TRENDS INTEL INDUSTRY REGION PURSUITS SUSTAINABLE BANKING STAWI PENSION EAST AFRICA TRAVEL GEMS NOT FOR SALE

Corporate Magazine | October2020 - January, 2021

A society in business It runs in Making Mulleys the Family Things cannot Secrets of building a great just fall family business into place

Also in this issue, updates on the COVID 19 vaccine and how Biden will approach Africa The Ultimate Trade Finance Solutions 18 How Biden will approach Africa Biden has promised to “bring Our services include: to the presidency decades of • Pre-Shipment Finance/Pre-Export Finance foreign policy experience and a • LPO Financing/Supply Chain Financing demonstarted committment to Africa.” • Bills/Invoice Discounting Facilities • Stock Financing Facilities • Documentary Collections • Bank Guarantees/Bonds • Post-Import Finance 6 • Letters of Credit KCB bags major green finance deal CONTACT US TODAY: The bank is the first lender in Kenya and private sector entity Call: 0711 087 000 or 0732 187 000 to receive this accreditation Email: [email protected] cementing the sustainability Web: www.kcbgroup.com thought leadership efforts within the Group 44 Side-stepping the common pitfalls of family businesses The challenges of family businesses can be summed up to governance and succession

10 First annuity road paves way for more The road construction contract 12 was awarded to Intex Raf Construction Company at a cost Will Africa get the short end of the vaccine stick again? of KShs8 billion and financed by Kenya among countries in which trials are being KCB Group conducted in race to beat virus

50 There are KShs51 billion worth of unclaimed assets, and that’s a bad thing

2 | | 3 Regulated by the Central Bank of Kenya WORDFROM THEEDITOR OPINION Prevailing in Covid times Family-owned businesses key to post pandemic recovery eedless to say, the year was one of the most By Peter Kathanga eventful we have had in a long time; COVID-19 ensured that the business amily enterprises have shaped hopefully passed from one generation Novartis (Edouard Sandoz family) among N environment was severely disrupted. the business landscape for to the next. A look at the last century others However, we have proved that we are Gloablly, we have seen centuries and remain an demonstrates that family business has An interesting lesson from these resilient and, with a long term view, we will prevail. some businesses that F important pillar as a source strong ties that bind and are critical in leading family-owned businesses is that, The more reason why this issue puts a spot light on can trace their roots to of employment, wealth enabling them to withstand recession, although most of them have publicly family ran businesses, how they can navigate the tough hundreds of years ago. creation, and economic growth. pandemics, and even wars. This resilience listed, the family retains at least some times and how to transition management from one Many thriving local In Africa, the roots of most businesses is a hallmark of successful family owned considerable shareholding, seats on the generation to another. KCB Group Head of Corporate Affairs are families, which have within them the companies. board, and are not necessarily the CEOs. family businesses can Judith Sidi Odhiambo We have talked to a few businesses that have learn a thing or two on characteristics, habits and cultures that Their ability to survive and adapt Like every other business, family succeeded by adopting business models that have how to nurture their Acting Director Marketing and often determine their success. coupled with quick decision making, enterprises are being severely tested by ensured survival across the economic cycles. One in busineess for the long Communications Some of the best brands and leading strong values, and long-term goals the world economic crisis occasioned Wanyi Mwaura particular – Rwathia Distributors – has been distributing haul. businesses are family owned and are endear most budding entrepreneurs to by the outbreak of COVID-19. On the products for East African Breweries Limited for more Assistant Brand Manager Marketing and considered important and dynamic this model of business. one hand, this is seen as the final nail than half a century without interruption. Communications participants of the global economy. In And these firms are found in all sectors on the family business model; on the We have seen the downfall of well established family Linda Amboye Kenya, family run businesses play a major of the economy, from automotive to other hand, the continued existence of business empires orchestrated by internal wrangles and Editor and KCB Bank Corporate role in sectors such as manufacturing, retail and wholesale, asset management, these businesses over generations is a bad management practices. Communications Manager agriculture, and small scale trading. media, banking and capital market, testament to their strength and resilience. Globally, we have seen some businesses that can trace Peter Mwaura This oldest form of commerce nurtures telecommunication, consumer products, The pandemic is just another crisis in their roots to hundreds of years ago. Many thriving local Project Editor the entrepreneurial spirit that is then and oil and gas. the journey and multigeneration-family family businesses can learn a thing or two on how to Anne Mathenge Unfortunately, a family-owned business will be critical as the engine for nurture their businesses for the long haul. business as a model is facing an existential post-pandemic growth. KCB Group Corporate and Regulatory In the issue, we report on a major milestone that Affairs, Kencom House, Nairobi threat. A lot of family enterprises are The pandemic also presents an KCB Bank achieved: that of being the first bank in East Tel:0711087000 or characterized by an alarmingly low opportunity for the family business to and Central Africa to be accredited by the UN Green 0732187000 / 0711012199 survival rate. Studies show that less take stock of their business models, Climate Fund as the first financial institution for the www.kcbgroup.com than a third of family companies survive question their operational sustainability Facebook: KCB Group implementation of green financing in East Africa. Twitter: @KCBGroup the transition from the founder to the and resilience, and to formalize their We have covered the first road annuity programme Instagram: @KCBGroup second-owner management. Worse yet, is governance structures; to safeguard their in the country – financed by KCB Bank – and the transition survival rates from second businesses for today and the future. Give us your feedback at: which is a reflection of our resourcefulness and [email protected] to third-generation ownership. In this edition of the Venture, we cast market leadership. This is a novel way of financing Subsequent transition is nearly the spotlight on some of the best-run large infrastructure projects which has been very KCB Venture is published for KCB unheard of, except in select enterprises family-owned enterprises we could find. Group by Oxygène MCL successful in developed countries but which has yet [email protected] with strong foundations, structures, We examine the relationship between to take root on the continent. www.oxygene.co.ke and succession plans. Some of these family business founders and the survival With the departure of Donald Trump as the President global brands include Ford Motor of these businesses as they transit from of the United States of America, we analyse the impact KCB Venture is available online - Company (Henry Ford family), one generation to the next and the agile https://ke.kcbgroup.com/our-blog/ of President Joe Biden’s and his government’s policies on kcb-venture Walmart, Volkswagen (Piëch- business decisions they need to make the continent of Africa. Porsche family), Reliance Industry to help protect employees and keep the ©2021 No part of the contents may be (Ambani family), Tata (Jamshedji company afloat. reproduced without prior permission We hope you enjoy the read. from the publishers. All advertisements Tata family), Nike (Phil Knight and non-commissioned texts are family), Samsung electronics The writer is the Director, Corporate taken in good faith. While every care is (Lee Byung-chul family), and Banking at KCB Bank Kenya taken to ensure accuracy in preparing Editor-in-Chief the magazine, the publisher and KCB Venture assume no responsibility for effects arising therefrom. Unfortunately, a family-owned business as a model is facing an existential threat. A lot of family businesses are characterized by an alarming survival rate. Studies show that less than a third of family businesses survive the transition from the founder to the second-owner management.

