Kenya airways in trouble as loss deepen to US$74 million

Fuel, personnel and cost of aircraft remain top drivers of the airline’s costs

Kenya’s national carrier-Kenya Airways has posted a Ksh7.558 billion (USD74.6 million ) net loss for the year ended December 2018, as higher operating costs continue to eat into its improving revenues.

The airline which has changed its reporting period (end year) from March 31 to December 31, had a Ksh6.418 billion (USD63.5 million) loss in the 9-month period between April 1, and Dec 31, 2017.

This is despite the airline’s growth in total revenue for the 12 months which increased to Ksh114.45 billion (USD1.13 billion), compared to Ksh80.79 billion (USD789.7 million) for the nine month period ended December 31, 2017.

According to the management, fuel, personnel and the cost of aircraft remain the top three drivers of the airline’s costs, contributing to about two thirds of total operating costs.

“Fuel price volatility remains a major challenge for airlines around the world, and Kenya Airways is no exception,” Chairman Michael Joseph said as the carrier released its results on Tuesday.

According to KQ’s management, the price of oil per barrel saw an upward trend from the beginning of the year before reducing in the last three months of the year.

“As a result we saw our fuel costs rise by 73.6 per cent from Ksh19 billion (USD187.8 million) incurred in the nine months period in 2017 to Ksh33 billion (USD362.2 million) in the full year ended December 2018. The total cost of fuel in the 12-month period of 2017 was Sh25.5 billion(USD252.1 million), a 30 per cent increase,” Joseph said.

Fleet ownership costs also increased to Ksh18.9 billion (USD 186.9 million) from a restated amount of Ksh12.5 billion (USD 123.6 million) incurred in the previous nine months.

“The 2018 results are not directly comparable with the 2017 results as it is a representation of 12 months against the nine months in 2017. Were the 2017 results to be annualized, there would have been improvement in the results for the year,” the management notes in its financial statement for the year under review.

KQ has been struggling with loses since 2015 when it reported a Ksh25.7 billion loss (USD254.1 million). Things worsened in 2016 when the airline sunk deeper into losses reporting a loss of Ksh26.2 billion (USD259 million).

READ:Kenya Airways posts a $38.7 million loss in 2018 half year results

The carrier has however been making strides in improving its revenue stream through a number of initiatives, including additional routes.

Last year, growth in passenger revenue boosted its total revenues from Ksh63.9 billion (USD631.7 million) in the previous nine month period of 2017 to Ksh88.7 billion (USD876.9 million) in the year ended December 31, 2018.

Passenger numbers were 4.84 million at close of December 2018, while the nine-month period ended December 2017 recorded 3.43 million passengers. The airline achieved a cabin factor of 77.6 per cent (12 months compared to 76.2 per cent in the nine months of 2017.

In addition to the growth in passenger revenues, revenue from cargo amounted to Ksh8.68 billion (USD85.8 million) for the year 2018 compared to Ksh5.7 billion (USD56.4 million)  in the nine months of 2017.

“Kenya Airways continues to focus on delivering the turnaround programme that we embarked on in 2016. In the last year ended December 31, 2018, the capital optimization programme dubbed ‘project safari’  was completed. We have also undertaken various actions to ensure financial and operating efficiency to enhance business sustainability,” Joseph said.

KQ hired Polish CEO Sebastian Mikosz in 2017 to help turnaround the loss making carrier.

READ:Polish CEO Mikosz taxiing Kenya airways back to profit runway

The carrier is hoping its new routes, including the long haul Nairobi-New York route which commenced in October last year, will help boost its revenues as it works on its turnaround strategy.

ALSO READ:History made: From Kenya to New York with KQ’s inaugural direct flight

“We are on the right direction to turn this airline around and make it once more the pride of Africa,” Joseph had said last year when the carrier narrowed its losses to Ksh4 billion(USD39.6 million)  in half year to June 2018.

 

 

 

 

African aviation has potential to rake in $29 billion

It has been by AviaDev event, in conjunction with partners, MIDAS Aviation and Futureneers Advisors, that the estimated potential revenue from new African aviation routes could yield $29 billion in direct revenue.

This revenue, which is more than the individual GDP’s of 70% of the countries in Africa, could be realized if the largest airports in each African country are connected with one another. Currently, only 33.7% of this huge market is served, meaning that there is over $19 billion in untapped annual revenue.

Now in its fourth year, AviaDev, brings together airports, airlines, tourism bodies, and suppliers and customizes one-to-one meetings so that new partnerships and routes can be created. AviaDev’s managing director, Jon Howell, unveiled the event’s mission: to connect the largest airports in each African country with one another. He stated: “AviaDev aims to challenge the status quo through encouraging disruptive thinking. We believe our new mission crystallizes the opportunity that African aviation presents, and we look forward to driving the industry forward and measuring the progress made. We are encouraged by the drive on the continent towards partnership and collaboration”

Rebecca Rowland, Partner at Midas Aviation, who estimated the current aviation services said: “We’ve looked at how well-connected Africa is in terms of the flights between the largest airports in every country, which mostly means the capital cities. Only a third of these routes currently have regular air services. We know that connectivity is vital for economic growth and trade, so the potential is huge. As the visa regimes become more open and regulatory constraints looser, we should see many more of Africa’s capitals connected to each other and, with that, we’ll see more of the opportunities realized.”

