the firm’s operating cash flow contributing to a 38 percent decrease in net finance costs in the period, while total net borrowings decreased by Sh8.5 billion.

Selling, distribution and administrative expenses increased by 10 percent compared to the previous year due to investments in their brands, route to consumer and people.

The board of directors has recommended an interim dividend of Sh2 per share up from Sh1.50 last year.

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Samsung, tech suppliers sink on smartphone woes but Asia stocks gain

The 40 percent fall in Samsung’s net profit and Apple’s report fuelled fears about the saturated smartphone market and the impact on smaller firms that rely on their ongoing popularity/FILE

Hong Kong, China, Jan 28 – Shares in tech suppliers sank in Asia Thursday as South Korean giant Samsung Electronics posted a huge fall in profit, a day after rival Apple recorded its weakest ever rise in iPhone sales.

The 40 percent fall in Samsung’s net profit and Apple’s report fuelled fears about the saturated smartphone market and the impact on smaller firms that rely on their ongoing popularity.

Adding to the concerns, Samsung said it expected 2016 to throw up continued challenges, which was in line with a warning from Apple that it saw year-on-year sales of the iPhone falling for the first time this quarter. Apple dived 6.5 percent in US trade.

Samsung tumbled 2.6 percent in the morning in Seoul. Among regional suppliers, Tokyo-listed Alps Electric — which Wednesday cut its profit forecast because of weak smartphone sales — collapsed more than 17 percent. Japan Display lost 6.7 percent and TDK 6.4 percent.

LG Display in Seoul was 2.6 percent off.

The losses came despite gains in most Asian markets after another day of volatility. They also followed a sell-off on Wall Street after the Federal Reserve left investors to speculate about another interest rate hike.

After concluding its first meeting since lifting rates in December, the US central bank kept rates unchanged and said growth in the world’s number one economy slowed late last year and it was concerned about ongoing global weaknesses.

– Focus on BoJ meeting –

But despite the turmoil that has wracked world markets so far this year, policymakers added that they expected inflation — softened by falling oil prices — would rise toward its 2.0 percent target in the medium term. The comment was seen as keeping the Fed’s option open for another hike in March.

“With investor sentiment quite poor and fixated on the negatives, they’ll likely latch onto the Fed’s focus over global risks,” Mitsushige Akino, an executive officer at Ichiyoshi Asset Management, told Bloomberg News.

“However, rather than a hawkish statement, I think we got one that was market friendly. And that should impact stocks over the longer run.”

Tokyo’s Nikkei index shed 0.7 percent, while Shanghai ended 2.9 percent down, with ongoing worries about the domestic economy continuing to play on investors’ minds.

Mainland Chinese investors seemed unmoved by the central bank’s decision to pump $52 billion into financial markets to ease liquidity problems leading up to the Lunar New Year break. The Shanghai market plunged more than six percent Tuesday despite an injection of $67 billion.

However, Hong Kong jumped 0.8 percent thanks to late buying, Sydney added 0.6 percent and Seoul gained 0.5 percent, while there were also advances in Taipei, Manila, Singapore and Wellington.

Next up is the Bank of Japan’s policy meeting, which concludes Friday. While expectations are that it will not move just yet, its statement will be pored over for an idea about policymakers’ thinking as Japan’s economy stumbles and local stock markets are jostled by the global rout.

On oil markets, both global contracts turned lower with US benchmark West Texas Intermediate down 1.6 percent and Brent 1.5 percent off.

They posted gains Wednesday, even after a report showed US stockpiles surged last week. Analysts said the rally was in reaction to the fact the rise was not as big as expected.

In early European trade London eased 0.2 percent, Frankfurt lost 0.6 percent and Paris dipped 0.4 percent.

– Key figures around 0830 GMT –

Tokyo – Nikkei 225: DOWN 0.7 percent at 17,045.45 (close)

Shanghai – Composite: DOWN 2.9 percent at 2,655.66 (close)

Hong Kong – Hang Seng: UP 0.8 percent at 19,195.83 (close)

London – FTSE 100: DOWN 0.2 percent at 5,976.40

Euro/dollar: DOWN at $1.0877 from $1.0892 Wednesday

Dollar/yen: UP at 118.84 yen from 118.67 yen

New York – Dow: DOWN 1.4 percent at 15,944.46 (close)

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Nigerian President Buhari to meet business leaders in Nairobi

Buhari’s visit is likely to play a key role in checking the implementation progress of these agreements and other MOUs signed/FILE

NAIROBI, Kenya, Jan 28 – The visiting Nigerian President Muhammadu Buhari and his host president Uhuru Kenyatta are Thursday morning expected to meet the business community in Nairobi to tighten business ties between the two countries.

The business forum that will take place at the Intercontinental Hotel is organized by the Kenya National Chamber of Commerce.

In 2013 during former Nigerian President Goodluck Jonathan visit to Kenya seven agreements aimed at boost their bilateral and trade ties were penned.

The agreements covered tourism, trade and investment, oil and gas, visa exemption for diplomatic passport holders, conclusion of agreements on double taxation, agriculture, livestock and fisheries and twinning of cities.

Buhari’s visit is likely to play a key role in checking the implementation progress of these agreements and other MOUs signed.

Buhari had on Wednesday witnessed a memorial for Kenya Defence Forces fallen heroes who were killed by the Al Shabaab militia in Somalia.

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Regulator says it won’t drop stand on Netflix

Speaking to Capital News, Mutua said the Board was not in a, “popularity contest,” and called on Kenyans not to dismiss them based on other people’s opinions and before giving them, “an honest to God listening.”/file

NAIROBI, Kenya, Jan 27 – Kenya Film Classification Board Chief Executive Officer Ezekiel Mutua says they will not be cowed into giving up their demand that Netflix rate their content as per Kenyan standards despite opposition from multiple quarters.

Speaking to Capital News, Mutua said the Board was not in a, “popularity contest,” and called on Kenyans not to dismiss them based on other people’s opinions and before giving them, “an honest to God listening.”

“Life is not Facebook. We’re not in office to get retweets.”

Mutua said that while they understand that Netflix provides over-the-top content and does not require to apply for a licence to stream in Kenya, it was, “parochial,” to argue that Netflix and other OTT content providers cannot and should not be regulated.

“We are not morons. We know that they are not traditional broadcasters and we don’t have anything against Netflix in particular; Hulu is coming, WhateverTV is coming, are we meant to just throw our hands up in the air and say oh well, the internet is difficult to regulate?”

He said what the Commission is demanding is, “not out of this world,” citing Singapore, Canada, South Africa and the United Kingdom as countries which have demanded that the Netflix show ratings be customised to their specific markets.

“Netflix content is not universal. Go and read. In fact, Canada is more conservative and they’ve rated it even more stricter than we’re trying to do here in Kenya.”

He said the Board’s position was not informed by a, “holier than thou attitude,” but by a practical concern over what impressionable minds would be exposed to.

“How Americans classify their films is not how we do it. It’s like what President Uhuru Kenyatta said about homosexuality when President Obama was around, our views are not the same. And America doesn’t always get it right. Didn’t President Obama shed tears the other day over their gun violence? How do you think that happens? You see your children murder people on their play stations and you think it’s just fun and games. It desensitises them. We are what we consume.”

Former ICT Permanent Secretary Bitange Ndemo has accused the regulator of being unreasonable in its demands and of seeking to stifle innovation, the Communications Authority of Kenya has said Netflix is not subject to Kenyan regulation and ICT Cabinet Secretary Joe Mucheru has cautioned it against interfering with Netflix.

READ: Bid to regulate Internet waste of time, Ndemo says on Netflix

But the film classification board is adamant that its views should not be dismissed so quickly. “Isn’t that the nature of democracy? Isn’t trying to shut us down using Twitter hypocritical? Wasn’t it created to accommodate dissenting views? Not haze someone into adopting the populist view.”

In an effort to be heard, the Board will be advancing its views at a ‘stakeholders forum’ planned for Febuary 9.

