After the Westgate shopping mall attack what next ?

 

As we all know nobody loves death be it natural or artificial as it were  , 21^st September  2013 remains a sad day in Kenya‘s history books, the day when those heinous beings that justifies Karl Marx statement that indeed religion is opium for the poor especially the ones prone to being brainwashed and that some extremist elements can wreck havoc coincidentally on World Peace day by mercilessly executing peace loving Kenyans, out to spend a weekend  with their loved ones grabbing a cappuccino, young children engaging in cooking festival amongst other noble notable reasonable duties.

After the inhumane attack it’s time we as country need to seriously relook at our policies and take stock regarding our Immigration, border and internal security, mismanagement of public offices either indirectly or directly, societal moral decay and reforms in our security agencies geared towards serving the taxpayers safety in shopping places, stadia’s, learning institutions, hospitals, trains, buses, hotels and other social places

The hard questions begin to ponder our souls have we as society becomes so capitalists that we can sell away our sovereignty, patriotism and morality? , is it because of the huge differential gaps in standards of living across the nation solely the  driving factor behind the sprawling young extremist recruitment in the slum areas  by the terrorist groups filling the income void occasioned by unemployment  ? Are we a victim of geo politics driven by resources and control of strategic countries by the so called super powers? Are our priorities as country geared towards elitist cum egoist goals at the expense of a broad spectrum, fortified and unified state, the questions are many but at this point we can only think of developing long lasting solutions which starts with me and you through digital and physical engagements as well through public and private sector partnerships in order to tame this inhuman externalities.

The way forward will involve players such as the insurance industry , lawmakers, Real estate owners, Hospitals , government agencies e.g. registrar of births, immigration, the traffic police , public and private learning institutions, shopping malls, security agencies inter alia. Let’s kick of with the:

Insurance sector ; plays big role in risk management, its one sector through which the various players such as A.K.I, I.R.A and R.B.A play a key role ranging from developing policies meant to prevent major occurrence of risks and imposition of heavy penalties for non compliance on  regulatory requirements through occasional surprise audits and any anomalies found in the regulatory reports for instance it’s high time the industry players adopted a digital platform for sharing information on Vehicles and their owners, adopt new policy clauses on the political, terrorism and sabotage covers requiring  disclosures of security measures put in place such Smoke ,bomb, anthrax and gas detectors for property that have American, British and Israel interests, property that are of economic importance to the government amongst other related institutions e.g. Ports Authority , airports, KRA and CBK however , parliament  needs to enact legislation that will see either zero rating of  car tracking devices and for insurance players to make it mandatory for each  car be fitted with it (form part of the insurance policy clauses), Equip the traffic police  with electronic gadgets that can enable mobile capturing and tracking vehicle details without stopping the said vehicle to supplement the cameras being installed in the city in order to curb crime rates thus reduce claim losses arising out of theft and hijackings .

Hospitals; Upon expectant mothers being blessed with  new born babies in the country they young ones should be assigned unique identity numbers and names allotted by parents electronically stored and shared on daily basis with the register of births and the immigration departments such that by the time one attains the majority age the authorities issuing identity cards have prior knowledge of the persons being issued with various statutory documents i.e. driving license, PIN number, NHIF, NSSF etc in short we should have one document this will curb cases of illegal immigrants, streamline profiling of Kenyans citizens on matters security amongst other issues.

Real Estate Developers and Land Lords; Though a bit complex landlords should be required to ask for employments letters from their tenants, identity cards, colored passports and or their sources of incomes and details of their immediate family members, cell phones however to achieve this, reforms in rental income filing to KRA by landlords such as  capturing  key statutory identity features of the tenants are necessary, it should be a requirement that key buildings associated with highly exposed foreigners and susceptible to terrorist threats deposit  their architectural designs with the NSIS  and subsequent changes and or partitions to the building subjected to same law. However the long term panaceas lie with the government floating a housing bond to supplement REITS and private developers in offering formal settlements country wide otherwise profiling of individuals living in slums areas is cumbersome it requires regular community policing ,another key factor lies in the threshold for approval of residential buildings that have no common areas and or social amenities should be controlled , its only through social places like community social halls, soccer fields that people get to know each other but not in apartments in a nutshell information comes to social places the more they diminish the more difficult it becomes to mine one.

Private Security Agencies; We do know that our G4S guys, Lavington security guards, Radar etc are not authorized gun handlers especially their employees deployed to guard shopping malls, schools, offices, residential houses etc, in my opinion given the sporadic shootings by teenagers in schools especially in the USA, that arouses the questions of gun control, I may be right or wrong but I tend to opine that they should either be absorbed or transformed into a special armed police body meant to specifically offer security in major shopping malls, stadia’s, schools, office place ,hospitals and  placed on a  government payroll and while at the same stakeholders should offer anti terror and safety security measures to its employees on regular basis this should form part of licence renewal requirements but at the same time allow for employers to claim the reimbursement under NITA rules formerly the Directorate of Industrial Training.

Reforming the police sector; The police units should not be seen as a preserve for those who scored low marks in high school and just because I can run faster does not mean I can dodge a bullet, our police force should be properly trained equipped with modern warfare techniques, properly remunerated and above all remain patriotic however iam told you don’t eat patriotism whose deficiency is sometimes as a result of low morale hence prone to bribery. High end terrorists by nature are well schooled individuals iam reminded that Osama was a trained engineer, Khalid Shaikh Mohammed one of the September 11 mastermind was a graduate of bachelor science in mechanical engineering attained from an American university Mr. President Uhuru be bold enough have graduates enroll for military for the sake of peace and stability in our country. Let’s have the SRF forces spread across the country in major towns for now the dissidents are fooling us with Nairobi, Mombasa and Northern Kenya how about the rest of the country, re engage retired military personnel on under cover surveillance .

Lastly this subject is wide we have not even covered schools, hotels and public transport sector remember the London underground transport bombing.  lets not turn a blind eye on the eyesore called terrorism lets  be our brothers keeper just like Abdul Haji during the westgate attacks.

Agriculture insurance in Kenya and the need to develop a commodity based futures market

 

Agro based insurance covers in Kenya are still a new type of risk or rather new class of  agricultural  insurance despite most insurers in the  market developing insurance products ranging from Wheat , sugarcane, sorghum, Greenhouses ,dairy cows , horses  etc  to cushion the farmers against adverse losses that may arise as result of  bad weather, theft , some classified  diseases especially for livestock farmers , arsonists attacks on sugar plantations inter alia. However, since the late 2005 the uptake of the agro insurance covers in the country has largely been driven by respective underwriters creating awareness through broad based marketing campaigns targeting agriculturally rich counties on the merits of insuring crops and livestock to which they have justified the same by electronically settling insurance claims for affected policy holders a case in mind is the Jubilee insurance company of Kenya compensating Sorghum farmers as result of poor rainfall in kibwezi which fuels the need for farmers to engage in value based farming devoid of acts of god.

What most insurance players in the market have been forced to develop products in a way that leverages their premium incomes  from adverse losses by developing key control factors for instance for wheat farmers they have a minimum requirement on the acreage to be insured, maximum guaranteed indemnity should a loss occur;  the regulator in tandem with the government ought to devise policies, create durable infrastructural facilities  and laws that will guide the growth of the insurance sector in the country as whole without burdening the insurers in the market. This will address the need to mitigate insurance costs usually passed over to overseas reinsurers especially for the highly mechanized farm plantations.

Other micro finance institutional players in the market such as KWFT have also partnered with insurance players by offering credit facilities to Sacco’s who in turn invest in dairy cows that are insured against death, theft and or gestation complicated issues in this way the insurance company guarantees to pay the farmer should a loss arise and that the micro lender is guaranteed that the farmer is able to repay the loan taken based on restitutio integrum. Having developed sound insurance base for the farmers opens up the farmers to another war frontier that usually involves exploitation from middlemen and brokers out frustrate their efforts to sell at a reasonable rate their farm produce to the specific industries that need to process agro based produce  hence a disillusioned farmer , though the other factors stem from the inability by the factories to pay the suppliers which arises out of fund mismanagement and or price fluctuations in the global markets .

The way forward to cushion the farmers from exploitation revolves around setting up commodities futures exchange market for products such as maize, wheat, barley, pork, sugar, coffee, tea etc such that   a farmer raising wheat can sell a future contract on his wheat, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price drops and the buyer from price rises. Speculators and investors also buy and sell the futures contracts in attempt to make a profit and provide liquidity to the system. However, due to the financial leverage provided to traders by the exchange, commodity futures traders face a substantial risk. This will go in a long way addressing the maize, coffee, sugar and other cartels that normally exploit farmers in the country for political and selfish interests.

