West Africa focused PE firm Verod Capital invests a $ 10 million in solar firm

Daystar Power receives 10 million US Dollars for expansion of solar power operations in West Africa

Anglophone West Africa focused private equity firm, Verod Capital Management (Verod), has announced that it has invested a $ 10 million in Daystar Power Group (Daystar), a leader in developing, owning and financing Commercial and Industrial sector hybrid solar generation projects across West Africa.

The investment will enable Daystar to further scale its deployments across the region, providing low cost, reliable and clean energy to its customers.  Verod will leverage on its wealth of experience and relationships in the West African corporate and industrial community to support Daystar’s growth.

Verod co-invested in Daystar Power with Persistent, a pioneer investor in the off-grid sector.  The investment will represent the 10th (and final) commitment of Verod Capital Growth Fund II LP, a $115 million fund launched in 2014 to invest in middle-market high growth companies.

Verod is active across various sectors, including but not limited to light manufacturing, consumer goods, business services, agriculture, education, healthcare and financial services.  Verod seeks to partner with companies with proven business models and high market growth potential, led by motivated management teams, to build sustainable and responsible regional leaders in their respective industries.

Founded in 2017, Daystar Power Africa, a solar energy company, specializes in providing individuals as well as enterprises with efficient solar energy solutions. Operating in Ghana, Nigeria and Tanzania, DayStar Africa provides energy to institutions for banking, consumer goods, agriculture and manufacturing needs. In addition to the $ 10 million, it plans to raise an additional $ 16 million in debt.

Since inception, Daystar has installed 1MW of off-grid solar energy solutions to Commercial and Industrial customers across Nigeria and Ghana. Daystar Power solutions deliver up to 25% of savings against current cost of energy and guarantees 99% uptime reliability to its clients while reducing carbon emissions from diesel generators.

Daystar Power provides Solar Power Systems ranging from 20 KWp and up to 5 MWp. Daystar provides clients with a monthly payment option that reduces capital outlay and thereby making it easier to switch to a cleaner energy solution. A key differentiator for Daystar Power is its focus on a high quality of service using only best-in class equipment with long-term warranties and a strong local technical support services team.

Read also: Green Mini-Grid Programme to light 3 DRC cities

Aga Khan University scholar appointed to major UNESCO role

Aga Khan scholar and chair of the Obstetrics and Gynecology and   Director of the Centre of Excellence in Women and Child Health, at the Aga Khan University (AKU) East Africa appointed as UNESCO Chair on Youth Leadership in Science, Health, Gender and Education

The United Nations Educational, Scientific and Cultural Organization (UNESCO) has appointed a director of  Aga Khan University (AKU East Africa  Prof Dr. Marleen Temmerman as its Chair on Youth Leadership in Science, Health, Gender and Education.

In her new role, Prof Temmerman is expected to empower young leaders and contribute to policies and development programmes on health and education amongst the youth in alignment with UNESCO’s priorities and to the achievement of the 2030 Agenda for Sustainable Development.

She will continue serving as the Chair of the Obstetrics and Gynecology and   Director of the Centre of Excellence in Women and Child Health, at the Aga Khan University (AKU) East Africa.

Speaking at the ceremony, Dr Evangeline Njoka, Secretary General and CEO, Kenya National Commission for UNESCO said: “The development of networks in higher education, in particular through the UNESCO Chairs as focal points for the development of training and research, brings institutions in different regions closer together, with a view to giving new impetus to higher-education establishments in developing countries. Today, the UNESCO program involves over 700 institutions in 115 countries globally.” 

The position of Chair is normally established for an initial period of four years between UNESCO and a university or any other institution of higher education to initiate programmes that advance teaching, learning and research in specific regions.

Accepting the appointment, Prof Marleen Temmerman, Director of the Centre of Excellence in Women and Child Health, Aga Khan University East Africa said that the youth is a key target group for UNESCO’s education programme interventions and by equipping them with the right knowledge, skills and values you the empower youth to become the new champions in their areas of interest.

“I am very humbled and honoured to be appointed the AKU- UNESCO Chair, and I am looking forward towards contributing to equitable investment in the next generation of young leaders in Africa,” said Prof Temmerman. “As an institution, Aga Khan University is well positioned to build capacity in the youth, to transfer knowledge into policy and practice, and to strengthen links between universities and other partners, in line with the SDGs.”

Lydia Mathia, Youth Advisor at the Ministry of Public Service, Youth and Gender Affairs said: “There is a huge information gap on youth issues and it is our hope the UNESCO Chair will do lots of research on youth-related matters because the Kenyan government urgently needs this data.”

General Electric, Aga Khan University Hospital in Nairobi hosts cancer event

UNESCO’s goal, as outlined in its “Strategy on Education for Health and Well-Being,” is to support the contribution of national education sectors towards promoting better health and well-being for all children and young people across the globe.

Prof Temmerman is a well-recognized global leader in women, child & adolescent health. She brings academic, technical, political, governance and leadership skills to the table as well as diplomacy, advocacy, fundraising, training and clinical expertise. She has a strong track record of working with governments, multilateral organisations, academia, professional bodies, development agencies, private sector, consultancy agencies, civil society, non-governmental and faith based organisations, in a global and changing world. She has also served as a Member of Parliament in Belgium.

In addition, she is a member of the advisory group of the African First Ladies on Cervical, Breast and Prostate Cancer, chaired by HE the First Lady of Kenya in 2015. Apart from her role as the Director of the Center of Excellence in Women and Child Health, she is also the Chair of the Department of Obstetrics and Gynaecology, Aga Khan University Hospital.

Read also: Aga Khan Education Services: How financing education in East Africa pays

Orca and Swala Oil terminate agreement

Orca Exploration Group has announced termination of its investment agreement with Swala Oil and Gas (Tanzania).

A statement from Swala Oil notes that pursuant to the terms of its investment agreement dated December 29, 2017 with Orca Explorations Group Inc in respect of PAE PanAfrican Energy Corporation (PAEM), the parties have agreed to terminate the Agreement as a result of Swala not acquiring additional shares in the capital of PAEM.

Swala continues to hold 7.933% of the issued and outstanding shares of PAEM through the Company’s subsidiary Swala (PAEM) Limited.

Meanwhile Swala Oil is in discussions with a US-based emerging markets institutional investor for US$75 million in acquisition funding for a transaction.

“In furtherance of this possible transaction, Swala is currently finalizing terms for its funding, which when completed is expected to lead to financing agreements within the next weeks.” A statement from the oil and gas company in Tanzania reads in part.

According to Swala Oil CEO  Dr. David Mestres Ridge , after considerable due diligence and engagement, the Company is finalizing commercial terms for an investment of US$75 million with an institutional investor with extensive experience in emerging markets.

“This capability, when formalised through to definitive agreements, should allow us to contemplate an additional transaction. There can be no guarantees that the financing or transaction contemplated, or any other, will be completed and the Company shall update the market as appropriate.” Said the CEO.

U.S pension investors eye Kenya’s infrastructure

The country is seeking investors in energy, roads, water and housing projects

Kenya is hosting over 30 representatives of major U.S. pension and asset management funds on an initial mission to evaluate the investment potential and opportunities in infrastructure projects.

The team is being hosted by the Kenya Pension Fund Investment Consortium (KEPFIC) on a three-day fact finding mission.

Collectively, these funds manage assets worth Sh100 trillion (US$1 trillion).

The visit is supported by the U.S. National Association of Securities Professionals, the World Bank, and the U.S. government, through USAID.

“By moving from traditional investments in stocks and bonds to new opportunities in Kenyan roads, power plants and enterprises, Kenyan and U.S. pension funds will strengthen commercial ties between our countries.  These investments will benefit both countries and enhance the economic security of Kenyan and American retirees,” said U.S. Ambassador to Kenya Kyle McCarter in a statement.

Historically, infrastructure development has been financed by the public sector. The country’s current financing gap for infrastructure stands at about Sh400 billion, a gap that could be bridged by increased participation of the private sector.

During the mission, executives from the U.S. pension and asset management funds will discuss opportunities with KEPFIC and its membership of 12 Kenyan leading fund managers, which currently manage Sh 200 billion in assets.

Projects to be financed under this partnership would include roads, water and sanitation, energy and affordable housing, an initiative that will go a long way in supporting achievement of the Big Four Agenda for national development.

“The new partnership represents a good match for the country and signals a new development in the landscape of Kenyan infrastructure investment.  This represents an exciting model which has been successfully executed in emerging markets and could fill the existing infrastructure financing gap in Kenya, and Africa,” the U.S Embassy said.

The U.S. delegation is led by Mobilizing Institutional Investors to Develop Africa’s Infrastructure (MiDA), a partnership between the U.S. National Association of Securities Professionals (NASP) and the United States Agency for International Development (USAID) to increase private sector capital into infrastructure investments in Sub-Saharan Africa.

Since 2017, MiDA members have closed on new deals totaling close to US$800 million(Sh80.6 billion )focusing in Africa and other emerging markets.

“Our delegation of US institutional investors comes to Kenya with a keen interest to explore investment opportunities in the region. While there is currently limited exposure in Kenya, there is great opportunity to scale up these investments. We are looking forward to advancing our discussions with our Kenyan counterparts at KEPFIC for mutual support and benefit” said Donna Sims Wilson, President of Smith Graham and Chair of NASP.

KEPFIC says it has received proposals for a wide range of infrastructure investments, including energy, roads, water and affordable housing.

“Even as we work to ensure KEPFIC is properly structured with the highest governance standards and an appropriate investment strategy, we are excited at the prospect of partnering with US pension funds for investing in infrastructure and other alternative investments,” said Sundeep Raichura, Zamara’s Group Chief Executive, a member of KEPFIC.

The World Bank and NASP signed a partnership in 2017 to build the capacity of Kenyan institutional in understanding the risks, requirements, and rewards for private sector investments in infrastructure through a series of workshops held in Nairobi.

“The World Bank Group is committed to supporting infrastructure development in Kenya and this new model represents a comprehensive approach of leveraging private investments,” said Felipe Jaramillo, World Bank Kenya Country Director.

Logistical support for this initiative has also been provided by the United Nations Economic Commission for Africa and StanBic Bank.

World Bank Group support for the Kenyan pension sector is made possible with support from the Government of Japan and Financial Sector Reform and Strengthening Initiative (FIRST)Trust Fund.

Economic impact of smallholder farmers in East Africa

Today’s indicator figure is 19,675,110

19,675,110 of what?

 

19,675,110 is an estimate of the number of smallholder farms in East African Community (EAC) countries as determined by the most available statistics from international data providers and reports from the respective country as available.

According to the Food and Agriculture Organization (FAO) of the United Nations, a smallholder farm is one that produces crops with less than approximately 2 hectares equivalent to a land mass the size of 100 meters by 200 meters.  Smallholder farms are typically are owned or managed by a single family or extended family.  Other definitions of smallholder farms in East Africa include titles as unregistered farms in Tanzania or household farms in Uganda and Rwanda.

Which EAC country has the highest and lowest number of smallholder farmers?  

 

Tanzania has the largest number of smallholder farms with 7,187,032 largely attributed to its large population and land mass respective to other EAC countries.  This is followed by Kenya with 4,469,494 farms, Uganda with 3,950,000 farms, Rwanda with 2,165,000 and Burundi, with the smallest number, or 1,903,584 smallholder farms.

How does the number of smallholder farmers in the EAC compare to other regions of the world?

 

Economic impact of small holder farmers in East Africa
The economic impact of smallholder farmers in East Africa – The Exchange

There are approximately 475 million smallholder farms in the world of which China has approximately 166 million, or 35% of the world total, followed by India with 114 million, or 24% of the world total.  EAC countries and it is over 19 million farms comprise approximately 4% of the world total.  The remainder of Sub-Saharan Africa has approximately 23 million, or 5% of the world’s smallholder farms.

Is the number of smallholder farmers in the EAC increasing or decreasing?

It’s largely unclear.  Some reports suggest smallholder farms are decreasing in some countries and increasing in others.  From 1960 to 2000 there have been 15 Sub-Saharan African countries reporting a decrease in smallholder farms compared to 3 reporting an increase.  Decisions made in the current generations of East Africans will determine if farms are divided among family members or sold off and consolidated along with farms owned by other families, organizations, or corporations.

 

What impact do smallholder farmers have on the economy of the EAC?  

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Exports Value from EAC Countries – The Exchange

 In the EAC smallholder farms contribute roughly 30-40% of GDP, employ roughly 70-80% of citizens, produce approximately 70% of the food that people in EAC countries consume every day.  Despite this impact, smallholder farms continue to be among the most underserved markets in the world.