Martin Jansen van Vuuren, founder of Futureneer Advisors, quantified the potential revenue from the new aviation routes. He indicated that the potential aviation growth could result in additional hotel growth, which will further add revenue to the destination.  He said: “Considering the anticipated increase in air connectivity, estimations on the number of room nights and expenditure per person can be made.  With this is mind, it is fair to say that anticipated investment of US$194 billion could be made in new and existing hotels across the continent in the coming years, further showcasing the untapped potential of Africa.”

Africa also has plans underway to establish a Single African Air Transport Market (SAATM) as was discussed at the recently concluded Second Ordinary Session of the African Union Specialised Technical Committee in Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism in Cairo Egypt. The SAATM is aimed at promoting intra-regional connectivity between the capital cities of Africa by creating a single unified air transport market in Africa, as an impetus to the continent’s economic integration and growth agenda.

African Union (AU) member states that have subscribed to the solemn commitment of establishing SAATM  are: Benin, Burkina Faso, Botswana, Capo Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Egypt, Ethiopia, and Gabon. Others are Gambia, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

Read Also: Single air transport market for Africa in pipeline

AfCFTA timeline starts to count in July

That will be decided during the forthcoming African Union meeting slated to take place in the next three months, according to the officials who gathered in Arusha on Thursday 25th April, 2019.

The proposed African Continental Free Trade Area is not simply a `Free Trade Agreement` it is about establishing a unified continental market with 1.2 billion potential customers and where the private sector is the major engine to make it happen.

This was the tone from the discussions of the meeting held in Arusha about how the East African Private Sector including Small and Medium Enterprises (SMEs) could benefit from the African Continental Free Trading Area (AfCFTA)

The one-day meeting, organized jointly by the East African Business Council (EABC) and the United Nations Economic Commission for Africa (ECA), convened close to 40 key players from the region`s private sector. The office for Eastern Africa of ECA estimates large potential gains from the AfCFTA, including an increase in intra-African exports of Eastern Africa by nearly Tshs.2.3 trillion ($1 billion) and the job creation of 0.5 to 1.9 million.

`Together African economies have a collective GDP of $2.5 trillion, making it the eighth largest economy in the world. That makes the continent much more attractive to investment, both from within and from outside the continent, ` said Andrew Mold, acting Director of ECA in Eastern Africa. `This should encourage business people to take advantage of AfCFTA and make the investments necessary to sustain economic growth and create employment.`

Nick Nesbitt, Chairman of EABC, emphasized the importance of the continent having a clear vision to put an end to the fragmentation of the internal market. `I really applaud everybody who has been involved in creating the AfCFTA because their vision is the one of Pan-Africanism. It is something our founding fathers aspired for a long time. Our thanks to ECA for being at forefront of this conversation and pushing the agenda forward so that the continent becomes a single economic trading bloc, ` he said.

Kenneth Bagamuhunda, Director General of Customs and Trade at the East African Community Secretariat, cited the experience of Regional Economic Communities as the building blocks for the AfCFTA. `The AfCFTA should build on what has already been achieved in regional negotiations like the Tripartite Free Trade Area, as well as within our respective regional blocks,` he said. Bagamuhunda also highlighted governments need to set a conducive environment for the successful implementation of AfCFTA.

The AfCFTA was signed in March 2018, at a historic meeting of the African Union in Kigali. 52 of 55 African Union member states have so far signed the AfCFTA, 22 countries that have ratified the agreement, which was the minimum number for it to enter into force. It seeks to create the largest trade zone in the world, increase intra-African trade by 52% by the year 2022 and remove tariffs on 90% of goods.

A summary of AfCFTA’s progress

  • 52 countries have signed the AfCFTA agreement
  • 22 countries have ratified the agreement as of April 2,2019
  • 15 countries have deposited their instruments of AfCFTA ratification with the AU
  • 7 countries including Gambia have received parliamentary approval for ratification but are yet to deposit instruments with AU.
  • Eritrea, Nigeria and Benin are yet to sign the AfCFTA agreement
  • The AfCFTA Agreement will enter into force; 30 days after the required number of ratifications have been deposited with the AU.

Also read:Africa’s move to push for cheaper, faster trade

Kenya’s biggest trading partners, Uganda tops EAC

China dominates as Kenya’s top import source globally 

Uganda is Kenya’s biggest trading partner within the East Africa Community (EAC), latest data show, with China dominating the global scene.

The Economic survey (2019) shows total trade volumes (import and exports) between Kenya and Uganda in the year 2018, were valued at Ksh111.3 billion (USD1.09 billion).

Tanzania comes in a distant second with a total trade value of Ksh47.6 billion (USD468.9 million) while Rwanda is third with Ksh19 billion (USD187.2 million).

Trade with DR Congo, South Sudan and Burundi, mainly export markets for Kenya, were valued at Ksh15.2 billion (USD149.6 million), Ksh12.9 billion (USD127.1 million) and Ksh6.6 billion (USD65.02 million) respectively.

Uganda

During the year under review, Uganda increased the value of its exports to Kenya by 17.6 per cent to close at Ksh49.4 billion (USD486.7 million), from Ksh42 billion (USD413.8 million) in 2017.

READ:Uganda keen on enhancing exports to EA region

“The value of imports from Uganda rose largely driven by increased imports of maize, sugar, milk and animal feeds,” the Kenya National Bureau of Statistics (KNBS) has noted.

Kenya however exported more to her neighbour where total volumes were valued at Ksh61.9 billion (USD 609.9 million),a slight increase from Ksh61.8 billion (USD608.9 million).

Uganda exports to Kenya include wood and articles of wood, wood charcoal, fodder, mineral, cereals, dairy products, honey, edible products, sugars and sugar confectionery, coffee, tea, mate and spices, tobacco and manufactures tobacco substitutes among other products.

