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Saturday, April 7th, 2018

 

Godec urges Uhuru and Raila to speed up national dialogue

By Macharia Gaitho
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Outgoing American Ambassador Bob Godec is urging President Uhuru Kenyatta and opposition leader Raila Odinga to speed up the process towards launch of a national dialogue.

As anxiety grows over lack of progress since the famous March 9 televised handshake between the two principal political foes, Mr Godec, in an exclusive interview with the Sunday Nation, expressed hope that the peace gesture will lead to an all-inclusive dialogue to address some of Kenya’s most intractable problems.

Mr Godec describes the handshake as a pivotal moment that helped cool down political temperatures, but is conscious that lack of information on the way forward does not bode well. 

The ambassador, who is set to leave Kenya after a record six-year stint (the typical tenure is three years) played a pivotal role in brokering a truce following a period of political tensions in the wake of the disputed presidential election last year.

SHUTTLE DIPLOMACY

Ahead of the surprise Harambee House meeting, Mr Godec had been at the heart of rounds of shuttle diplomacy between Mr Kenyatta’s State House and Mr Odinga’s Capital Hill office involving a large number of intermediaries, including other western envoys, and religious, business and community leaders.

He does not want to claim credit for the breakthrough and remains coy on inner details of the interventions that finally broke the ice, but the discussion makes it clear that the United States was a key player, and committed itself to offering financial and technical support.

Since the handshake and appointment of a joint secretariat headed by diplomat Martin Kimani and lawyer Paul Mwangi, there has been no announcement on progress and the way forward.

In an intervirew with the Nation a fortnight ago, Mr Odinga was not willing to reveal much, only saying an announcement would be made in due course.

Mr Godec now adds that a lot of work has been taking place behind the scenes, and hopes that the discussion will lead to unveiling of a framework for national dialogue. He hopes an announcement can be made soon to calm any anxieties and also make public the finer details to what he hopes will be an a open, transparent, all-inclusive dialogue to address not just a political settlement, but the deep-seated underlying issues that invariably lead to conflict.

2022 COUNTDOWN

He is keen that the issues, including ethnic divisions, inclusivity, the political and electoral system, protection of judiciary and fundamental freedoms be addressed before the countdown to the 2022 General Election.

Having been so closely involved, Mr Godec no doubt would like to see some progress before he makes way for his successor Kyle McCarter. He is marking time unsure of when he will exactly depart, awaiting the arrival of Mr McCarter who still has to go through the formalities of vetting by Congress.

The long-serving envoy, however, continues to be fully engaged in nudging Kenyan politicians to reach a settlement that will ensure the country is never again at risk of violent meltdown over competition for political office.

Mr Godec believes that once President Kenyatta and Mr Odinga put aside the issue of whether the former was legitimately elected, they opened the door for Kenyans to look at the broader picture beyond political competition. Both leaders were genuine, he believes, in putting aside their differences and reaching broad concurrence on the critical issues that ail Kenya.

As he prepares to depart, Mr Godec radiates hope and optimism that Kenyans will negotiate a way out of political impasse and the ever-present threat of ethnic violence with every electoral cycle.

He reels of a long list of accomlishments he is proud of during his tenure, but also expresses disappointment and regret on some critical issues. One is the state of security, with the terrorist threat still looming in the background. One thing that seems to pain him is accusations that he was partial towards Jubilee during the electioneering period, and in the aftermath after Nasa boycotted the repeat presidential election and launched the #Resist campaign, which included the mock sweating-in of Mr Odinga and the ‘Peoples President’.

He insists that the US was absolutely neutral, with interventions guided mostly on the principle that once the Supreme Court upheld President Kenyatta’s victory in the repeat presidential election, that formed the reality from which everything else had to be built around.

That was why, he explains, he, along with other western envoys, opposed Mr Odinga’s mock swearing-in, which they saw as illegal and potentially dangerous. He denies that they were simply echoing the President Kenyatta’s Jubilee Party line, but simply acknowledging the reality and existing law.

CIVIL SOCIETY

That was also what they put to Nasa co-principals Kalonzo Musyoka, Moses Wetang’ula and Musalia Mudavadi, who dramatically left Mr Odinga in the lurch at the last minute. Mr Godec deftly avoided a query on whether they were threatened with visa bans and other sanctions.

The stance also caused a rift with the activist civil society groups who traditionally enjoy US funding and patronage. While Mr Godec emphasises that he never deviated from established policy of support for civil society, he concedes that there had to be differences when it came to the issue of whether or not to recognise President Kenyatta’s legitimacy.

Mr Godec is emphatic that recognising President Kenyatta’s election in no way reflects political bias or a repudiation of long-established US support for civil rights campaigns.

That was why the US played a leading role in pushing political players to the negotiating table. At a time the Jubilee regime seems to be, despite the handshake, adopting an authoritarian and intolerant streak, Mr Godec  expresses strong support for a Judiciary increasingly under siege from ruling party operatives.

DONALD TRUMP

He expresses distaste at political attacks on the Judiciary and regular disobedience of court orders, abhors the shut-down of TV stations after broadcasting Mr Odinga’s swearing-in, harassment and arrest of opposition politicians, and voices unwavering support for freedom  of media and freedom of expression that are seemingly under threat.

Mr Godec also addresses ‘external’ issues of keen interest to Kenyans, including the advent of President Donald Trump, the spectre of US-Chinese competition on Kenyan soil, and the Somalia situation and terrorist threats.

On the infamous ‘shithole’ reference to African counties, Mr Godec absolves President Trump on the basis that he denied making the comment, and had since written to African presidents re-affirming support for the continent.

AFRICAN EXPORTS

The ambassador also makes light of any threats posed to Africa by Presidents Trump’s recorded protectionist tendencies and antipathy towards trade pacts. He points out that Congress in 2015 renewed the African Growth and Opportunity Act allowing favourable tariffs for African exports to the US, and he sees no sign of a rethink. The catch, however, is that Mr Trump has not shied away from trashing international trade pacts and other bilateral or multi-lateral agreements signed by his predecessors.


Raila succession talks assume relevance after peace deal

By RUSHDIE OUDIA
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By BARACK ODUOR
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When former Attorney-General Charles Mugane Njonjo warned that it was a treasonable offence for one to imagine the death of a sitting president at the height of the Kenyatta succession in the late seventies, he might have foreseen the simmering but subdued debate in Nyanza over opposition leader Raila Odinga’s political future.

The Odinga succession debate has assumed new relevance following the March 9 handshake between him and President Uhuru Kenyatta at Harambee House and the subsequent deportation of opposition activist Miguna Miguna to Canada.

Dr Miguna’s deportation cast the spotlight on Mr Odinga who had told a rally at Kondele, Kisumu, that part of his deal with President Kenyatta was to ensure that the outspoken lawyer returned to the country unconditionally.

NASA LEADERS
It is at this point that diehard supporters of Mr Odinga started questioning the deal and warning that the opposition chief risked losing his hard-earned stature as an agitator for justice and the rule of law.

“The handshake rises or falls on the pedestal of the rule of law and, if the State is out to undermine the rule of law, then the deal has no basis,” Siaya Senator James Orengo said.

The concerns have since paved way for the debate on Mr Odinga’s succession, though spoken in muted tones in his Nyanza stronghold.

The debate has also been fuelled by pressure from Nasa co-principals Kalonzo Musyoka, Musalia Mudavadi and Moses Wetang’ula that Mr Odinga exits the scene and backs one of them come 2022.

Kakamega Governor Wycliffe Oparanya has also joined the fray, asking Mr Odinga to back him for the presidency in 2022.

ELECTORAL INJUSTICE
According to the chairman of the Kenya Diaspora Alliance and former Rangwe MP Shem Ochuodho, the Odinga succession debate is rife.

In an interview with the Sunday Nation, Dr Ochuodho listed Mr Orengo, former Nairobi Governor Evans Kidero, former Rongo MP Dalmas Otieno and himself as possible successors.

“The position needs fresh blood who can propel the community to the next level, and I believe the community will identify such a leader,” Dr Ochuodho said.

But National Assembly Minority Leader and Orange Democratic Movement chairman John Mbadi would rather not entertain the subject.

“Mr Odinga is busy fighting electoral injustice and other evils bedevilling the country and some people are busy discussing his succession,” Mr Mbadi said.

WETANG’ULA OUSTER
On Saturday, an MP from Siaya County who sought anonymity due to the sensitivity of the subject in the region accused Mr Orengo of scheming to succeed Mr Odinga.

The MP cited Mr Orengo’s alleged defiance of Mr Odinga’s advice not to topple Ford Kenya leader Moses Wetang’ula from the position of senate minority leader, a move which has split Nasa.

“Jakom (Mr Odinga) was totally against Wetang’ula’s ouster but Mr Orengo defied him, and went ahead to whip his fellow opposition senators and dethroned the Bungoma senator,” the MP said.

Like Mr Mbadi, Ugunja MP Opiyo Wandayi and his Alego Usonga counterpart Samuel Atandi separately trashed the Odinga succession debate.

“Our focus should be taking the country forward in the spirit of the agreement between the country’s top leadership and not engage in such debates,” Mr Wandayi said.

REFORM
Mr Atandi warned any leader talking about Mr Odinga’s succession to stop.

Mr Atandi lashed at Dr Miguna saying his tribulations are of his own making describing Dr Miguna as a ‘Johnnie come lately’ in the reform struggle and therefore cannot be compared to Mr Odinga.

“Luo martyrs are well-known; Dr Miguna is not one of them. We do not have a crisis in leadership in Nyanza or the opposition and anyone talking about the Odinga succession should be stoned,” Mr Atandi warned.

Homa Bay Woman Rep Gladys Wanga during a recent function at Kojwach Ward in Homa Bay said Mr Odinga can run for presidency come 2022.

“Agwambo is still young and can vie in the next election, he is still our leader,” said Ms Wanga.


Senators usurped role of MCAs, study says

By ALPHONCE SHIUNDU
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Kenya’s Senate overstepped its mandate when it began summoning each of the 47 individual governors to Nairobi’s Parliament Buildings seeking responses to audit queries, a new study says.

The paper, published in the latest issue of the Africa Journal of Comparative Constitutional Law, has slammed the senators for ignoring a judicial call for restraint when reviewing the expenditure of billions allocated to the counties.

The paper says that the senators’ obsession with pursuing audit queries in the counties had not only distracted the Senate from its core mandate, but had also neutered the role of county assemblies in checking the expenditure of the county executives.

Put another way, the senators were doing the job of the Members of County Assemblies (MCAs).

“The exercise of the oversight role, as approached by the Senate, comes with extra resources to execute it.

“As such, it is an additional incentive for the senators to push for an interpretation of article 96(3) of the Constitution that allows them to visit counties and carry out the oversight,” the study conducted by Dr Conrad Bosire, currently a Postdoctoral Research Fellow at the University of Western Cape, South Africa, reads.

The paper cites dozens of archival information, court and parliamentary documents, and even research by other Kenyan scholars with expertise in devolution and has come to the conclusion that the Senate had no business setting up a specific committee to ask governors to explain audit queries.

It is a waste of public money.

“County assemblies and the Parliamentary Service Commission have already set aside funds for committee meetings and, therefore, the county-level oversight is an additional strain on limited public resources,” the study notes.

ALLOWANCES
Whenever governors travel to Nairobi, they have to cater for accommodation for themselves in five-star hotels in the city, that of their drivers, bodyguards and aides.

They also pay for their senior officers who handle the operations in the counties to join them in the committee meetings.

And because they will all be working out of station, they end up pocketing hundreds of thousands in daily allowances.

With important officers out of the county, business is crippled.

Furthermore, the senators who sit in the County Public Accounts and Investments Committee also pocket money in allowances.

EQUITABLE SHARE
Instead of protecting counties, the paper notes, the Senate was undermining the spirit of devolution.

“The sheer magnitude of the oversight work, as contemplated by the Senate, will clearly overburden it and it will certainly not be effective in the long run,” the study says.

The study also indicts the Senate for not finding a way to force the National Treasury to ensure the county governments get their money on time.

While noting the well-documented challenges in the aptitude of members of county assemblies to check the County Executive, the study says the Senate is engaged in a vain job, because even if it finds malfeasance in county expenditure, it has no way of enforcing its sanctions without undermining devolution.

“A County Assembly has an array of measures that it can take against the lower-level executive.

“These include a refusal to approve appointments, budgets, plans or legislation.

“Indeed, the county assembly can cause an ‘American-like government shutdown’ in order to force the lower-level government to account.

“The county assembly can also start impeachment proceedings if transgressions of the executive reach the requisite threshold.

“While the Senate may scrutinise audit reports, it has no powers to deal directly with the county executive in a manner similar to that of county assemblies,” the paper records.

SOLUTIONS
Besides, the study proposes that the senators should focus on issues that affect all counties, and come up with a solution, instead of going county by county addressing similar weaknesses.

The Senate continues to take refuge in a pronouncement by the courts that the Senate could summon governors.

But the new paper argues it has no capacity nor locus standi to make meaningful intervention. 

“The Senate is a part of Parliament, an organ of national government. Accordingly, it is not possible for the Senate to play a legislative role with regard to counties,” the paper reads.

This position echoes a similar one held by prominent devolution scholar Mutakha Kangu in his book Constitutional Law of Kenya on Devolution.

To buttress this position, the paper cites the episode when Kiambu MCAs reached out to the Senate to stop then governor William Kabogo from signing a bill into law.

The courts ruled the Senate had no such powers.

Similarly, when Kisumu MCAs pleaded with the Senate to stop disbursements to the county, the Senate admitted that it had no such powers.

Dr Bosire dug into the history of the independence constitution that had a Senate and regional governments, and found that even then, the Senate did not have the authority to supervise regional governments.

“Senators generally view county governors more as political rivals than as collaborators or partners in the pursuit of the collective interests of county governments,” the paper notes.

It goes on: “Consequently, relations between the directly elected senators and county governors have been characterised by hostility and competitive politics rather than a consultative and collaborative approach as envisaged by the Constitution.”

It is that rivalry that came to the fore in the 2017 elections that could partly explain why at least 10 senators vied for the gubernatorial seat, of which six were elected.


How ‘Sunday Nation’ broke the story of NBK rot in 2015

By SUNDAY NATION TEAM
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When the Sunday Nation broke the story on the rot at the National Bank of Kenya (NBK) on June 21, 2015 — based on an anonymous whistle-blower’s leak — there was a vicious reaction against the newspaper led by the board and the embattled CEO Munir Sheikh Ahmed. At the centre of it was an attempt to intimidate and discredit the writer, editors and the Nation Media Group as a credible source of information. It was a plan that was easy to sell: the publicly reported numbers showed a healthy balance sheet, the CEO and his board chairman Mohammed Hassan were suave and experienced managers while the bank had in recent years rebranded and declared a bold strategic direction away from its troubled past. So how could a “malicious” newspaper project a picture of deep rot beneath the glitzy façade?

PROMINENT LAWYER

The fight-back was well-choreographed, and started that Sunday morning on social media — led by prominent lawyer Ahmednasir Abdullahi who perhaps found it an inconvenient detail to declare his personal and professional ties with the bank. Mr Munir was portrayed as a sought-after manager who had just rescued NBK from the doldrums by declaring profits of Sh1.7 billion and winning the 2014 CEO of the year award. Sunday Nation investigation editor Andrew Teyie, who wrote the article, and the managing editor were tarred with the brush of corruption, malice, incompetence and some unprintable adjectives in between. 

This reaction was probably not unexpected as, even before the article was published, a manager from the legal department had unsuccessfully approached the writer with a Sh3 million bribe to “kill” the story. Whether it was a personal initiative or sanctioned by the bank was hard to tell. A few days earlier, the CEO had been contacted for a comment, which he provided on e-mail, denying the institution was in a deeper financial mess than was being acknowledged. 

PAID BLOGGERS

Once the exclusive report was published, Plan B kicked in on social media. #SalutemunirNBK on Twitter, which was pushed by paid bloggers, discredited Sunday Nation as “gutter press” and the writer as a hireling of, among others, President Uhuru Kenyatta’s Chief of Staff Joseph Kinyua who was alleged to be pushing for the sale of the bank to senior government officials.  After the June 21, 2015 campaign onslaught, the journalists were confronted on the morning of June 23 with demand letters from top city lawyers and law firms. One of the letters which liberally quoted Shakespeare – the ultimate bard – was drafted by Mr Abdullahi claiming that the Sunday Nation had defamed the bank’s CEO.

During the intimidation campaign, NBK dangled carrots in form of advertisements to NMG platforms. Before then, the bank had withdrawn all advertising. Its board also released a statement telling customers and shareholders to disregard stories on the “rot”.

CLEAR WARNING

But Sunday Nation, backed by more leaked documents, did not relent, publishing the second part of its investigative special report on the bank the following weekend.

A board member was then tasked to call the writer with a clear warning — in his mother-tongue no less. One particularly aggressive conversation took an unfortunate ethnic turn:

“You are being used by Kikuyus, who want to buy the bank. Do not be used. How much money have they given you? I have to tell you this because you are from home (read ethnic community). Do you understand how a bank operates? Sh1 billion for a bank is nothing,” said the board member, alluding to the amount of a substantial toxic loan that had been highlighted in Part 2 of the Sunday Nation special report.

But behind the scenes, a more sinister operation was under way. Supposedly in collaboration with rogue Safaricom staff or State security agents, a senior bank official illegally accessed the writer’s entire call logs and messages. The writer, after establishing what had just happened, sent a protest note to the communications company, but this has to date not been responded to. The target was clear: to unmask the whistle-blower who had leaked damaging secret documents.

EVENTUALLY SACKED 

But they were looking in the wrong place. The Sunday Nation had mostly dealt with the whistle-blower through discreet face-to-face meetings.  

However, this did not stop the bank from targeting three staff members they suspected of leaking the information. With the help of Directorate of Criminal Investigations officers, the three were forced to record police statements — and later sacked.

Mr Ahmed was himself eventually sacked a year later after the full extent of the rot became clear. And last week, the Capital Markets Authority uncovered the web of deceit that involved cooking account books and siphoning at least Sh1 billion. Mr Ahmed was fined Sh5 million for his role in the mess — something he has vowed to appeal against —  while former Head of Treasury Solomon Alubala was asked to pay Sh104.8 million in penalties and chief finance officer Chris Kisire Sh1 million.  


KRA banks on technology to catch tax fraudsters

By KIPCHUMBA SOME
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The taxman is banking on automated technology to eliminate fraud that has cost the government billions of shillings in lost revenue, Kenya Revenue Authority (KRA) Commissioner-General John Njiraini has said.

Mr Njiraini was speaking on Friday as a city businessman was being charged in the High Court in Nairobi with tax evasion amounting to Sh11 billion.

Mr Parmar Kirit Kumar Ranchodbhai allegedly failed to declare the value added tax returns to KRA for the 2015 income. He was released on a cash bail of Sh1.5 million.

A day before, another businessman, Mr Keval Kumar Maisura, had been charged also in a Nairobi court with defrauding the taxpayer of about Sh15 billion between 2015 and 2017.

CYBERCRIMES

KRA investigators say he did this mainly through fictitious invoicing carried out through nine company names he registered for this purpose. The businessman denied all the charges and was released on a cash bail of Sh5 million.

“It is a common strategy used by businessmen to avoid VAT (Value Added Tax) exposure,” said Mr Njiraini in his office.

He said the detection of the fraud allegedly committed by the two businessmen would not have been possible were it not for the technologies that KRA has put in place in the past five years.

“Up until last year, we did not have a dedicated intelligence unit, yet the biggest risk to tax collection are fraudsters, including cybercrimes,” he said. “The projects we have installed have really transformed our operations.”

SH50 MILLION

Without disclosing the names of those targeted so as not to prejudice ongoing investigations, Mr Njiraini said that more arrests are expected to be made in the coming days.

“All I can say is that these are big corporates involved in this. But we are determined to recover every coin lost,” he said. The corporation is targeting to recover up to Sh50 billion in the on-going crackdown.

Some of the new technologies that have been introduced include an Integrated Scanner Command Centre which enables KRA officers from Nairobi to easily verify the kind of goods being imported into and exported out of the country.

Currently, the taxman has two large scanners installed at the Port of Mombasa, but Mr Njiraini said they had received 10 more. “In addition to this, we are strengthening our dog unit. We have two dogs but we are getting five more soon,” he said.

SIMBA SYSTEM

KRA has also introduced a Regional Electric Cargo Tracking System which enables it to track on real time all trucks leaving the Port of Mombasa to destinations in either Uganda or Rwanda. This has reduced cases of goods destined for the regional markets being diverted to the local market.

The KRA boss said they will soon roll out a new Integrated Customs Management System, which will replace the outdated Simba System currently in use at Customs.

The Simba System runs on multiple platforms that KRA has said makes it difficult to track cargo from the port of entry to when it gets final clearance. The ICMS will run on a single system that will make cargo tracking easier.

Another technology that they have introduced is the Customer Relations Management System, which will enable KRA to be responsive to customer needs more efficiently.

“Our system was recently listed as among the top three customer management systems in the world, which speaks about the quality of technologies we are acquiring,” said Mr Njiraini.

100 INVESTIGATORS

He added that the system has won an international award by Oracle, the American multinational computer technology company. The award ceremony will take place in Chicago.

Although the taxman is trying to limit the role of workers in its clearance operations, so as to cut down on fraud, the machines will complement the work of an intelligence department that he formed last year.

“We realised that you can’t tackle tax fraud without proper intelligence,” he said.  He said that he was aware that the changes will be resisted externally and internally by some KRA employees who were working in cahoots with unscrupulous businessmen. To mitigate this, the corporation had embarked on retraining the 7,000 employees to take advantage of the new changes.

As a result of increased  fraud threats, the authority had hired more than 100 investigators and prosecutors over the past one year, Mr Njiraini said. 


Why efforts to unite the Luhya might bear little fruit

By OSCAR OBONYO
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Western Kenya political supremos Musalia Mudavadi and Moses Wetang’ula have started chanting the all-too-familiar “Luhya unity” tune.

Only this time the chants have started rather too early ahead of the next polls – thanks to the political tiff between the Mudavadi-Wetang’ula pair and opposition colleague Raila Odinga.

The move by Mr Mudavadi and Mr Wetang’ula was not entirely unanticipated.

In fact going by Wetang’ula’s threats that he would face off with his political enemies “mundu khu mundu (man to man)”, after being stripped of his position as senate minority leader by Parliamentary colleagues, it was clear the Ford-Kenya leader was set to play the tribal card.  

MERGER
Wetang’ula claims the people of “Mulembe Nation” in Bungoma, Busia, Kakamega, Trans Nzoia and Vihiga counties voted overwhelmingly for Mr Odinga in last year’s presidential elections, courtesy of him and Mr Mudavadi.

But instead, Wetang’ula alleges, Mr Odinga has opted to “reward” members of the Luhya community by disrespecting and discarding their leaders.  

The Mudavadi-Wetang’ula duo now want Mr Odinga politically locked out of the land of Mulembe in 2022 for perpetually (mis)using the Luhya community at the ballot.

And the process of actualising this move has kicked off in earnest – thanks to the initiative by Amani National Congress (ANC) and Ford-Kenya allied legislators to merge the two parties. 

According to Lugari MP Ayub Savula, the move is geared at sealing off the “Mulembe nation” from outsider political poachers like Mr Odinga.

ELECTIONS
Once Mudavadi and Wetangula dissolve their parties, Mr Savula says, they will form a giant western Kenya party that will propel one of them to the presidency in 2022.

Savula’s party boss, Mudavadi, concurs by stressing their determination to build a strong and solid outfit that can withstand Kenya’s characteristic political storms.

The former vice-president envisages a formidable political force from western Kenya capable of appealing to all Kenyans, including attracting other senior political players on board such as Mr Kalonzo Musyoka of the Wiper party.

And for Mr Wetang’ula, this is also an opportunity to demonstrate to the ‘doubting Thomases’ that it is possible to unite the Mulembe nation.

Unlike Mudavadi who appears open to an all-inclusive process, the Ford-Kenya party leader clearly advocates for a Luhya-led outfit that isolates Mr Odinga and supporters from his Luo Nyanza backyard.  

RAILA ONSLAUGHT
It is an open secret that Mr Wetang’ula has a bone to pick with Odinga, whom he has blamed squarely for his exit from the Senate leadership.

When he threw in the towel after opposition senators resolved to replace him by Siaya Senator James Orengo, Mr Wetang’ula vowed to continue giving Mr Odinga “small measured and calculated dosage to ensure he enjoys no comfort”.

And by retreating to his backyard in Bungoma and Vihiga counties to de-campaign the ODM leader, moments after being stripped off the post, Wetang’ula inadvertently sought to make Mr Odinga a campaign issue – yet again – in Luhya land.

Over the last two decades, the election campaigns have been hinged on the hate or love for Odinga, and not a people’s agenda for the region.

And judging from the timing of anti-Odinga campaigns in western Kenya by Mr Wetang’ula and Mr Mudavadi, there is no doubt voter mobilisation ahead of 2022 is once again premised on the Odinga factor.

DEVELOPMENT
Terming it an abuse of the intelligence of the Luhya community, ODM Secretary-General Edwin Sifuna faults political leaders in western Kenya for focusing on their personal relations and hate for certain individuals at the expense of useful development agenda for the electorate.    

Noting that members of the Luhya community have a right to choose whom to politically associate with and acknowledging the importance of Luhya unity, Sifuna nonetheless regrets that the current unity efforts have kicked off on a wrong premise.

The Luhya, he argues, will only make it politically by teaming up with the rest and not by isolating long-term and potential allies.       

Looked at from Sifuna’s point of view, it is actually foolhardy at this point in time when communities are merging with a view to expand their political constituency, for Mr Mudavadi and Mr Wetang’ula to do the exact opposite by splitting into smaller voting blocs.   

POLITICAL COMMUNITY
If one has to borrow from the “best practices” locally, not because they are the finest democratic tenets but rather they have proved fruitful in delivering results at the ballot, the instances of Central Kenya and Rift Valley come to mind.

While, for instance, there exists the Kikuyu tribe, politically there is only talk of Central Kenya, which is an amalgamation of several communities including Kikuyu, Meru, Embu, Tharaka, Nithi and Mbeere.

While this humongous political community has gone further to woo Rift Valley community and is busy eating into the neighbouring Kisii, the Luhya-Luo political community that has since 2007 offered potent political competition to the Central Kenya bloc, is bound to disintegrate into smaller units.

And even as the Luhya leaders run away from the Odinga stranglehold, it remains unclear where this political sprint will land them.

It may well be a case of a change of masters, from Odinga to Deputy President William Ruto.

The DP’s recent meeting with western Kenya legislators at his Karen home is a pointer to this possibility.

That the delegation was led by none other than Tongaren MP Simiyu Eseli is quite telling.

Dr Eseli is Ford-Kenya’s Secretary-General, and it is unlikely that he can respond to such an overture from a top Jubilee politician without the nod of his party boss, Mr Wetang’ula. 

Which begs the question – is this all about slighting Odinga and ruining his presidential ambitions or a prudent move to bolster chances of a Luhya politician to State House?

VOTES
While ANC, through Mr Savula, has condemned Ford-Kenya’s dalliance with Mr Ruto, Mr Wetang’ula’s party is yet to come clean on the development.

The Deputy President’s overture is just one of the impediments that Mudavadi and Wetang’ula have to overcome in securing the elusive Luhya unity dream.

There is no denying that realisation of political cohesion among the Luhya, the second largest community after the Kikuyu, poses the greatest threat to a host of politicians from other voting blocs.

Meanwhile, as the Luhya political bigwigs push for political cleansing in the western Kenya to emulate counterparts in Kikuyu, Kalenjin, Luo and Kamba regions, they seem blind to their unique situation and geopolitical realties of western Kenya.  

Besides the Luhya, the region comprises the Teso and Saboat communities, who have three parliamentary constituencies between them and thousands of the Luo who reside in urban centres and who are part of the fishing communities along Nzoia, Suo rivers and Lake Victoria.

INCLUSIVITY
In fact the latter are so closely related to the Luhya, culturally and even by marriage.

This reality is responsible for the emerging community of the Abaluo – individuals born of a Luhya and Luo parent.

The population of the Abaluo has grown over the years and is even deemed to be larger than some Kenyan communities.

The import of this reality is that the anti-Odinga/ODM campaign in Luhya land cannot succeed 100 per cent. 

Failure of all-inclusive drives in the region has similarly led to the collapse of a number of political and development initiatives.

During the last Parliament, for instance, the move to set up a “Mulembe” community bank failed to take off owing – partly – to protests by the minorities over the Luhya label of “Mulembe”.

Even in the current unity drive, some legislators are already demonstrating signs of non-cooperation.

Busia County’s Teso South MP Oku Kaunya protests at the drive being labelled as “Luhya unity” on account that the initiative isolates the Teso and members of other communities, who reside in Western Kenya.

Although fruits of a proposed Ford-K and ANC merger are hazy at the national level, at the local level, Mudavadi and Wetangula are likely to enjoy a bountiful harvest come 2022. 

Their failure to team up in last year’s elections, for instance, gave room to Jubilee party to harvest big in the region.

In Kakamega County for instance, Jubilee benefited from the ANC, Ford Kenya and ODM failure to field one candidate, to secure four seats with ANC carrying the day with five seats, ODM (2) and Ford Kenya (1).


Tracing genesis of Jirongo's financial troubles

By KIPCHUMBA SOME
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The complexity of Mr Cyrus Jirongo’s deal with the Emirati investors to construct high-end houses in Ruai pretty much sums up the extent of the former MP’s financial misfortunes

Mr Jirongo is a man with properties worth billions of shillings but woefully short of cash: a broke billionaire, unable to pay his debtors, be they banks or his friends.

“He has properties worth billions but his liabilities running into billions as well, and therein lies the problem,” said a source with close knowledge of Mr Jirongo’s financial troubles, but who asked not to be named since he is acting for him in another deal.

PRESIDENTIAL ELECTION

In February this year, the Central Bank sold Mr Jirongo’s 103-acre farm in Uasin Gishu for Sh53 million in a bid to recover loans owed to the collapsed Dubai Bank. Through his three companies, Mr Jirongo owed Dubai Bank Sh495 million at the time of its collapse in August 2015.

In October last year, the High Court declared Mr Jirongo bankrupt after he failed to pay a loan of Sh700 million he borrowed through his friend and longtime friend Sammy Boit Kogo.

Mr Jirongo had secured Sh700 million from the National Bank of Kenya (NBK) using properties registered under the names of eight of Mr Kogo’s companies.

He, however, failed to repay the loan and the bank sold the properties on May 22, 2009 through a public auction.  Mr Jirongo appealed the High Court’s bankruptcy declaration to enable him to run in the October 26, 2017 repeat presidential election.

FLASHY LIFESTYLE

Mr Jirongo and Mr Kogo were founders of the infamous Youth for Kanu 1992 group, popularly known as YK‘92, a youth lobby group formed to campaign for President Daniel  Moi in that year’s elections.

YK‘92 members are best remembered for their flashy lifestyles which is suspected to have been funded by money looted from state coffers. Over time, the group became a by-word for corruption.

In 2016 Mr Kogo went to court in an attempt to recover a piece of land in Upper Hill, Nairobi, from Mr Jirongo. The latter said he bought the land by acquiring a firm — Soy Developers Limited — from Kogo in 1991.

He claimed in court that Mr Kogo had admitted to being a proxy for Mr Jonathan Moi, a son of former President Daniel arap Moi, who was the actual owner of Soy Developers Limited.  

APPEAREDMALICIOUS

 Mr Jirongo said he gave Sh7 million to Mr Moi before using the Upper Hill land to secure a Sh50 million loan from Postbank Credit Limited.

Mr Boit and Mr Moi denied claims that the former president’s son received money from Mr Jirongo or that he is linked to Soy Developers Limited.

The Directorate of Criminal Investigation recommended his prosecution for allegedly forging the land’s documents. However, in January last year, the High Court stopped the prosecution saying the suit, coming 24 years later, appeared malicious. But the court declined to determine whether Mr Jirongo was guilty or innocent in the matter.

Heavily in debt, friends appear to have deserted Mr Jirongo, a fact that he  publicly admitted when he spoke two weeks ago at a funeral in Karachuonyo, Homa Bay County.

During the event, which was attended by former Prime Minister Raila Odinga, he claimed that President Uhuru Kenyatta and his deputy William Ruto had abandoned him.

JOHN MAGUFULI

“I shall continue being close to the Luo community because even the other day, I visited Raila and told him how the top Jubilee leadership had abandoned me,” said Mr Jirongo.

He added that Mr Odinga had come to his aid by introducing him to Tanzanian President John Magufuli and Premier Kassim Majaliwa who gave him a “job”. He did not reveal the nature of the job.

Although Mr Jirongo complained of being sidelined by Jubilee, it is Deputy President Ruto, another former member of YK ’92, with whom they have had the most bitter of fights in recent times.

In May 2016, Mr Jirongo sensationally linked the DP to the death of outspoken government critic Jacob Juma who was murdered by unknown people. Mr Jirongo and the DP were once close friends, political associates and business partners before they fell out supposedly due to business rivalry.

The DP, who acknowledges that he was once Mr Jirongo’s mtu wa mkono (handyman), says that his friend-turned-foe is jealous and bitter of his (Mr Ruto’s) political and business success.

“I acknowledge I was his junior, but why is he so chronically bitter at me?” said the DP during the funeral of former Malava MP Soita Shitanda in June 2016. “I have told him quite often, it is all about ‘kujipanga’ (strategy).”

In January, last year, Central Organisation of Trade Unions (Cotu) secretary-general Francis Atwoli sued Mr Jirongo over a Sh110 million debt.

The trade unionist claimed that under an agreement made in August 10, 2016, he advanced Sh100 million to Mr Jirongo, payable in 50 days, with an interest of Sh10 million.

The former Lugari MP allegedly made an undertaking on October 10 admitting his indebtedness to Mr Atwoli and undertook to repay him by October 21.

“Despite demand made, Mr Jirongo has totally refused, failed and ignored to effect payment as per the terms of the agreement,” said Mr Atwoli in court papers.

The turn of events marked a dramatic fall of one of Kenya’s most colourful businessmen. By the time he shot into the national limelight aged 32 as the chairman of YK ‘92, Mr Jirongo had made a name as a successful real estate developer in Nairobi. He often brags that he was a billionaire by the age of 30.

When the Sh500 note was first released in the early 1990s by the Central Bank, it was nicknamed ‘Jirongo’ because the note was widely dished out in the public by his YK’92 outfit during the 1992 campaigns.

Ironically, the genesis of his current financial predicaments can be traced to his involvement in the group. A few months after winning the 1992 general election, President Moi disbanded the group, calling its members a bunch of “con men.”

Mr Moi moved in to financially cripple its ambitious chairman who, by his own admission, harboured ambitions to build the group into a formidable political outfit to rival the then ruling Kanu party.

In May 1993, the National Social Security Fund (NSSF) was ordered to cancel the purchase of 500 housing units worth Sh1.2 billion at Hazina Estate from Jirongo’s company, Sololo Outlets.

In quick succession, Sololo Outlets was declared bankrupt and lawyer Mutula Kilonzo appointed the receiver. All this was exposed as government plan to hamstring Mr Jirongo financially after top secret documents on the deal surfaced in 2012.

In the same year, Jirongo was paid Sh 490 million by NSSF in an out of court settlement for the houses. But it is evident from his current financial crisis that Mr Jirongo is far from recovering from this initial setback 25 years ago.


Uhuru, Raila silence on unity deal fuels unending speculation

By IBRAHIM ORUKO
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By PETER LEFTIE
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By SAMWEL OWINO
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Close allies of President Uhuru Kenyatta and opposition leader Raila Odinga remain in the dark about the progress in implementing the deal between the two leaders, exactly one month after the famous handshake at Harambee House.

The fact that neither President Kenyatta nor Mr Odinga have spoken openly on tangible progress made since the handshake has only fuelled speculation that the deal is either a closely guarded secret or that it is headed nowhere.

Some of Mr Odinga’s closest allies including Siaya Senator James Orengo, Kakamega governor Wycliffe Oparanya and Busia Senator Amos Wako have openly voiced their frustration at the lack of progress in the deal.

On Thursday, Mr Wako vented his frustrations over the slow pace in implementing the handshake in a press statement, pleading with the two leaders to launch the dialogue programme urgently.

“It is almost one month since you issued the statement and neither the programme has been rolled out nor launched,” Mr Wako said in a letter to President Kenyatta and Mr Odinga.

Mr Wako warned that if not acted upon, and fast, the fruits of the deal, if any, will be drowned by noises about 2022 succession politics.

“I suggest that where constitutional and legal provisions will require to be enacted, the target should be that those provisions be enacted by mid-2020, before the 2022 elections fever takes over,” Mr Wako said.

Among the issues the two leaders promised to confront are ethnic antagonism and competition, lack of national ethos, inclusivity, devolution, divisive elections, safety and security, corruption and shared prosperity.

PATIENCE
They also promised to rollout a programme that was to implement their shared objectives and mandated lawyer Paul Mwangi and former Ambassador Martin Kamau to oversee the establishment of the programme.

The two were to establish an office and retain a retinue of advisers to assist in the implementation of the programme, all of which remain unclear a month later.

On Saturday, State House spokesman Manoah Esipisu called for patience from Kenyans.

“Let us exercise patience, the team that was mandated to implement the programme, Paul Mwangi for Raila and Martin Kimani for Uhuru are still working on it; when they are through, they will let the country know the progress made.

“I do not think that the launch is important, what is important is what is achieved,” he said on telephone.

2022 ELECTIONS

Dr Noah Akala, Mr Odinga’s Private Secretary, on his part insisted that the planned launch was still on but referred Sunday Nation to Mr Mwangi for further details.

“I understand there is a sense of anxiety among the political class and this is because they are more concerned about the 2022 elections.

“The MoU said that the official launch will be held soon and I can tell you we are still in the time frame of soon. You must understand that good things take time,” Dr Akala said.

He insisted there are regular consultations between Mr Mwangi for Mr Odinga and Mr Martin Kimani representing President Kenyatta.

“I can also confirm to you that there are regular consultations between Mr Odinga and President Kenyatta.”

DEVOLUTION FORUM
Dr Akala said Mr Odinga has reiterated to his secretariat, the MPs and the senators his unwavering commitment to the MoU.

“You have noted that this week the government and the Council of Governors extended an invitation to Mr Odinga to give the keynote speech during the devolution conference in Kakamega later this month.”

This sentiments were supported by Minority Whip Junet Mohamed who asked critics of the handshake to give the two leaders time.

“The deal was not about ODM joining the government. It was about the nine-point agenda the two leaders articulated after their meeting,” he said.

“The deal is just about one month old. No child walks in one month after birth.

“The implementation programme of the initiative will be communicated to the country by the technical committee the two leaders set-up and it is only fair that everybody remains calm,” he maintained.

ODM LEADERS
But even as Dr Akala and Mr Mohamed defended the deal, it was evident that a lot remained to be done to achieve the objectives of the deal. 

Top ODM officials interviewed by Sunday Nation were not sure when the official launch of the programme will take place.

“Only Paul Mwangi can give you that kind of information,” ODM Secretary General Edwin Sifuna said when contacted.

The party’s deputy leader, Mr Oparanya, was equally in the dark about the progress of the talks.

“Call me on Tuesday I may have some information,” he said when reached for comment.

Mr Mwangi did not pick our calls for the better part of the week, and the few times he picked, he urged that time was not ripe for him to give any updates on the progress in the implementation of the deal.

“We will give you a detailed brief at the appropriate time, bear with me lease,” he said when reached on Thursday.

MIGUNA DEPORTED
The fact that a scheduled press conference to have been addressed by Mr Mwangi and Mr Kimani two weeks ago was called off at the last minute has not helped matters either.

The second deportation of fiery lawyer Miguna Miguna back to Canada in full view of a helpless Mr Odinga has worsened matters, with the latter’s allies and supporters questioning President Kenyatta and Jubilee’s commitment to the deal.

A number of ODM MPs have voiced their concerns about the handshake, arguing that it does not advance the interests of the party.

“Our party leader has given everything for the good of the country but this has not been reciprocated by our colleagues on the other side who still insist on hurling insults his way,” an ODM MP complained.

UHURU’S LEGITIMACY
What is of concern to the party hardliners is that there is no direct benefit Mr Odinga has accrued as a result of the handshake.

While Mr Kenyatta’s presidency has been legitimised, there is little indication that Mr Odinga has anything tangible to show for it.

Within Jubilee Party, suspicion surrounds Mr Odinga’s sudden change of heart, with some cautioning President Kenyatta not to trust the opposition leader blindly.

Those critical of Mr Odinga are mainly allied to deputy President William Ruto who view his arrival as a scheme by some within Jubilee to overturn the apple cart and short-change their man.

Events of last Thursday, when a scheduled meeting between Mr Odinga and Devolution Cabinet Secretary Eugene Wamalwa, Council of Governors vice-chairperson Anne Waiguru and Senate deputy chief whip Irungu Kang’ata was called off at the last minute, have only added more confusion about the status of the handshake.

EXECUTIVE POWER
Sources within the CoG secretariat confided in Sunday Nation that while the meeting, that was to be held at Mr Odinga’s Capitol Hill offices to brief him about the forthcoming Devolution Conference in Kakamega later this month had tacit approval from State House, it was called off at the last minute following another call from the Office of the President.

A highly placed source within the executive revealed that there was discomfort from some government functionaries that the meeting would have portrayed Mr Odinga as a person who wields executive powers to the extent of summoning a Cabinet Secretary to his office.

It is unusual for a Cabinet Secretary to go to the office of an opposition leader to brief him about an upcoming event and deliver a personal invite to him, said a top government official who sought anonymity because of the secrecy surrounding the deal.

“The team was immediately called and told to cancel the meeting,” the source said.

CANCEL MEETING
According to the source, Mr Kang’ata and Ms Waiguru frantically tried to reach out to DP William Ruto to intervene so that they could continue with their meeting with Mr Odinga but it bore no fruit as both the President and the DP were in Bomet County on that day.

When contacted, Mr Kang’ata said he has no idea of what led to the cancellation of the meeting.

Mr Wamalwa is said to have earlier informed both Mr Kang’ata and Ms Waiguru that he had clearance from State House to go ahead with the meeting only for the two and other technocrats from the Devolution ministry to receive a call with firm instructions to abandon the journey.

By the time of receiving the call, the team was holed up in a room at Panafric Hotel fine-tuning what would have been areas of discussion with the opposition leader.

Early in the week, President Kenyatta had reportedly instructed all his Cabinet Secretaries and close allies that the relationship between him and Mr Odinga is purely personal and no third party should get involved unless he gives an express permission.


Let each financial institution determine own interest rates

By TOM KIRAGU

The Sunday View (Gitau Warigi’s) column of April 1 roots for continued interest rate regulation.

Effectively, interest rate capping interferes with the core functions of a bank.

The role of a bank as a key component of the financial system is to mobilise deposits from savers and lend to borrowers in an efficient manner.

Kenya aspires to be a free market economy depicted by unregulated pricing as opposed to a command economy where prices are set by the regulator.

The regulator in a free economy needs to ensure a level playing field for all sellers with free flow of information to buyers.

This leaves pricing to market forces guided by supply and demand.

REGULATIONS
However, Kenya is a de facto mixed economy as expressed by market practise in some sectors.

“Price Ceiling” regime prevails in the energy sector while “interest rate capping” is currently practised in the banking industry.

Most of the other sectors including transport, hospitality, health amongst others are market driven.

Apart from pricing, the banking environment has become laden with regulatory and compliance requirements driven by domestic and international mandates with more including International Financial Reporting Standard (IFRS 9) set to take effect this year.

This enhanced reporting and compliance has compromised the laissez faire principle of a free market economy for the banking industry.

LOANS
However, with strict oversight being provided by the regulator, shareholder representatives and industry lobby groups, compliance should not in isolation disadvantage any particular bank or client thus arguably enough latitude exists for market forces to determine interest rates.

Before the current capping, an interest rate liberalised banking industry had existed in Kenya since 1991 though fraught with mixed fortunes.

Given the just concluded 2017 reporting period (all banks had to report by March 31), it is clear growth rate in loans was higher in the previous interest rate regime than the current regime.

It is also clear that non-performing loans ratio has escalated hitting a 10 year high, this negates the overriding reason that was advanced in favour of interest capping, which was largely the cost of loans.

MARKET
The current suppressed credit growth is a manifestation of restricted pricing options while rise in non-performance of loans is a result of the adverse multiplier effect of interest rate capping triggering lower economic activity and a subsequent decline in economically viable undertakings.

The freedom to determine interest rates should rest with each financial institution given its risk appetite.

The competition authority and other regulatory arms should forestall collusion in interest rate setting resulting from monopolistic or oligopolistic realities. 

Each institution would then present its wares to the market and let the informed customer choose.

The resulting market price levels would accommodate all the different client profiles, including small and medium enterprises and individual borrowers, Government and large corporates.


Telecoms: How consumers can benefit from competition

By KWAME OWINO
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The formal liberalisation of Kenya’s telecommunications industry started in 1997 and has, therefore, entered its third decade now. At the start of liberalisation, the policy imperative was to ensure increased investment and extend telecommunications services beyond high income groups and selected urban areas. That 20-year journey which started in 1998 with an Act of Parliament has, to a large extent, determined the market outcomes that we see today. During that time, the major debate was that of freeing the industry from monopoly and allowing new investment into the sector. 

The review of the public discourse and the debates in Parliament shows that at the time, the reforms were not implemented with assurance of their outcomes and, therefore, undertaken tentatively. So the entry of new firms into the sector was phased in gradually and so different firms faced different entry conditions over that time. Due to these decisions, we have a market structure with one dominant firm in selected market segments and competitors with varying levels of market share in the retail end of the communications market.

MARKET LEADER

This concern about the possibility of domination is still with us and is now the key issue in Kenya’s telecoms sector where Safaricom Kenya has a substantial lead and command of significant market areas. Based strictly on interpretation of Kenya’s Competition law, the study conducted by the Communications Authority has found that Safaricom bears substantial market leadership in the wholesale segment of transmission infrastructure, text services and mobile money transfer in the retail side. These findings were reached by the examination of the overall revenues, individual subscriber share and share of all transactions. These are facts and are not debatable.

COMPETITION

What is debatable is the conclusion reached that this situation of dominance warrants ex ante asymmetric regulation. This implies that the dominant firm would be required by the regulator to adhere to strict reporting and conduct within the market in the quest to preserve competition. This approach is unprecedented in Kenya’s telecoms market but is also questionable because it appears to make assumptions that market dominance will be abused even where that evidence has not been empirically established. It is a serious abrogation of the tenet of competition policy that market dominance alone is not a violation except where specific conduct is intended and leads to harm to consumers and other competitors.

It is possible that about half of the market entrants in Kenya’s telecoms industry may have faced difficulty in recruitment of subscribers because of late entry. This phased-in entry to liberalisation has harmed competition because it means that firms that entered the markets after Safaricom Kenya’s licence was issued had significant competition pressure that they did not have to face. And it appears that the dominance factor may have been influenced by the regulatory decisions that were made at that time. It cannot then be the failure of one market competitor if the regulatory policy leads to a market situation that has asymmetric effects.

LATTER ENTRANTS

It is better for consumers when entry into sectors is as open as possible from the first instance. The appropriate analogy is that a race ought to start with all competitors on the starting line and ready to start at the same time.

The dominance picture that has been demonstrated by the Communications Authority’s study, therefore, reflects legacy decisions of its predecessor which should have persuaded the ministry to allow for all licenses to start operations two decades ago. That failure meant that some latter entrants were bound to struggle. In addition, the existing structure has harmed consumers who should have had a suite of telecommunications providers to begin with.

And the reason that this tentative approach has created a market situation that worries the regulator is because of failure to trust competition at the beginning. It helps to trust the market from the word go rather than have runners start at different times and then try to adjust the course in order to steer the race towards ideal competition conditions.

4G LICENCES

It does not appear that this lesson has been heeded because the issuance of the 4G licences has also been done on the basis of a “beauty contest’ as opposed to open competition in an auction.

Entrants in the telecoms 4G market have paid different licence fees and started their race at different times. That’s bound to lead to very bad outcomes that have denied the consumer the opportunity to benefit from competition right away. 

The main lesson is that the market is smarter than a system designed administratively and warns us not to repeat an error that is 20 years old. If we adhered to this, in five years we would find no need to conduct another market study with foregone conclusions and which tries to reinstate competition when a market is nearing maturity.    

Mr Owino is the chief executive Officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank