A Political Kenya: Latest Politics and Kenya Economy News

One of the lessons I learnt from my father was the philosophy of wealth — naturally — and, more specifically, how, in his view, to get rich. Wealth, I was tutored, is not necessarily having a lot of money in the bank. Being wealthy is having many little sources of money and few costs. It is like a big sufuria with many pipes pouring water in and many holes draining it out. You get rich by multiplying the little pipes and reducing the holes.

It follows, therefore, that I should resent having to spend money on taxes. If the government cuts taxes tomorrow, therefore plugging a few of those holes, I’d go out and have a beer in celebration.

IT IS FOR THIS REASON THAT I THINK Mwingi North MP Kalonzo Musyoka deserves a warm round of applause not necessarily because he has made useful proposals — I shall turn to that shortly — but because he has turned the spotlight on an issue which is of absolute importance to us all: Taxation. I am willing to bet a substantial amount of money that all presidential hopefuls will announce their own tax measures, too, borrowing good ideas from each other liberally.

I feel that there is no radical, visionary thinking about the economy coming out of the Treasury. The people in charge there are content to fix what Mr Daniel Moi had undone and create a few efficiencies, but they exist in the vague, misty Kibakian world where kila kitu iko sawa (everything is fine). By drawing up concrete proposals, the Opposition is forcing economic managers to take a closer look at their own policies and this can only be good for those of us who would be happy to seal a few holes in that sufuria.

Having said that, let me turn to the specifics of Mr Musyoka’s proposals. Now, heaven knows I am not an economist. I am just a peasant, on loan from the village, whence I shall return at the expiry of my tour of duty.

I have read Mr Musyoka’s proposals and, whereas I have an ideological problem with them, I must confess that many of them on housing and agriculture are quite good.

But it is the attitude of his proposals in dealing with poverty that I disagree with, especially to the extent that they seek to create a welfare state, a mistake that has been committed all over Africa by misguided socialists. I believe that giving Mwafrika free things is a bad thing; he will not work. There is also no such thing as “free” where government is concerned: It takes from you to give to me and when it does that, you’d like to hear a very good explanation for it.

WHY AM I POOR? IS IT BECAUSE I PREFER to sit in the house, drink busaa and make babies for you to educate?

I think it is bad politics to glorify poverty and excuse laziness by creating non-existent “victims”. Every man is called to work with his hands and care for the issue of his loins. If he has no hands, then every man is called to help him. That is why the man who pulls a mkokoteni to feed himself is my brother. The one who defecates in his own house — and blames it on poverty — just because he does not wish to pick up a shovel and call a few of his buddies to help him dig a latrine has no claim to my taxes or pity. He has made a lifestyle choice and I am happy to respect his wishes. Number one, Mr Musyoka is proposing to shrink the tax net by raising the minimum taxable income from Sh10,000 to Sh30,000 and the earnings at which the maximum rate of taxation is applied from Sh38,000 to Sh150,000.

I AM TOLD BY THE BUSINESS JOURNALists that this will cut government revenue by Sh96 billion. You can comfortably do this if you wish to cut expenditure as well, but if you are proposing a welfare state, complete with welfare cheques — Family Support Coupons — where is the money going to come from? Probably from more taxes from the few who are left in the tax net.

It is like a man who writes to his employer instructing him to cut his salary by half, then goes out and marries an extra three wives. It is a recipe for a heavier tax burden on a smaller group, to let the mass off the hook of paying their own way.

“It is common knowledge that the rate of compliance with our taxes is extremely low,” said Mr Musyoka. Spoken like a true MP, who pays no tax.

True, tax compliance in Kenya is low. I have seen a study which puts the rate of VAT compliance at 50 per cent and income tax compliance at 30 per cent. I think the attitude should be to enforce compliance with the ultimate aim of bringing the rate of taxation down, to encourage investment and production, rather than maintaining the current high rates to give free cheques.

THE FOCUS ON INCOME TAXES IS PERhaps overemphasised, the bulk of our taxes are the so-called consumption taxes. I have seen a study which says that consumption taxes are the equivalent of 10 per cent of GDP, income taxes 7 per cent. It is therefore possible to give income tax breaks to low earners, who are still clobbered by indirect taxes.