In return, Kenya exports salt, sulphur, earth, stone, plaster, lime and cement, mineral fuels, oils, distillation products, plastics, pharmaceutical products, vehicles, beverages, spirits and vinegar, soaps, lubricants, waxes, candles, modeling pastes among others.

Tanzania

The value of imports into Kenya from Tanzania increased by 3.5 per cent to Ksh17.8 billion (USD175.4 million) up from Ksh17.2 billion (USD169.5 million), mainly on live animals, cereals, beverages, spirits and vinegar, fertilizers, mineral fuels, oils, distillation products and textile articles.

Kenya exports to Tanzania on the other hands gained marginally to close at Ksh29.8 billion (USD293.6 million) from Ksh28.5 billion (USD280.8 million), despite the existing tariffs and Non-Tariff Barriers (NTBs) between the two states.

READ:Kenya, Tanzania mistrusts ripping apart the EAC

Last year, the two EAC member states were entangled in a trade war after Dar es Salaam denied unrestricted entry of Kenyan made chocolate, ice cream, biscuits and sweets entry into its market.

Nairobi retariated by imposing new tariffs on Tanzania products such as flour with both breaching the EAC common market protocol, which allows free movement of locally manufactured goods.

Presidents Uhuru Kenyatta and John Magufuli have on several occasions directed their ministers to resolve outstanding trade disputes, to pave way for increased trade between the two countries and the region as a whole.

ALSO READ:Why Magufuli, Kenyatta are worried over Kenya-Tanzania borders

Rwanda and the rest of EAC

The President Paul Kagame led country lost ground on its exports to Kenya where the value dropped by 29.4 per cent to close at Ksh1.2 billion (USD 11.8 million) from Ksh1.7 billion (USD16.7 million) in 2017.

This is expected to further dwindle based on the recent tiff with Uganda which has led the closure of borders, with Uganda being the main transit route between Kenya and Rwanda.

Kenya’s exports to Rwanda however surged to Ksh17.8 billion (USD175.4 million) from Ksh17.1 billion (USD168.5 million) in value.

Those to DR Congo, South Sudan, and Burundi however dropped to Ksh15.2 billion (USD149.6 million), Ksh12.9 billion (USD127.1 million) and Ksh16.8 billion (USD165.5 million), from Ksh18.9 billion (USD186.2 million), Ksh6.6 billion (USD 65 million) and Ksh7.4 billion (USD72.9 million) respectively.

“This was occasioned mainly by the political instability in these regions,” a trade expert told The Exchange.

EAC and Africa

Kenya’s total imports (value) from her EAC peers totaled Ksh68.4 billion (USD 673.9 million) an upward trend compared to Ksh60.9 billion (USD 600 million) the previous year.

READ:EAC bloc has made significant gains in reducing trade bottlenecks

The East Africa economic power house however lost ground on her exports to the regional markets where the total value dropped 1.9 per cent to close at Ksh129 billion (USD1.27 billion), from Ksh131.6 billion (USD1.29 billion) the previous year.

In the continent, South Africa topped as Kenya’s biggest trading partner with the trade being in favour of the southern country.

This is on the Ksh64.7 billion (USD637.4 million) worth of imports from SA up from Ksh61.9 billion (USD609.8 million), against exports valued at Ksh4.4 billion (USD43.3 million). Kenya however gained 57.1 per cent from Ksh2.8 billion (USD 27.6 million) a year earlier.

Other notable trading partners in Africa include Egypt where the country exported to, goods worth Ksh201. Billion (USD198 million), and Somalia whose imports from Kenya in the year amounted to Ksh15.1 billion (USD148.8 million).

Imports from Swaziland were valued at Ksh8.6 billion (USD84.7 million) a drop from Ksh11.2 billion (USD110.3 million ) in 2017, while those from Zambia closed the year at Ksh6.9 billion (USD67.9 million) after dropping from Ksh7.7 billion (USD75.8 million).

Mauritius, another key trading partner exported goods worth Ksh6.1 billion (USD 60.1 million) to Kenya, a drop compared to Ksh7.3 billion (USD 71.9 million) in 2017.

During the year, total imports from the African market were valued Ksh205.9 billion (USD 2.03 billion) a slight increase from Ksh200.5 billion (USD 1.98 billion) the previous year.

That of exports however dropped slightly, by 3.4 per cent, to close at Ksh216.2 billion (USD 2.13 billion) compared Ksh223.9 billion (USD 2.21 billion) the previous year, meaning Kenya lost its export market share in intra-Africa trade.

China and the World

China continues to dominate as the top source of imports into the country in the global scenario, despite losing five percentage points on its trade with Kenya last year.

READ:US-China rivalry to shape Kenya, Africa’s foreign policy in 2019

According to the survey released this week, imports from china were valued at Ksh370.8 billion (USD3.65 billion) in 2018, a slight drop from 390.6 billion (USD3.85 billion) the previous year.

India comes in a distant second where imports from the Far East nation totaled Ksh185.3 billion (USD1.83 billion). This was however an increase from Ksh170.4 billion (USD 1.68 billion) worth of imports into the country in 2017, mainly on account of medicinal and pharmaceutical products.

The drop in the value of imports from china is seen as a result of reduced importation of machinery and equipment, related to the construction of the standard gauge railway, whose phase two-Nairobi-Mai Mahiu is 91 per cent complete.

Major Chinese imports to Kenya include machinery, electronics, motorcycles, motor vehicles spare parts, furniture and clothes.

Other top import sources for the country are Saudi Arabia and the United Arab Emirates (UAE), where total imports were valued at Ksh172.7 billion (USD 1.70 billion) and Ksh147 billion (USD 1.45 billion ) respectively.

The Asian continent remains the top source of imports into the country having closed at a total of Ksh1.168 trillion (USD 11.5 billion) in value last year.

It is followed by Middle East whose imports closed the year at Ksh355.7 billion (USD3.50 billion).

Imports from Europe and the US were valued at Ksh292.6 billion (USD2.88 billion), and Ksh85.9 billion (USD846.3 million) respectively last year.

READ ALSO:How Trump will beat China in Africa

Exports to china last year were valued at a paltry Ksh11.1 billion (USD 109.4 million) with the total exports to Asia closing at Ksh180.9 billion (USD1.78 billion).

“The increase in exports to Far East was largely due to significant improvement in exports to India, China, Thailand and Afghanistan,” KNBS notes in its survey.

According to the official government statistics, trade balance widened by 1.4 per cent to a deficit of Ksh1.147 trillion (USD11.30 billion) in 2018, from a deficit of Ksh1.131 trillion (USD 11.14 billion) in 2017.

“The growth of exports weakened in 2018 compared to the strong performance recorded in 2017, as increased uncertainties in the global trade led to constrained external demand,” KNBS Director General Zachary Mwangi noted during the release of the survey in Nairobi.

Kenya’s top exports include tea, horticulture, articles of apparel and clothing accessories, coffee, titanium ores and concentrates, collectively accounting for 62 per cent of the total domestic export earnings.

“The rise in exports was mainly as a result of increase in exports of horticultural products, while the slowdown in import growth was attributable to decline in imports of food due to favourable weather conditions as well as a reduction in the value of machinery and transport equipment imports,” Mwangi said.

The government has prioritized growth of the manufacturing sector, under the big four agenda, with a key focus on value addition on local produces, as it seeks to bridge the trade deficit and increase the sector’s contribution to the GDP.

“We have been implementing various initiatives to support manufacturers. This includes cutting by half the cost of electricity for industries,” National Treasury CS Henry Rotich said.

READ:Five ways Kenyan government bets will boost manufacturing sector

PEWIN CABS invests Ksh100 million in Kenya, rebrands to PTG Travel

It has invested Ksh100 million to grow its fleet

Pewin Cabs has officially rebranded to PTG Travel in a bid to increase its market share by offering diversified service in the Kenyan market.

The firm, which is now moving beyond cabs after 10 years, was among the first to launch its cab-hailing App in 2013, a move that contributed significantly to corporate transport solutions in Kenya.

Speaking at the launch of PTG Travel, Managing Director Justus Kirigua, said: “We are excited about the opportunities the new brand offers us.  The transition to PTG Travel is anchored on a three-year growth strategy which includes a Ksh100 million investment to grow our fleet and increase our services to include Bus services, VIP Services and Charter Flight.”

The sum invested translates USD986,232.

Mr. Kirigua has since assured the existing customers that even with the identity change, the firm will continue to deliver greater convenience to clients.

“To help our clients manage their logistics costs, we have enhanced our APP for increased transparency and accountability,” Kirigua said.

Nairobi County Roads, Transport and Infrastructure Executive Hitan Majevdia who graced the event said:”We are proud of PTGs strategy to innovate the transport sector in Kenya. Services like corporate transport sharing and Air Charter will greatly enhance road safety and ease congestion on our roads.”

PTG Travel is eying to enter two East African countries using its current corporate client franchise model in the near future, Kirigua said , as the company seeks to transform corporate transport landscape in Africa.

The move to rebrand comes at a time when tourism numbers continue to improve in the country thus increasing demand for tourism travel.

Last year, number of international arrivals hit 2, 025, 206 compared to 1, 474, 671 in 2017, an increase of 37.33 per cent.

Moreover, foreign companies continue to show interest in setting up shop in the country due to the continued government’s efforts in improving ease of doing business in the country.

Last year, over 20 new UK companies announced plans to set up in Kenya during UK Prime Minister Theresa May visit in the Country.

Speaking about the opportunity to give back to the community, Mr. Kirigua concluded:”There are different modes of transport, and majority of people in our country actually walk to their places of work. We need to improve the walk paths, and make provision for bike lanes. This is something PTG would love to do as part of CSR for the industry.”

ALSO READ:Investing in Kenya’s logistics space

Single air transport market for Africa in pipeline

Nigeria’s Minister of State for Aviation, Hadi Sirika, and other Africa transport ministers have rallied other countries on the continent behind the Single African Air Transport Market (SAATM).

Sirika, at the ongoing Second Ordinary Session of the African Union Specialised Technical Committee in Transport, Transcontinental and Inter-regional Infrastructure, Energy and Tourism in Cairo Egypt, made the resolution of the ministers known via his twitter handle.

The ministers, in the resolution concerning transport in Africa, “urge all remaining member states to join the Single African Air Transport Market (SAATM), ratify the African Road Safety Charter, the Revised Maritime Transport Charter and the Africa Civil Aviation Commission (AFCAC) Constitution.” Presently, only 28 African  countries have so far shown interest in the SAATM, even as the African Union awaits the decision of others to join the train.