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Dalbit Petroleum gives KNH ward Sh15mn facelift

Dalbit Petroleum Group Managing Director Margaret Mbaka said: “The renovations we are launching today have covered general works in the wards, refurbishments to the washrooms and the staff room, paint works and purchase of office furniture and kitchen equipment and among other items/FILE

NAIROBI, Kenya, Jan 27 – Regional oil marketer, Dalbit Petroleum has handed over the refurbished paediatrics ward 3A at the Kenyatta National Hospital as part of the hospital’s adopt-a-ward program. The refurbishment works have been done in two sets at a total cost of Sh15 million.

Speaking when she handed over the new-look ward, Dalbit Petroleum Group Managing Director Margaret Mbaka said: “The renovations we are launching today have covered general works in the wards, refurbishments to the washrooms and the staff room, paint works and purchase of office furniture and kitchen equipment and among other items.

In the first phase of the project in 2013 Dalbit Petroleum had done extensive electrical works and donated beds, mattresses and procedure room equipment.

“At Dalbit Petroleum, giving back to the community is not something we do as a favor, but rather as a duty to the society,” said Mbaka.

Kenyatta National Hospital CEO Lily Koros urged other corporate organizations to join the adopt-a-ward initiative to supplement the hospital’s limited resources.

“This gesture by Dalbit Petroleum has changed the look and capacity of this ward,” she noted.

On her part Mbaka committed that the oil marketer’s partnership with Kenyatta National Hospital would be renewed and replicated across the countries the company operates.

“We continue to invest within the communities we operate in as we support key projects in Health, Education and Road Safety sectors.”

Apart from the financial support from Dalbit Petroleum, the oil marketer’s staff have spent time with the children admitted to the referral hospital as part of the firm’s initiative to involve its staff in its CSR initiatives, added Mbaka.

Dalbit Petroleum is a regional oil marketer operating in the Great Lakes and Southern Africa regions that began operations in Kenya in 2002.

The company engages in the procurement, trading and management of petroleum products within the Great Lakes and Southern Africa regions through partnerships.

Read more here >> Capital Business

Centum’s Two Rivers gets Vision 2030 flagship project status

MoU signing ceremony attended by Centum CEO James Mworia, Dr. Chris Kirubi Centum Board Chair and Vision 2030 Acting Director General Prof. Gituro Wainaina

Nairobi, Kenya, Jan 27- Two Rivers development, a project of Centum Investments has been given the vision 2030 flagship project status. The project, which is touted to be the biggest shopping and lifestyle development in East and Central Africa, is located within a 102 acres piece of land in Nairobi’s diplomatic blue zone, Limuru road.

Two Rivers has been given the Vision 2030 flagship status partly due its sustainable approach to resource usage setting a new precedence in the region.

Speaking during a MoU signing ceremony attended by Vision 2030 Acting Director General Prof. Gituro Wainaina, Centum CEO James Mworia and Dr. Chris Kirubi Centum, Mworia said Two Rivers represents a new level of real estate in the region.

“We are going to change how retail, wholesale, real estate and mall business is done in the region,” said Mworia.

Two rivers mall by itself has planned a 2MW solar power production making it the largest rooftop concentration of solar panels in Africa.

“More than 80 percent of gray water will be recycled and treated to World Health Organization standards,” added Mworia.

Centum estimates 10,000 people will be employed at Two Rivers when it is complete, boosting the local economy.

As part of the promise to the economy of Kenya, the development is currently doing a technical skills transfer. This will ensure that Kenyans who are employed in the development of the mall will retain skills that are going to be key in ensuring that Vision 2030 is achieved.

“Through Vision 2030 we are spearheading the transformation of Kenya into a newly industrializing, middle-income country providing a high quality of life to all its citizens and a clean and secure environment. Projects like Two Rivers are crucial steps in attaining our goals and we are pleased to collaborate in this venture,” Prof. Gituro Wainaina said. ,

The development seeks to be socially responsible. Up to that end, it has collaborated with Nairobi City County to rebuild Old Mathari Primary School.