“It is my conviction that it is possible to double the current level of tax collections without introducing new taxes or raising existing ones,” Mr Musyoka said. Yes, but is it desirable? As a proportion of GDP, Kenya has one of the highest tax yields in Africa. I think the current thinking is to target a tax-to-GDP ratio of 22 per cent. If you double collections, you will have a tax ratio of 40 per cent, higher than the average for developed countries.

Probably the way to proceed is not for the government to suck up more money but to cap taxes at 22 per cent of GDP and leave enough money in our pockets for capitalism to do its job of creating jobs and wealth.

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Mutuma Mathiu is managing editor, Sunday Nation.
nationmedia.com

This Sunday Raila Odinga launches what promises to be the most electrifying campaign since 1992 Kenneth Matiba’s “Earthquake”.

Sunday is Raila Odinga’s big day. It is the day he formally launches his 2007 presidential campaign.

And typical of Raila, the launch will be in style – with pomp and colour characteristic of the man. Two media organizations have already been contacted to beam the launch live on television!

Invitations to the ceremony to be at the Kenyatta International Conference Centre have been sent out to everybody who is somebody in Nairobi. Even President Kibaki and First lady Lucy have been sent an invitation! So is retired President Moi.

One message coming from Raila’s grand launch is that he has his mind set on the presidency and nothing is about to stop. Not even the much anticipated ODM presidential nominations. For starters, Raila has made it clear that Sunday function is not a launch for his ODM nomination bid but one for the national presidential contest scheduled for December. Indeed, the invitations to president Kibaki and his predecessor Moi tell as much. That as far as Raila is concerned; he is playing the big league.

Analysts are reading three things in Raila’s grand launch. One, that as far as he is concerned, ODM nominations count for nothing. It is either that ODM pick him as its candidate or he will go it alone all the same. Going by the kind of resources he is investing in his campaign, it is a foregone conclusion that the man is going for it one way or the other.

So why would Raila take such an unilateral move knowing very well that should ODM fail to pick a single candidate to face the incumbent, the party may well have handed victory to Kibaki without him having to drop a sweat?

One explanation is that Raila is putting all his bets on the proposed 50% plus one rule. In that case, a free-for-all contest would serve him right since it would deny the incumbent the required threshold and force a re-run.

In such an eventuality, a strong bid by Raila would serve to place him at a vantage point and most likely emerge as the runner up to the incumbent and hence the man to face in a re-run. That way, Raila would be the single opposition presidential contender without going through the hassles of a party nomination process.

If that is the thinking in the Raila campaign, then there is a triple down-side to it. One, there is no guarantee that the minimum reform package will include the 50% plus one rule. As of now, proponents of the rule have not demonstrated that they have enough numbers to force it through parliament or have enough muscle to arm twist the government to pass it in the style of 1997 IPPG package.

Secondly, in the event of a run-off with the incumbent, there is no guarantee that all ODM presidential hopefuls would rally behind Raila. Should they perceive that he deliberately sabotaged ODM presidential nominations with such a plot in mind, they may as well decide to punish him by throwing their lot with the incumbent. Indeed, it only requires just one of the ODM top contenders to back the incumbent in a run-off and the latter would smile all the way to State House.

The third risk to it is that in the event ODM fails to pick a single presidential candidate and the December contest ends up a free-for-all, angry opposition supporters may decide to avenge the let-down by ODM and vent their wrath by voting for the incumbent or staying home altogether to give the incumbent a walk-over.

If Raila is not putting too much hope on enactment of the 50% plus one rule, the second explanation, analysts believe, is that in hitting the road with pomp, he is aiming at eclipsing everyone else in ODM, a factor that would give him a head start when it ocmes to the nominations.

In the event Raila would either be the man to beat within ODM. Alternatively, it would give him great leverage with whoever the party picks as its candidate.

Already, the thinking in Raila camp is that except for Kalonzo Musyoka, the rest of the ODM lot have no scruples about leaving it to Raila as long as they are adequately rewarded for the gesture.

Indeed, opinion on the ground is still strong that besides Kalonzo and Uhuru Kenyatta, the rest of the ODM presidential candidates are actually Raila’s ‘projects” and would play ball on the day of reckoning.

That also tallies well with thinking in Raila circles that Kalonzo can be ignored because all he can bring on the table is the Kamba.

In the same vein, Raila strategists view Uhuru’s candidacy as of no consequence as long as president Kibaki is in the race, what he once characterized as mere ‘sentimental value in the ODM calculus.

The down side to that kind of strategy is that so far there are no constitutional offices that Raila can dish out to the rest of the ODM key luminaries as an inducement to have them in his camp. And going by Narc’s flopped experiment on pre-election power sharing. Perhaps no ODM presidential hopeful will be too enthusiastic to hedge his bet on a promise which is for now just wishful thinking.

Granted that constitutional offices like the office of a prime minister and more than one vice president may require a majority vote in parliament, the government side would certainly sabotage their creation just to frustrate the ODM.

But being the pragmatic politician he is , analysts have a their explanation and believe Raila could be thinking outside the ODM toolbox altogether.

Could there be a possibility that he is positioning himself as the single biggest (threat to president Kibaki bid for a second term to goad the latter to negotiate as an accommodation.

As of now, one thing is clear. Raila is set to electrify this year’s campaign scene in manner last seen in a manner last seen in 1992 when Kenneth Matiba took the country by storm. Certainly, none of the other presidential contestants, including the incumbent, can beat Raila in election campaign planning. Whether that translates into votes is another matter altogether.

We have no intention of raining on Lang’ata MP Raila Odinga’s parade on Sunday as he rolls out presidential election blueprint at the KICC, Nairobi. We will not even attempt to drizzle on one of the greatest days of his eventful life. Instead, we will reflect on a number of dynamics of the forthcoming General Election. In other words, the day of Raila’s launch will provide a rare occasion for political meditation.

First, we hope that Kalonzo Musyoka, William Ruto, Uhuru Kenyatta and Musalia Mudavadi will all be present in the KICC’s Plenary Hall as Raila launches his bid to capture both the ODM-Kenya presidential ticket and the national presidency itself.

It was Kalonzo who detonated the culture of the spectacular launch when he unveiled his Kalonzo Musyoka Foundation. To Raila’s and Uhuru’s explicit surprise and that of the Narc administration, more than 30 Western diplomats, including the American, British and EU envoys, attended the launch at the Hotel Inter-Continental in Nairobi. It was at this event that both Kalonzo and Raila spoke enigmatically about being able to “die” for each other — meaning to strategically opt out of the race in order to boost the chances of one of them.

But the main reason the large diplomatic corps presence, quite apart from his then commanding lead in the presidential election opinion polls, was the fact that, as Foreign minister, he had mediated the Sudanese and Somali crises and was now establishing a foundation to foster conflict resolution and democratic ideals in Africa.

A lot of water has passed under the bridge since then, not to mention the fact that quite a few bridges have been burnt, too. This was the period soon after the Government’s defeat in the referendum on the Draft Constitution. Two years later, President Kibaki’s economic reform programme has borne fruit. He, not Kalonzo, now has a commanding lead in the presidential opinion polls, followed by Raila.

Raila is the fifth ODM-Kenya presidential aspirant to launch his vision. Besides Kalonzo, Julia Ojiambo, Ruto and Najib Balala have unveiled theirs.

RAILA’S CHOICE OF VENUE, THE KICC Plenary Hall, was governed in large part by the security and comfort, not to mention the focus, of a large contingent from overseas drawn from the Kenyan Diaspora and the Odinga family’s wide network of contacts in foreign regimes and international non-governmental organisations.

Of the big-time political players, only President Kibaki had a key public function in the week leading up to the Raila launch: the Labour Day address to the nation from Uhuru Park, Nairobi, where he waived tuition fees in secondary schools and left the Opposition reeling with the timing and the largeness of his gesture. Raila has commented twice on the President’s May 1 move, both times trying to find fault, but coverage of his reactive remarks has been surprisingly patchy.

The first real jitters of the anxiety about the scale and scope of the Raila launch were perhaps voiced by former Vice-President Mudavadi last week when he suddenly blurted out a warning about a latter-day Idi Amin. And then, speaking in Meru, Kalonzo, now dethroned as king of the polls, finally went into fatalistic mode and actually uttered words to the effect that President Kibaki could well win a second term.

One of the greatest lessons to be drawn from a Raila presidential bid is that the minimum reforms process is not the only thing that stands between ODM-K internal cohesiveness and State House. The most petty and petulant individual jealousies, hates, betrayals, fears and loathing also loom large.