 

What is being done to better serve the needs of smallholder farmers?  

 

The governments of EAC countries, a multitude of development partners, NGOs, donors, established private sector businesses, and startup businesses are all seeking to improve the needs of smallholder farmers.   A few larger programs and initiatives include the following:

The EAC is supporting initiatives around food security, irrigation, early warning systems, research and training, interregional trade which all affect smallholder farmers – https://www.eac.int/agriculture/strategic-interventions

The FAO has developed its East Africa Resilience Strategy for 2018-2022 to contribute to enhanced food security and nutrition – http://www.fao.org/resilience/resources/resources-detail/en/c/1174823/

USAID has developed a program called Feed the Future which seeks to work with countries in the EAC and others to develop agricultural sectors with a particular focus on smallholder farmers – https://www.feedthefuture.gov/

 

What investment opportunities are growing with this phenomenon?

  • Lending and Credit – One of the main challenges facing smallholder farmers is access to credit due largely to poor collateral, varying financial product needs, and lack of credit information.  In Kenya, approximately 33% of smallholder farmers have access to credit with loan sizes at approximately $195, or 8% of their annual income.  In Tanzania, only 17% of smallholder farmers report having access to credit.   There are dozens of microfinance companies and over 40 fintech startup companies operating in Kenya alone, many seeking to address this market gap and many seeking capital for expansion.

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Impact and Investment from Increased Urbanization in East Africa – The Exchange
  • Seeds and Agricultural Inputs – Approximately 17% and 34% of smallholder farmers in Tanzania and Kenya respectively have access to improved seed varieties.  Without these seed varieties, the potential yield and income from these farms are limited. Other agricultural inputs such as fertilizer, pesticides, irrigation, and farming insights are also lacking in EAC countries.  Several startup companies in East Africa are focused on precision agriculture or using sensors and data analytics to improve farming inputs and outcomes, many of which are seeking expansion capital to grow.
  • Supply Chain – getting perishable agricultural products from a smallholder farm far away from main roads all the way to a dinner table presently involves a largely informal network of motorbikes, village markets, a limited set of cold storage enabled trucks, city markets along with traders buying and selling goods throughout.  Additionally, getting products to these smallholder farmers from international or local providers requires a similar logistical challenge.  Typically supply chain businesses serving smallholder farmers tend to be informal and low margin with significant opportunities for consolidation and efficiency.

How can I learn more?

 

The Number, Size, and Distribution of Farms, Smallholder Farms, and Family Farms Worldwide – https://www.sciencedirect.com/science/article/pii/S0305750X15002703

The Economic Lives of Smallholder Farmers – http://www.fao.org/family-farming/detail/en/c/385065/

Smallholders Data Portrait – http://www.fao.org/family-farming/data-sources/dataportrait/farm-size/en/

Tanzania Agricultural Census – https://www.nbs.go.tz/nbstz/index.php/english/statistics-by-subject/agriculture-statistics/1089-2016-17-annual-agriculture-sample-survey-crop-and-livestock-report

Uganda Census of Agriculture – https://www.ubos.org/publications/statistical/2/

Rwanda Agricultural Household Survey – http://www.statistics.gov.rw/publication/agricultural-household-survey-2017

About the authors:

David L. Ross is the Managing Director at Statera Capital, Distinguished Professor of Practice at Carnegie Mellon University-Africa, and US Ambassador to the Open University of Tanzania.  David is active in growing companies in Eastern and Southern Africa through angel investment, investment advisory, strategic partnerships, and executive education. Connect on LinkedIn at http://tz.linkedin.com/in/davidlross1 or at david@stateracapital.com .

 

Catherine Mandler is a Consultant at Statera Capital. Connect on LinkedIn at http://www.linkedin.com/in/CatherineMandler or at catherinemandler@stateracapital.com .

Tanzania and Egypt mean business with new meat plant

Tanzania and Egypt are set to construct a mega meat processing plant in the country with a slaughtering capacity of 1,500 cows and 4,500 goats per day.

The plant `Ruvu Integrated Industry` , will provide a relief to livestock keepers since they will sell their livestock at better prices. Upon its completion, the industry is expected to create 5,000 employment opportunities. On Saturday 30TH March, the two sides through the National Ranching Company Limited (NARCO) and NECAI of Egypt signed an agreement for the construction of the plant to be situated at Ruvu ranch, Bagamoyo District in the Coastal Region.

Egypt has a vast meat market and this will eventually provide a market for Tanzanian livestock keepers. Tanzania has the third largest livestock population on the African continent comprising 25 million cattle, 98 per cent of which are indigenous breeds, complemented by 16.7 million goats, 8 million sheep, 2.4 million pigs and 36 million chickens.

The industry is also expected to produce leather products such as shoes, belts, handbags and livestock food. Minister for Livestock and Fisheries, Luhanga Mpina said the establishment of the plant in the Coast region was a blessing for livestock keepers across the country, who have for years been searching for reliable markets.

`This is a message to other East African countries and Southern African Development Community (SADC) who have been buying livestock from Tanzania. We are soon going to export processed meat instead of livestock, ` he said. According to Mr. Mpina 1.4 per cent of livestock worldwide are from Tanzania and 11 per cent of livestock in Africa are found in the country. He pointed out therefore, that supply of raw materials to the established industries would be assured. The minister also instructed experts from both sides to wind up with feasibility study and make sure the agreement for the construction and running of the industry is signed in three months time.

The Egyptian Ambassador to Tanzania, Mr. Mohamed Gabel Abulwafa said his country had been attracted to invest in the livestock sector after learning the potentiality and the number of livestock in the country.

Shanta Gold to fund gold mining in Tanzania

Shanta Gold Limited, the East Africa-focused gold producer, developer and explorer, has provided an update on its plans to finance the Singida Gold Mining Project in the Singida Region that lies in central Tanzania.

The company is to float its Singida gold mining asset in Tanzania on the Dar es Salaam Stock Exchange (DSE). The gold miner wants to raise Tshs.46 billion ($20 million) to develop the Singida gold mine, with the Initial Public Offering (IPO) expected to take between 6-12 months. The funds will be used for key infrastructure requirements in place including water, grid power, resettlement and an operating camp.

Shanta Gold will retain at least 51% ownership of Singida and will operate the project with the money to be used to start production and for exploration to expand the resource.

An internal study at the end of last year estimated gold production of 28,000 ounces per year for six years at an upfront cost of Tshs.43.7 billion ($19 million). Cash costs were projected at Ths.1.8 million ($794) per ounce.

Eric Zurrin, the chief executive of Shanta Gold, said using asset-level financing unlocks value for Shanta Gold shareholders while also allowing it to retain a controlling interest. He added that he had been encouraged by the initial feedback from institutional investors across East Africa who are seeking US dollar linked investments in support of industrialization. The IPO will also offer Tanzanians a rare investment opportunity within their own mining sector.

Besides the Singida gold mine, Shanta Gold owns the New Luika Gold Mine located in the Lupa Gold Field in Mbeya Region, south west of Tanzania. The mine started gold extraction in 2012, producing 81,873 ounces of gold in 2015.

Gold reserves in Tanzania are estimated at about 45 million ounces with gold exploration centered mostly on the greenstone belts around Lake Victoria. Gold production in Tanzania stands at around 50 tonnes per year which makes it the 4th largest gold producer in Africa after South Africa, Ghana and Mali.

Also read: Shanta Gold on track to meet full year guidance of 85,000 oz at cost of $850/oz

 

South African business people upbeat after Ghana visit

South African business people who participated in the outward trade and investment mission to Ghana are confident that the leads that they generated during the mission will develop into concrete deals that will see them exporting their products to Ghana or investing in the West African country, according to the trade and industry department (dti).

The group of about 30 business people were due to arrive home on Sunday morning after spending four days in Accra attending seminars, engaging with Ghanaian business people in business-to-business meetings, and conducting site visits in search of trade and investment opportunities, the dti said in a statement.

“I will be going back to Ghana soon, as I have identified quite a number of business opportunities in the energy efficiency value-chain,” Sandiswa Qayi, from East London, said in the statement.

“The seminar provided me with valuable information on the Ghanaian economy and opportunities available for the South African companies to explore. Our company attracted a lot of business people that I met during the two days of business-to-business meetings. I am considering returning and investing in a plant in Accra,” Qayi said.

Stellenbosch winemaker Malcolm Green also had set up a bottling plant in Ghana as one of his objectives for travelling to Accra.

“I had fruitful meetings with people who are interested in helping our company establish a wine bottling plant there as part of our export growth strategy for Africa. The Ghanaian investment promotion agency is also keen to play a role in facilitating the implementation of the project because of its potential to contribute in creating employment opportunities for the Ghanaians. We are excited because this will enable us to export South African wines bottled in Ghana to the rest of the West African region,” Green said.

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Hendrik Naude of Gauteng said he travelled to Ghana with the aim of seeking a distributor for his company’s information and communication technology solutions

“From the numerous meetings that I held with the Ghanaian business people, I am coming back home with a list of three promising companies which we are likely to do business within the near future. I have also met a potential customer who has requested a quotation that can see our products making their way to Ghana in the near future,” Naude said.

Karien Jafta of Gauteng said her cosmetics products attracted an impressive amount of attention from potential clients and business people who were even willing to assist her to register her products in Ghana. She expressed confidence that positive results would be forthcoming from the meetings.

“I went to Ghana mainly to gather information about the country’s construction industry and the mission assisted me a lot in that regard. I met officials from the department of transport as well as some developers. I am positive we will be doing business in the country in future,” said Deon Duvenage from the North West.

Black entrepreneurs urged to seize Western Cape investment opportunities

The National Empowerment Fund has urged black entrepreneurs to take advantage of various opportunities on offer in the Western Cape and grow their investments across the country.

NEF acting divisional executive for small and medium enterprises and rural development Nhlanhla Nyembe said the fund was looking for viable business plans from black-owned enterprises in any of the key sectors of the economy, supported by financial projections.

“Since operational inception in 2005 the NEF has approved 957 transactions worth more than R9.6 billion for black-empowered businesses across different sectors countrywide,” he told an empowerment expo in Cape Town held in partnership with the Western Cape Department of Economic Development and Tourism (DEDAT).

To qualify for NEF funding of between R250,000 and R75 million, entrepreneurs must meet criteria pertaining to black ownership, management and operational involvement; risk sharing by entrepreneurs, black women empowerment, community involvement where relevant, compliance with relevant NEF product criteria, job creation and the geographic location of the business.

The head of the NEF’s iMbewu Fund, an investment unit dedicated to small and medium enterprises funding, Eldene Govender, said franchising was one of the most effective means of enabling black economic participation because it reduced investment risk due to the training, marketing, operational systems and general entrepreneurial support typically provided by franchisors.

“Over the past few years, the NEF has entered into agreements with the top oil companies that service the national fuel retail market. The purpose of these agreements has been to facilitate the establishment of more service-station outlets by black entrepreneurs,” Govender said.

She said to date the NEF had invested R495 million in 89 petroleum service stations owned and managed by black entrepreneurs countrywide which supported 1,825 jobs. Of these, 33 were owned and managed by black women.

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Chief director for integrated economic development services in the Western Cape Johan Peters said DEDAT remained committed to making it easier for small businesses to operate in the province.

“We envisage continuing our partnership with the NEF in the new financial year to improve access to finance to Western Cape entrepreneurs,” he said.

Will Kenya’s Cabinet reshuffle affect Chinese investments?

Members of parliament allied to Jubilee are calling on the ‘handshake’ that brought Kenyatta and Odinga together to be denounced.

President Uhuru Kenyatta is expected to reshuffle his cabinet any time now as demands for accountability and decisiveness in fighting corruption from Kenyans increase.

Facing the axe are three Cabinet secretaries as investigations into the Ksh21 billion ($207.38 million) Arror and Kimwarer dams’ scandal continue.

The Directorate of Criminal Investigations (DCI) has widened the net in the probe where those culpable in the scandal are targeted.

It is expected that Kenyatta will use his State of the Nation address on Thursday next week to ask those implicated in the scandals to step aside.

This list also includes Principal Secretaries embroiled in various scandals.

National Treasury Cabinet Secretary Henry Rotich, his Agriculture counterpart Mwangi Kiunjuri and Devolution’s Eugene Wamalwa have already been questioned by the DCI over the dams’ scandal.

Rotich is allied to Deputy President William Ruto and has held the docket since his nomination on April 23, 2013.

Another CS allied to DP Ruto is Simon Chelugui who is in charge of the Water Ministry. He has not yet been questioned by detectives but he is a person of interest in the investigations.

