[kictanet] Discipline & Ethics - Re: Legislation and Regulation fore-Commerce in Ken

Tue Jul 15 06:50:32 EAT 2008

Joe,

We have many qualified Kenyans both within and outside the country, who
could run these companies just as efficiently, the foreign
investors behind these companies obviously have their financial interests
higher placed and that is why one of their own is at the helm.

Economically speaking, there are many squandered opportunities that go to
waste. For example the Egyptian government raised US$1 billion dollars from
the sale of 3G licences. An entity with heavy interests in Kenya's ICT
sector spent over $500m for such a licence. In contrast the same licence in
Kenya went for $20m. Naturally new shareholders associated with the entity
will be happy as "investors" that their new investment did not spend
hundreds of millions to acquire access to a rare and finite national asset.
Which brings one to what might seem like a wish list. What if the government
had sold the 3G licences for $100m? $40m could have gone to the exchequer to
ease tax payers burdens and $60m could have gone into an ICT specific
development fund. The below thoughts assume that one would not come to the
table empty handed and that the necessary vetting and due diligence would be
naturally carried out:

- Establish a self sustaining government managed fund to promote indigenous
Kenyan ownership of enterprises specific to ICT
  a) Ease access to capital needs by helping fund eligible and qualifying
indigenous enterprises
  b) Can be administered through the CBK or in conjunction with local
commercial banks and limited to specific lending terms
  c) Establish repayment periods

- Issue government backed guarantees to ease access to capital for
qualifying enterprises or locals engaged in equity participation
  with foreign investors.

- Establish laws and the framework to grant incentives to foreign investors
who create opportunities for local investors to participate
  in their entities through significant equity participation.

- Passive equity participation by government in local indigenous enterprises

- Passive equity participation by government in foreign led enterprises with
a view to eventually offloading the equity to Kenyans

Perhaps additional questions to ask in trying to address these issues are:

- What will it take to ensure that Kenyans can effectively compete in the
global/regional ICT sector?

- Who are the stakeholders needed to ensure that policies get the due
attention of parliament?

- What are the regulatory changes needed to allow the government to
participate passively in private ICT sector investments?

- At what level do regulatory changes that promote local ownership and
entrepreneurship need to be undertaken to make
  this a part of official government policy and economic strategy?

On Mon, Jul 14, 2008 at 5:51 PM, Joseph Manthi <jmanthi at gmail.com> wrote:

> Mike
> So the question of the day is this?
>
> Where do we go from here? Look at what foreign companies are doing all over
> Africa while we are napping - especially Indian and Middle Eastern ones? If
> I may be rhetorical - Is it a well established fact that we cannot find
> Kenyan - I mean indigenous Kenyans - MDs of Celtel, Safaricom, KDN,  Orange
> etc? Is that a fact?
>
> All Kenyan members of this list would like a concrete resolution to this -
> if I may be bold enough to say this.
>
> Thanks,
> Joe
>
>
> On Mon, Jul 14, 2008 at 6:39 PM, Mike Theuri <mike.theuri at gmail.com>
> wrote:
>
>> Joe,
>>
>> Had these rules been implemented, today we might be in a position to call
>> Kenya "economically sovereign" but that is far from reality and unless
>> corrective measures are undertaken rather quickly it will be too late unless
>> the government of the day turns radical and resorts to nationalising private
>> entities the Hugo Chavez way. However that is a mirage on the horizon, as
>> any such attempts would likely to lead to expropriation claims in
>> international world courts, pariah status and we would be headed the
>> Zimbabwean way where having seven figures in one's
>> bank account would qualify one as a poor millionaire.
>>
>> Friends of Kenya are most welcome to give their input and offer expertise,
>> however, policy making ought to be led and controlled by Kenyans. Policy
>> makers and decision makers will hopefully grasp the urgency of the need to
>> ensure that the country's economic independence and national security is not
>> threatened by abdicating their core duties to formulate policy that will
>> result in greater Kenyan ownership and control of the key sectors of the
>> economy. If it takes legislation to mandate a shift in shareholding over
>> time eg the South African economic empowerment way, it would be worth the
>> time, consideration and study. As you correctly point out, the US, Canada,
>> China, Libya and many more around the world would never allow foreigners
>> directly or indirectly by proxy to define public policy, to do so would be
>> to deliberately disown the nation's sovereignity.
>>
>> Mike
>>
>> On Mon, Jul 14, 2008 at 9:54 AM, Joseph Manthi <jmanthi at gmail.com> wrote:
>>
>>> Mike
>>> Well said.
>>>
>>> What I would like to add is that every investor in Kenya should be
>>> subjected to the same rules that a Kenyan would be subjected to in India and
>>> EEU or any other country. Additionally we should not be having foreigners
>>> attempting to shape Kenya's public policy. In fact in the US no foreign
>>> owned company is allowed anywhere near where public policy is created. Any
>>> foreign based public policy body must identify itself as such. In this case
>>> KIF would be an illegal associations because it has non Kenyan entities as
>>> its members.
>>>
>>> At the end of the day when all hell breaks loose these guys are the first
>>> ones to get airlifted by their embassies and leave Kenyans to face the music
>>> alone. We have seen it time and again all over Africa.
>>>
>>> They say: "History does not repeat itself only the folly of Kenyans does"
>>>
>>> Joe
>>>
>>>   On Mon, Jul 14, 2008 at 7:41 AM, Mike Theuri <mike.theuri at gmail.com>
>>> wrote:
>>>
>>>>   One need only look at past history and realize that a Kenyan whether
>>>> resident in Kenya or not is an underdog when it comes to fairly competing
>>>> against foreign entities that have the "right connections" and "right" goes
>>>> beyond having "business connections". When official policy intentionally or
>>>> unintentionally appears to dictate that anything Kenyan led should be
>>>> relegated or ranked lower because local is not better, is the biggest single
>>>> contributing factor that has led to foreign control and ownership of key
>>>> sectors of the economy.
>>>>
>>>> One need only look at India's current economic prosperity where
>>>> official policy was key in ensuring that any major player wanting to do
>>>> business in India had to engage in joint ventures with local players, the
>>>> benefit of that foresight can now be seen as some of these firms turn into
>>>> true multinationals as a result of knowledge and technology transfer while
>>>> ensuring that in the process, the wealth and long term benefits
>>>> generated remained mostly in India and not in foreign coffers.
>>>>
>>>> As for the diaspora, they may have already decided to keep off due to
>>>> the lack of incentive and a guaranteed (not preferential) level playing
>>>> field , besides remittances, can anyone mention any major investment
>>>> activity in a key national sector that a broad based diaspora led initiative
>>>> has succeeded when competing in one's own country against foreign led
>>>> entities? The answer might be found once again in official policy and
>>>> approach as this brief analysis indicates, why should one invest where they
>>>> are likely to get burned by playing their cards fairly and transparently
>>>> when the policy makers are not willing to address key issues of legitimate
>>>> investor concern?
>>>>
>>>>
>>>> http://kenyaimagine.blogspot.com/2007/03/kimunya-attempts-to-woo-kenyan-diaspora.html
>>>>
>>>>
>>>>  On Sun, Jul 13, 2008 at 11:36 PM, Alex Gakuru <alex.gakuru at yahoo.com>
>>>> wrote:
>>>>
>>>>>
>>>>> --- On Sun, 7/13/08, Brian Munyao Longwe <blongwe at gmail.com> wrote:
>>>>>
>>>>> >
>>>>> > To certain members of this list who are either not resident
>>>>> > or have
>>>>> > not been resident in this country for some time, please be
>>>>> > cautious
>>>>> > with your statements, sometimes you might be bashing
>>>>> > someone who has
>>>>> > made huge sacrifice to serve this nation's ICT.
>>>>> >
>>>>>
>>>>> Earlier said we should not discriminate against non-Kenyans.
>>>>> Would you be asking that honest opinion now also be qualified and
>>>>> legitimized by the residency status? The Diaspora should keep off?
>>>>>
>>>>> Expanding to all society, are historical "made huge sacrifice to serve
>>>>> this nation" permanent tickets to never be questioned? To be rewarded
>>>>> generously ad infinitum?  I am avoiding cheapening the discussion.
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> _______________________________________________
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>>>>>
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>>>>>
>>>>
>>>>
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>>>>
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