According to African Union, SAATM is “Promoting intra-regional connectivity between the capital cities of Africa by creating a single unified air transport market in Africa, as an impetus to the continent’s economic integration and growth agenda. “In Cairo, the ministers unanimously agreed to strategies that would boost infrastructures in Africa. “We, the Ministers in charge of Transport Transcontinental and Inter-regional Infrastructure, Energy and Tourism meeting in Cairo, Arab Republic of Egypt on 16 and 17 April 2019, in the Second Session of the Specialised Technical Committee on Transport, Transcontinental and Inter-regional Infrastructure, Energy and Tourism , organised by the African Union Commission (AUC) in collaboration with the Government of the Arab Republic of Egypt to consider strategies for developing smart infrastructure to boost Africa’s continental transformation and integration,” said the ministers in Cairo.

We, the ministers, reiterating our commitment to develop Transport, Transcontinental and Inter-regional Infrastructure, Energy and Tourism sectors and our strong will to implement the outcome of the meeting as we have agreed.”

The committee of ministers requested the African Union Commission (AUC), to take the appropriate measures to accelerate the development of the African integrated High Speed Railway Network (AIHSRN) flagship project, revitalisation of the Union of Africa Railways (UAR) and speed up operationalisation of SAATM.

They also called upon the African Development Bank (AfDB) to continue providing support and mobilise more financial resources for priority intercontinental transport sector programmes such as SAATM and implementation of African Plan of Action for Road Safety.

The committee appealed to member states to speed up signing and or ratification of pending legal instrument related to infrastructure, notably Maritime Charter, Yamoussoukro Declaration (YD), SAATM, AFREC Convention and Road Safety Charter.

Member states that have subscribed to the solemn commitment are: Benin, Burkina Faso, Botswana, Capo Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Egypt, Ethiopia, and Gabon. Others are Gambia, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

The second Ordinary Session of the African Union was a meeting of the African Union (AU) Specialized Technical Committee on Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism (STC-TTIET) with a theme: Developing SMART Infrastructure to Boost Africa’s Continental Transformation and Integration. The meeting occurred during 16th and 17th April of 2019, organized by the African Union Commission; through the Department of Infrastructure and Energy; in collaboration with the Government of the Arab Republic of Egypt, the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA) and the African Union Development Agency (AUDA-NEPAD).

Also read: AfDB, AU banks on creative industries in Africa for GDP growth

 

One Urban Garden; the road to Africa’s food security

The venture is keen to achieve food security, income generation, healthy living and environmental awareness

It is early morning in the outskirts of Kenya’s capital, Nairobi. A group of three young people are working in a field, using hoes to remove plastic bags and other solid waste from the soil in preparation for crop planting.

Together with other youth, they are raising seedbeds of vegetables such as kale, cabbage, spinach, carrots, onions, green peppers, tomatoes, and other commonly consumed vegetables in Kenya.

The seedlings will later be transferred to gardens and irrigated for several weeks before the vegetables are supplied to clients in households and restaurants within Nairobi.

The trio are Mastercard Foundation Scholars, selected for their academic talent, social consciousness, and leadership qualities.

Mutoni Shadadi  from Rwanda, and her colleagues Laetitia Mukungu and JacquilineMaina, from Kenya, are pursuing their studies in agricultural sciences at EARTH University in Costa Rica.

Mastercard Foundation Scholars have formed One Urban Garden, a social venture that gives people an opportunity to engage in the food production process, enhance the farm-to-table value chain,and demonstrate self-sustenance on a small piece of land. The group targets to help Kenya and the East Africa region achieve food security.
From Left: Mutoni Shadadi, Jacqueline Maina and Laetitia Mukungu during the Resolution Social Venture Awards in 2018.

Together, they formed One Urban Garden, a social venture that gives people an opportunity to engage in the food production process, enhance the farm-to-table value chain,and demonstrate self-sustenance on a small piece of land available.

One Urban Garden will provide fresh vegetables to the clients, acting as a training centre and an incubator for job opportunities involving youth.

One Urban Garden aims to provide youth with training in agriculture and agribusiness.The social venture envisions achieving food security, income generation, a healthy lifestyle and environmental awareness-raising among urban dwellers in Nairobi.

“We envision One Urban Garden as a hive of production and service provision. We are planning to start with vegetable production, which will include kale, peppers, and spinach and be readily available for household consumption. The second phase of production will be the introduction of rabbit farming and greenhouse production mainly targeting restaurants. Once the centre is established, six youth will undergo a 21-week training program and they will be in direct contact with our clients as consultants” said Shadadi.

Expected to be fully operational by end of this month (April 2019), One Urban Garden will first identify the farmers and provide training to those that need it.

The Scholars are currently looking for partners and available land in Nairobi and investing much time in studying other similar models, especially from other developing countries.

To serve a larger clientele in Nairobi, One Urban Garden will create several farms in different locations.

“We plan to move in phases and our target for the first phase is to have 25 farmers as our base, as well as a couple of restaurants. As variety is one of our selling points, the prices will vary depending on demand and we plan to make the prices more affordable as we grow.We estimate that farmers will pay 50 dollars for the training each year, and we hope that one day we might take on a big project from a hotel or institution. We are also considering the option of installment payments,” said Laetitia.

One Urban Garden won the Resolution Social Venture Challenge in 2018, a competition that rewards compelling leadership and promising social ventures led by youth.

These young leaders earned a fellowship that includes seed funding, mentorship, and access to a network of young global change-makers to pursue impactful projects in their communities.

Mastercard Foundation Scholars have formed One Urban Garden, a social venture that gives people an opportunity to engage in the food production process, enhance the farm-to-table value chain,and demonstrate self-sustenance on a small piece of land. The group targets to help Kenya and the East Africa region achieve food security.
The Trio

A collaboration between the Mastercard Foundation and The Resolution Project, the Resolution Social Venture Challenge provides a pathway to action for socially responsible young leaders who want to create change that matters in their communities.

Shadadi, Laetitia, and Jacquiline want to use urban farming to motivate African youth who think farming is a dirty job and only meant for people living in rural areas.

“It feels great being a Resolution Social Venture Challenge winner because it proves to me that we have the potential to contribute to change in the world. Being a Mastercard Foundation Scholar makes me feel like a winner because I get a chance to accomplish my dreams and also share them with my community as I give back,” said Shadadi.

Jacquiline said she is overjoyed and is very proud of her team.

“We have started working on the business strategy and sometimes that gets a bit overwhelming, but the teamwork is great and I learn more each passing day. I am also very grateful for this opportunity.”

Laetitia said that being a Resolution Social Venture Challenge winner is both a blessing and a challenge to keep pushing until One Urban Garden starts making a difference in the lives of Nairobians.

“I am thankful to the Mastercard Foundation because it not only gave me the opportunity to pursue my career but also to fulfill my interests and goals, and expand my network.”

The ambitious group’s initiative is just but one example that can go a long way in helping President Uhuru Kenyatta achieve his food security plan under the Big Four Agenda.

READ:EAC to launch platform to promote food security and nutrition

READ ALSO:Kenyan President Uhuru Kenyatta Tackling Food Insecurity as part of his Big Four Plan

 

MIT, Liquid Telecom partner for Inclusive Innovation Challenge

The IIC will award a total of USD1.6 million this year —including USD250,000 to each of the four winning organisations.

The Massachusetts Institute of Technology’s (MIT) has selected Liquid Telecom as its official partner for the 2019 Inclusive Innovation Challenge (IIC) in Africa.

Since 2016, MIT’s Inclusive Innovation Challenge (IIC) has challenged entrepreneurs around the world to re-invent the way technology innovation is harnessed.

This year the challenge will take place on five continents: Africa, Asia, Europe, Latin America, and the US and Canada.

Recruiting African entrepreneurs and innovators

Liquid Telecom will serve as the IIC’s outreach partner for Africa, where it will play an important role in recruiting African entrepreneurs and innovators to participate in the challenge.

The 2019 IIC has four categories focused on creating solutions to help people prosper in the era of automation.

These are technology access, financial inclusion, skills development and opportunity matching, and income growth and job creation.

Through its Innovation Partnership initiative, Liquid Telecom will be encouraging African based start-ups, innovators and technology companies to take part in the various challenges.

Using digital technology across Africa

The IIC will award a total of USD1.6 million this year —including USD250,000 to each of the four winning organisations.

Liquid Telecom is looking forward to working with MIT on delivering the IIC in Africa as it is aligned with our mission to support innovation, using digital technology, across the continent. As an African company, greater inclusion in both the creation and application of technology is fundamental to Liquid Telecom’s DNA. We are happy to help IIC reach more entrepreneurs and innovators across the continent,” said Liquid Telecom’s Group Chief Technology and Innovation Officer Ben Roberts. “

IIC Executive Producer, Devin Cook sees a “revolution afoot” to create high-tech jobs and skills training that bring people more fully into the digital age. “Our vision is an economy that works for all,” she said.

The future of work

To achieve this, the IIC serves as a catalyst to “accelerate entrepreneurs who are already making our vision a reality.”

In addition, the challenge wants “to drive a solutions-oriented conversation about the future of work.”

Registration is open now and the deadline for submissions is May 9. Regional finalists will be announced 23 July and winners will be recognised at regional celebrations. The challenge will culminate with a Global Grand Prize Gala at MIT on 21 November 2019.

Competition winners and awards

Since 2016, 3,000 organisations have registered for the IIC from more than 100 nations. It has worked with more than 100 Global Outreach Partners, 500 judges, and drawn 3,300 event attendees.

There were 100 winners in last year’s competition, awarded a total of USD3.5 million, which developed solutions ranging from agricultural climate apps for African farmers to training courses for US healthcare workers and coding boot camps in India and the Middle East.

“We believe that inclusive innovation – the use of technology to generate increased economic opportunity for moderate and low-income earners – is imperative with a tight deadline,” said IDE Director, Erik Brynjolfsson.

“The question we should be asking isn’t ‘what is technology going to do to our economy and society,’ but rather, ‘what will we do with technology’?”

This year’s challenge details are available here.

MIT says it is awarding the USD1.6 million to organizations “revolutionizing the future of work”.

Liquid Telecom is also in a partnership to reduce air pollution deaths in Kenya, getting 250,000 refugees to be treated over the internet and in IoT to increase Kenya’s fish production.

US firm cements African business with Ksh7Bn factory in Kenya

The factory can produce about 7.8 billion pellets of chewing gum annually

US headquartered Mars Wrigley Confectionery has cemented its business in the East and Central Africa region with the new state of the art Ksh7billion (USD68.9 million) manufacturing plant in Athi River, Machakos County, Kenya.

The plant was officially commissioned by President Uhuru Kenyatta on Tuesday. The President was represented by Industry, Trade and Cooperatives Cabinet Secretary Peter Munya.

Kenyatta has since hailed Mars Wrigley for putting up the new factory citing the need to invest in additional manufacturing capacity to create more jobs for Kenyans.

The investment gels well with his ambitious Big Four Agenda’s manufacturing pillar that seeks to increase manufacturing’s contribution to GDP from the current 8.5 per cent to 15 per cent by 2022.

