Archive for March 2012

Peter Kuguru - Why the Kikuyu Elite Back Raila

The question was not whether but rather when the xenophobic interrogation would show up.

And when it did, in October 2007, it was manifestly clear that there was no love lost at that time between presidential aspirant Raila Odinga and the business honchos who run East Africa's biggest economy.

Odinga faced the choreographed grilling at the Nairobi Stock Exchange where the dominant cabal was drawn mainly from the numerically strong Kikuyu community. On this day the NSE deputy chairman and business magnate was holding fort.

"What type of President will he be? Is he a socialist, a communist, a democrat, a social democrat? Is he going to be a man of revenge or peace or reconciliation? Is he likely to take over assets which we have succeeded in building? Is he likely to nationalise privatised buildings? Is he likely to take wealth from others? How certain are we with a Raila leadership?," asked James Wangunyu.

Days before, Finance minister Amos Kimunya had intimated that members of the Luo community were untutored in matters concerning money markets.

"Many of the opposition politicians do not understand how the Nairobi Stock Exchange operates. It is not a fish market... its much more complicated," said Kimunya.

The " fish market" description was subtly targeting the Luo who are historically associated with
fishing as a commercial enterprise. But Odinga, a seasoned and hardened politician, remained unfazed and cordially went ahead to answer the uncharacteristic queries.

"I have come here as a friend of the Nairobi Stock Exchange and as an investor, who owns shares at the stock market and I am a businessman and owner of a successful company which manufacturers gas cylinders for the East African market.

"I have an advantage that I lived in both communist and capitalist countries so I understand the issues better," he said.

He told the businessmen that he was a Social Democrat, like former British Prime Minister Tony Blair and former German Chancellor Gerhard Schroder.

"Social democrats believe in Capitalism with a human face," he explained.

Invariably as the country gears up for the next election scheduled for March 2013, a seismic change of hearts and minds has engulfed the House of Mumbi aka the Kikuyu. This has not escaped the notice of the political and business elite of this entrepreneurial community.

As Kenyans are deeply aware, leading lights from the community have opted to do what was previously unthinkable and are supporting Odinga rather than Uhuru Kenyatta, a popular Kikuyu candidate but currently facing the Herculean task of defeating charges of crimes against humanity at the ICC.

Why this switch?

The group of which I am a member believes that we hold our country in trust, not as an entitlement. We believe in progressive politics that deal with real issues that affect our people irrespective of ethnic origin.

Since Kenya achieved its independence in 1963, members of the Kikuyu community have disproportionately been targeted for all sorts of evils. As a consequence, whenever ethnic clashes occur, the Kikuyu again suffer the most pain.

The Kikuyu unwittingly are their own worst foes. The Kikuyu elite mistakenly preach the divisive politics of ethnic superiority with of course the Kikuyu community placed on top of the pedestal.

Were the venerable patriarch Jomo Kenyatta alive today, he would certainly be cross with his community.

"The spirit of independence, love of freedom in thought and action and hatred of autocratic rule, are ingrained in the minds of the Kikuyu people...In their highlands and mountain homes, the people cherished the system of democratic government, the principles of which have been passed down from generation to generation," he wrote in his popular book My People of Kikuyu in 1942.

Were Kenyatta alive today, he would support those members of the Kikuyu elite currently batting for Odinga, for practicing in word and deed the cultural beliefs of the community.

The so-called Limuru 2 talks held last Friday ostensibly endorsed Uhuru as the preferred political leader of the Kikuyu community. The gathering was archaic, anachronistic and divisive.

It only accentuated the belief that the Kikuyu community was disinterested in engaging the rest of the 42 communities who form the tapestry of the Kenyan nation

The thinking of these Kikuyu leaders mostly affects ordinary members of the community who suffer the brunt of impunity triggered by other communities who understandably feel slighted.

We, the Kikuyu elite who have opted to go to bed with Odinga, are not enemies of Uhuru as a person but only that this time round we strongly have believe hat Odinga offers the best possible option as a leader.

As economically well endowed, hardworking Kikuyus, can we possibly vote in a candidate who will go ahead to wreck, confiscate or nationalize assets we have so strenuously taken time to build?

As a sincere Social Democrat, Odinga puts the interests of the country first and not the self aggrandisement of ethnic chieftains.

I thank God that the intelligentsia from the community has eventually seen the light, and like Jeremiah of old are counselling on the way forward.

Peter Kuguru is NWSC chairman and author of Trailblazer.
Courtesy of The Star

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Public-Private Sector Intervention Saves the Mt. Kenya Ecosystem

Public-private sector partnership interventions managed the fire that had threatened to wipe out vegetations in Mt. Kenya and Aberdare National Parks.

The raging inferno took a concerted effort of Government agencies lead by Kenya Wildlife Service, Kenya Forest Service, the Kenya Army and private sector volunteers coordinated by Lady Lori Helicopters more than 10 days to put out.

Lady Lori Helicopter’s Captain Shawn Evans said helicopters were useful in reducing fires to manageable sizes to enable ground operations put it off in totality. However experts noted that there was need to invest in fire fighting assets.

‘‘There is need for specialized firefighting equipment to curb forest fires in the event of future occurrence. It is important to equip fire fighters with surveillance equipment, all-terrain motor vehicles and motorcycles, personal protective gear and other assorted fire suppression tools to make fire fighting professional’’ said Captain Evans who coordinated the private sector operation.

Kenya Wildlife Services Chief Park Warden Simon Gitau said the fire threatened an ecosystem around the mountain that acts as a water catchment area for most of the country and is home to magnificent tourism sites.

“The fires have destroyed trees worth Shs. 8 billion. It is also feared that thousands of acres of vegetation and animals, most of them rodents, have been destroyed in the fire’’ said Gitau.

The UN describes the region as “one of the most impressive landscapes of Eastern Africa, with its rugged glacier-clad summits, Afro-alpine moorlands and diverse forests.

‘’ The fire has caused considerable damage to this ecosystem, posing a big threat to conservation efforts and culminated into major losses in terms of biodiversity, revenue and wildlife habitat’’ said Gitau.

Captain Ian Mimano, CEO of the locally operated luxury helicopter company said Government and local leaders must sensitize people on the benefits of conserving forests since the fire was most likely caused by arsonists or negligent activities like honey-harvesting or charcoal burning.

Captain Mimano said with Kenya Vision 2030 singling out Isiolo for development as a Resort City, active private sector participation in protecting, preserving and increasing the value of attractions found in the counties surrounding Isiolo like Nanyuki, Mt. Kenya, Aberdares, Lewa, Samburu and Meru among others, will help sustain the tourism and leisure business for longer.

‘’We will always step in to assist in such emergencies because as a company, it is a national obligation. Besides, we directly benefit from the beautiful landscapes of this tourism circuit’’ said Captain Mimano.

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Former CMC CEO Martin Forster and Former Chairman Jeremiah Kiereini Response on the CMC Saga


It has been one year since I was unceremoniously fired from CMC.

Jeremiah Kiereini and I have silently sat by as our names and reputations have been attacked by the press without ever asking for our side of the story - the truth.

I gave up reading the countless allegations with no substance in the newspapers many months ago.

Three expensive forensic audits have now been conducted with no charges brought for fraud or corruption yet will cost shareholders in excess of what is held in the Company's 'offshore' account

The boardroom 'wars' had been ongoing for many months before my summary dismissal.

One faction wanted me out so they could have an easy path to control the company. It was my discovery of Andy Forwarding's overcharges on containers that took away his vote of support before I was able to finish my investigation.

When I barged into the boardroom some weeks after my dismissal and was given five minutes to address the Board, I told them not to appoint Peter Muthoka as Chairman of the Board because of his conflict of interest. They didn't listen.

At that time, I was still unaware of the deals made by Muthoka with the sponsors of Bill Lay to move me out of my position of 33 years.

The real story is how this strong, profitable, honest, corporately responsible firm, that had regularly paid a dividend to shareholders each year, could be so quickly ruined by the mismanagement, sensationalism and greed of the current regime.

Now the shares cannot even be traded, the franchises are being pulled away, the experienced senior staff resigning, and the three banks used by CMC are becoming nervous enough to call in the directors for clarification.

Those who have created this dismal state of affairs are the ones who owe an explanation to the shareholders. They are using the press to turn attention away from the negative trading results of the company compared to my tenure with the company.

Market share in 2011 was 11.7% compared with between 17 to 19% in 2010. In January 2012, this dropped further to 10.4%. Agri tractors fell from 75% to just over 50% in the same period.

CMC was the market leader on large buses under my watch, but has now lost that position.

For the first time in over 30 years CMC in 2011 made a loss. In the five years prior to my departure (2006-2010) while I was CEO , CMC yearly average profit before tax was over Sh800 million a year with the record being 2008 with a profit of over Sh1.4 billion.

The top management of Land Rover Ltd, a franchise CMC has held for over 60 years, are discouraged.

The potential loss of this franchise, added to the loss of the Ford franchise in Northern Tanzania, plus the sharing of MAN heavy vehicles in Kenya and the loss of the Agri Tractor in South Sudan speak poorly of the present top management of CMC and their care for this valuable asset - Franchises.

The deal giving exclusive government sales to one man with a 6% commission is absurd.

I read with amusement that Lay's 'focus' is to build a stronger CMC. After a year in the job, I have to wonder, when is he going to start? When will the witch hunt stop covering up the truth that a good taxpaying company like CMC is being destroyed?

In order to set the record straight, we have bought this advert to ensure no editing or bias in reporting and hereby address a few key issues:

Offshore account:

This is an irrevocable trust that was set up over 40 years ago in the days of exchange control in order to provide extra remuneration to expatriate staff who had overseas payment commitments. The settlors Jack Benzimra and Bruce McKenzie are long dead.

Since I took over as CEO, PK Jani, J Kiereni, others and myself have all made efforts to have it dissolved and the funds repatriated to CMC Holdings in Kenya. We wanted to use the money to fund a training academy in Kenya at the time of my being fired. All this was fully explained to Lay in April of 2011, when I provided him full details of the account as well as information about the training academy.

The original file was purposely left in the safe as funds are company property. There was no "stumbling over a file" and the account was not a "secret."

South Sudan:

What a surprise to read that formation of this company was also a "secret" or "illegal".

All decisions regarding registration of this company were made by the full board and published in the 2010 CMC annual report and financial statement on page seven. The company remained dormant, as it was easier to trade with South Sudan customers directly through CMC Uganda and Kenya. This includes orders for several hundred tractors.

CMC Aviation:

I was told by the forensic auditors, whom I have met with several times and provided full disclosure and complete cooperation, as has Kierieni, that according to some directors CMC aviation was "sold for a song." This was insulting.

The board decided that Aviation should be sold as it was outside the CMC core business. An asset valuation was conducted to the tune of Sh86.3 million. After two years, no good offers were on the table and the board instructed that a lower sales price of Sh60 million would be acceptable, I kept trying and eventually sold at the full valuation price 86.3 million.

I have been deeply saddened by the constant bad press directed at my past chairman, Jerry Kiereini. This gentle respectable mzee, who served the government with distinction, does not deserve all this nonsense.

In CMC he was non executive and made no trading decisions. I was the one who ran the company and brought it to the level where CMC was admired by the public, its bankers, vehicle suppliers and proud staff.

I now share their disappointment to see CMC as fodder for the press.

I take the liberty of asking Jerry Kiereini to join me in signing this document.

God help CMC.

Martin Forster
CMC staff 1978-March 2011

Jerry Kiereini
CMC Chairman 1984 to 2011

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Cabinet Reshuffle Reveals Kibaki's Succession Preference

Eugene Wamalwa - Minister for Justice, National Cohesion and Constitutional Affairs

- Biggest winner as the docket will promote him to the senior most politician in Western province and probably check Musalia Mudavadi's rising star

- He is an Ocampo 4 sympathiser

- Was once linked to president Kibaki's son (Jimmy Kibaki) 2012 campaign as his prefered presidential candidate.

- Also seen as a compromise candidate for the G7 alliance

Mutula Kilonzo - Minister of Education

- Demotion from Minister for Justice Minister for Justice, National Cohesion and Constitutional Affairs despite having delivered a new constitution which many previous justice ministers failed to do

- Punished for being an ardent Ocampo 4 Critic and for not toeing the ODM Kenya line

Njeru Githae

- Minister of Finance (Confirmed after acting for a while)

- Leans towards Uhuru campaign

- Expected to checkmate his former boss, Martha Karua in Kirinyaga politics

Prof Sam Ongeri - Ministry for Foreign Affairs (Reward for loyalty despite free primary education cash scandal)

Moses Wetangula

- Minister for Trade

- Demotion for leaning towards Mudavadi campaign

Jamleck Kamau

- Ministry of Nairobi Metropolitan

- Expected to checkmate the rise of Peter Kenneth in Muranga politics

Chirau Ali Mwakwere - Minister for Environment

Danson Mwazo - Minister for Tourism

Najib Balala - Sacked (Punished for disloyalty to the Odinga brand)

Uhuru Kenyatta - Still Deputy Prime Minister, Ministry of Finance still under DPM?

It is all about political interests and nothing to do with performance.

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CIC Advisory to the Public on the Setting of the Election Date by the Independent Electoral and Boundaries Commission (IEBC)

In the discharge of its mandate to oversee the process of implementation of the Constitution of Kenya, 2010, The Commission for the Implementation of the Constitution (CIC) finds it appropriate to issue this advisory to the people of Kenya as regards the setting by The Independent Electoral and Boundaries Commission (IEBC) of the date for the first elections under the Constitution of Kenya, 2010.

In giving this advisory, CIC is concerned, not with the political interests and preferences surrounding the election date debate, but with the constitutional and legal issues that underlie the setting of that date.

IEBC is established under Article 88 of The Constitution of Kenya, 2010, and is an independent
Constitutional Commission within the meaning of Chapter 15 of the Constitution.

In terms both of Article 88(4) of The Constitution and Section 4 of The Independent Electoral and Boundaries Commission Act, 2011, IEBC is inter alia “responsible for conducting or supervising referenda and elections to any elective body or office established by the Constitution”.

In terms of Sections 14, 16, 17, and 19 of The Elections Act, IEBC shall publish a notice of the holding of the election, in the Gazette and in the electronic and print media of national circulation, in the case of a General Election, at least sixty days before the holding of the elections.

As regards the first General Election under the Constitution of Kenya, 2010, IEBC on Saturday 17th March 2012, made public its decision to hold the said Election on 4th March 2013.

In the considered view of CIC, and in the context of the public debate generated by IEBC’s announcement, two questions fail to be determined:-

(a) Is IEBC the constitutional organ mandated to set the date of the General Election; and

(b) If so, has IEBC set the date within the parameters of the Constitution and the Law.
Both these questions were canvassed and interrogated comprehensively in the judgment handed down by the Constitutional Division of The High Court (Lenaola, Ngugi and Majanja JJ) in Constitutional petition no.65 of 2011 consolidated with petitions nos. 123 of 2011 and 1855 of 2011.

In its judgment on the question, “when shall the first General Elections be lawfully held?”, the constitutional Court ruled:

“the first General Elections under the Constitution can only be lawfully held as follows:-

(a) In the year 2012, within sixty days from the date on which the National Coalition is dissolved by written agreement between the President and the Prime Minister in accordance with Section 6(b) of The National Accord and Reconciliation Act, 2008

(b) Within sixty days from the expiry of the terms of the National Assembly, on 15th January, 2013”

On the question, “which body under the Constitution is entitled to fix the election date, the Court

(i) In light of the authority and powers conferred by Article 88 to the IEBC to conduct and supervise elections, it is the IEBC that will fix the election date for the first elections under the Constitution.

The IEBC is an independent body and in line with its mandate, it shall fix a date once it is satisfied the conditions and arrangements that ensure a free and fair election have been met but within sixty days of either of the two events referred to.

(ii) Having found that the first elections under the Constitution shall be held within sixty days from the end of the expiry of the National Assembly as provided or upon dissolution of the National Coalition, we hold that it is the responsibility of IEBC, to fix any date within the sixty days thereafter.”

The Constitution of Kenya, and specifically Article 165, gives the High Court jurisdiction to hear and determine any questions with respect to the interpretation of the Constitution, unless therefore, a decision of The High Court is reversed or varied either by the Court of Appeal or the Supreme Court, such decisions remain the authoritative and binding constitutional and legal position.

In the instant case, it is the unequivocal view of CIC that IEBC, in Terms of the judgment of the Constitutional Court, is the organ constitutionally mandated to set the election date.

CIC is fully persuaded that, in the discharge of the mandate, IEBC acted entirely within the parameters of the Constitution, as stated by the Constitutional Court.

The date set by IEBC is therefore the constitutionally valid date for the first General Elections under the Constitution.

It is to be recognized that this date may change if:-

(i) The Court of Appeal or The Supreme Court reverses or varies the judgment of The High Court; or

(ii) In accordance with the Court’s ruling, the President and the Prime Minister, by a written
agreement, dissolve the Grand National Coalition; or

(iii) The Constitution is amended to expressly set a different election date.

In the absence of any of the above events taking place, it behoves all Kenyans, including all other
constitutional organs and offices, to respect IEBC and its mandate.

Article 2 of The Constitution of Kenya, 2010, states that, “This Constitution is the supreme law of the Republic and binds all persons and all state organs at both levels of Government”. Further, by virtue of Article 3 of The Constitution, “Every person has an obligation to respect, uphold and defend the Constitution”.

CIC therefore calls upon all Kenyans to uphold the Constitution of Kenya, 2010, in particular by according respect to both the Judiciary in its constitutional role of interpreting the Constitution, and to IEBC, in the discharge of its mandate, as the Election Management Body, including, the mandate to set the date for the first General Election under the Constitution of Kenya, 2010.

CIC takes this opportunity to reaffirm its commitment in ensuring that the Constitution of Kenya, 2010 is implemented fully and faithfully, in letter and spirit.


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Kenya next General Election to be held on March 4 2013

March 4th 2013 it is! IEBC has finally announced the date for the next general elections. The date has been a subject of controversy ever since the constitution was enacted.

With the announcement, we are not out of the woods yet. Simply because Kenyans wanted an early election, August 2012 as presumably set in the constitution or latest December 2012 as has been the trend.

It makes matters worse that Prime Minister Raila Odinga and ODM preferred a December election. Whenever there has been no consensus between Raila and Kibaki, it is the ordinary Kenyans that suffer. Kibaki has favoured a March 2013 election and it looks like that opinion carried the day.

The reformed judiciary did not make matters easier by giving a time range when elections should be held instead of a specific date. It is the same mistake that constitution drafters made by having contradicting provisions as to when the date of next elections will be.

One wonders why Kibaki has to antagonize popular public opinion to the last day of his presidency. Many Kenyans cannot wait for the end of this coalition dispensation which has been riddled with political strife, post election violence, governance controversies and escalating costs of living.

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Coffee Stakeholders’ Appeal for Streamlining of Nairobi Coffee Exchange Operations


Every Tuesday morning in a calendar year, the Coffee Producers (through their Marketing Agents - who represent over 600,000 coffee producers) meet with Coffee Dealers at the trading floor of the Nairobi Coffee Exchange (NCE) for trading of coffee.

The auction creates a forum where competitive bidding for coffee occurs therefore the real price for each lot of coffee on offer is discovered due to the large number of buyers present in a transparent manner.

The auction system has fully withstood the test of the times and currently stands out as one of the outstanding mechanism of selling coffee without compromising the prices.

In 2010/2011, over 95% of Kenya coffee worth USD 221.4 million (about Ksh 21 billion) was traded here with the balance being sold through the direct sale. Coffee Growers and the Coffee Dealers finance the operations of the NCE at KSh 20.00 per 60kg bag sold translating to KSh 13.4 million in 2010/11.

Suspension of the Weekly coffee Auction

On Tuesday 13th March 2012, the weekly coffee auction that was expected to trade in over 25,000 bags of coffee worth approximately KSh 640 Million was suspended.

This obviously affects the financial cash flow of coffee producers and will have a ripple effect on the financing of farming operations. In addition, the suspension denies the government the much needed revenue.

Issues Leading to the Suspension of the Coffee Auction Scheduled for Tuesday 13th March 2012

Distribution of Coffee Buying Samples to Coffee Dealers

In order for the auction to run efficiently Coffee Buyers must receive coffee samples at least 8 days in advance in order to analyze them on the basis of quality so that they can make informed choices when bidding.

Some active coffee dealers who number 29 (those who buy over 1000 bags in a year) out of the 80 licensed by the Coffee Board of Kenya have ended up receiving very little sample material or none at all due to the fact that inactive coffee dealers end up taking most of the sample material drawn from the farmers coffee .

This scenario undoubtedly results in lower bids for the coffees on offer to the detriment of the producers.

Trading in Coffee Samples

Distributing coffee samples of 0.25kgs each for each of the 600 lots on offer per auction for 45 auctions in a year to over 50 inactive dealers translates to 337,500kgs valued at Ksh 180 Million loss to the growers annually (using an average Price USD 6.58 per Kg in 2010/11 season).

This means that each of these inactive dealers is able to make Ksh3.6 Million without participating at the trading floor.

This situation cannot therefore be allowed to continue and must be addressed by the relevant authorities.

Some of the inactive dealers have registered more than one company in order to continue profiting from these free samples.

It is important to note that, Growers are in business, and in the hope of realizing better prices for their coffee provide these samples of 14kgs of clean coffee translating to 112kgs of Cherry for every lot of coffee free of charge to the active dealers.

Growers have no objection to the balance of samples being issued to non-active dealer startups in the hope that these too will become active within reasonable timeframes of a few months to maximum one year, failing which it becomes unreasonable and unrealistic to expect the farmers to continue giving away the product of their sweat to “startups” that are well over 1 year old, to continue enriching themselves at their expense.

Growers do not receive free samples for the inputs they use and have to pay upfront getting heavily indebted and most times procuring loans at high interest rates that sometimes result in loss of property and livelihoods!

Release of Coffee Sample Deposit Refunds to Growers

Coffee Marketing Agents have severally without success requested the NCE manager to issue refund cheques on pro rata (depending on volume of coffee sold in 2010 and 2011) for sample deposits from the dealers that did not meet the threshold of coffee trading as per the Trading Rules.

These refunds amounting to over Ksh 10 million are refundable to growers and have not been processed to date.

The manager of the NCE insists that this is part of his income, a position contradicting the Trading Rules on this matter.

Below is an excerpt;

13.The charges, if any, of availing to dealers the offer samples shall be agreed from time to time between marketing agents and the Management Committee of the Association, and will be informed to dealers in writing in advance. These charges shall be deemed the property of the marketing agent and shall be remitted by the Association to the marketing agent on a lot pro-rata basis.


1) Arising from the above issues the Commercial Millers and Marketing Agents Association (CCMMAA) representing the coffee growers and the Kenya Coffee Traders Association (KCTA) representing the coffee buyers met on the 23rd February 2012 in a meeting attended by the Executive Officer of the Nairobi Coffee Exchange and resolved that only the Active Coffee Dealers will receive coffee samples for sale 16 to be held on 13th March 2012.

This was effected and the Marketing Agents and Traders were ready to proceed with the auction on the 13th March 2012 as scheduled.

2) The CCMMAA representing the growers at the auction and the Kenya Coffee Producers Association (KCPA) representing the owners of the coffee remain committed to ensuring the prosperity of the NCE and will participate fully in any effort aimed at restoring the pride of the NCE and will support the Coffee Board of Kenya in the ongoing structural changes of the NCE towards this end.

Meanwhile we appeal to the relevant government institutions to address this crisis as a matter of urgency.

  • Commercial Coffee Millers & Marketing Agents Association (CCMMAA)
  • Kenya Coffee Producers Association (KCPA)

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Prime Minister Raila Odinga Statement on the Forged UK Dossier

Forged UK Dossier

Prime Minister Raila Odinga appears to be the target of the so-called UK Government document introduced into Parliament on Thursday, March 8, 2012, and we call upon all progressive Kenyans of sincerity and good will to note the following:

1. The document is clearly a forgery, part of a smear campaign fabricated by the same political interests that earlier forged a letter purporting to be from Prof Anyang’ Nyong’o to the ICC.

2. The English language used in the document is not that of native English speakers and the plot of the document has no credibility, conveniently bringing in every minor local development, including recent developments and propaganda, in a manner totally alien to UK Government official procedures and communications.

3. President Kibaki’s name is included without any justification, as part of a naked plot to gain public sympathy. Kenyans watched ICC proceedings closely and President Kibaki was mentioned nowhere as a perpetrator. In addition, prosecutor Luis Moreno-Ocampo has already stated that he has no evidence with which to charge President Kibaki.

4. To concoct such obvious lies and propaganda and expect them to be taken seriously is primitive.

5. Stooping so far as to use the so-called august (noble) House for such an obscene and reckless act exposes the gross lack of scruples defining some leaders. There are no depths to which they will not sink. Nothing is too low for them.

6. Let us never forget that more than 1,000 innocent lives were lost in the post-election violence of 2008. Investigations were conducted and the Waki Commission compiled a list of suspected perpetrators that was handed over in its entirety to the ICC. The ICC made its own investigations. Preliminary hearings at the ICC found that the four suspects have a case to answer. This decision was made on the basis of evidence. The charges against them are the result.

7. Crimes against humanity are worse than murder. Yet these suspects of crimes against humanity remain free to traverse the country holding ‘prayer meetings’ — while Kenyan suspects of the lesser crime of murder conduct their prayers only behind the forbidding walls of Kamiti Maximum Security Prison, often for years before their cases are heard.

8. The guilt or innocence of suspected perpetrators is proved through trial, where the facts of the case are examined. No one becomes innocent through public grandstanding and shouting from the rooftops "I am innocent". The suspects are not being tried by public opinion. The platform for these suspects to prove their innocence is the ICC. It is the platform they chose. In the meantime, they remain suspects in terrible crimes against Kenyans.

9. The people responsible for this forged document have defiled Parliament and shown their absolute disrespect for what Parliament and democratic representation means to the Kenyan people. The perpetrators have no regard for their job descriptions and no sense of their obligations to their constituents and to the nation as a whole.

10. The forged document is a clear act of desperation, and this attempt to commit fraud on the Kenyan people should be treated with the seriousness it deserves.

11. We call upon the media to guard against becoming - by reporting obvious falsehoods as if they were fact - co-conspirators in this despicable violation of Parliament’s solemn duty to the country.

MARCH 10, 2012.

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The Kenya Defence Forces Bill - Commission for the Implementation of the Constitution


Pursuant to section 5(6) of the Sixth Schedule to the Constitution, Section 4 of the Commission for the Implementation of the Constitution Act, 2010 and in the spirit of upholding the principle of public participation under Article 10 of the Constitution, the Commission for the Implementation of the Constitution (CIC) hereby seeks public views on the Kenya Defence Forces Bill, 2011 (KDF).


The Constitution establishes the Kenya Defence Forces and obligates Parliament to enact legislation to provide for the functions, organisation and administration of the Kenya Defence Forces amongst other security organs.

Article 237(2) of the Constitution provides for the principles of national security.

It states that: national security of Kenya shall be promoted and guaranteed in accordance with the following principles:

(a) national security is subject to the authority of the Constitution and Parliament;

(b) national security shall be pursued in compliance with the law and with the utmost respect for the rule of law, democracy, human rights and fundamental freedoms;

(c) in performing their functions and exercising their powers, national security organs shall respect the diverse culture of the communities within Kenya; and

(d) recruitment by the national security organs shall reflect the diversity of the Kenyan people in equitable proportions.

Additionally, the Constitution requires that in the performance of their functions and exercising their powers, the national security organs and every member of the national security organs shall not act in a partisan manner; further any interest of a political party or cause; or prejudice a political interest or political cause that is legitimate under this Constitution. The Constitution
further subjects the national security organs to civilian authority.

In addition to the principles above, the national security organs are bound by other values and principles under the Constitution. (Articles 10, 232, amongst others)

The purpose of this advertisement is to afford the people of the Kenya an opportunity to participate in the lawmaking process as required under the Constitution, by offering input on how best the KDF Bill should be formulated ensuring the realization of the values and principles enshrined in the Constitution.

CIC is currently undertaking internal review of the KDF Bill and invites members of the public and in particular members of the defence forces of all ranks as well as those that are retired to submit written memorandum on the KDF Bill. Members of the Public are invited to submit their memorandum eithLinker in hard copy or by email within a period of one month. (by 10th April, 2012).

The Bill may be accessed from our website:

Written memorandum may be delivered, posted or emailed to the address herein below.

Contact details:

Commission for the Implementation of the Constitution
Parklands Plaza, Chiromo Lane, Westlands
P.O. Box 48041 -001 00
Tel. no: 0202323510, 0204443216, 0732000313,

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Central Bank of Kenya - Sustaining Price Stability





The Monetary Policy Committee met on 6th March, 2012 to review the economic developments since its last meeting in February 2012 and evaluate outcomes of its previous decisions.

The Committee observed that the current monetary policy stance supported by appropriate fiscal policy continued to deliver the desired outcomes on inflation and exchange rate stability.

The information provided to the Committee revealed the following positive developments for the economy:
  • Overall inflation continued to decline, dropping from 18.31 percent in January 2012 to 16.69 percent in February 2012.
  • The exchange rate of the Kenya Shilling to the US Dollar remained stable within the narrow range of 82.65 to 83.93. This is an outcome of the policy of a floating exchange rate.
  • Demand pressures on inflation eased following the slowdown in private sector credit growth that expanded on an annual basis by 28 percent in January 2012 from 30.9 percent in December 2011.
  • The measures taken by the Kenya Bankers Association in December 2011 were noted to have assisted to cushion borrowers from potential effects of high interest rates and that there was no increase in net non-performing loans.
  • Average commercial banks lending interest rates and the average spread between lending and deposit rates have also declined during the month.
  • The MPC Market Perceptions Survey conducted in February 2012 revealed that the private sector expects inflation to continue declining; the exchange rate to remain stable and the economy to remain resilient in 2012.
Nevertheless, the Committee noted that there were still potential risks in the economy:
  • The inflation measure excluding food and fuel (an inflation measure that excludes volatile items that are not subject to monetary policy) had yet to respond dramatically to its measures taken in the recent months.
  • The forecast balance of payments continued to be a matter of concern as the heightened risks around the movement of oil through the Strait of Hormuz are already causing global crude oil prices to rise. Due to the significance of oil in the import bill, this was seen as a threat to both the stability of the exchange rate and continued easing of inflation pressure.
  • Although private sector credit growth was declining, its effect on both the demand for imports and consumer goods had yet to be adequately felt.
  • Uncertainties surrounding the resolution of the Greek debt crisis could cause a downturn in the eurozone growth. This could depress tourism and demand for some of Kenya’s horticultural exports thereby constraining domestic economic activity as well as supply of foreign exchange.
Given the above considerations, and the need to ensure that inflation continues to decline towards the Government target, the Committee maintained the Central Bank Rate at 18.0 percent.

This will ensure that the monetary policy measures in place continue to work through the economy to deliver the desired outcomes of reducing inflation, dampening inflationary expectations and sustaining exchange rate stability.

6th March, 2012

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Ahmednasir Abdullahi - Narrow interests will deny Kenya true police reforms

The country is at the tailend of constituting the many constitutional commissions provided for in
the Constitution. These commissions are designed to play a critical role in the management of the country. The rationale for providing for these commissions was a noble goal.

The aim is to delimit and disperse powers previously exercised by the President and bestow the same on independent commissions. The Constitution has assigned these commissions the power and mandate to deconstruct and dethrone the imperial Presidency.

Due to the important roles played by the commissions, their composition and how the members are appointed has been a very contested and tricky proposition. Political and tribal interests have primarily defined the compositions of these commissions. In the process, the independence and calibre of some of the commissions has been watered down.

As a representative of the Judicial Service Commission, I have been privileged to be a member of two panels assigned the task of recruiting members of two commissions dealing with the police force. These are the Police Service Commission and the Independent Police Oversight Authority.

These two commissions will in future play important roles in addressing the historic shortcomings of the police force.

Lately, the matter of the Police Service Commission has been in the news.

Initially, a member of the panel representing the Gender Commission complained that a certain lady’s name was not forwarded to the principals as if the panel was compulsorily obliged!

Now we have the tussle between the office of the Prime Minister and that of the President on whether the latter consulted the former in appointing members of the commission.

The Police Service Commission is a critical organ. It will literally run the police force.

This commission is important to three organs — the office of the President, the office of the Prime Minister and then the Kenyan people. The panel that recruited members of the commission represented these three diverse and at times antagonistic political interests.

The offices of the President and Prime Minister undertook this recruitment in light of their broader national political agenda. Both wanted individuals whom they think will advance
the agenda of their respective offices and political power base.

Both want regional balance but each according to one’s political agenda. These two offices took part in the recruitment exercise in different ways.

First, the office of the Prime Minister was hands-on and very engaged in the process. It took a broader national perspective of the commission’s composition than the office of the President. It supports individuals it thinks will help in the broader reform agenda. Due to the strategy it adopted right from the start, it had a good idea of the final list of members of the commission.

The office of the President has adopted a different strategy. It is laid back and relies heavily on
members of the panel whom it thinks are sympathetic to the agenda of the office. It took a
very narrow vision of regional composition of the commission.

Most importantly, it rarely pursues a viable strategy. It relies a great deal on the strategy that it
can absolutely influence things when the names are finally forwarded to the principals.

This is the problem that currently faces the Police Service Commission. It is quite clear that the preferred candidate of the office of the President for the position of chairperson of the commission hasn’t made it.

Both the Constitution and the Police Service Commission Act are clear on the professional qualifications of the chairperson of the commission. It is also very clear that the President, in purporting to appoint the members of the commission, has failed to strike a fair regional balance. It is thus abundantly clear that the office wants police reforms on its narrow terms.

Ahmednasir Abdullahi is the publisher, Nairobi Law Monthly

Courtesy of

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Ministry of Agriculture Agricultural Credit Guarantee Scheme




Farmers Empowerment towards a Globally Competitive Agriculture

The Government of Kenya, with the assistance of the European Union through the World Bank, has entered into contracts with local financial institutions to leverage the institutions’ resources, thereby encouraging them to avail affordable loans to eligible borrowers to purchase farm inputs and finance other value chain activities.

The scheme will also support other financial services, capacity building and marketing.

Target borrowers: small scale farmers, agro dealers, other agricultural value chain players

Financial institutions/partners: Equity Bank Ltd., Family Bank of Kenya Ltd., Kenya Women Finance Trust and The Cooperative Bank of Kenya Ltd.

Enterprises to be financed: Grains and horticulture

Interest rates: 12% per annum

Source of lending funds: The Government of Kenya has agreed to deposit funds in these financial institutions to the tune of Kshs 500 million. The amount deposited is for leveraging Ksh.5.0 billion to be availed to eligible borrowers by the institutions from within their own

The Government of Kenya fund is not for lending but will be applied as a risk sharing facility (up to 10% of any proven losses) with the financial institutions. The financial institutions are
expected to apply their lending policies and procedures.

Security: flexible and includes group guarantee, household goods, chattels, tangible security among others

When to access: apply now for 2012 long rains season

Where: at the 4 partner financial institutions’ branches i.e. Equity Bank Ltd., Family Bank of Kenya Ltd., Kenya Women Finance Trust and The Cooperative Bank of Kenya Ltd.

CAUTION:Borrowers must repay back disbursed loans

For more information contact:

1. Your area District Agricultural Officer

2. The 4 financial institutions

3. NAAIAP Secretariat – Nairobi.

Tel: 020 215704 Ext 1158, 020 2400527

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Kenyan Land Alliance - Women are not property but land is property that women can own

As we mark the International Women’s Day, we celebrate the milestone achieved as far as Constitutional Provisions on Women’s land and Property Rights are concerned: Article 27 (3) Women and Men have the right to equal treatment, including the rights to equal opportunities in political, economic and cultural spheres.
Article 60 (1) eliminates gender discrimination in law, customs and practices related to land and property in land. 

We mark this International Women’s day during a historical moment that will define the security of women and and property rights.

In light of Article 68 (c) of the Constitution of Kenya, 2010, Parliament has been tasked with enacting legislation on land. According to the Fifth Schedule in the Constitution of Kenya all legislative pieces on and premised on Article 68 must be completed latest on February 26, 2012.

Consequently, the following land Bills have been drafted and are under review and being critiqued:

1. The land Bill, 2012

2. The National land Commission Bill, 2012

3. The land Registration Bill, 2012

We note with concern the extension of the dates stipulated in the Fifth schedule by 60 days and call upon parliament to speed up the process and ensure that the above bills secure women’s right to property and land based resources.

We also call upon all Kenyans to take advantage of the 60 days period to interrogate the bills and ensure their views are incorporated through memoranda to parliamentary committees for inclusion.

Kenya Land Alliance (KLA)

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Central Bank of Kenya Requests for Designs for the New Kenyan Currency

The Central Bank of Kenya wishes to draw the attention of the public to Article 231 (4) of the New Constitution on the production and issuance of Kenyan currency notes and coins.

The Article provides as follows:

Notes and Coins issued by the Central Bank of Kenya may bear images that depict or symbolize an aspect of Kenya but shall not bear the portrait of an individual

Section 22 (1) of the Central Bank of Kenya Act also provides as follows on the issuance of currency notes and coins:

The Bank shall have the sole right to issue notes and coins in Kenya and, subject to subsection (3), only those notes and coins shall be legal tender in Kenya”.

In exercise of powers conferred by the law as stated above, the Central Bank of Kenya has embarked on the process of designing a new generation of Kenyan currency bank notes and coins that comply with the Constitution.

Accordingly, the Central Bank hereby invites individuals, institutions, organizations, and professional bodies to present, in writing, proposals on elements/features to be considered for incorporation in the design of the proposed new Kenyan currency banknotes and coins.

For general information, the current family of currency banknotes and coins in circulation bear portraits of individuals at the front while the back of the banknotes bear different features for each denomination. The back of the coins bear the Kenyan Coat of Arms.

In the design process of the new currency, the Central bank of Kenya considers the following as guiding themes:

  • ‘Kenya Reborn’ - to reflect the spirit of the new constitution
  • ‘Kenya Prosperity’ - to reflect Kenya development goals as outlined in Vision 2030
The design concepts should also take into account the following broad factors while remaining faithful to the general guidance provided in the stated themes:
  • Dominant physical features that reflect any aspect of Kenya but consistent with requirements of the Constitution;
  • Key aspects in Agriculture, Technology, Sports, Manufacturing, Infrastructure, Tourism, and Environment;
  • The nation’s natural treasures, culture and heritage;
  • Common dominant features/wildlife;
  • Flora and fauna unique to Kenya;
  • Preferred colour schemes for each banknote
  • Preferred sizes for both banknotes and coins
The design elements submitted must be unique to Kenya, attractive, socially acceptable and culturally relevant while creating harmony among Kenyans.

The Central Bank considers citizens’ views and input in the design process to be a fundamental constitutional right and therefore highly encourages public participation in this important exercise.

The public is also reminded that the current family of currency shall continue to concurrently circulate along with the new design currency, once commissioned and released into circulation, as provided for under the Sixth Schedule (Article 262), Section 34 of the Constitution.

The deadline for the submission of design proposals is 13th April, 2012.

The proposals, or any clarifications should be addressed to:

Currency Operations & Branch Administration Department
Central Bank of Kenya
P.O Box 60000 -00200

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Response to Recent Media Reports on Commercial Banks Borrowing From Central Bank of Kenya Overnight Discount Window Facility

It has come to the attention of the Kenya Bankers Association that certain sections of the media have carried reports on the Commercial Banks borrowing from the Central Bank of Kenya through the Overnight Discount Window Facility and to which we wish to make some clarifications as follows:


1. The CBK Overnight Discount Window is a last resort facility for providing overnight liquidity to stable banks with temporary liquidity shortfall, which is in line with Central Bank operations world over.

2. Commercial Banks borrowing from the CBK Discount Window averaged Kshs. 4.4 billion per day in 2011.

3. The total core capital of CBK is only Kshs. 5.0 billion and therefore lending Kshs. 600 billion is beyond the capacity of CBK’s balance sheet

4. The total core capital of all commercial banks in Kenya is Kshs. 259 billion, and so borrowing Kshs. 600 billion would mean that all banks in Kenya are insolvent

5. CBK Overnight Discount Window is for overnight borrowing only, and it is incorrect to add up a succession of overnight loans paid off the next day and show them as outstanding.

6. Commercial Banks in Kenya conduct their business within the guidelines set by the Central Bank of Kenya.

1. Rationale for the CBK Overnight Discount Window

  • Section 36 of the Central Bank of Kenya (CBK) Act provides for a facility whereby the Central Bank can grant loans or advances to banks, secured by Government securities. The CBK Overnight Discount Window is a facility of last resort and is a means of providing overnight liquidity to stable banks that have a temporary shortage of cash. The facility is necessary as circumstances can arise when even fundamentally sound banks cannot raise liquidity on short notice. This facility plays a significant role in ensuring banking sector stability by offering overnight liquidity as a last resort.
  • Liquidity shortfalls in commercial banks can arise out of large and unanticipated payments of taxes, dividends, some depositors calling for deposits without prior adequate notice or generally liquidity tightness occasioned by tight monetary policy stance that may not be fully covered by the traditional sources of liquidity.
  • As a requirement, banks must explore all the available markets for liquidity before coming to the CBK Overnight Discount Window. These include the interbank market, Horizontal Repos, rediscount of Government securities at CBK, and sale of foreign exchange holdings. When these sources cannot fully cover the shortfalls, banks are legally allowed access to the CBK Overnight Discount Window to ensure that their maturing obligations, most of which are for clearing the market, are fully financed. This serves to protect the credibility of the banking system as a custodian of deposits and an appropriate avenue for financial intermediation.
  • Given that the CBK Overnight Discount Window is a facility of last resort, access to funds through the facility is designed to be less attractive through a high penalty interest rate and restrictive guidelines. The higher interest rate and restrictions are meant to send a strong message to banks that funds from CBK can only be accessed under extreme liquidity shortfall conditions.
2. Facts on the Operations of the CBK Overnight Discount Window
  • The CBK Overnight Discount Window constitutes only a small proportion of the total borrowings by commercial banks through the interbank market. Specifically, commercial banks borrowing through the CBK Overnight Discount Window averaged only Kshs 4.4 billion per day in 2011 compared to an average of Kshs 12 billion per day for borrowing through the interbank market.
  • Since borrowing through the CBK Overnight Discount Window is for overnight only, it is incorrect to add up a succession of overnight loans that were paid off the next day and claim that these were still outstanding loans. In addition, given that the total core capital of CBK is only Kshs 5.0 billion lending 600 billion is beyond the capacity of CBK’s balance sheet. Secondly, the total core capital of all commercial banks in Kenya is Kshs 259 billion, and so, borrowing Kshs 600 billion would mean that all banks in Kenya are insolvent. The claim therefore that CBK lent Kshs 600 billion to banks through the Overnight Discount Window facility is without foundation and is grossly misleading.
  • While the CBK Overnight Discount Window is an important tool for central banks dealing with liquidity problems that may threaten financial stability, commercial banks are often reluctant to borrow from it not only because this source of liquidity tends to be expensive but also because of the “stigma” that is associated with Discount Window borrowing. This is because banks fear that the regulator, other banks, or investors would read a negative signal about a bank’s health if that bank is discovered to be a regular borrower at the Discount Window. The assertion therefore that banks frequent the Discount Window to borrow at a free cost is against this principle.
  • The CBK publishes the total amount of borrowing from the Discount Window on a weekly basis, but not the information on individual lending. However, the CBK Overnight Discount Window rate is published on the CBK website on a daily basis.
  • Since the CBK Overnight Discount Window is an overnight facility, banks cannot borrow funds through the facility and invest in longer term assets due to the maturity mismatch as they must repay the funds the next day. Existing guidelines prohibit use of funds borrowed through the facility for on-lending to other commercial banks or investing in Government securities or foreign exchange trading. In this regard, the nature of operation of the CBK Overnight Discount Window does not provide an opportunity for foreign exchange speculation.
  • Access to the CBK Window by commercial banks did not start in 2011. Even during regimes of easing monetary policy stance, there would still be banks accessing funds through the CBK window due to occasional yet unanticipated liquidity shortfalls. As expected, the demand for funds by banks during tight monetary policy regimes is higher.
  • There is no linkage between the increased activity at the CBK Window between June and October 2011 and investment in Government securities and foreign exchange trading due to a mismatch in the maturity structure given that borrowing through the CBK Window is for overnight only.
  • Following the adoption of a tight monetary policy stance in March 2011, interest rates in the interbank market rose rapidly prompting banks to resort to the CBK Overnight Discount Window as they adjusted their portfolio to meet their daily liquidity requirements. Activity at the CBK Overnight Discount Window also reflected increased cost of funds as most depositors moved to divest their deposits from banks to invest in Government securities which were attracting higher yields.
  • The persistent inflationary pressures in 2011 also undermined the mobilization of savings which is the main source of funds for banks. Consequently, banks started liquidating their assets including their holdings of Government securities. The stock of Treasury bills and bonds decreased from Kshs 425.1 billion in March 2011 to Kshs 363.3 billion in September 2011 and further to Kshs 346.5 billion in December 2011. Notably, many banks incurred heavy losses through rediscounting of their holding of Government securities in their bid maintain liquid positions.
  • The rise in the interest rates on Government securities in 2011 following tightening of monetary policy also attracted short term capital inflows as investors sought to take advantage of the higher yields. This explains the build-up of foreign assets of banks during the period.
The Kenya Bankers Association members conduct their business within the Guidelines set by the Central Bank of Kenya.


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