“Two Rivers is nearing completion of the new school which is situated in Mathari. The school is scheduled to get more than 32 new classrooms, a dining hall, social hall, a library and a fully stocked computer lab,” explained Mworia.

The development will also integrate services such as waste management with Ruaka, Runda and Rosslyn and also provide a police post, emergency services, a fire brigade and healthcare facilities.

By 2020, the first phase of the Two Rivers Project, set on 55 acres, is expected to be complete. The first phase will contain the biggest retail, commercial and lifestyle centre in East and Central Africa. In addition, it will possess 3 and 5-star hotels, luxury apartments, office parks and world-class infrastructure.

The mall will have 66,000m2 of retail space and 22,000m2 of office space, making it the largest multi-purpose centre in Africa outside South Africa. The mall is scheduled to be opened in March 2016.

“This project proves that we have the capacity to tackle our own challenges such as unemployment and rapid urbanization. We all have an opportunity to be part of something great,” said Chris Kirubi, Two Rivers Board Chairman.

Infrastructure will include a 46MVA modular substation, a 1.3 MVA solar park, state of the art water treatment and roads. The development has also invested USD 10 million in smart city ICT infrastructure.

Read more here >> Capital Business

You can now get monthly M-Pesa statements via email

 

Safaricom has announced a new service that allows M-PESA customers to access monthly statements free of charge via email.

The service is one of the enhancements made possible to the system following the relocation of the M-PESA servers from Germany to Kenya, which took place last year in April.

“Every month an average of 30,000 customers’ visit our Retail Centres specifically seeking to receive printed M-PESA statements, as a prerequisite to accessing credit from financial institutions or for business reconciliation purposes,” said Betty Mwangi, Director – Financial Services, Safaricom.

Ms. Mwangi noted that on average a further 9,000 calls are made to the Customer Centre every month requesting for statements, and listed the new services as illustrative of the transformative power of placing more control at customer’s disposal.

The development follows the launch of another value-added service the system called Hakikisha, which allows subscribers to confirm the recipient of their mobile money transfer before it is sent.

With the new statements service, M-PESA customers will also have the option to proactively request for a statement, as well as set up automatic monthly statements every 5^th day of the month in a move that is designed to enhance transparency and accountability for users of the service.

The launch of the service will continue to complement the already existing option that allows customers to obtain statements by visiting Safaricom Retail Centres across the country.

To access the statements, customers dial *234# from their handsets and follow prompts to enter the preferred email address they would like their statements sent to. Customers have an option of accessing one-off statements for three, six or twelve months in one go.

“The launch of this service is consistent with our strategic focus to make our products and services easily accessible for our customers. We are leveraging on our continued investment in technology to deliver these statements any time the customer needs them,” said Ms. Mwangi.

M-PESA has over the years grown to become integral to Kenya’s economy, with over 22 million customers already registered to the service.

Read more here >> Capital Business

Apartments yielding higher returns than stand-alone houses

KBA Director of Research and Policy Jared Osoro said this justifies the increased appetite and relative affordability of apartments by the emerging middle class/FILE

NAIROBI, Kenya, Jan 27 – Real estate investors are now opting for apartments as they are yielding higher returns compared to stand-alone houses.

This is according to Kenya Bankers Association (KBA) quarter four Housing Price Index report that indicates that apartments accounted for the 92.79 percent of the total number of houses offered in the market with maisonettes coming second at 5.8 percent and bungalows third at 1.41 percent.

KBA Director of Research and Policy Jared Osoro said this justifies the increased appetite and relative affordability of apartments by the emerging middle class.

He said apartments are yielding high returns given that a number of units can be put up in a small piece of land as opposed to maisonnettes and bungalows.

Advertised land prices in Nairobi have risen five fold in the last eight years, up 5.74 times from 2007 to an average of Sh173.6 million per acre.

“The average house prices in Kenya was stable at 1.14 percent in the fourth quarter of 2015 compared to 1.25 percent in quarter three of 2015. This was the third successive quarter that this measure has been below 2 percent indicating a possible softening in the underlying rate of price change,” Osoro said.

The demand for houses in the quarter was influenced by the location of the house, amenities available that include good roads, schools, shopping malls, health centres among others.