“To create the desired jobs, we need to invest in existing and new industries that will grow our country’s manufacturing capacity from the current eight-point four percent to fifteen per cent of the Gross Domestic Product by 2022,” President Kenyatta said in a speech read on his behalf by CS Munya.

He added that the government was particularly keen on working with the private sector to achieve that goal.

“My administration remains committed to catalyzing even more private-sector-led growth in the manufacturing sector,” the President said.

The new factory which is constructed on a 20-acre piece of land in Mavoko, Machakos County has replaced the company’s old plant that was located in Nairobi’s Industrial Area.

According to the company’s management, investment in a new facility whose construction started three years ago, was driven by the need to meet growing demand for the firm’s products in Africa, while improving capacity and technology.

READ:Americans to build $70M chewing factory in Kenya

“With the rapidly expanding middle class and youthful population, we see our products becoming more and more integrated into people’s lifestyles.” Said Mr. Duncan McCulloch, Regional Managing Director for Mars Wrigley Confectionery.

The facility is expected to have a major impact on the Kenyan economy in terms of job creation both directly at the factory and indirectly through its expansive value chain a

US manufacturer Mars Wrigley Confectionery has cemented its business in the East and Central Africa region with the new state of the art Ksh7billion (USD68.9 million) manufacturing plant in Athi River, Machakos County, Kenya. It will serve a growing market of more than 14 countries - that includes Uganda, Tanzania, Rwanda, Burundi, Ethiopia, Djibouti, DRC and South Sudan. The new factory will produce popular Mars Wrigley Confectionery brands, including Big G, PK, Doublemint and Juicy Fruit.
The main block at Mars Wrigley Confectionery’s new factory in Kenya.

s well as boosting the country’s exports.

It will serve a growing market of more than 14 countries – that includes Uganda, Tanzania, Rwanda, Burundi, Ethiopia, Djibouti, DRC and South Sudan.

Mr. McCulloch commended President Kenyatta for his efforts in boosting local manufacturing through his government’s Big Four Agenda saying it will contribute to the expansion of employment and business opportunities for Kenyans, while cementing the country’s position as a leading industrial hub in Africa.

“Increased capacity and efficiencies made possible by this new facility will contribute significantly to the scaling up of our already existing entrepreneurship program. So far, over 1,000 youth and women from across the country have benefited from the program we call Maua. With the support from government and other partners, we hope to increase the number to 5,000 in the next two years,” Added McCulloch.

Maua is the company’s entrepreneur accelerator program designed to empower individual entrepreneurs as well as create large networks of micro-entrepreneurs and micro-distributors.

“As government, we remain committed to supporting local industries as part of the Big Four agenda under the manufacturing pillar. Our intention is to transform the country into a competitive global economy and improve the lives of Kenyans.” said President Kenyatta.

He added that the company’s decision to invest in Kenya on such a substantial scale is a clear affirmation of the country’s position as an attractive investment destination.

Mars Wrigley Confectionery is a global leader in the manufacture of chewing gum, confections and chocolates. The new factory will produce popular Mars Wrigley Confectionery brands, including Big G, PK, Doublemint and Juicy Fruit. Additionally, the company will also look to expand a wide range of their chocolate portfolio in the market.

The factory has the capacity of producing about 7.8 billion pellets of chewing gum annually.

Just recently, the new factory was recognized for adopting green building strategies and practices in its design and construction, becoming the first manufacturing plant in Eastern Africa and one of the few in Africa to achieve LEED GOLD certification status.

LEED, or Leadership in Energy and Environmental Design, is the most widely used green building rating system in the world. It is run and managed by the U.S. Green Building Council (USGB), a non-profit organization that promotes sustainability in building design, construction, and operation. It is a prestigious rating for environmentally conscious buildings and sites.

Mars Wrigley Confectionery is the world’s leading manufacturer of chocolate, chewing gum, mints, and fruity confections. Once the planned worldwide integration of the Mars Chocolate and Wrigley businesses is complete, Mars Wrigley Confectionery will employ over 34,000 Associates globally and have operations in approximately 70 countries.

Headquartered in Chicago, Mars Wrigley Confectionery will distribute its world-famous brands including M&M’s, Snickers, Twix, Skittles and Orbit in more than 180 countries.

In Kenya, the company has its headquarters in Athi River and has been operational since 1969.

 

Kenya’s Chinese debt to hit USD9.8 billion as world meets in Beijing

Loans from China closed 2018 at USD6.2 billion (Ksh 627.1 billion)

Kenya will be keen to secure additional funds from China for construction of Phase 2B of the Standard Gauge Railway (SGR), as the World meets for the second Belt and Road Forum for International Cooperation (BRF) in Beijing.

The forum which takes place this week is expected to attract a high number of Heads of States from Africa and across the globe, with thousands of delegates from over 100 countries.

President Uhuru Kenyatta’s administration is seeking a Ksh370 billion (USD 3.67 billion) loan to extend the rail project which is currently at its second phase of construction (Nairobi-Naivasha).

Phase one of the project, 472 kilometre Mombasa —Nairobi line, is currently operational having been completed and commissioned by President Kenyatta on May 31, 2017.

It was constructed by China Road and Bridge Corporation (CRBC) on a Ksh327 billion (USD3.2 billion) loan from the Exim Bank of China.

READ: Boost for East Africa trade as Kenya commences SGR cargo services

Phase 2A is being developed by a sister company-China Communications Construction Company (CCCC), funded by the Chinese at a cost of Ksh150 billion (USD1.48 billion).

The 120-kilometre line which runs between Nairobi-Mai Mahu and -Duka Moja, a small centre between Suswa and Narok town, is 90 per cent complete.

