Kenya Not ready For GM food...but money talks

The Government decision to allow importation of Genetically modified food (GM)is flawed and sets a dangerous precedent that might hurt Kenya in the long run.

The decision by the cabinet committee might have been advised by the current severe drought and the rising food prices that need immediate intervention before the situation turn catastrophic.But,can GM food really be the solution,given that the government has not exhausted other avenues?

The importation of GM maize is shrouded in controversy,it is quite telling that the minister for health was against the importation, but powerful forces seems to have swayed the minister to give-in to the importation pressure.

Those against the importation site health implications and absence of astringent bio-safety law as well as establishment of a competent and efficient regulatory body that can check any unauthorized importation of GM food or seeds.The government has turned a deaf ear to the concerns raised by the general public as well as other stakeholders who interestingly include the millers.

Its interesting to note that the same government failed to provide adequate seedling during the planting season and later there was a lot of out cry from local farmers when the same government failed to buy maize at prices that at-least covered farmers overheads.

so why would the government overlook public health,economic and political implications to import this food?

Monsanto is a Fortune 500 company and the world largest producer of genetically modified Products (GMOs), its owned by the largest funds and institutional investors in the world it is also closely associated with Bill & Belida Gates foundation as well as the Rockefeller foundation, This means it is well capitalized to fund a marketing campaign across the globe in search of market for their product which include:-

*Agricultural and vegetable seeds
*Plant biotechnology traits
*Crop protection chemicals

Monsanto is known for its aggressive defense for its patents.In the past, the company sued farmers for growing crops that cross-pollinated with Monsanto crops and became contaminated with the company's patented genetic codes.The company usually demands seasonal royalties from farmers who use their seeds.

The government is definitely under pressure from western donors, which include USAID,UK and several Foundations that Fund Activities worth Billion of dollars in Kenya, to allow Importation of GM food without passing stringent bio-safety laws to safeguard the long-term health of the Kenyan people.This is apparent when you look at how the government agreed to the importation without first conducting an impact assessment survey on something that local researchers have not given a clear bill of health.

There are reports that In india farmers are worse off after they started using engineered seeds with claims of some even committing suicide.Dr. Vandana Shiva, director of Navdanya, a research foundation based in New Delhi, India, has long been an opponent of GM foods.Here is what she says in a VOA interview.

GMOs definitely don’t overcome grain shortages. The technology doesn’t allow an increase in yield. So far, all it’s done is introduce two kinds of toxic genes into plants. One, herbicide resistance, which is failing to control weeds in the U.S…and Bt toxin gene, which is also not able to control pests. We have an emergence of resistance in the bollworm in India.

There are safety issues. The U.S. has never ever done serious trials independent of the company’s. Unfortunately, in 1992 the United States introduced the principle of ‘substantial equivalence,’ which said treat a genetically modified food as if it is a normal food. And therefore, it is a ‘don’t see, don’t look and assume safety’ policy.

Organs are getting affected. Immunity is getting affected.

The only way to deal with drought is through organic farming because drought means scarcity of water. That means you must have more moisture available in your soil to be able to produce food. The only way you can increase soil moisture is through increasing organic matter. Our research in India shows that we can have as much as a 25 percent increase in organic matter by recycling plant residues, organic manure and doing composting.

Our work in India shows that we can double food production in India if we adopt ecological methods. The United Nations, based on African studies…put out a report showing that ecological methods are…doubling production in Africa. That data cannot be ignored anymore. Kenya can feed itself. Africa can feed itself. The world can feed itself through organic matter

The warning signs of embracing GMO is now apparent in US where the cost of organic food is relatively high than GMOs substitutes.This, in essence, means organic food has now become a luxury with the entire population solely dependent on genetically engineered food whose long term health effect has never been conclusively done.

Release of Oil Reserves Might Hurt Kenya.

The decision by the Obama administration to release its strategic oil reserve to ease price pressure, brought about by the Libyan crisis, might be too costly to the Kenyan economy if OPEC decides to retaliate by tightening supplies.

The release of the 60 million barrel of oil might help in the short term to bring the prices down, but if the oil producing countries view the action as an affront by a consumer government to control their business ,they might reduce production, further creating a shortage that the strategic reserves can not satisfy resulting in an upward price pressure that might cause a recession in Kenya.

The prices of oil in the international market has lately been falling with Saudi Arabia promising to increase its quota to bridge the gap created by disruptions in Libya.OPEC failure to reach an unanimous decision to increase production might have triggered US and a 28 member International Energy Agency (IEA)decision to release the strategic oil reserves into the market.The oil from the reserves will obviously stir the market in the next few months with prices dropping by about $10-$12, this is according to a Goldman Sachs note.But what will happen after the reserves has been depleted?How will the consumer countries like Kenya protect themselves from the rising prices?

