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Monday, September 17th, 2018

 

Former Zimbabwe President Mugabe in Singapore for medical treatment

By Nenenji Mlangeni

HARARE-(MaraviPost)-Zimbabwe’s former president Robert Mugabe and his wife Grace, have reportedly been flown out of the country for “emergency” medical checks in Singapore.

The Mugabes left on Sunday on a flight chartered by President Emmerson Mnangagwa’s government, New Zimbabwe.com reported.

Mugabe, 94, and Grace, 53, have “been struggling with poor health, regularly traveling to the southeast Asian country for medical attention”, the report said.

The development came a few weeks after Mnangagwa spent more than half a million US dollars to fly Grace home to attend her mother’s funeral.

At least US$550 000 was used to charter a top-of-the range jet from a company in Qatar, said the private Standard newspaper.

“The money, it has been established, was sourced by a local business tycoon with vast interests in energy, mining and agriculture, who is close to Mnangagwa,” the paper said.

Grace was reported to be unwell and in Singapore last month. She was still there when her 83-year-old mother, Idah Marufu, died in Harare on August 30.

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Kibwezi West MP Patrick Musimba charged over Sh1bn bank fraud

By RICHARD MUNGUTI
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Kibwezi West MP Patrick Musimba, his wife, Angela Mwende, and three other people were on Monday charged with conspiracy to steal more than Sh1.1 billion from Chase Bank. They denied six counts of stealing, money laundering and conspiracy to defraud.

Mr Musimba, who presented himself in court after a warrant for his arrest was issued last week, will remain in police custody until Thursday, pending a ruling on his bail application. They will be held at the Kileleshwa Police Station.

The couple is jointly charged with former senior managers of the collapsed bank — Duncan Kabui (director), James Mwaura Mwenja (general manager corporate credit) and Makarios Omondi Agumbi (general manager) — who denied the charges before Senior Resident Magistrate Hellen Onkwani in Nairobi. Also charged was the bank’s former chairman, Mr Mohammed Zafrulla Khan, who was released on Sh2 million cash bail and allowed to travel to the US for heart surgery.

CRUCIAL DISCUSSION

The former managers are represented by lawyer Cecil Miller while the Musimbas and their companies are represented by Steve Kimathi.

“I urge this court to grant Mr Musimba a personal bond to enable him to participate in the bill returned to Parliament by President Kenyatta last week over the imposition of the 16 per cent VAT on petroleum products. It is a crucial discussion in which the Kibwezi electorate must participate through Mr Musimba since the increment has adversely affected everyone,” Mr Kimathi said.

He added that, since Mr Musimba is a State officer, the court should balance public interest with the task placed upon his shoulders. The lawyer also urged the court to free the MPs wife “to attend to one of their three children, who is a special case”.

OPPOSED PLEA

But State prosecutors James Warui Mungai and Ruby Okoth opposed the plea, saying the MP is now a suspect, and that his parliamentary duties will be handled by others. “Mr Musimba has been accused of stealing billions of depositors’ money. This court should take judicial notice of the money involved while considering his bail,” Mr Mungai added.

The prosecutor also opposed Mr Musimba’s plea that his case be heard in camera, saying Director of Public Prosecutions (DPP) Noordin Haji had taken into consideration all issues of national security when he ordered his prosecution.

The court heard that Mr Musimba, his wife, and their two companies, Porting Access Ltd and Itecs Ltd allegedly stole Sh1,150,125,587 between January 23, 2015, and March 31, 2016 from Chase Bank.

They also face money laundering charges for allegedly benefiting from the transfer of Sh740,442,687   from Chase Bank to Paramount Universal Bank and of another Sh409,682,900 to KCB by their co-accused.


Kiunjuri: Coffee farmers to get Sh1.3bn subsidised fertiliser

By JOSEPH WANGUI
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The government has set aside Sh2.8 billion to supply subsidised fertiliser to coffee farmers, Agriculture Cabinet Secretary Mwangi Kiunjuri said on Monday.

Speaking at Kabiruini grounds in when he officially opened the Central Agricultural Society of Kenya fair, Mr Kiunjuri said Sh1.3 billion fertiliser for this season has already been purchased.

“During the long rains from April to May, the government will again buy another consignment of Sh1.5 billion fertiliser. A bag of subsidised fertiliser goes for only Sh1,500,” the minister said.

He added that the government is doing so in order to revive the coffee industry.

Mr Kiunjuri insisted that the fertiliser is for coffee farmers only.

“We want to increase annual production of coffee from 40,000 to 100,000 tonnes in the coming four years,” Mr Kiunjuri said.

COFFEE SEEDLINGS

“Foreign exchange for the government should increase. That will also push our GDP up by about three to four per cent.”

The minister said the government has come up with a programme to distribute two million coffee seedlings in the next rainy season.

“This will ensure our farmers get coffee varieties that are high-yielding and resistant to diseases,” he added.

He said corruption was the main reason some farmers resorted to uprooting their coffee bushes.

The Cabinet Secretary said corruption and exploitation starts at the weighing and pulping stages in coffee co-operative societies.

“For how long shall we exploit our people? A woman takes 50 kilogrammes of coffee to a factory but is paid for just 30 kilogrammes,” he said.

POULTRY FARMING

He added that weighing and pulping machine problems must be addressed urgently.

Mr Kiunjuri also urged farmers to cultivate other crops like macadamia, avocado and pyrethrum.

He told them to try other ventures such as poultry farming.

“The government will subsidise and distribute macadamia and avocado seedlings. Not many farmers can afford the seedlings because one goes for between Sh300 and Sh400,” he added.

Mr Kiunjuri said he and his Trade counterpart Peter Munya have been instructed by President Uhuru Kenyatta to ensure coffee farming becomes a profitable once again.

“We are committed to reviving the industry. Fore the first time in many years, the government has decided to take this matter seriously,” Mr Kiunjuri said.

He explained that his Ministry will ensure there is development of the sector while Trade Ministry will deal with promotion and marketing.


How competition drove motor vehicle firm Foton East Africa to debts

By BRIAN WASUNA
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Chinese Foton vehicle manufacturer had come to drive everyone else out of the Kenyan market, instead it was driven into a Sh1.1 billion mountain of debt — and the owner banned from leaving the country.

While other Africa-based Chinese companies are making respectable profits, Foton East Africa is a classic case of how Chinese automobile firms are failing in Africa due to vicious competition and for failing to comply with local laws.

For the last 10 years, Chinese automobile firms have been targeting the growth market in the continent where there are only 42 vehicles per 1,000 inhabitants, compared to the global average of 182, according to a 2016 data from the International Organisation for Motor Vehicle Manufacturers.

Before he founded Foton, Mr Da Li had been doing business in Kenya for over 20 years. He not only married a Kenyan lady, they have a 30-year-old son but also became a Kenyan citizen.

JOINT VENTURE

Mr Li was the local representative for Foton, a joint venture between the Chinese government through its Beijing Automotive Industry Holding Company (BAIC Group) and German multinational Daimler, the world’s largest commercial vehicle manufacturer.

But that was as far as things went right. On July 14, 2014 at City Hall Nairobi, officials of the company led by Beiqi Foton Motor general manager Wang Jinyu had a meeting with then Nairobi Governor Evans Kidero where they signed a Sh6.4 billion deal which would have seen the replacement of the matatus with Foton buses, operated by the county government.

So promising was the Kenyan market that Mr Li borrowed Sh1 billion from NIC Bank to set up a manufacturing plant in Mlolongo, some 20km from Nairobi on the Mombasa highway.

Under the City Hall deal, the firm was to sell 266 buses as part of the planned metro transport system. But that was just a dream and the beginning of its woes.

JAPANESE MODELS

More so, the uptake of the Foton vehicles was so poor that it could hardly match Kenya’s devotion to Japanese models.

While China is the world’s-biggest manufacturer with 29 million vehicles produced in 2017, it has no globally recognised brand since its biggest companies are either contracted manufacturers or joint ventures with global car manufacturers.

Foton East Africa’s troubles piled in 2016 when the Kenya Revenue Authority (KRA), after assessing the company’s books, demanded Sh223 million for withholding tax; something that has now seen Mr Li banned from leaving Kenya.

KRA admits in court papers that they issued the ban to force Mr Li out of hiding after he failed to meet its officials to negotiate the tax payments.

While other Chinese firms could be recording envious successes in the Kenyan economy, Foton’s tale of failure and auction of its properties has cast doubts on whether their vehicles could make an imprint in the market.

PROPERTY AUCTIONED

After Foton defaulted on the Sh1 billion, the NIC Bank auctioned Foton East Africa’s properties to recover its money.

That failure may have cost the firm dearly, but Mr Li could be the biggest loser as he has been left in a mountain of debt, at risk of losing a 10-acre piece of land he had dedicated to Foton’s warehouse and plant, and fighting to lift a travel ban instigated by the taxman over a Sh223 million demand.

The 54-year-old businessman sued KRA in May after failing to negotiate a lift of the ban.

He denies owing any taxes in the suit, but the taxman insists that Mr Li failed to prove that he can offset admitted debts hence it cannot lift the ban.

He claims that the taxman’s demand is aimed at hammering the final nail in his Foton East Africa’s coffin, to favour competitors.

EXIT KENYAN MARKET

“I believe the basis of the decisions is to harass and unlawfully force us to close our business and exit the Kenyan market in favour of competitors. Unless the honourable court urgently intervenes, Foton will be forced to lay off its workers which will lead to loss of business and livelihoods for the directors and our employees,” Mr Li says.

KRA holds that it was forced to lure Mr Li out of hiding through the ban, as he failed to honour a promise to meet its officials and talk about settlement of the taxes.

“It is only after the issuance of the departure prohibition order on December 14, 2017 that Mr Li through Foton’s tax agent Stratton Consulting Limited, contacted KRA in a move to settle the tax matter. Once Mr Li became aware of the travel ban, he sought a meeting with us pursuing a lifting of the said order,” KRA assistant manager, enforcement Walter Odede says in suit papers.

ASSEMBLY PLANT

While Foton only opened its Nairobi plant in 2014 through Mr Li, the firm’s trucks have for years been locally assembled at Thika-based Kenya Vehicle Manufacturers (KVM).

The Kenyan government has a 35 per cent stake in KVM.

The decision to put up an assembly plant in Kenya was in line with Foton’s plans for market expansion which was expected to yield more sales.

At the time of its entry in Kenya, the manufacturer’s parent firm Beiqi Foton was struggling as its 2011 profits had dipped by 30 per cent to $182.54 million (Sh18.4 billion) from a year earlier.

Africa was one of the markets to be conquered and the expectations were high.

Last year, the Chinese vehicle manufacturer’s profits fell by 80.25 per cent to $17.82 million from $22.2 million in 2016.

MOVED TRUCKS

In Kenya, Foton has opted to move its trucks through established car dealers like Pewin Motors and Roton Africa.

To fund the Foton East Africa warehouse and plant, Mr Li borrowed Sh1.1 billion from NIC Bank. The loan was guaranteed through another firm he owns—Gold Lida Limited.

Mr Li’s plant did not miss out on controversy, as in 2014, KVM accused Foton of using a guise of inspecting vehicles assembled in the Thika facility to poach its staff.

Foton had then sued KVM for refusing an inspection or release of 12 vehicles.

KVM then argued that Foton had poached 12 of its employees since December, 2012 and that allowing the Chinese firm access to the plant could see more workers leave.

One year later, Foton bagged the highly contested City Hall tender for supply of 266 buses to be used in a metropolitan public transport project.

TENDER CANCELLED

But the victory was short lived as county assembly members months later called off the $73 million deal, arguing that then Transport minister Evans Ondieki did not consult them before approving it.

Worse still, the firm claimed in yet another suit that City Hall irregularly cancelled a tender for supply of vehicles worth Sh82 million after it had customised the machines.

Foton also claimed that City Hall had not paid for another set of vehicles earlier delivered worth Sh70 million.

The Chinese firm sued City Hall for Sh152.8 million, a dispute that is pending in court.

In 2015, KRA formed a task force to probe a number of bonded warehouses, and Foton found itself under audit.

In June 2016, KRA reached out to Mr Li who requested that he be given 10 days to return to arrange for a meeting with the taxman. But for one year, no communication came from Mr Li.


Renewable energy is best way to power ‘Big Four’ agenda projects

By ROSE HASSAN
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One shilling. Yes, Sh1 is the price of a litre of petrol in Venezuela. To put this in a logical context, an egg is more expensive than petrol there.

According to the authoritative globalpetrolprices.com, which tracks petroleum prices, a litre of petrol in Venezuela is $0.01; in Kenya it is $1.15 (Sh115).

The South American country is facing hyper-inflation of world war proportions but can still sell petrol to its citizens at Sh1 per litre. The government heavily subsidises the cost of petrol. This is the same permanent subsidies that made fossil fuels globally cheap are simply not available to the renewable energy industry. Why not?

A new study by International monetary Fund (IMF) cites $10 million a minute as the cost of subsidy internationally. It is this situation that makes petroleum products very cheap — almost free — in oil-producing countries such as Iran and Venezuela.

Traditionally, when a finance minister in the greater East Africa wanted to widen his tax base, the natural culprits were tobacco and beer. These were, metaphorically, named ‘sin taxes’. Petrol was considered an economy enabler for it touches on every facet of our lives — from transport, energy and even petroleum jelly.

16 PER CENT VAT

However, National Treasury Cabinet Secretary Henry Rotich, despite public protestations, went ahead to impose a 16 per cent value added tax (VAT) on all petroleum products.

Those in the renewable energy sub-sector consider the VAT another arrow in their market communication quiver. Reliance on fossil fuel for our energy needs was not, and will never, be a sustainable option in both the short- and long run.

Due to the VAT, consumers should brace for another increase in the price of electricity. It’s as if the government gives benefits with one hand and takes them back with the other!

To the credit to the President Uhuru Kenyatta administration, a task force on energy came up with a raft of measures to reduce the cost of power.

KEY RECOMMENDATIONS

Among the key recommendations were termination of independent power producers’ (IPP) contracts and the adoption of a local currency-based tariff structure to, hopefully, reduce the high forex charges per unit consumed. Finally, there was a recommendation that can be lifeline to anyone who has invested in the solar system modules — renewable energy auction system for solar and wind power plants.

Adoption of these measures, together with the Feed-in Tariff (FiT) policy, which is part of the Energy Bill 2017, will usher in an era where ordinary Kenyans can produce and sell power to the State-run Kenya Power.

Consumers can install micro grids, even as an individual one-kilowatt solar array, or pool their resources and invest in mini grids that can produce 100KW and more.

FiT was designed to achieve two key objectives. The first is peak shaving; that is, consumers to use solar or other renewable energy during peak hours, considerably reducing their costs and also being able to sell at set prices unused wattage using a feed-in meter that indicates the amount of electricity that has been ‘fed’ into the grid. The second is to have an economic return on investment by earning money that can offset the cost of their solar array within one year.

CHRISTMAS GIFT

In Germany last year, power consumers had a surprise Christmas gift. Electricity prices in the top European economy went negative — below zero — for many customers because the country’s supply of clean, renewable power actually outstripped demand, according to The New York Times.

Germany has invested over Sh20 trillion in renewable energy over the past few decades — primarily wind and solar power. During times when electricity demand is low — such as weekends, when major factories are closed, or when the weather is unexpectedly sunny — the country’s power plants pump more electricity into the grid than consumers actually need. The electricity consumers were actually paid Sh6,000 per kilowatt consumed.

The ‘Big Four’ projects can be fuelled by renewables, which can make our energy as cheap as Venezuelan oil and help us to produce globally competitive goods and services.


Don’t fear boundary review, census

As we approach next year’s national population census, and the subsequent review of electoral boundaries, a new cogent debate is unfolding: Should we review wards, constituencies and counties?

If so, why? Or why not? Are our arguments local or national? Should economics inform our standpoints? Why fear mergers of electoral units for the 2022 General Election as per our constitutional threshold?

As we root for strong geopolitical economic blocs with strong regional assemblies, we should consider reducing electoral units. An increase in county revenue allocation to 45 per cent and raising CDF to five per cent will greatly change the economic fortunes of the citizens. Downsizing representation will also help to reduce the skyrocketing public wage bill.

We should also amend the law to provide for a hybrid cabinet at regional and national levels to tap specialised skills while ensuring legislatures are linked well with executives.

We are over-represented. With a population of 56 million and gross domestic product of $400 billion (Sh40 trillion), South Africa has nine regions. Nigeria, with 190 million people and a GDP of $360 billion (Sh36 trillion), has 36 states.

Kenyans are only slightly over 40 million and our GDP is around $71 billion (Sh7.1 trillion) but we have 47 counties. Yet Kenya is geographically half the size of Nigeria and 40 per cent of South Africa.

Proportional representation is a basic human right. But some constituencies, such as Mathira in Nyeri County, are too big. With a population of 196,000 and over 100,000 voters, it is bigger than some counties! On the other extreme are sparsely populated and far-flung administrative and elective units.

While a careful balance is contemplated in the Constitution, some injustice happened in the last boundary review. To cure this, we must be bold and think not out of the box but without any box at all! Review across the board. Right-size everyone. We should not burden the taxpayer. Not anymore.

The United States has a bicameral legislature. At the primary level is the House of Representatives with no more than 435 seats comprising elected congress-persons from the 50 states. Then there is a powerful Senate with two senators from every state.

SMALLER ECONOMY

The US population is about 400 million. Roughly, Kenya would make only one of the states, but with a much smaller economy. I hasten to underscore the economic comparison since, in the real sense, there is an affordability question to representation. Were the US federal states, every one of them under an elected governor, to be ranked as independent national economies, California (population 39 million) would be the fifth-richest country. That means the US can easily underwrite the costs of its heavy political administration.

The biggest hindrance to a desirable review is that Kenyans are yet to cohere. Our voting trend is 90 per cent tribal. Unlike Tanzania, we are many ‘nations’.

Our fear of domination is largely ethnic. Perhaps political parties can be required to somehow ‘innovate’ nationalism.

In the early 1960s, Tom Mboya won Nairobi’s Kamukunji seat, Achieng Oneko, Nakuru Town with 80 per cent ethnic Kikuyu population and John Keen vied in Trans Nzoia.

The good news is, we are witnessing a recurrence, albeit in a different format. Ethnic minorities are MPs in Kisumu, Uasin Gishu and Meru counties, an MCA in Kiambu and, in 1992, a councillor in Murang’a.

TRANSIENT POLITICS

Analysts should factor economic viabilities over transient politics. In fact, this what Boresha Katiba parliamentary caucus (2015/16) lobbied.

Let’s also correct the warped 2009 census, whose dispute has been in the High Court for eight years.

We also need to talk money matters to the grassroots without diluting the weight of any vote or marginalising anyone. Equality of votes is indispensable. And so is equitable distribution of resources. We cannot correct historical mistakes by making historic mistakes. No minority contempt, no majority phobia.

The fear to merge electoral units for better political and, more importantly, economic dynamics is because we are hostages of ethnic — even village — prejudices and idiocy. This is a product of elite myopic self-preservation.

Before we reach this point, we need to support the Building Bridges to Unity. If the nine points enunciated in the “handshake” are achieved, citizens will care little about the geographical proximity or mother tongue of their elected representative.


Millennials stand up, this is the hour

By ARNOLD MALIBA
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A United Nations Department of Economic and Social Affairs (UN Desa) analysis report, ‘World Population Prospects 2017’, shows that people born after Year 2000, commonly referred to as Generation Z, will next year constitute 32 per cent of the world’s population, surpassing Millennials, or Generation Y, who will comprise 31.5 per cent.

Millennials are the demographic cohort following Generation X. They were born between the early 1980s and the mid ’90s to early 2000s.

Next year, the first batch of circa one million Kenyans born in 2001 will turn 18, the age of majority. And whereas, the world will wait till next year to experience this phenomenon, Kenya’s Generation Z have already surpassed Millennials as we are a child-rich nation, with slightly over half of the population under 18.

Millennials (Yours Truly included), with their exceptionalism and self-centredness, must contend with the fact that they are not only old but also a minority that ought to give way to Generation Z — a people who have never known a non-digital world, have a more global thinking, are less self-centred, are tech-savvy and entrepreneurial.

PASSING BLAME

Millennials are now the elders of this generation (by the way, you don’t argue with age; no one wins). Already, there’s no room for passing the blame to the generation ahead as Millennials assume watch over the nation and, therefore, take on national responsibility.

With a background of such an epic demographic handover on the homestretch, the nation is also plagued with a host of other challenges threatening its very existence — including massive unemployment, an unbearable national debt, fledgling leadership and an economy in turmoil.

LOT AT SEA

Policymakers, educators and the private sector had just cracked an understanding of the Millennials, and here we are, with the arrival of a different generation in a country now seemingly lost at sea.

The political front is amorphous; you can’t tell head from tail, government and opposition — a larger Jubilee group with three formations: A (Kitaeleweka), B (Tangatanga) and C (Tingatinga). In addition, we have a weakened civil society, a rogue Parliament and an apathetic electorate.

Millennials now have the singular task of leading the charge in shouldering the largest national debt any generation of Kenyans has ever serviced, defend civil liberties and revive the economy before Generation Z takes the baton of the republic.

INDUSTRIAL REVOLUTION

But as this is happening, the rest of the world is preparing for the Fourth Industrial Revolution (Industry 4.0); a technological revolution riding on Big Data, Internet of Things (IoT) and Artificial Intelligence (AI) that will fundamentally alter the way we live in a scope, scale and complexity never experienced by Mankind before.

No one knows how that will unfold as yet but the response to this must be integrated and comprehensive involving polity, public, academia, private sector and civil society.

And with Kenya at a crossroads, grappling with a present too complex, the future is bleak — unless Millennials show up for duty with diligence, determination and discipline. For this is their hour!

 Mr Maliba is a programme manager at Emerging Leaders Foundation (ELF). [email protected] Twitter: @ArnoldMaliba


New police uniform a sartorial disaster, discard it with haste

By MACHARIA GAITHO
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The designer in me was last week roused from a long period of hibernation.

I was not inspired into a burst of creativity, but provoked into deep outrage and revulsion by that travesty of the new uniform to be worn by the men and women of the National Police Service.

I may be meeting Inspector-General Joseph Boinnet as you read this.

I have a basketful of questions on the expected outcome of the police reforms unveiled last week, issues of training and professionalism, lack of technical capacity, corruption on the roads, police brutality, failure to contain violent crime and surrender of entire regions to terrorists, bandits, cattle rustlers and ethnic militia.

Unfortunately, all these important issues will have to join the queue behind the one burning question of the day: Who designed the new police uniform? Was the task left to a bunch of idle officers with no sense of aesthetics? Who approved that atrocious product?

Were the outfits modelled at the unveiling on Thursday made by a professional garment manufacturer or left to some jua kali fellow with a rickety sewing machine?

Everything about that launch was a disaster. The officers selected to model the new outfit before none other than President Uhuru Kenyatta did no credit to the image of the service — unless potbellies and a generally unfit and unkempt look are now the accepted standards.

There is still a lot to digest and analyse on the raft of police reforms unveiled that day; unfortunately, everything had to be relegated to the back burner because the entire discussion has been dominated by that ugly uniform.

Mr Boinnet and Interior Cabinet Secretary Fred Matiang’i might want to justify the need for the new look. Merger of the often-feuding Kenya Police and Administration Police formations might have necessitated a new ‘unified’ uniform not associated with either of the two. A revamped look also acts as a powerful indicator of a new direction.

But a new look must also indicate progress and improvement, the discarding of old habits and adoption of new and better standards. What we were presented with is something far worse that what it replaces. Instead of signalling a march forward into new beginnings, we are seeing retrogression, a step backwards.

UNIVERSAL HORROR

If social media chatter is anything to go by, there is an almost universal horror on the new outfit. It may have retained the ‘boys in blue’ concept but, instead of a rich navy blue as with the present trousers worn by officers on the beat, or the formal tunics of the top brass, the designer came up with a shade of the colour that is painful to the eye, more of an electric cobalt rather than royal blue.

Then there is the untidy design that will look not good even on Mr and Ms Body Beautiful of the service, a finish that is an insult to the tailoring profession.

Other than the general public, I gather that even the men and women who are supposed to be kitted in the new uniform are not impressed. Casual chats with cops on the beat over the past few days reveal that they are unhappy, echoing public views that they will not be distinguishable from municipal constabulary or those watchmen at the lower scale of the private security industry.

Before the outfits go into full production, Mr Boinnet should listen to public opinion and call a halt to the sewing machines. He can then order a fresh start involving competent professional designers and, most critically, listen to the views and opinions of the officers who will wear the new uniform.

COMPETENCE

He must also pay keen attention to the competence, experience and capacity of the factory that will stitch the outfit.

It has been mentioned in the recent past that the National Youth Service garment production unit will be given a monopoly on outfits for all uniformed services. Well and good, but it should only get that job if it can produce at acceptable standards.

If it is the one that made the initial batch of the new police uniform, then, clearly, it is below par and will need to improve.

This should remind us that a Kenyan company used to provide impeccable uniforms for the Kenyan military. It did world class work and even attracted orders from countries around the region and from as far down south as Namibia.

Another local company produced all the brass and silver belt buckles, buttons, medals and other accoutrements that glitter on police and military uniforms.

Both companies were eventually denied the businesses because some fellows in the security procurement industry decided that it was more profitable, for themselves, to contract overseas manufacturers for inferior products.


MPs must tackle fuel VAT debate soberly

By EDITORIAL
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The decision over the controversial fuel tax and a wide array of austerity measures to plug a huge Budget deficit lies with Parliament, which has convened a special session this afternoon to unlock the impasse that threatens the nation’s economic well-being.

MPs must rise to the occasion and confront the brutal reality on the state of the economy dispassionately and without recourse to party or regional considerations.

The facts of the matter are pretty clear. A proposal by the National Treasury to introduce 16 per cent value added tax on petroleum products was ill-advised and poses a serious challenge to the economy.

Which is the reason President Uhuru Kenyatta offered a counter-proposal to halve the levy — in effect seeking to meet the public half-way. But this has not gone down well with Kenyans.

FINANCE BILL

President Kenyatta has argued that the MPs chose the easier path when they passed the Finance Bill 2018, which vetoed levying of value added tax (VAT) on petroleum products.

That the MPs cannot run away from confronting harsh realities and making difficult decisions. Thus, his argument is that consumers must pay some levy for fuel — that it is not possible to run the economy without seeking alternatives, even if that is going to be painful.

Our argument has always been that the 16 per cent VAT was unjustified. Reducing it to eight per cent is not any better. This must now be debated soberly. Taxation and more taxation is not the panacea for budget gaps. Alternatives must be found, which, in our view, must start with cost cutting and prioritising expenditures.

BUDGET CUTS

This why the next conversation about budget cuts makes sense. And in this context, the President made a raft of proposals to raise additional funds to meet the budget deficit.

He itemised vote heads to slash, among them the Constituency Development Fund that is managed by MPs.

In the list are recurrent costs of travel, workshops, salaries and social subsidies as well as capital projects such as the Konza Technology City and the Digital Literacy programme.

In essence, the government must look inward and ask tough questions: What are the priority areas?

EXTREME COSTS

What can we deliver in the short- and long term? Such conversation must be divorced from politics, which really is part of the problem afflicting the country. Most decisions were political — poorly thought out but quickly executed to appease the masses but at extreme costs.

We urge all the MPs to look at the proposals critically and make realistic decisions. We would abhor a situation where they debate with self-interest — like shooting down the proposals in their entirety just because CDF is being slashed. Importantly, they should give productive proposals to move the conversation.


Resolve Migingo dispute

By EDITORIAL
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For two countries that enjoy cordial relations and deep economic ties, the apparent failure to resolve a simmering dispute over the one-acre piece of rock in Lake Victoria that is Migingo Island is an indictment of the leadership.

The controversy has raged for several years, yet the very top leaders of Kenya and Uganda, including Presidents Uhuru Kenyatta and Yoweri Museveni, meet frequently and are in constant communication.

SECURITY PRESONNEL

With some overzealous junior Ugandan border security personnel reported to be engaging in provocative actions such as arresting Kenyan fishermen and generally needlessly flexing muscles on the island, we are left wondering whether the East African Community, in which both countries are pivotal members, still has a role to play.

Or could it be the case that the dispute has not been formally reported to the EAC?

The last time there was a flare-up over Migingo several years ago, the authorities in both countries pledged to have the border delineated to put to rest the ownership dispute.

TRADING PARTNER

How come the report has never been made public? But there is absolutely no reason why an agreement cannot be reached to enable the citizens of both countries to exploit the rich fishing potential for mutual gain.

Uganda has traditionally been Kenya’s major trading partner and the ongoing development of transport and other infrastructure is indicative of increasing co-operation and a firm resolve to work together for regional prosperity. Efforts to ease travel and the transportation of goods through the establishment of one-stop border points confirm this commitment.

Pesky junior officials must not be allowed to create unnecessary tension and sour the good relations. Any disputes that arise must be amicably resolved to avoid conflict and enhance co-operation.