The report further states that preference of houses still continues to be influenced by their size, number of bedrooms, whether the house has a balcony, master ensuite or whether a house has domestic staff quarters.

The report follows the recently released Hass Property Index that indicates prices for land in Nairobi rose by 9 percent in 2015 with Kitusuru, Loresho and Gigiri recording the highest increases in the year growing at 26.1 percent, 23.4 percent and 14.6 percent respectively.

The Hass report indicate Spring Valley had the lowest growth in land prices among the city’s suburbs having recorded a 3.9 percent drop in 2015 alone.

According to the report, land prices in Nairobi’s satellite towns tracked similar growth rates to land in Nairobi at 11.9 percent over 2015 with Kiserian running ahead of the average at a growth rate of 25.3 percent.

However, land in Mlolongo fell by 0.4 percent over the year.

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Michael Soi, painter and creator of the ‘Lupita Handbag’

His paintings, which hang on the walls with some sitting on tables waiting completion, are not without a story/FILE

NAIROBI, Kenya, Jan 27 – Michael Soi drives into the GoDown Centre, Nairobi at high speed. You would think he is trying to beat the 8 O’clock check-in deadline at an office. While walking, his steps are however different; he walks slower, more sure and confident, like a man woken by purpose does.

“Do you always get to work by 8 O’clock on the dot?” I ask him after we exchange pleasantries.

“I try to, sometimes much earlier. I wake up early, by latest 6. You can’t sleep all day when you are self-employed,” he says simply and I immediately like him.

Soi, a contemporary artist who lives off painting, has tattoos on his right hand and a distinctive piercing that can be seen protruding at the tip of his left ear. He is also bald with a good measure of beard.

At the GoDown Centre, Soi has two corner offices, one bearing mostly his finished works of art and another one that houses paints, painting brushes, a laptop, headphones and a packet of cigarettes among other things.

His paintings, which hang on the walls with some sitting on tables waiting completion, are not without a story.

According to Soi, the message behind a majority of his portraits mainly revolves on issues no Kenyan wants to discuss, such as one of his recent piece which is dubbed, ‘Nairobi Battle of the Socialites.’

“My work is basically a social commentary drawn from the inspiration I draw from the city of Nairobi. The ‘Nairobi Battle of the Socialites’ portrait is therefore just one of the portraits that illustrate the sad state of our social scene. Girls are now more than ever believing that their beauty lies on the size of their derriere; the bigger, the better it is for you,” Soi says.

He also depicts the state of sexuality, especially in Nairobi. Such include affairs between married men and young women, young women and white men among other facets of unconventional relationships.

“If you go out in Nairobi at night, you will see that these things are happening in Nairobi. Some young women openly prefer going out with white men because of money while others say that they are treated better by these men more than they are by Kenyan men.”

On the opposite side of the ‘Socialites’ portrait lies another distinctive one of a Chinese man surrounded by young women. According to Soi, the portrait is the last of the Chinese themed collection which has since sold out.

“I did an entire collection that depicted Africa’s relationship with China, dubbed ‘China Loves Africa’. It illustrated the relationship between the two and the social implication that are a result of the relationship.”

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Toyota keeps top global automaker crown, sells 10.15 mn in 2015

Toyota kept its title as the world’s biggest automaker on Wednesday as it announced global sales of 10.15 million vehicles last year, outpacing scandal-hit Volkswagen and US rival General Motors.

Struggling to move past a pollution-cheating scandal, Volkswagen earlier said it logged sales of 9.93 million vehicles worldwide in 2015, while Chevrolet and Cadillac maker GM moved 9.8 million.

In the first half of the year, Volkswagen was in pole position, outpacing Toyota as the German automaker rode momentum in emerging economies.

But then it posted its first drop in annual sales in more than a decade, as it was hammered by a massive pollution cheating scandal.

Volkswagen sank into its biggest crisis over stunning revelations in September that it had fitted 11 million of its vehicles with devices designed to dodge pollution tests.