Kenya will enjoy the dropping prices for now, but how will it cushion itself once,as some analyst are predicting,a tightened supply start exerting an upward price pressure by year end?
We have seen how rising oil prices has negatively impacted the Kenyan economy especially the rising inflation and the depreciating shilling,in fact oil imports account for 50% of all Kenya's Imports Bill.

Kenya has no strategic reserves and relies solely on oil marketers’ 21-day oil reserves required under industry regulations.National oil corporation of Kenya (NOCK)is in the process of building a strategic national petroleum reserve but due to the capital outlay required it will need to partner with the private sector.The reserve will hold about 1bn litres — equivalent to 90 days consumption — and help ease disruptions in the supply chain.NOCK has sought consultants for a detailed feasibility study on the development and implementation of the reserves.

Lack of strategic oil reserves in the meantime means the country is exposed and vulnerable to shocks brought about by high oil prices.Treasury, therefore, needs to be proactive and come up with strategies to insulate the country against shocks in the medium term.Treasury and the ministry of energy should continue with their efforts to negotiate with oil producing countries for good prices through bilateral concessions.The economy needs a predictable business environment to grow.Price shocks brought about by oil price fluctuation threatens the growth of the economy and the stability of the nation.

Elite Kenyan Families Lack Proper Estate Planning.

Lately we have witnessed some bizarre incidents involving families of some elite Kenyans Fighting over the asset of a deceased family member.

Apart from infighting between family members unknown characters appear from nowhere, claiming to be related to the deceased,The sole intention being getting a slice of the estate.

All this drama can easily be avoided by a simple estate plan.Estate planning is essentially attempts to eliminate uncertainties over the administration of an estate of a deceased person as well as grow the value of the estate by avoiding unnecessary taxes and expenses.

Most people prefer a will(A document that names beneficiaries of the estate) which is good,but it should also be accompanied by an assigned lawyer and a living will(A document that gives a person wishes regarding life prolonging medical treatment)

Involvement of the beneficiaries in the drafting of the estate plan May reduce the possibility of nasty family disputes in future.If the family unit is strong, a family member can be chosen as an executor, but if there is a possibility of a strife by doing so, an independent lawyer, although costly, is advisable.

Another way to manage an estate is by using a Trust. A trust fund is something that is set up for individuals or even organizations and charities that allow the person making the trust to set provisions on the money and other assets inside the trust.Trusts are considerably more complex than executing a last Will, but they offer substantially more protection. Several types of trusts exist and each offers pros and cons. However, all require a legal Will and designated Trustee to oversee estate settlement procedures.

The trustees, as legal owners of the trust's property, administer the affairs of the trust this may include investing the assets of the trust, ensuring trust property is preserved and productive for the beneficiaries, accounting for and reporting periodically to the beneficiaries concerning all transactions associated with trust property, filing any required tax returns on behalf of the trust, and other duties.Depending on the terms in the trust instrument, the trustee might decide weather a beneficiary would receive trust assets for their benefit.

Estate planning is involving, but very critical in ensuring a demise does not result into a soap opera that tears the private affairs of a family into a public spectacle.

Is Ksh. under speculative attack?

Recent rapid depreciation of the shilling tends to raise the question, is the Kenyan shilling under speculators attack? The CBK floating exchange rate system has been susceptible to unusual volatility that had forced the central bank to intervene from time to time to shore up the shilling, but lately CBK has decided not to intervene and let the market forces dictate the shillings fate.

Currency speculation exists whenever someone buys a foreign currency, not because she needs to pay for an import or is investing in a foreign business, but because she hopes to sell the currency at a higher rate in the future (in technical language the currency "appreciates"). This is nothing more than the old rule of buying low and selling high—only with foreign money.

Sometimes currency speculation might be necessary especially when exporters wants to exchange their currencies to local currency so as to offset local expenditures,Hence the need to engage forex traders who might charge a commission for the exchange and in most cases speculate on the foreign currency hopping to get a higher value from the market.

Speculators sometime use very sophisticated metrics to measure their risks and in most cases engage in guess work to influence depreciation or appreciation of a certain currency.The data they rely on may not in some instances reflect the reality on the ground hence affecting implementation of essential government policies and financial upheaval as we are currently witnessing.

Most speculators are Banks,just a few days ago CBK warned banks engaged in currency speculation they would face certain undisclosed disciplinary actions and within a few days the shilling started to appreciate.The involvement of banks in currency speculation explains why policies which reduce the short-term profitability of financial and industrial businesses triggers the selling of a currency, while policies that expand or open profit opportunities influence the buying of a currency.

Currency speculation is quite a lucrative business, a trader can make huge profits in a matter of minutes.If you look at financial reports of several large bank you would notice increase in Foreign exchange/treasury or other incomes over the years, which indicates currency speculation is rife in the banking industry.

CBK might be partly to blame for the current crisis hitting the shilling this is because its IMF funded dollar reserves might have sent signals of insufficient Foreign exchange reserve and absence of exchange controls.The problem might also be exacerbated by its constant borrowing and participation in the currency market as exemplified by its recent purchase of the Euros.