The next General Election is not Yes-No territory. The President is not an overbearing, authoritarian hate figure. He is an economist of the old school who says what he means as well as means what he says. There is no equivalent of the Kanu bogey.

Mr Kariuki is a PR consultant in Nairobi
nationmedia.com

Between presidential aspirants Kalonzo Musyoka, Musalia Mudavadi and Najib Balala, former vice-president Mudavadi stands out as the richest in the group.

While the other two, Kalonzo and Balala, can be said to be quite modest in terms of affluence, Mudavadi’s wealth puts him almost at par with the big two in the presidential race; President Kibaki and Raila Odinga.

Born Wycliffe Musalia Mudavadi in September 1960 in Vihiga division of the then larger Kakamega District, the young Mudavadi was the privileged son of the late Moses Budamba Mudavadi, a former education officer who later became a very powerful minister in president Moi’s cabinet.

Wealth in the larger Mudavadi family could be traced to the long period the elder Mudavadi served as a powerful minister for local government and a close confidant of president Moi. He was first appointed to the cabinet in 1979 soon after Moi succeeded Jomo Kenyatta as president.

The senior Mudavadi used his closeness to the president (having been instrumental in getting him nominated to the Legislative Assembly by the colonial authorities in the 1950s) to entrench himself both politically and economically.

He was an extremely generous person and in the 80s he regularly hosted mammoth goodwill delegations at his Mululu home in Kakamega, from other parts of Luhyaland. After such visits, each member of the delegation would leave with a bulging pocket from the King of Mululu, as the elder Mudavadi had been nicknamed due to his extensive political influence in the entire Western Province.

To some extent. then, one could say that long before the young Mudavadi made his own millions, the larger Mudavadi family was already a beneficiary of old money. In fact the senior Mudavadi was feted as the first Luhya to own a Land Rover vehicle in the 1950s when he served as an education officer in the Rift Valley Province, a no mean feat since Land Rovers were the vehicles of choice for the British aristocracy.

Mudavadi’s big break

The younger Mudavadi became an MP in 1989 to fill the vacancy created by the death of his father that year. President Moi immediately appointed him Minister for Supplies and Marketing but the 29-year old made little impact owing to his relative inexperience.

His big break both in politics and world of business came after the 1992 General elections when he was appointed to the plum portfolio of Minister for Finance.

It was as Finance Minister that Mudavadi entrenched himself in the world of business first venturing into insurance and later investment in the banking sector. During his tenure at Treasury, Mudavadi enjoyed good relations with big players and wheeler dealers in business and in the process learnt useful tips on how to keep afloat in the cut throat, ruthless world of business.

Mudavadi also enjoyed extremely good rapport with Moi’s former personal assistant and dealmaker Joshua Kulei. There are reports that the two ventured in a few business deals during this period.

He later served as Minister for Transport and Communications overseeing the then lucrative parastatals such as Kenya Posts and Telecommunications. He also served at the Ministry of Agriculture, besides the brief two-month stint as vice-president during the final days of the Moi presidency.

Despite being very wealthy in his own right, Mudavadi has maintained a cloak of secrecy around his investments unlike other players in the presidential race, such as Raila Odinga.

Besides being co-owner of an insurance company, a bank and other companies, among other known Mudavadi investments include an office block in Westlands and a number of residential houses in the city.

Mudavadi, a Land Economist by training who started his employment career working for a local real estate agent, Tysons Limited, also has his property management company which operates from Westlands. Analysts estimate Mudavadi’s family wealth to be in the region of hundreds of millions of shillings which means he can comfortably finance a good political campaign from personal resources.

Kalonzo Musyoka, a man of modest means

Unlike President Mwai Kibaki, Raila Odinga and Musalia Mudavadi, the other three presidential contenders, Kalonzo Musyoka is a man of modes means. The big three can easily marshal substantial personal financial resources to fund their presidential campaigns, which is more than can be said of the man from Mwingi.

He has been in politics for a relatively longer time than most of the others in the presidential race, except the president, (he was first elected to parliament in a by-election in 1985) and he has held prominent cabinet positions. But unlike most other politicians he does not appear to have used public positions to advance himself politically.

Besides being a silent partner in a city law firm, among the few investments that Musyoka is known to have including a humble hotel business that goes by the name Mwingi Cottages. The hotel is located in his home district.