Toyota broke GM’s decades-long reign as the world’s top automaker in 2008 but lost it three years later as Japan’s earthquake-tsunami disaster dented production and disrupted the supply chains of the country’s automakers.

However, in 2012 it once again overtook its Detroit rival and has remained on top since.

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Flat iPhone sales fail to dent Apple profit

Apple on Tuesday posted record quarterly profit even as iPhone sales flattened out after years of rocketing growth.

Net income for the quarter ending December 26 was two percent higher than the same period a year earlier at $18.4 billion, while revenue of $75.9 billion set another record for the company.

“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV,? Apple chief executive Tim Cook said in an earning release.

“The growth of our services business accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices.”

Apple reported that, overall, a billion iPhones, iPads, Macintosh computers, iPod touch devices Apple TV units, and Apple Watch wearable computers had “engaged” with its services in the past three months.

Apple shares slipped slightly more than a percent to $98.72 in after-market trades following release of earnings figures that showed iPhones that have been driving revenue for the California company showed the slowest growth since the lifestyle-altering handsets were introduced.

Apple said that it expected revenue in the current quarter to be between $50 billion and $53 billion.

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Taxing the gambling industry in Kenya: Which way forward?

The gambling industry in Kenya has gained a lot of public interest recently. The industry has been in existence in Kenya since 1969 and has made a substantial contribution towards the development of the country. Gross revenues from the industry are estimated to be in the region of Sh3B and forecasts indicate that the industry will experience steady grow over the next five years.

The gambling industry in Kenya is regulated by the Betting Control and Licensing Board (BCLB). The board regulates all gambling activities ranging from lotteries, casinos, sports betting, prize competitions and promotions. Sports betting has recently emerged as one of the most thriving of the gambling businesses with betting on international football, especially the prestigious English Premier League taking center stage.

Kenyan gamblers have for some time enjoyed the services of online and mobile sports betting. Most of the operators in the sports betting industry in Kenya operate through betting shops with others adopting to the new trend that makes use of mobile and online based platforms. Some of the big players in sports betting include SportPesa, Betway, Betln and mCheza.

Despite the steady growth of gambling in Kenya, the industry has faced several challenges such as low-profit margins as a result of high fixed costs, technological challenges, weak regulatory and institutional framework, intense competition, and an unclear tax policy.

Unlike in developed countries, Kenya does not have a special tax regime for the gambling industry. The scope of taxes in the industry range from licensing fees to income taxes, however, gambling services are exempt from VAT.

Winnings from the gambling businesses in Kenya have remained untaxed for a long period of time. The first attempt to subject such winnings to tax came in 2011 when the Finance Bill 2011 introduced a 20 percent withholding tax. The Finance Act 2012 however repealed this tax.

The tax was later reintroduced through the Finance Act 2013. The reintroduction caused an uproar from players in the sector who moved to court to petition the reintroduction on the basis that the legislation introducing the tax was unconstitutional as it was passed without public participation contrary to the Constitution. The court, however, dismissed this petition.

Two years down the line and with a vibrant gambling industry, tax revenues from the industry have been disheartening with gambling operators citing impracticability and difficulties in implementing the tax laws.

The Finance Act 2015 introduced various changes in a bid to improve tax revenues from the industry. The law specifically seeks to tax winnings payable to punters (players) by bookmakers. Whilst the intentions of the changes introduced are clear, there is a gap regarding the applicable withholding tax rates and the persons to whom the withholding tax rates are applicable to.

The law seems to imply that payments by bookmakers to non-resident players should not be subject to withholding tax whilst winnings of bookmakers (whether resident or non-resident) should be subject to withholding tax at 7.5 per cent of the gross profits. Gambling operators have moved to court to compel the Government to repeal the tax clauses affecting the taxation of winnings from gambling on the basis that the clauses are contradictory and not clear on who should, in fact, pay the tax.

The BCLB wants the government to eliminate the withholding tax on winnings of a bookmaker and introduce a gaming levy on the gross revenue of an operator. There is a bill that seeks to amend the Betting Control and Lotteries Act to introduce levies that range from 5 percent to 15 percent of the gross revenues of the operator. It is still unclear whether these levies will be the only taxes that will apply to the gambling industry.

Las Vegas, for instance, is a testament on the powerful ability of gambling to foster economic development. Taxation of this industry in Las Vegas is simplistic with the operators paying a certain percentage on their gross revenues as tax. The Kenyan government should, therefore, borrow heavily on the taxation of this sector from jurisdictions that have a thriving gambling business so as to ensure its growth and sustainability going forward.

By Maurice Lugongo & Salome Kaiba

PwC Kenya’s Tax practice

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Infographic: Euro Bond money trail

What is a Sovereign Bond (Euro Bond)?

A debt security issued by a national government within a given country and denominated in a foreign currency. The foreign currency used will most likely be a hard currency, and may represent significantly more risk to the bondholder (Source: Investopedia)

When was the Euro Bond money raised?

The amount was raised in June 2014

Which specific stock exchange was the money raised from?

Irish Stock Exchange

How much was raised then?

$2 billion equivalent to Sh174 billion at the exchange rate of 87.00

Did the government raise any extra money through the Euro bond?

Yes, it raised another $815 million equivalent to Sh73,0805,169,715.30 at an exchange rate of 90.51. This is commonly known as the Tap Sales.

What was the purpose of the sovereign bond money?

According to the prospectus for the sovereign bond, the purpose of the Bond issuance was for general budget support including funding of infrastructure and the repayment of the Syndicated loan.

It also helped the government in the following macro economics areas:

Lower interest rates

Build up international reserves

Stabilize the Kenya shilling

Reduce inflationary pressure

Were the euro bond objectives met?

Objective 1: Lower interest rates

Between June 2014 to May 2015, the 91 day treasury bill rate declined from 9.8 to 8.3. (Source: CBK)

Objective 2:  Build up international reserves

The CBK foreign reserves rose from US$ 6,498 Million (4.3 months of import cover) to US$ 8,555 million (5.7 months of import cover) in June 2014, reflecting the $2B deposit  from the Eurobond proceeds (Source: CBK)

Objective 3: Stabilize the Kenya Shilling

The Kenya shillings exchange rate depreciated less than many other currencies. In the period January 2014 to September 2015, the Ksh depreciated by only 22.1% compared with 36.9 % for the Tanzania shilling, 45.2% for the Ugandan shilling among, the Brazilian Real depreciated by 60% and the Turkish Lira by 85.1% (CBK & Thomson Reuters)

Objective 4: Reduce inflationary pressure

Inflation in the period 2014 remained low, stable and within the target. Overall month to month inflation declined from 8.36% in August 2014 to 5.5% in January 2015. Source: (KNBS & CBK)

What’s a syndicated loan?

A loan offered by a group of lenders (called a syndicate) who work together to provide funds for a single borrower. The borrower could be a corporation, a large project, or a sovereignty (such as a government) (Source: Investopedia)

When was the loan due for repayment?

It was due in August 2014

Why then was it paid in July 2014?

The contract documents for the syndicated loan required that the loan be repaid within ten days of the receipt from the sovereign bond. That’s why it was paid on 2^nd July, 2014.

From the Irish stock exchange, where was the money deposited?

The first amount ($2B) was deposited in a CBK Account held at JP Morgan Chase Bank, New York on 27.06.2014. The bank statement confirms the position. The statements were also presented to PAC of the national assembly and the Senate Finance Committee.

The tap sales proceeds ($ 815 Million) were credited to Central bank of Kenya account held at Citibank, New York on 17.12.2014.

Why was the money deposited in foreign accounts?

It is a standard international practice to open international currency designated accounts that will facilitate receipt of the Euro Bond proceeds. The national treasury in line with Section 45(d) of the central bank of Kenya Act and Section 28 of the public finance management Act 2012 instructed the central bank of Kenya as the banker of government to open receiving account for the proceeds of the sovereign bond.

Did the treasury break any law?

The national Treasury operated in line and within Section 28 of the Public Finance Management Act, 2012 by instructing CBK to open the accounts inline with section 45 (d) of the Central Bank of Kenya Act.

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