CBK latest moves although meant to maintain stability in the market might in actual sense result in the following negative outcomes:

(i)Destabilize exchange rates and asset prices as we are witnessing currently.

(ii)Results in serious losses of output,investment and employment bringing increased poverty.

As I had indicated earlier CBK knows who the speculators are and I dont know why measures are not been taken to bring them under control.As things stand, the speculation on the shilling is risking the lives of poor Kenyans as fears of increased inflation grow.Taxes or controls should be instigated against speculators to curb the menace.The tax will not only benefit the economy in terms of development but also bring down currency speculation.

Interconnection charges Dilema.

As CCK readies itself to cut the interconnection charges operators are divided on the issue .The big players wants the regulator to shelve the process while the underdogs in the industry are pushing for a review and quick implementation of the new charges.

Internationally ,interconnection charges are used to promote an environment that best simulates a competitive market.Most agreements state that interconnection (or access) prices should be cost-based,although there are other pricing methods that can promote efficiency in term of access .

Many countries use the Cost-based interconnection pricing as it puts greater burden on the incumbent to stay competitive, as customers lost to entrants represent potential lost profits.It also promotes easier entry by new operators since it maximizes cost efficiencies by avoiding duplication of essential facilities,hence the most efficient over the long term.

There are few shortcoming to cost based pricing in that in term of access most entrants focus there services in profitable networks and limits building out networks.There is also the inability of the incumbents to easily recover all their fixed costs which might affect service delivery and network quality.

The main challenge the regulator will have to contend with when reviewing the interconnection charges will be the issue of the incumbents recovering their fixed costs as well as stimulating competition and network penetration and access.This can be resolved by viewing all costs in the long-term, where all costs, including capital, are considered.

Operators who are against the latest revision argue the new rates are unsustainable and will reduce their margins which will eventually have a ripple effect in the economy,Job losses and reduced tax income have been quoted.The protagonist of the review want to use the revised rates to win more clients since incumbents have historically used the high interconnection charges to lock in subscribers.

Recent reports indicate that a committee that was formed by the the prime minister favor the reviewof the interconnection charges downward, so its a matter of time before CCK effect the new charges.The development  will be watched keenly to see the effect of this new charges to the industry.    

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Eveready? I doubt It.

Eveready is a company looking at its death bed, if  recent events are anything to go by.The continued drop in profitability and turnover does not show a company that is proactively fighting for its survival. In fact ,we can say its loosing this bruising battle terribly.


Recent reports indicates there are plans to shut down its Nakuru based plant,sending hundreds of its employees home,this is after several retrenchment failed to cut costs to a level where the company could remain a viable ongoing concern.
The plant which is among the biggest in Africa has a capacity of manufacturing 150 million units annually, but its currently utilising 1/3 of that capacity. 


The management has continuously blamed counterfeits and uneven playing field for their woes,indeed  the former  Eveready MD has been very vocal in the fight against counterfeits.But, one thing they have overlooked over the years is the threat of substitutes and increased competition from cheap imports.
Eveready watched as its market was invaded by cheap Asia batteries that ate most of the market share, then, as this was not enough, rechargeable flashlight hit the market making dry cell flashlights obsolete.


The challenges facing EverReady is not unique to it,there has been signals of  difficulty in operations in the consumer goods manufacturing sector after several Multinational such as Procter and Gamble ,Colgate Palmolive, Reckitt Benckiser  shut down their Kenyan factories and concentrated on distribution of imported products,This was  due to high local operational cost  and stiff competition from Asian competitors  which  eroded profit margin forcing many to reevaluate their strategies,Which in this case meant relocating to countries which has low operational cost and only investing  in a distribution office here in Kenya.


There are immense opportunities for Eveready to exploit in this market,but the management need a strong board that will offer strategic direction to seize the emerging opportunities that will enable the company wade through this competitive environment.


The market is currently flooded with Asian counterfeit so it would be necessary for the company to continue fighting this threat through relevant government ministries.But, waiting for the government help  will be myopic, the company should partner with an Asian company that can produce product cost effectively hence hedge against cheap Imports.


Eveready core business, still offers tremendous opportunity for growth,  rechargeable flashlights and batteries are still a common feature in the market  ,its sad the company has not seen it fit to diversify into cellular  and Laptops batteries which I believe is the next cash revenue stream for battery makers.


Exploiting this market will require a company that is attuned to market changes and respond quickly to these changes, thats why I said earlier a Young, dynamic  board is required to take this company to the next level.
For now we will have to wait for the new managing director to unveil his strategic plan for the future which ,to me, looks bleak if they continue doing business as usual.
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Entrepreneur 101

Although I have not succeeded yet in my businesses I find the rules below quite an eye opener,I have decided to copy them into my blog not only to help my readers who might be intrigued by self employment but also for my self.

I have come to realise that  being successful in business does not come by chance, and these rules at least makes you aware of what is in store for you if you ever wanted to go it alone.

Here’s the real rules: