Jaindi Kisero: We need to save the coffee industry most urgently

To revive the coffee industry, we need a Marshall plan. The health of any industry is as good as the health of it key institutions.

Today, nearly all the key institutions in this sector are a pale shadow of their former selves.

And, nothing illustrates this point better than the present sorry predicament of the Kenya Planters Cooperative Union, the 70-year-old farmers’ company that used to mill all the coffee produced in the country.

When I started reporting coffee issues in the late 1980s, KPCU had a balance sheet size larger than most of these blue chip companies you see listed on the Nairobi Stock Exchange today.

Coffee cooperatives were rich and powerful institutions, paying dividends and bonuses to farmers year in, year out.

The Coffee Board of Kenya, although State-controlled, operated more or less as a farmers’ company, the majority of its directors elected at an annual conference in which all coffee farming districts would be represented.

The Coffee Research Foundation was a well-funded, robust body conducting rigorous cutting-edge research on modern agronomical practices and passing it on to farmers. Ruiru 11, the pest-resistant seed variety was developed locally by our own researchers at this foundation.

I also enjoyed the politics. No crop in this country will give you better examples of how organised farmers can influence State policy or come together to resist interference into their affairs by power-hungry Government officials.

The Kenya Coffee Growers Association (KCGA) played a critical role on this score. Such was the influence the association commanded in the coffee industry that even in the days of the single-party dictatorship when what former President Moi said was law, coffee farmers would resist arbitrary Government decisions.

They had mastered lobby group politics and were always ready to confront and disagree with unpopular decisions by ministers of Agriculture.

I still remember how KCGA under the chairmanship of the late Zachariah Gakunju mobilised farmers in May 1987 to oppose a directive by President Moi to dissolve KPCU and to replace it with a proposed National Cooperative Coffee Union.

It was the regime’s way of eliminating or bringing under its control autonomous farmers’ organisations.

Earlier, the regime had dissolved the Kenya Farmers Association, which was a profitable body that had been created by European settler farmers in the colonial days to buy inputs in bulk and sell them at fair prices to farmers.

KCGA successfully organised the coffee farming fraternity to reject Moi’s proposal.

In March of the same year, the farmers angrily protested at an attempt by the Ministry of Agriculture to sack KPCU managing director Henry Kinyua and chief executive of the Cooperative Bank of Kenya Jason Kimbui from directorship of the Coffee Board of Kenya. Moi had to rescind the decision publicly.

I will stop there as I do not wish to be accused of dwelling in the nostalgic past. The point here is that in terms of activism and resistance to arbitrary State decisions, the coffee farmer was there long before the agitation by political classes and civil society for the Second Liberation started.

Where did the rain start beating us? Clearly, part of the problem was uncritical implementation of the Washington Consensus.

We applied liberalisation as if it was dogma and in the process dismantled the institutions and pillars upon which the coffee industry rested, without replacing them with new and more efficient ones.

Allowing more coffee millers to come in and challenge KPCU’s monopoly, and liberalising marketing were not bad decisions. But was the phasing and sequencing right? We dismantled existing buildings but made nonsense of it by starting to build new houses from the roof.

In the process, all those institutions and pillars that propped up the industry mutated into parasites whose only reasons for existence was to erode margins from the meagre payments which end up in the pocket of the poor farmer.

I read from a new European Union-funded consultancy report that KPCU directors have recently decided to pay themselves Sh100,000 per month irrespective of board attendance.

How on earth can we allow these directors to leave in opulence from the sweat of the poor farmer who continues to wallow in poverty? At the height of coffee farmer shareholder activism, these are the type of leaders who would have been voted out immediately.

In 1988, we exported 130,000 tonnes of coffee. Today, we export less than 55,000 tons. This is not a situation to respond to by mere tinkering. Massive investment is needed to rehabilitate the institutions.

We seem not to recognise the link between successful rural small-scale agriculture and national security and stability.

The unplanned mushrooming of slums in our major towns is a reflection of the collapse of rural agriculture. In a sense, the Mungiki menace is itself an offspring of the collapse of small-scale coffee sector in central Kenya.

We need to fix the coffee industry, urgently.

Kivutha Kibwana: Time overdue for the flowering of a tribe known as Kenya

Kenya's recent political imbroglio largely stems from a vigorous contestation between two paradigms of the nation-state. One group of the political elite promotes a model of the ethnic nation.

Jakob Rosel defines the ethnic nation as a closed nation premised on three assumptions i.e. (1) Mankind consists of different and easily definable peoples or ethnic groups which value and perpetuate their district identity. (2) The development of an ethnic identity best matures inside the group’s own controlled state. (3) The transformation of a people into a nation precedes and facilitates the conquest of its own nation-state.