Livestock Futures as a solution for cattle rustling in northern Kenya and the neighboring countries

 

Over the years cattle’s rustling has been rampant in the arid and semi arid areas of northern Kenya amongst the nomadic communities especially the cushites and the plain nilotes as well extending to neighboring countries i.e. Ethiopia, Uganda and Sudan. The well documented causes of the problem which revolves around some communities being armed “illegally” to fend off cattle rustlers from other pastoralist’s communities for political reasons, communities appetite to replenish lost stock after  harsh weather conditions during wet seasons from their fellow  nomadic communities and last but importantly the lack of proper education and low literacy levels by the pastoralist communities which the main rogue market players take advantage of in terms of buying their stolen livestock at a cheaper price and selling the same to the main urban centre’s at a premium price. This cyclical lifestyle does more harm for an economy that plans to achieve middle income status by 2030.

The political class and the regional leadership only resorts to short term measures such as disarmament of illegal firearms and left it to the N.g.o world to manage state affairs such provision of irrigation and lastly nature to dictate for instance   during dry seasons no rustling occurs due to en masse death of livestock as result of inadequate pasture as well as the famine experienced by nomads hence their inability to steal  and where as during the wet seasons, it’s time to strike for there is plenty within the borders to replace lost stock . During the inauguration ceremony for president Uhuru I saw his Ugandan counterpart Yoweri Museveni accuse the pokots from stealing animals to which the latter’s Kenyan legislators did not take lightly and yet we did not see any constructive solution to the problem at hand.

The long lasting panacea to this problem lies partly with our  regional government efforts to irrigate arid and semi arid areas , have more nomadic communities  enroll for formal education in order to avert this rather perennial problems however, the long lasting solution lies in financial sector deepening which calls for establishment of cattle’s futures market to take care of the harsh weather conditions and political cartels that exploit this nomadic society and as such cattle futures market will enable Consumers and producers of livestock to  manage  cattle price risk by purchasing and selling cattle futures. Cattle producers can employ to lock in a selling price for the cattle they produce while businesses that require cattle can utilize a long hedge to secure a purchase price for commodity they need.

Cattle futures can also be traded by speculators who assume the price risk those hedgers try to avoid in return for a chance to profit from favorable livestock price movement. Speculators when they believe that cattle prices will go up. Conversely, they will when they think that feeder cattle prices will fall. However, to achieve this other related products such livestock insurance must be a prerequisite for one to trade on the cattle futures market ,furthermore it’s high time the government relaxed rules on importation of tracking devices which can be installed on   cattle  horns or hooves and the same should form part of insurance policy so as to mitigate theft claims.

 

 

Taxing the poor to fund the rich in kenya

The last few months, Kenyans have witnessed an ever bulging national debt occasioned by the need to finance the various capital expenditure projects as envisioned in vision 2030 however, I tend to opine that the executive is being held captive by the legislature due to selfish and political interests, the clamor by our lawmakers forcing the Salaries and remuneration commission to award them huge pay perks in country where the GDP per Capita is USD 800 only widens the gap between the have and the have-nots. The president was arm twisted into accepting their salary this would in return mean legalizing VAT ACT NO 35 meant to tax the poor on basic needs, this raises another pertinent question will the taxes be used effectively repay the Chinese loans or shall we as country always revert to soft target taxation groups while major tax evaders and offenders are let loose, the so called fat cats take advantage of the political divisions in the country to advance their imperialist cum capitalist interests.

As a realist accountant I do concur that capital investments in infrastructure and energy have multiplier effects on the general populace; however as country we ought to realize that capital investments only will not spur industrialization unless the government creates an enabling environment that can effectively fend off proponents of the flying geese model, a point in case is the recently completed Thika Eight lane highway  that has seen multinational companies such Pepsi, Foton and the emergence of new Golf Resort Cities e.g. Thika Greens targeting the affluent while the poor can only be offered jobs that are technologically dead and low paying , the current and future governments should devise and give priority to policies that are agro friendly and tech savvy  driven by setting special  investment deductions  incentives for companies and individuals willing to set up novel local  firms with novel ideas along such infrastructural establishments but this  calls for moral respect of intellectual property laws and investing in quality education.

 

Lastly I must commend positively to what our kaka zetu  Tanzania are doing, their resolve to establish new port in bagamoyo and the port of  Dar-es- salam reengineering has given Kenya wake up call to remove trade barriers along the Mombasa – malaba highway and even think of a modern railway inter alia   that in itself has been  demonstrated in the recent meeting between EAC heads of state member but it begs the question do you have to wait for neighbor to wake you up - in a nutshell it’s high time Kenyans stopped reasoning along partisan lines address real issues like the cost of living, immigration, security ,Education ,devolution as opposed to thinking using their surnames when indeed addressing their own personal and political interests.