Musyoka built the hotel about ten years ago with a Kshs 10 million loan from the Kenya Tourism Development Corporation (KTDC). Sources say he is still repaying the loan.

The only other prominent asset that Kalonzo is known to have a magnificent house in Karen where he lives with his family. The house, sources say, was built with substantial material assistance from former President Moi during the period Musyoka served as Moi’s trusted Cabinet Minister and key Kanu official.

Kalonzo, who is married with four children, served in various positions in the Moi government. He started off as an assistant minister before becoming the Deputy Speaker of the National assembly in 1988. he was appointed Minister for Foreign Affairs after the 1992 General Elections.

It is perhaps out of the understanding that unlike other key presidential contenders he is not in a position to personally finance his presidential campaign in any significant way that Musyoka was among the first politicians to set up a political foundation to serve as a fundraising platform.

Through the Kalonzo Musyoka Foundation, the youthful looking presidential contender hopes to use his extensive international connections to raise substantial funds for his presidential campaign.

There are also a number of wealthy local associates especially moneyed businessmen and professionals from Ukambani who would most likely provide substantial financial backing to Kalonzo should he become the ODM presidential flag bearer. They include gemstone dealer Johnstone Muthama, a real estate magnate David Masika, city lawyer Mutula Kilonzo and tycoon John Harun Mwau.

Najib Balala and the Arab money

Turning 40 years on September 20^th this year, ODM presidential hopeful Najib Balala is clearly the youngest presidential aspirant in 2007. Balala comes from a prominent Mombasa family that has been in business of tea export for years. The family is also said to have some investments in the hotel industry at the coast which could explain why Balala served as the chairman of the Mombasa and Coastal Tourism Association (MCTA) at one time.

Balala is not wealthy enough to be in the leagues of other ODM presidential aspirants such as Raila, Musalia or William Ruto, but he is relatively wealthy in his own right.

The Mvita MP made substantial personal money between 2003 and 2005 when he served as Minister for Sports and culture. During this period, informed sources say, Balal had some lucrative business dealings with prominent players in the oil rich Arab countries of Qatar, Oman and Yemen where he is reputed to have made close to US$ 2 million (about Kshs 140 Million).

Interestingly though, when in Nairobi, Balala stays in a rented house at Kolobot Gardens near State House.

It is not clear in which sectors Balala may have invested his windfall. Suffice it to say that besides the personal fortune, he has good links in many oil-rich and generous Arab countries where he can turn for financial support should he emerge a serious presidential contender.

Balala’s political career begun in 1998 with his nomination as councilor in the Mombasa Municipal Council where he subsequently became the mayor and played a critical role in positively transforming Mombasa into a clean and tourist-friendly city.

Source: The Leader

Following the footsteps of Energy Minister Kiraitu Murungi, who asked former Ethics permanent secretary John Githongo 36 questions about the Anglo Leasing scandal, we today pose just a few 10 questions about Mungiki.

1. Why were members of the Mungiki, which had been purportedly outlawed after the killing of 21 people in Kariobangi, Nairobi allowed to hold a demonstration in the middle of the capital in the same year?

2. Why did the members perpetuate another orgy of blood letting in Nakuru as soon as the Narc government was sworn into office?

What did it take to end the killings, and what deals did government officials get into such that the then National Security minister, Dr. Chris Murungaru, could declare the sect “finished”

3. at the outset, Mungiki leaders claimed that it was a harmless cultural organization of young people who had a keen interest in snorting snuff, circumcising women and praying facing some mountain.

At what point did it start cutting off the heads of its defectors, killing “enemies”, having AK-47 rifles and murdering police officers?

4. How come the sect’s spokespeople nad officials – people who have no record of having put in an innocent’s day’s work anywhere – are suddenly living in custom-built multi-million shilling palaces?

5. The National Security Intelligence Service has records of conversations people have in bars.

How come it does not seem to have a clue over the Mungiki which has been extorting protection fees from Matatu operators, landlords and small business people?

6. Why have the police not investigated the backgrounds of people who have claimed links openly with Mungiki?

If investigations of this nature have been done, how come the public does not know?

7. Why did the then special programmes minister Njenga Karume meet with Mungiki leaders, when the sect was proscribed, to discuss mobilizing support for the “Yes” side during the constitution referendum in 2005?

8. Why is the Government of two minds regarding the method to adopt in dealing with a terror organization disguised as a religious sect?

Does this lend any credence to Mungiki’s boast in the past that it has recruited people in the Government, among them police officers and politicians?

9. Try and take over Nairobi’s Harambee Avenue and start collecting power charges and protection fees and see what will happen to you.

Why then is the Government abdicating security in sections of the city (and country) to groups? What is the motive?

10. Why is Mungiki, which is now no more than a tribal army, always most active in the years when there is an election?

And why are those of them arrested always charged with useless offences such as belonging to a prescribed organization instead of murder, assault, female genital mutilation and other offences for which the group is known?

These questions need not be answered in any particular order, but they require forthright and comprehensive responses from the Government that collects taxes to enable it to deal with this kind of nonsense. Any of those who defend Mungiki can also attempt.

Makokha’s Memos – Saturday Nation

Some people might think that 2012 is quite far but as the saying goes, Rome was not built in a day so I’m proposing a forum where we could start a “Kenya Dream-Team” campaign by first nominating 10 relatively reputable Kenyans and then we could slowly market the team in the next 5 years and hopeful when 2012 arrives, we would have a strong team that would change the way politics is currently run by the privileged few.

I know this sounds like a far-fetched idea and quite frankly it is, but as the Chinese proverb goes, a journey of a thousand miles starts with a single step so I do strongly believe that is truly feasible and we could make turn this far-fetched dream into reality!

Once we locked-in on the Dream-Team, we could start working out the logistics of raising campaign funds. This could be a simple campaign like soliciting Ksh.100 donations from 5 million Kenyans (5,000,000 * 100 = Ksh. 500,000,000 (half a billion Kenya shillings)) since it is an open secret that money does play a huge role in any political battle.

Here are my first 3 nominees:
1. Mutavi Musyimi
2. Raphael Tuju
3. PLO Lumumba

(a comment left on kenyapolitical.blogspot.com)

4. James Mwangi (Equity);
5. Titus Naikuni (KQ);
6. Martin Odour-Otieno (KCB);
7. Wangari Maathai (2004 Nobel Peace Price Winner, Founder Green Belt Movement, MP for Tetu Constituency);
8. Bitange Ndemo (PS Ministry of Information & Communication);
9. Peter Kenneth (Asst. Minister-Finance, MP for Gatanga Constituency).

Kenya needs technocrats who can deliver.
(MainaT)

President Mwai Kibaki is a discreet businessman who, though fabulously wealthy, shuns owner-manager kind of business operations where the owner’s hand becomes obvious and visible, much like his predecessor Daniel arap Moi.

He is unlike Raila Odinga, his main challenger for the presidency in the forthcoming elections. With Raila, his or the Odinga wealth is easily identifiable thanks to the more flamboyant and outgoing nature of the Odingas.

The Odinga family, for instance, has the highly visible flagship investments such as the Kisumu Molasses Plant and the gas cylinder manufacturing firm, the East Africa Spectre.

In sharp contrast, everything is very low key with Kibaki. The only fairly known Kibaki family company is perhaps Lucia & Company Ltd which used to operate from Finance House where Kibaki had a private office before he became president.

Lucia & Company has since moved its office to the more prestigious Bishop’s Gardens building in the Kilimani suburbs. This is where members of Kibaki’s immediate family, daughter Judy Kibaki, sons Jimmy, Tony, David and Kagai regularly operate from either manning some family concerns or minding their own private interests.

The Kibaki family is also said to have a direct substantial interest in the prestigious and successful cloth store Deacons. Among other investments where Kibaki is said to have interests include Silver Springs Hotel in the outskirts of Nairobi and Green Hills Hotel in Nyeri.

In earlier years Kibaki was in partnership with Njenga Karume in tourism business via the now collapsed United Touring Company (UTC) which in the 80s was one of the largest and most successful tour operators in the country. Through UTC the two had an interest in Nyali Beach Hotel in Mombasa but it is not clear what became of these interests following the collapse of UTC and subsequent legal battles between Karume and buccaneer businessman Ketan Somaia.

Financial analyst concede that it is hard to estimate Presdient Kibaki’s actual net worth “because the man operates through a series of investment companies and other special purpose investment vehicles”, as one seasoned stock broker told The Leader in an interview last week. The broker had previously handled some accounts associated with investment companies Kibaki had an interest in.

Besides operating under the cover of investing companies, Kibaki also prefers having his investments held in trust through holding companies, which again throw a smokescreen for anyone trying to pry on what he owns and where it is situated.

Perhaps it is because of his professional orientations as an economist where he learnt the art of discretion in matters of money. The shroud of secrecy could also be possibly be attributed to his nature as a man who keeps his private life as confidential as possible.

Whichever the case, president Kibaki is an immensely wealthy man with substantial investments in some of the most profitable companies in the country today.

Financial analysts estimate that the Kibaki family through shares held via investment and holding companies which in turn own shares in blue chip companies at the Nairobi Stock Exchange (NSE) could be controlling an investment empire worth s much as Shs 2 billion.

Besides investing at the NSE, the Kibakis are also big in farming, owning huge farms in several parts of the country.

Among the farms that Kibaki owns include one in Nakuru, a ranch in Naro Moru area near Nanyuki, farming interests via a holding company in Mweiga where businessman Naushad Merali too has an interest, besides property in his rural home in Othaya.

Kibaki is also the best exemplification of the adage “business knows no political enemies” for he is in business with some personalities who are clearly his sworn political enemies.

Of business and strange bedfellows

Official records show that Kibaki, for the first time, teamed up with the likes of former President Daniel arap Moi, former powerful Attorney General Charles Njonjo and motley of other big players of the 70s and 80s towards the end of Mzee Jomo Kenyatta’s regime.

Teaming up in what was like a roll call of who-was-who at the time, Kibaki and co,. formed an investment company which they named Heri Limited and went on a business shopping spree.

First stop was at DT Dobie Limited, the franchise holder of the prestigious Mercedes Benz cars. Here Heri Limited acquired a 40 per cent shareholding. Years later, Heri ltd was to sell its shareholding to Mrs D T Dobie, the wife of the creator of the company at hundreds of millions. In 2000, after holding onto the shares she had acquired from Heri Ltd for about a year, Mrs Dobie sold her majority shareholding to the French firm CFAO making a clean Shs 587 million in the deal.

Heri Ltd also invested heavily in property with its flagship properties being such prestigious Nairobi landmarks as Norfolk Towers, College House and Kolobot Gardens. The company also invested heavily in quoted securities at the Nairobi Stock Exchange (NSE) and was for many years among the top 20 shareholders of ICDC Investments, nation Media Group, Jacaranda Hotel, Standard Chartered Bank, Lonrho Motors East Africa, Housing Finance Company and the Barclays Bank.

Heri also invested in lesser known companies such as Clarkson & Soutehrn Ltd, Taisho Monarch Insurance Company.

In commercial and real estate sector, the company owned substantial shares in Housing Finance Company (324,250 shares), Barclays Bank (352,764 shares), ICDC Investments (158,490 shares) and Standard Chartered Bank (697,837 shares).

Besides having shares in Heri Ltd – which essentially gives him a substantial take in all companies that Heri had invested in – president Mwai Kibaki also has an interest in International House Limited, the company associated with businessman Chris Kirubi and the one that owns the prestigious International House.

In addition to Kibaki, other listed shareholders or directors of International House limited in the company’s annual returns for 2003 were Kiruma iNternational (a company in which Kirunbi has substantial interests), Barclay Trust Kenya, Roirie Ltd and Mr Chris Kirubi.

Even when Kibaki fell out with Moi, Njonjo, Kenneth Matiba or even Njenga Karume, their business links remained intact perhaps sustained by the fact that they operated mainly through investment companies. This arrangement meant that they did not have to meet in order to transact business since the firms were run by hired professionals and all that the shareholders did was to wait for their dividend cheque every quarter or so.

Other discreet operators in Kibaki league

Apparently in the days Kibaki made his money, the operative word in business circles was discreet. At about the same time the man who would be president made his bundle, his contemporaries too, made a good account of themselves. Their vehicle was an outfit by the name African Liaison & Consultants Services Limited (ALCS).

Although the two companies – Heri Ltd (Kibaki outfit) and African Liaison & Consultants Ltd – had some common directors and shareholders cut throat competition existed between the two with each trying to outdo each other when it came to clinching lucrative investment deals. Whereas in the case of Heri Ltd the company’s creators came to the fore immediately on its formation, this was not the case with African Liaison where the shareholders initially stayed behind the mask of a legal firm.

In the initial documents, African Liaison shareholders were lawyers Francis Addley and Amos Wako, both then working with Kaplan & Stratton Advocates. The company’s secretary was listed as Linda I. Lee. Somewhere along the early days of African Liaison Company, Wako ceased being a director and his place was taken by a colleague at Kaplan & Stratton, Leslie Keith Savage.

The two Kaplan & Stratton lawyers continued as directors of the company until Novemebr 1977 when they both resigned and the real owners of the company came to the fore.

Dropping the mask

As 1977 came to a close, the forces behing African Liaison Ltd decided to drop their masks. Thus Julius Gecau, then managing director of the Kenya Power & Lighting Company, Ben Gethi, then commissioner of police, James Kanyotu, then director of Special Branch and the late Bruce McKenzie, then minister for Agriculture were officially listed as directors of African Liaison & Consultants Services Ltd.

However, before the company could really take off, Bruce McKenzie, one of the primne movers in African Liaison, died on May 24, 1978 in an aircraft accident en route from Uganda. Like other mysterious deaths of many politicians, the circumstances surrounding McKenzie death has never been fully explained.

His place in the board of African Liaison was taken in January of the following year by a new player Prahland Kalyanji Jani (who was better known as PK Jani in corporate circles)/ he has since died. After Jani, came in Jeremiah Kiereini as a director.

By 1980, the company was doing very well and was quietly investing in key companies in the economy. Subsequently, an annual general meeting held decided to increase the company’s share capital from one million shillings to Kshs 2.25 million. With the introduction of new shares came in more shareholders and directors.

Trogon Ltd, Coopers & Lybrand Trust Corporation, Feneast Nominees, Thuthuma, Nebanga and Kawakanja ltd took 12,500 each while Tarakuet Ltd had 7,500 shares. Behind the corporate mask at Coopers & Lybrands was Addley, Feneast Nominees (Charles Njonjo), Kawakanja (Kanyotu), Kingsway nominees (Jeremiah Kiereini), Nebanga Company (Ben Gethi), Thuthuma holdings (Gecau) and in Trogon was PK Jani.

Today African Liaison is among the major shareholders in such public quoted companies as CFC Bank, Barclays Bank of Kenya, CMC Holdings as well as Heritage Insurance Company.

Heri Ltd and African Liaison Ltd are not only among the oldest investment holding companies but also two of the firms with most highly connected shareholders. The few millions originators of the two firms invested some 30 or so years ago have multiplied in geometric proportions putting shareholders of the two firms in the billionaires club. Sources well versed in investment matters say that none of the companies was started with more than Kshs 5 million seed money.

Key shareholders of Heri Ltd at its inception

Shareholder	Number of shares held
Kingsway Nominees	122,000
Julius Gecau (former CEO of KPLC)	121,000
Charles Njonjo (Former AG)	96,000
Philip Ndegwa (the late former CBK Governor)	96,000
GK Kariithi (former Head of Public Service)	53,000
DR Njoroge Mungai (former powerful cabinet minister)	44,000
Heny Kinyua (former MD of KPCU)	44,000
Jeremiah Nyaga (former cabinet minister)	41,000
Duncan Ndegwa (former CBK governor)	39,000
Richard Kemoli (business executive with close links with former President Moi)	38,000
Dr Gikonyo Kiano (late former cabinet minister)	35,000
Njenga Karume (Kibaki’s defence minister)	35,000
Hohn Kotut Koitie (prominent business man)	35,000
John Michuki (Internal security minister)	31,000
Coopers & Lybrand (audit firm possibly acting as nominees)	30,000
Kyale Mwendwa (former cabinet minister)	24,000
Mwai Kibaki	19,000
Nick Mugwandia Muriuki (business executive)	19,000
Githui Kariithi Ihiga (former commissioner of income tax)	19,000
Kenneth Matiba (former cabinet minister)	18,000
Sam Waruhiu (lawyer and business man)	17,000
GG Kariuki (former powerful minister now an MP)	12,000
Matu Wamae (former MP)	11,000
David Kamau (prominent businessman)	7,000
James Mugo (former envoy and husband to MP Beth Mugo)	6,000

Source: The Leader Newspaper (Mwenda Njoka)