Saturday, June 14, 2008


I must confess i was pleasantly surprised, i expected capital gains Tax, more taxes on second hand vehicles etc.First it was smaller than i expected at about Ksh 720 billion(was expecting a Ksh 850 billion plus budget). Here are the specifics:

-Stronger Regulation for the Capital Markets.There are now restrictions on ownership of stockbrokers,investment banks and fund managers.By the way Banks,Insurance companies and similar corporate entities are exempt from these restrictions.
Let us hope that the new rules will keep us from a repeat of the Francis Thuo,Nyaga stockbrokers debacles.

The new ownership requirement will increase the number of politically correct persons(read new ODM personalities) with stakes in the Capital markets.i.e. has anyone noticed who owns the stock brokerage firms?

-No new taxes on personal or corporate incomes.What can i say? More taxes= less disposable income. -Senior citizens over 65 years of age exempt from taxes on their pensions.

-New capital requirements for banks. I thought Ksh 1 billion in core capital over 2 years was a joke.
I approximate over 60% of the banks are multiples over this Ksh 1 billion core capital amount.For example if Housing Finance successfully completes its rights issue,the core capital will be over Ksh 2 billion.Barclays has over Ksh 5 billion.
The requirement is unlikely to spur mergers and acquisitions.

-No Value Added Tax decrease
VAT acts as a drag on consumption.Lower VAT and consumption might get a kicker with all the added benefits e.g. higher demand in the economy.

Apparently,Orange/Telkom Kenya have the rights to sell it in Kenya.

Wednesday, June 04, 2008


Ahh…finally back from my sabbatical May I point out I’m not an ODM or PNU die-hard, I detest politicians but this post is merely an interesting observation. The former President Moi was a disciple of Machiavellian politics. He perfected the act of conjuring a rabbit out of a hat. He would perform the unexpected and agree to a previously unacceptable position. Remember, when he appointed Richard Leakey, one of his political opponents the Head of the Civil Service?

On the other hand, Prime Minister Raila’s strategy seems to be straight out of the 48 Laws of Power by Robert Greene. A few weeks ago the Prime Minister’s office was wracked by internal infighting (according to Kumekucha-whose a liar-but that's a story for another post) and dissent in the ODM party concerning the Grand Opposition and the Amnesty issue(according to the Daily Nation and EA Standard).The negative press was hammering Agwambo’s standing in the eyes of the public.Skeptics wondered if the invincibility of tinga was just a myth.

The PM quickly found a way out of the mess that was hurting him; he distracted the Public. How? He entered into the Mau forest fray. Now the news headlines are full of politicians for and against settlement in the Forest . Nobody remembers ODM’s internal struggles or the PM’s staffing issues.

On Nyanza politics Raila’s motto appears to be ‘Keep your friends close and your enemies closer’.Notice that all of Raila’s political foes in Nyanza are now Ministers.Dalmas Otieno(formerly a KANU rival),James Orengo and Anyang Nyongo(formerly SDP rivals).These individuals posses either the intellectual or organizational ability to challenge him politically on his home turf.
Now that they are closer to him, his rivals can’t use them to fight him.

Law 31 from the Laws of power states- “Control the Options: Get Others to Play with the Cards you Deal”.The current tussle over whether or not the Government should negotiate with the Mungiki aptly illustrates its application.
Who started the debate? If you guessed Raila that’s right.
Who is struggling with the issue? Central Kenya politicians.All of a sudden political,religious and civil leaders from the region are falling over themselves to appear to be backing the proposed talks with Mungiki.

Whose deck are they playing? Certainly not theirs.