Kenya’s other political elite supports a liberalised democratic open nation under which, to quote Rosel again, mankind is conceived as an aggregate of equal and free individuals who are unencumbered by tribal colour and loyalty.

Often, a leadership which envisions a democratic nation can be besieged by political entrepreneurs of the ethnic nation. These progressive rulers may then respond by veering towards the ideology of an ethnic nation and nation-state.

The Party of National Unity was, at the end of 2007, forced to oscillate between a democratic nation and an ethnic nation due to its competitors’ ability to mobilise key regional voting blocs against it.

Conversely, those who support the ethnic nation may lace their rhetoric with a commitment to championing a more inclusive democratic open nation. Thus vision, rhetoric and praxis are in incessant combat.

During the 1983 and 1988 elections, then President Moi adroitly isolated both the Kikuyu and the Luo ethnic nations and built a non-Kikuyu and non-Luo counterpart community and ethnic vote bank. Kenya was defined as the Kikuyu and Luo group on the one hand and the Rest.

In 2002, Kenya’s political entrepreneurs created the Kalenjin and non-Kalenjin split on which the National Rainbow Coalition (Narc) was erected. Essentially the Orange Democratic Movement in 2007 strove to mobilise non-Gema voters as a single ethnic nation to defeat the so-called Mt Kenya region voters.

Clearly, the political party in Kenya is essentially the political competition vehicle of an ethnic nation or coalition of several ethnic groups which have loosely coalesced into one ethnic nation.

Mr Raila Odinga’s National Development Party’s merger with Kanu was meant to aggregate a Luo and Kalenjin (alongside Akamba, Luhyia, Miji Kenda, Arab and Taita) nation. This political union was eventually consummated in 2005, and, minus the Akamba, in 2007.

In 2007 again, DP, ODM-K and Narc Kenya unsuccessfully struggled to shed the ethnic tag. The events of December 2007 and January-February 2008 were a culmination of the transformation of social inequalities, cultural resentments and economic competition between ethnic groups through dangerous ethnic nationalism into politicised ethnic conflicts and, finally, civil strife.

Between 2003-2007, Mr Odinga was able to create an ethnic nation out of several ethnic nations because the peasants, workers and lumpen groups from each of these ethnic groups saw the possibility of their tribal leader ascending into the presidency.

Several ethnic groups which craft a coalition of ethnic nations expect that they will control the attendant ethnic nation-state. In 2008, for Mr Odinga, a sense of fair distribution of the ODM slate of appointments was thus critical to the rise of his political party within the Grand Coalition and into the future.

From 2003, President Kibaki decided to modernise Kenya on the basis of liberal democracy, the market and nascent welfarism. His notion of an open society saw him mobilise the country on a development agenda.

But this was temporarily challenged by the 2007 post-election crisis. Instead of receiving kudos for reviving Kenya, the ethnically inspired nation sought to reverse the gains.

At the heart of the current political contest, therefore, is the question whether a full-blown transition from the closed ethnic nation and its nation-state into a democratic, open nation and nation-state or the democratic transition began in 2002 will be aborted. Put simply: Shall Kenya proceed with ethnic nation-building or democratic nation-building?

In the struggle between the ethnic nation and the democratic nation and their variants of nation-states in Kenya, the modern nation-state will only triumph if Kenya is successful at promoting an inclusiveness based on opportunity.

Resources must be shared efficiently and equitably, not merely by the elite, but by the broad masses. If and when the country is finally turned around, it is then that ethno-nationalism, the ethnic nation and its nation-state will be dealt a serious blow.

It is then that Kenyans can recognise, accommodate and celebrate the diversity of their languages, culture and history without fear. To borrow from Stanley Tambiah, only then will Kenyans confront the truism that ethnicity is a persistent, boisterous many-headed beast.

To slay the dragon of negative ethnicity, Kenya’s youth, civil society, non-partisan intelligentsia, and forward looking members of the business class have a pivotal role.

Public education and the new constitution must also guarantee the positive political recognition of ethnicity within a modern democratic, open society.

The time is long overdue for the flowering of a tribe called Kenya.

Prof Kibwana is adviser, Constitutional Review, Office of the President.

Macharia Gaitho: Kibaki-Raila synergy proves sceptics wrong

Slightly over 100 days of a loveless forced marriage can feel like an eternity, but President Mwai Kibaki and Prime Minister Raila Odinga continue to confound skeptics with the way they have accepted and accommodated one another.

Even when their respective lieutenants within the Grand Coalition Government are busy hurling brickbats at each other, the President and the PM have not exchanged unkind words since they went into the power-sharing deal.

The two men may be polar opposites in many ways, but they do seem to enjoy a personal chemistry that puzzles many.

While the President rarely calls Cabinet meetings, a fact that may reinforce impressions of a dysfunctional government, he hosts the PM for weekly meetings at State House.

The coalition often presents the picture of a fractured government made up of two deeply hostile camps pulling in opposite directions. This makes even more vital the roles played by President Kibaki and Prime Minister Odinga in keeping things together, and they have both been demonstrating at every opportunity that the coalition is united.

This is a scenario that confuses their respective sets of allies, many of who remain not only openly suspicious of the opposite side, but also worried that the two principals are leaving them out of the power-sharing equation.

In the Kibaki camp, for instance, many of the traditional political power brokers are openly resentful that they have lost out as the President comes to rely more and more on Mr Odinga whose clout is growing by the day.

Powerful politicians such as Cabinet ministers Martha Karua, Kiraitu Murungi and John Michuki might have thought that the entry of Mr Odinga into government merely gave them time to re-group and consolidate a hold on power while the newcomer played a peripheral role.

However, they have had to watch as Mr Odinga became the one to define the real role of the new Office of Prime Minister and firmly consolidate his own position within the power structure.

Then there are Vice-President Kalonzo Musyoka of ODM-K and Deputy Prime Minister Uhuru Kenyatta of Kanu — the initial leaders incorporated into the PNU coalition to keep ODM at bay. The formation of the Grand Coalition reduced their clout in the Government dramatically.

Even the early tussle between Mr Odinga and Mr Musyoka over the pecking order is no longer an issue as the former has entrenched his position.

Within Mr Odinga’s ODM, there have been similar issues, and compatriots who at one time might have viewed themselves as co-leaders have had to adapt to the new realities. Key members of the ODM Pentagon controlling sizeable blocs, notably Deputy Prime Minister Musalia Mudavadi and Agriculture minister William Ruto, are now seen as ordinary Cabinet ministers rather than regional kingpins.

Mr Ruto’s populous Kalenjin bloc, however, remains a problem for Mr Odinga who has to increasingly contend with accusations that he sold out once he ascended to high office.

In many ways, the entry of Mr Odinga into government might have been the best thing that ever happened for President Kibaki in his final term.

If anything he has become a key asset. On his overseas travels, on meetings locally with visiting foreign dignitaries and also from his close links with the diplomatic community, the PM has emerged as a most enthusiastic spokesman and salesman for the coalition.

As seen on his visit to he UK, Mr Odinga is always effusive in his praise of the President and the way in which the two of them are working closely to shape a new Kenya.

This gives the President the legitimacy that was lost after the disputed elections, in addition to persuading the international community, donors and potential investors that Kenya is back to normal.

Mr Odinga has also played a key role in driving key initiatives, particularly in taking the lead on politically risky decisions such as the Mau Forest evictions.

With his legendary reputation for hard work and risk-taking, PM Odinga is the ideal partner for a famously laid-back and risk-averse President Kibaki, whose focus at this stage in his career might be a peaceful final term and plans for a retirement that will not be tainted by a legacy of having ruined the country.

Caused disarray

While the succession battle has caused disarray in the PNU ranks, there is some bit of calm in the ODM camp. Mr Odinga is quite secure in his position, but there is bound to be a scramble for the number two slot.

That both the presidency and the premiership being up for grabs create room for plenty of horse-trading, and even more so when the offices of vice-president and deputy prime ministers are added into the mix.

But one option that has not been examined seriously is that President Kibaki and Mr Odinga could decide to craft a joint succession plan. There might be some moves in this direction in the coming years, but it is apparent that the President is not as obsessed with the succession as are his supporters.

The President will not be a contender in 2012, and thus unlike some of his allies, does not see the Prime Minister as a threat.

Macharia Gaitho: Jostling to succeed Kibaki an example of acute myopia

IT WAS PROBABLY ONLY BY chance that the hybrid we have in place became known as the Grand Coalition instead of the Government of National Unity (GNU).

I don’t know whether this has something do with the selection last year of our famous wildebeest migration as one of the Seven Wonders of the World, but we seem to have an affinity for all things GNU.

The creature President Kibaki cobbled together in the middle of his first term in an effort to keep at bay rebellious elements within the then governing coalition was a GNU.

Now as the President’s political camp jumps hither and thither like a headless chicken, some fellows have crafted their own GNU, the Grand National Union, in what is becoming an increasingly comic series of disjointed manoeuvres in the bid to have a footing come 2012.

I am not quite sure what the new GNU is supposed to be about, but it reflects the utter confusion in President Kibaki’s backyard as succession politics comes to the fore and every little grouping starts looking out for its own survival.

The President wants PNU, put together as a coalition of parties for the express purpose of securing his re-election in 2007, transformed into a united political party.

He failed with a move to unite the original Narc in a similar fashion five years ago, and there is little chance now that the PNU affiliate parties will agree to dissolve. If anything, they are all busy looking towards securing their positions post-Kibaki.

Hence Ms Martha Karua striking out on her own with Narc Kenya; Mr Musikari Kombo in Ford Kenya still signalling a determination to remain independent; Mr Mwangi Kiunjuri and others scampering towards the new GNU, and even President Kibaki’s own ‘‘original’’ party, the DP, indicating through its present leader, Joseph Munyao, that its wants to remain intact.

The source of everything seems to be the very early jostling for the Kibaki succession. There are indications that the President and some of his close advisors are trying to manage the process, but some are beginning to see the Head of State as largely irrelevant to shaping the future dispensation.

President Kibaki might not personally care too much as he serves out his final term, but it is apparent there are many around him who live in mortal dread of life without one of their own at the helm.

And here their limited thinking focuses not on how PNU, Narc Kenya, GNU or any of the other mutations can secure power, but how their region, Central Kenya, can remain in power.
They ignore the first unwritten rule of Kenyan politics: There must be some rotation at State House.

PRESIDENT KENYATTA COULD NOT be succeeded by a Kikuyu and neither could President Moi be succeeded by a Kalenjin.

President Kibaki was extremely fortunate to win himself a second term, probably with some sleight of hand, after having succeeded in turning most ethnic constituencies solidly against the Kikuyu. Anyone who imagines now that Kenyans would elect another Kikuyu to succeed him come 2012 must be on Cloud-Cuckooland.

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I always assumed that Prof Samson Ongeri was of advanced education. After all that professorship must have come from somewhere, and the man actually taught at university – medicine, no less.

And his medicine was the real thing, unlike that practised by the myriad ‘professors’ and ‘doctors’ in the classified pages who promise to cure you of cancer, Aids and every other disease known to humankind.

But when I heard the good proof in his capacity as Education minister give us his two-cents worth on the secondary school unrest, I wondered.

Anyway, what Prof Ongeri uttered is wholly understandable. There is something about our brand of politics that infects everybody who enters the field. It is a great leveller, and sooner or later, there is nothing to tell apart the most learned and polished of the lot from the lout of extremely modest education and even less refinement who somehow made it to the august House.

I have lost count of the number of creature comforts of this day and age that the minister blames for unrest in schools, but he is clearly flailing out very wildly, and in the entirely wrong direction.

He should be looking at systemic failure in the management of our public schools.

Mobile phones and entertainment systems, obviously, might not be desirable where they will cause distraction in a school environment, but they cannot be the cause of strikes.

If that kind of ossified thinking were to prevail, then somebody will soon start advocating for a return to the stone age and a ban on all modern “luxuries” everywhere and not just in schools.

One poser for the minister: The unrest is almost exclusively in public schools where a Spartan and harsh existence is the norm, unlike in the high-class private schools where luxuries and modern conveniences are taken for granted.

Any lesson there, Mr Minister?

Mutahi Ngunyi: Why I do not condemn school riots

The riots in our schools must be blamed on poverty and hopelessness. Drugs, Mungiki and the devil have nothing to do with the menace. And to blame it on poor parenting is also pedestrian.

What are my reasons? In my days, we did not burn schools or ask for the principal’s head! We were good students: Not because of the caning, or because of effective parenting. We were good because we had hope.

I KNEW, FOR INSTANCE, THAT if I passed my examinations, I would amount to something. I, therefore, played my head off until the last year of high school. I was always number 38 out of 39. The boy at number 39 became a watchman, but he later started a small security firm.

As for me, I finally got serious with school and made it to the University of Nairobi. Here, we were pampered with ‘‘boom’’ and groomed to become the educated elite. We had four course meals, starting with soup and buns, ending with hot chocolate. For those who drunk, Serena was the place.

And then there was this guy called Abu. The man supplied us with every thing clandestine: from bhang to seditious literature from the Communists! When the administration tried to remove his kiosk, former president Moi had to intervene to save him – or so we believed! After an exciting time at the university, I was posted by the government as a District Officer (DO), given a Land-Rover, a driver, and a policeman with a gun.

This was a kali sana (tough)job, but I could not take it up because the university invited me to do a masters degree and teach at the political science department. My classmate at number 39 and I had realised the Kenyan dream. And what is more: although we were poor, we became something because the system was fair.

CONSIDER THE RIOTING STUDENT now. This guy has no hope, and no probable future. If he is from a poor background, his chances of getting out of the woods are next to zero. More so if attending university is his hope out of poverty

In a class of 50 students, only an average of four will make it to a public university. And of the four, only one will get a decent job. The others will scavenge for decent opportunities until ‘‘Thy Kingdom come!’’

Sad twist

But there is a sad twist for the poor regular student. The guy has to compete with students in the parallel programme. While a regular student is required to take a minimum of four years, it is possible for a parallel student to take a similar course for 2 ½ years.

In the end, the privileged student will be working for one-and-a half years before the regular student can finalise the same course. This is unfair advantage!

But what is the relationship between this and the riots? In my view, we are experiencing a state of social collapse. And the rioting students are just messengers sending us the early warnings. To cane them, jail them and expel their leaders is, therefore, unwise.

INSTEAD OF LASHING OUT AT them, we need to understand their anger. More fundamentally, we need to listen to their inarticulate point of view. In fact, I am persuaded that it has nothing to do with bad food, the fear of mock examinations, and all the excuses being pimped around.

These, in my view, are just the triggers. At the core of the riots is a deep concern for fair justice. And this is subconsciously linked to our politics. Consider a hypothesis with me.
The post-election crisis had two revolts: one from above and one from below.

The revolt from above was about power relations, while the one from below was about distributive justice. When President Kibaki and Prime Minister Raila Odinga agreed to share power, the revolt from above ended.

THE POLITICAL ELITE WAS HAPPY and so it assumed that the rioting mobs were happy too. Well, they were wrong! The revolt from below had acquired a life of its own. And some of its foot soldiers were the rioting students.

Most of these students were involved in the uprooting of railway lines, and servicing of crude weapons. In the process of this short struggle, they became conscious of what is just and what is not.

Equity and justice

When they went back to school, therefore, they took the struggle with them. Although their riots are expressed as an aggression against the school administration, they have a political connotation.

At the core is a struggle for equity and justice – the ideals they fought for on the streets early in the year. In fact, I am prepared to bet that some teachers identify with this struggle and, if they had a choice, they would burn the schools with the students.

My point? The riots are a political expression of displeasure: a disorganised fight against poverty and inequality!

BUT THERE IS ONE MORE THING. Youth crises of this nature are a cry for help. Our young people are looking for something to believe in; something inspiring. And if they will not get it from our leaders, they will follow a demagogue.

This is what happened in Sierra Leone, Cote d’Ivoire and Liberia. And to avoid such a blunder, we must ignore the Education Minister, Prof Sam Ongeri.

This Mzee is old school and minimalist in his approach. What this situation requires is innovation, not condemnation. And this is why Mr Odinga should intervene. By the way, when will Mr Odinga stop travelling and start supervising these unimaginative ministers?

Mutula Kilonzo Nairobi Metropolitan Development Master Plan Takes Shape

Mutula Kilonzo, the ODM Kenya MP for Mbooni and a top Nairobi lawyer, hit the ground running when he was given the Nairobi Metropolitan development Ministry. For a start there was grand talk and visionary dreaming of how Nairobi will be. Then came the aerial inspections and radio talk shows.

Now, Mutula Kilonzo has advertised for consultants to actualize his dreams of a Nairobi Metropolitan. The details can be found on

http://kenyanjobs.blogspot.com/2008/07/ministry-of-nairobi-metropolitan.html blog.

The Nairobi Metropolitan will swallow the following councils:

1. Municipal Council of Thika
2. Municipal Council of Kiambu
3. Municipal Council of Ruiru
4. Municipal Council of Limuru
5. Municipal Council of Mavoko
6. Municipal Council of Machakos
7. County Council of Kiambu
8. County Council of Thika
9. County Council Ol Kejuado
10. Town Council of Tala-Kangundo
11. Town Council of Kikuyu
12. Town Council of Karuri
13. City Council of Nairobi
14. Town Council of Kajiado
15. County Council of Masaku

The areas covered in the consultancy tender are:

1. Integrated roads, bus and rail infrastructure for Metropolitan Area;
2. Efficient Mass Transport System for Nairobi Metropolitan Area;
3. Replacement of Slums with Affordable Low cost/rental Housing; Provision of adequate Housing;
4. Development and Enforcement of Planning and Zoning Regulations;
5. Preparation of Spatial Planning for Metropolitan Area
6. Efficient Water Supply and Waste Management Infrastructure;
7. Promotion, Development and Investment in Sufficient Public Utilities, Public Services and World Class Infrastructure for Transforming Nairobi into a Global Competitive City for
8. Investment and Tourism;
9. Promotion of Nairobi Metropolitan Area as a Regional and Global Services Centre for Financial, Information and Communication Technology, Health, Education, Business, Tourism and Other Services.
10. The Development of a Sustainable Funding framework for the Development of Identified Urban and Metropolitan Areas.

Disenfranchised Party of National Unity (PNU) Suppliers

Open Letter to H.E Hon. Mwai Kibaki CGH M.P. President and Commander-in-Chief of the Armed Forces of the Republic of Kenya

Your Excellency, we write this appeal to you, as a measure of last resort, having exhausted all other means and avenues of getting our payments settled. As ordinary Kenyans, it is understandably difficult to get your direct audience to air our pleas. We have tried severally to use intermediaries to present our case, to no avail. 7 months later, and many broken promises after, we have no one else to turn to who can bring the matter to you in truth and unaltered. Hence, this open letter.

During the last general elections, we were engaged by the then Party's executive director Mr. Lee Karuri to provide various critical goods and services for the campaign including Hired vehicles, T-Shirts, Printed Registers, Caps, Badges, Banners, Lesos, Billboards, flyers e.t.c. This was in full knowledge of party officials who include the Chairman Mr. Jasper Nyaboga and the Secretary General, Mr. Albert Kamau.

However, since December 24th last year to date, we, the undersigned, are yet to receive our payments in full. We have invoices and LPOs signed by Mr. Karuri detailing how much we were paid and how much is outstanding.

As we make this appeal, we have used all known avenues and made countless pleas to demand for settlement of these debts but all our efforts have been in vain. On several occasions, we have been advised that our cheques are ready but nothing has been forthcoming.

Your Excellency, we are young entrepreneurs who believe in Kenya and have faith in your government. We are honest Kenyan taxpayers out to make our daily bread to sustain our young families and assist in nation building. However, because some officials are keen on taking away from us the little that belongs to us, we now face financial ruin.

Some amongst us suppliers are facing bankruptcy, others have been evicted with their families from their homes, others have been forced to close down their businesses or lost their offices and worst of all, some children have been forced to stay home for lack of school fees.

We are now fully aware that we are on the verge of losing our hard-earned investments and the ensuing ruin to our families and businesses is real. Already, we have missed out on many opportunities e.g. in the Stock Exchange, on account of these unpaid debts.

Our lives have been put on mortgage, borrowed time, and we are now appealing to you, our President, to come to our aid. We used all our energy and resources to supply goods and services in good faith and without delay, for the benefit of the party. Now we appeal for an extension of the same goodwill, to speedily resolve this matter.

We pray to the Almighty GOD for your continued blessings of good health and wisdom as you continue to steer our beloved country Kenya, to greater heights.

SIGNED BY RESPECTIVE PNU SUPPLIERS.

No	Suppliers Name	Items Supplied	Amount
1	Easy Ride Car Rentals & Safaris	Car Hire	2,575,000
2	Badge Masters	Badges	1,000,000
3	ARNET	Nomination Register	2,600,000
4	Fina Company	T-Shirts & Lesos	3,325,000
5	CAD Creations Ltd.	PNU Poll Database	1,200,000
6	Mega Link	T-Shirts / Caps	679,000
7	Media Masters	Billboards	1,740,000
8	Live Ad	Matatu Advertisement	843,000
		Grand Total	13,962,000
THANK YOU AND GOD BLESS KENYA

Clarification by the Nairobi Stock Exchange (NSE) on the Automated Trading System (ATS)

Reference is made to the editorial opinion and article in the Financial Journal titled "NSE flirts with trading shutdown" carried yesterday, in The Standard newspaper, the 22nd of July 2008.

The Nairobi Stock Exchange (NSE) categorically states that the direct reference to and implication of the possibility of a trading shut down owing to the alleged arrears owed to UUNET and alleged "hasty implementation of the Automated Trading System" are erroneous and alarmist.

In response to the said article, for which no official request for substantiation is on record as having been made to the Nairobi Stock Exchange (NSE) by the writer or any member of The Standard Group, it is our wish to clarify the alleged issues raised here below.

1. The Automated Trading System (ATS) has been and operates independent of the Wide Area Network (WAN), through which the member firms are able to trade remotely. The NSE exercises complete control and management over the ATS. Only the NSE can grant or deny access to the ATS.
2. The Automated Trading System (ATS) can be accessed either through the NSE trading floor (based on the Local Area Network) or via remote trading from the member firm offices (based on the Wide Area Network). The disablement of the WAN remote trading option/connection does not interfere with trading from the NSE trading floor
3. The Automated Trading System (ATS) is a robust and efficient trading software, obtained from Millenium Technologies (MIT), who have serviced other exchanges in Africa, Europe and North America i.e. The Boston Stock Exchange, Boursa Malaysia, the Stock Exchange of Mauritius, and the Colombo Stock Exchange. The ATS has actually enhanced transparency in the trading of shares, making it easier to identify Illegal trading'. The ATS, which has a self check mechanism, is tested daily before commencement of trading and is backed up on a separate system
4. The Nairobi Stock Exchange (NSE) and UUNET enjoy a cordial working relationship, and we are satisfied with the service rendered to us to date. The NSE is not in any arrears to UUNET. UUNET has individual contracts with the respective member firms and no such firm is in arrears.
5. The Wide Area Network (WAN) has 2 separate components; a primary fibre link and secondary Kenstream link provided by two providers, increasing the link redundancy.
6. The implementation of the Automated Trading System*(ATS) was thoroughly tested and authenticated prior to its launch. This implementation was done according to laid down processes and procedures, with the express approval of the regulator, the Capital Markets Authority.
7. The Nairobi Stock Exchange and the Capital Markets Authority continue to partner in seeking solutions with the best interest of the investor in mi$d, through our respective surveillance and compliance procedures.

The Nairobi Stock Exchange, in line with its mandate to provide a fair and transparent trading platform and wealth creation mechanism, continues to seek ways of improving this and we urge investors to continue to have confidence in the market.

NAIROBI STOCK EXCHANGE

Kenya Revenue Authority: Verification of Age For Imported Motor Vehicles

Kenya Revenue Authority has noted with concern increased cases of unscrupulous persons who "cheat" unsuspecting buyers/importers of motor vehicles in regard to the Kenya Bureau of Standards regulation KS1515. The Standard prohibits the importation of motor vehicles that are more than 8 years old. It also prohibits the importation of the Left Hand Drive vehicles.

In this context, the Authority would like to inform potential importers that they can verify the age of vehicles imported from Japan at the following website:

www.japan-partner.com/check-manufacture-year.php

Commissioner of Customs Services

KPCU Management & Board Relations

There have been recent media reports that the KPCU Management has Issued quit notices to the board of directors over disagreements on how to run the company. This press release serves to clarify the true position, for the sake of our clients, industry stakeholders, professional colleagues, families and friends.

1. It is true that on 15th July 2008, the under listed ten senior managers wrote to the board Chairman, raising various concerns which in the view of the management have to be addressed if the normal working relations have to be maintained, and the welfare of the company guaranteed. In the said letter, the said managers offered to step aside to give the board a chance to address the issues raised or take whatever action would be deemed fit in the circumstances. The said managers have thus stayed away from their offices, in view of the gravity of the issues raised.
2. The summary of the matters raised by the Management are that there are serious governance issues that have to be addressed if the company has to survive. We concede that it is impossible for the Management to control the board, and as such the only ultimate option for us is to step aside on principle.
3. The issues of governance at KPCU have been raised before. In January 2007, the Government of Kenya, through the Ministry of Cooperatives Development & Marketing, and with funding from the European Union commissioned an independent study on KPCU, with a view to establishing the major bottlenecks to the company's turn around. Poor corporate governance is one of the major issues highlighted in the said report.
4. In response to the findings of the GoK/EU Report, the Commissioner of Cooperatives, in exercise of his powers under the Cooperative Societies Act, instituted an Inquiry into the workings of KPCU, in order to address some of the problems plaguing the organization. The board of directors sued the Commissioner and obtained an injunction against the intended inquiry. The matter is still pending in court.
5. The Management has in the recent past raised these issues with the Minister for Cooperatives Development & Marketing, with the hope that the relevant interventions can be brought to bear on the KPCU situation.
6. The continued highlighting of the poor governance issues by the Management has as expected elicited strong reactions from some of the board members, and has resulted in situations of stand offs and outright harassment of staff. Obviously, the working environment has become increasingly poisoned and a lot of energy is spent on in-house frictions.
7. We appreciate the view by some of the directors that the Management is not entitled to take the extreme position they have taken, but we invite the relevant stakeholders, particularly the farmers, to interrogate the issues we have raised in writing to both the Chairman of the Board and the Government.
8. A section of the board has reacted to the position taken by Management byway of wild allegations of financial impropriety by the Management. The Management has already sought quotations from two of the top four audit firms in the country, for a thorough, forensic audit of the company's finances for the entire period that the present Management has been in office. It is expected that the audit exercise will be fast-tracked and the findings not only made public but appropriate action taken from its recommendations.
9. We appreciate that this kind of action is not common in the corporate set up, but KPCU as a company has a unique mandate in mobilizing the small scale coffee farmers countrywide, and indeed the organization is a public body owned 100 % by the farmers and a key vehicle towards the realization of the objectives set for the Agricultural sector under the Vision 2030 goals.
10. What is in issue here is not so much about the board of directors or the management and the welfare or survival of either; it is the sanctity of the farmers' sweat and blood, their very hard earned money and wellbeing.
11. For avoidance of doubt, we reiterate that some of the KPCU board members are not fit to hold any public office.
12. It is finally not lost to us that this kind of situation may well mean the end of our tenure at KPCU. If this be the case, we shall unfortunately be compelled to leave, knowing that in the new dispensation of greater accountability in Kenya, each of us must have ideals for which we are ready to fight for. We believe that the interest of the coffee farmer is paramount, and this informs our passion, commitment and willingness to work towards ensuring that the farmers get true value from the coffee business. For us, this is not just a corporate duty, but a calling for which we are willing to make personal sacrifices to see accomplished.

KPCU farmer clients are requested to remain calm until this matter is resolved.

Dated and Signed This 21st Day of JULY, 2008.
Peter N, Kimani - Managing Director
John M, Kanyingi - Financial Controller
Nicholas M.Kahihu - IT Manager
Simon K, Gitonga - Ag. Operations Manager
Nicholas Muteti - Growers Account Manager
Amos N. Kiarie - Legal Officer
Silvestre Okoth - PR & Marketing Manager
Michael M, Kanyuru - Chief Accountant
Simon Daba - Quality Control Manager
Gabriel Nderitu - Snr. Systems Analyst

Sale of property investments by Kenya National Assurance Company (2001) Limited (KNA)

Our attention has been drawn to reports appearing in a section of the press regarding the sale of property assets of the Life Fund by Kenya National Assurance Company (2001) Ltd. The newspaper reports contained inaccuracies likely to cause disquiet to the policyholders and the general public.

The management of Kenya National Assurance Company (2001) Ltd would therefore like to make the following statement regarding the sale of property investments belonging to the Life Fund to put the record straight:-

Name of Property	Valuation by Official Receiver in 2000	Valuation by Government Chief Valuer in 2004/7	Sale Price
Corner House	Shs550 Million	Shs 620 Million	Shs 700.7 Million
Bima House, Nairobi	Shs 400 Million	Shs 560 Million	Shs 560 Million
Bima Tower, Mombasa	Shs 250 Million	Shs 256 Million	Shs 256 Million
KNAC Tower, Kisumu	Shs 21 5 Million	Shs 224 Million	Shs 224 Million
Protection House	Shs 200 Million	Shs 220 Million	Shs 220 Million
Town House, Nairobi	[_ Shs 190 Million	Shs 210 Million	Shs 210 Million
Salama House	Shs 95 Million	Shs115Million	Shs 127,786,000
Bamburi Plot	Shs 22.5 Million	Shs 26 Million	Shs 43,945,000
Eldoret Complex	Shs 27.5 Million	Shs 22.5 Million	Shs 50 Million
Tiwi Plot, Mombasa	Shs 8.76 Million	Shs 11 Million	Shs 16 Million
Managers House, Mombasa	Shs 6 Million	Shs 7.5 Million	Shs 7.5 Million
Managers House, Kisumu	Shs 4.2 Million	Shs 4.8 Million	Shs 4.8 Million
Managers House, Nakuru	Shs 3.5 Million	Shs 2.55 Million	Shs 2.650 Million
Managers House, Nyeri	Shs 3 Million	Shs 3.2 Million	Shs 3.2 Million
Kisumu, Ex-Ohawa Plot	Shs 1.35 Million	Shs 1.35 Million	Shs 1.35 Million

Value of Corner House

Corner House was valued for Sh550 million by Gimco Limited in June, 2000 for the Official Receiver. This valuation was done along with the valuation of all the property investments listed above. The property valuations formed the basis of the total value of the assets transferred to KNAC (2001) Ltd from the Official Receiver in March, 2002. The valuation report and the values of the properties were accepted by the High Court for the purpose of the Transfer.

Subsequent Valuations

The Board requested the Government Chief Valuer to carry out valuation of all properties in March, 2004 in preparation for sale. The valuations formed the reserve prices.

Corner House was valued for Shs570 Million in March 2004 by the Government Chief Valuer. The building was revalued for Shs620 Million in July, 2007 by the Government Chief Valuer before it was advertised for sale.

Advice to Policyholders

We advise institutional policyholders that the balances of the benefits due to you will be paid as soon as the transfer process is completed and the sale proceeds received from the buyers.
Individual policyholders are requested to complete and return the Discharge Vouchers sent to them without delay together with the original policy document and a copy of ID to facilitate payment of their benefits.

Policyholders who have not received Discharge Vouchers should contact General Manager on telephone number 020-2216063, 2215784, 340759, Mobile numbers 0727751024 and 0736491301 or visit our offices in Mezzanine 2, Corner House, Kimathi Street Nairobi. Requests may be posted to General Manager, Kenya National Assurance Company (2001) Ltd, P.O. BOX 20425 - 00200, NAIROBI.

AT, KAMINCHIA PRINCIPAL OFFICER