Kenyatta’s style of firing government officials

Since Kenyatta assumed office for his second term, many Kenyans have become uncomfortable with high-level corruption with no convictions.

Many prominent personalities accused of embezzling public funds remain in public office with no consequences for the crimes they are accused of committing.

While a few have been moved in mini-reshuffles, only one Cabinet Secretary has been fired for impropriety. And even so, it is on politics and not integrity matters.

Rashid Echesa, the former sports CS was fired after just one year in government becoming the first minister to be outright sacked by the President.

Echesa was DP Ruto’s henchman and in an unlikely style where Kenyatta has in the past re-deployed ministers or relieved them of their duties by asking them to step aside, the president sacked the Sports CS.

However, with former Prime Minister Raila Odinga having cosied to the government, there is a likelihood that a reshuffle will happen.

But, this is not guaranteed since there has been disquiet among members of the ruling party Jubilee who feel that Odinga is a spoiler and has come to disintegrate the party.

Members of parliament allied to Jubilee are calling on the ‘handshake’ that brought Kenyatta and Odinga together to be denounced. This is a muted threat to the president to clean up the house and get rid of Odinga, especially.

How would a Kenyan government reshuffle influence China-Kenya cooperation?

According to an author, registered licensed and practising Valuer Kariuki Waweru, most Chinese projects are done on a government to government agreement thus the reshuffle-real or imagined would have no effect whatsoever on the main projects.

Kariuki says that even if the projects are related to transportation and finance or even treasury, nothing much would happen to the China-Kenya projects.

“I think any housekeeping (reshuffle) won’t affect the main projects. A reshuffle will not affect any current or future projects. These projects are not anchored on an individual but on a government that has a life of 5 years.”

In June 2015, China Wu Yi was at the centre of a controversial hospital upgrade project where the Chinese firm was accused of bribing Deputy President William Ruto.

At the time, China Wu Yi Chief executive Officer Liu Hui said they had interacted with the DP because the project is in his home are.

“We made a courtesy call to the Deputy President’s office to brief him on the proposed project at Moi Teaching and Referral Hospital mainly because the project is in his home area.”

Hui denied any impropriety adding, “We at no time presented any gift to him. We only showed him designs of the work we intended to do.”

While the conduct of China Wu Yi may have been questioned at the time, the company’s dealings with the DP cannot imperil any projects between the two governments.

China Wu Yi would upgrade the referral hospital with the China Machinery Engineering Corporation (CMEC) in an Sh17 billion deal.

Effects on big projects, especially Nairobi-Mombasa and Nairobi-Malaba SGR?

Kariuki says that projects that have been signed by Kenya and Chinese governments remain safe.

However, those that have been negotiated by individual companies would not be safely guaranteed unless it was legal recourse in case of a contractual breach.

“In case a Chinese company agrees to work with a Kenyan one, then the government cannot intervene or interfere. It is only the courts that can handle such a case of contractual abandonment by either party,” adds Kariuki.

In a post-reshuffle scenario, any bilateral cooperation and the foreign relationship remains since the government only changes hands.

Avoiding politics

For any Chinese company to survive in Kenya, there is a need to avoid political interference or siding with any particular individual as this may spell doom for any projects.

For instance, in August last year, 9 Chinese contractors were arrested in Nairobi with Governor Mike Sonko confirming the arrest of the Chinese nationals and various Kenyans.

The governor said, “We wish to inform the general public especially people residing around Parklands, Westlands and Riverside that we have this morning stopped the construction of the Avic International Building along Chiromo Road and arrested all the Chinese and Kenyan contractors on site for defying the county planning laws by encroaching on the famous Chiromo close public access which is a feeder road to Chiromo lane which feeds Chiromo road and then Waiyaki Way.”

Sonko’s press statement betrayed his intentions since the National Environment Management Authority (NEMA) is the body mandated to make such announcements.

The nine were later freed on Sh100, 000 cash bail each.

“It is alleged that they paid a substantial under table amount totalling 2 million dollars in cash to the previous administration as protection fee and we should confirm that with the current staff in the building plans approval department bosses who are still with us,” said Sonko.

Sonko’s approach shows that he was making a political statement. He was flexing his muscle and he knew where to hit.

You can also read about the Chinese connection in Africa’s disappearing wildlife, what, where Chinese invest in Africa and how Russia is roped in as China-US war over Africa intensifies.