The funds being sought by the government are meant to fund Phase 2B (Duka Moja-Kisumu) and the final stretch (Phase 2C) connecting Kisumu to the Kenyan-Ugandan border of Malaba.

President Kenyatta and former Prime Minister Raila Odinga are expected to lead a delegation from Kenya to the Beijing meeting.

“I will be part of the delegation that will accompany the President to the Asian country next week,” Mr Odinga confirmed at a public forum over the weekend.

In a recent meeting at the Chinese Embassy in Nairobi, Kenya Railways acting Managing Director Philip Mainga said the government is keen to secure funds during the BRF meeting.

“We hope to sign phase 2B during the meeting,” Mainga said, “Kenya Railways is working with the Chinese government in achieving the commitment we have on the 974 kilometre Mombasa-Malaba SGR project.”

Heavily indebted to China

If secured, Kenya will push up its debt obligation to China to above USD9.8 billion (Ksh991.2 billion), after loans from Beijing closed 2018 (December) at USD6.2 billion (Ksh627.1 billion).

This is up from USD5.3 billion (Sh536 billion) a year earlier, where a lion share has gone towards the construction of the multi-billion SGR.

The move will add pressure to the country’s debt portfolio which stands at USD53.3 billion (about Ksh5.4 trillion), nearly double the country’s annual budget.

ALSO READ: Tough times: Kenya piles Kshs 2.5 billion debt in a day

China tops the list as the biggest lender to Kenya followed by Japan, France and Germany.

Other sources for Kenya’s funds include the International Development Association (IDA), International Fund for Agricultural Development (IFAD) and the African Development Bank (AfDB).

In the next financial year commencing July 1, the government plans to borrow Ksh306.5 billion (USD3.03 billion) externally and Ksh277.5 billion (USD2.24 billion) in the domestic market to bridge its budget deficit.

It plans to spend Ksh2.67 trillion (USD26.3 billion) in the fiscal year with the budget focusing on President Kenyatta’s Big Four Agenda of affordable housing, growth in the manufacturing sector, universal healthcare and food security.

Kenya Revenue Authority (KRA) is expected to collect Ksh1.88 trillion (USD18.5 billion) to support the budget up from the current revised Ksh1.65 trillion (USD16.3billion).

The proposed spend for the year 2019-2020, by Treasury Cabinet Secretary  Henry Rotich, is up from the Ksh2.51 trillion (USD24.8 billion) he had proposed for the current fiscal year(2018-2019) which ends on June 30. The budget was however revised upwards to Ksh3.074 trillion(USD30.3 billion).

Kenya country’s ballooning debt has continued to spark debate over its sustainability with both the World Bank and the International Monetary Fund (IMF) cautioning the government to go slow on its borrowing.

In a recent report, the IMF noted that the country’s risk of defaulting on debt repayment had increased from low to moderate.

There has been a heated debate that Kenya could lose its key assets, among them the Port of Mombasa, to China if it defaults its debt. Kenya could lose Mombasa port to China over SGR debt

Financial experts have since questioned China’s motive in its increasingly lending spree to Kenya to finance mega infrastructure projects, warning that it could be a debt trap.

READ: Is China setting a debt trap on Kenya?

The Chinese government has however dismissed the claims, even as it defended its relationship with Kenya, which it has termed mutually beneficial.

“We are not putting Kenya into a debt trap. China-Africa Corporation cannot put Africa into a trap but booming economic growth,” the Chinese Embassy in Nairobi said.

The Belt and Road Initiative

A project of President Xi Jinping, China is using the Belt and Road Initiative (BRI) to enhance both China’s development and its cooperation with global partners.

According to the Chinese government, BRI represents a major breakthrough in “both theory and practice, and it carries far-reaching significance.”

Since its inception, the BRI has received a strong endorsement and warm support from the international community. So far, a total of 124 countries and 29 international organizations have signed BRI cooperation documents with China.

Most recently, during President Xi’s visit to Italy, the two countries signed an MOU on promoting BRI cooperation, giving a new impetus to this process.

Meanwhile, the BRI vision has been included in documents of major international institutions including the United Nations, the G20, the Asia-Pacific Economic Cooperation and the Shanghai Cooperation Organization.

China has been using the platform to strengthen global trade links across the world, in particular between Asia, Africa and Europe, with investment in an array of large-scale infrastructure projects along these two land and sea corridors.

The land route runs along the ancient Silk Road that for centuries connected China with Europe via Central Asia and Russia. Once completed, it will consist of a number of new road and rail routes, as well as energy pipelines and other key infrastructure.

The sea route is a maritime trade corridor built for the 21st century. It will stretch from Chinese coastal ports all the way to Europe via new and upgraded ports in the South China Sea, the Indian Ocean, the Middle East and the Mediterranean.

The potential size and scope, with related investments totalling as much as USD8 trillion by 2020, is projected to boost global trade by 12 per cent, impacting more than 65 countries and nearly two-thirds of the world’s population.

This year’s BRI has three things to look out for. First, the number of foreign heads of state and government officials in attendance (expected to be high) as they seek partnerships.

Secondly, the number of countries participating with thousands of delegates expected and third, there will be numerous side events including 12 thematic forums focusing on practical cooperation, and for the first time, a conference organized specifically for the business community.

A huge number of African leaders are expected to attend the forum where they will be keen to present the interests of their respective countries, especially on development.

Business communities from Africa are also expected to sign numerous MoUs for closer trade ties, a move that will tighten China’s grip on Africa.

ALSO READ: How China plans to beat US in capturing Africa