4 | | 5 TRENDS&INTEL this accreditation, cementing the with the fiduciary standards of the sustainability efforts within the Group GCF, positioning the Group as a TRENDS&INTEL especially for portfolio re-imagining in thought leader in the wider climate the green lending space. action community and at the forefront “We are proud of the efforts and of environmental/green/climate investment we have put over the change initiatives and solutions. years to mainstream and entrench a Kenya, which is a signatory to sustainable business that has earned the UNFCCC, Kyoto Protocol, Paris us this recognition. It is a milestone agreement, SDGs and numerous for the Bank and the country as it global and regional frameworks opens up investment and development geared to climate action, has put a of the green economy through GCF’s lot of effort to operationalize various support,” says KCB Group Chief policies and laws. Executive Officer and Managing “The National Climate Change Director, Joshua Oigara. Response Strategy, and its associated The Bank has been accredited under National Climate Change Action the medium to large private sector Plan, lay the groundwork for Kenya’s category, and is therefore capable of Nationally Determined Contribution fronting projects of between USD 50 under the Paris Agreement, says CS million (KShs.5 billion) and USD 250 National Treasury Amb. Ukur Yattani. million (KShs.25 billion). “It is against this background that KCB Bank Kenya was nominated Kenya became the first country in the FINANCE by the National Treasury under the world to develop the National Policy We are proud of the efforts and investment Ministry of Finance to participate in on Climate Finance to improve our we have put over the years to mainstream Green Climate Fund Accreditation ability to mobilise and effectively and entrench a sustainable business that KCB bags major in 2017. Under the GCF programme, manage and track adequate and has earned us this recognition. It is a the National Treasury is the National predictable climate change finance.” milestone for the bank and the country as Designated Authority (NDA) for The Fund will also enable KCB it opens up investment and development of accrediting entities who apply for Bank Kenya to sustainably support the green economy through GCF’s support,” funding through GCF in Kenya. the country’s aspirations including the says KCB Group Chief Executive Officer and Treasury Principal Secretary Dr. Big 4 Agenda and Vision 2030. Managing Director, Joshua Oigara. green Julius Muia said the accreditation “There are sectors that we are underpins Kenya’s position as a leader looking to invest in. The Fund will finance deal in green finance. enable us fill the climate finance gaps KShs5 billion to “KCB now has direct access to in all the sectors of the economy,” Mr. funding to finance climate change Oigara added. KShs25 billion mitigation and adaptation projects, as The Green Climate Fund (GCF) is a The Bank has been accredited under the well as grants for capacity building,” global fund created to support efforts medium to large private sector category, and Dr. Julius Muia said. of developing countries to respond is therefore capable of fronting projects of During the rigorous accreditation to the challenges of climate change between USD 50 million (KShs.5 billion) and process, an applicant entity’s policies and to help limit or reduce their USD 250 million (KShs.25 billion). and procedures, track record, greenhouse gas (GHG) emissions. and demonstrated capacity to It seeks to promote a paradigm undertake projects or programmes shift to low-emission and climate- of different financial instruments resilient development, considering 194 and environmental and social risk the needs of nations that are The accreditation The fund was CB Bank Kenya has development of green-climate resilient categories are assessed against the particularly vulnerable to climate by the United set up in 2014 standards of the Green Climate Fund. change impacts. been accredited by the investment assets/projects in Kenya as by the 194 Nations Green Kenya has continued to play a The fund was set up in 2014 by United Nations Green well as in the region where the Bank countries who Climate Fund leading role in implementation of the 194 countries who are parties K Climate Fund as operates. are parties to the reinforces Sustainable Development Goals (SDGs) to the United Nations Framework the first financial The accreditation follows extensive United Nations Kenya’s position and Climate Change Advocacy in the Convention on Climate Change intermediary for the implementation of due-diligence assessment, conducted by Framework global and local platform. This GCF (UNFCCC) and is the main as a leader in green financing initiative in East Africa. GCF since 2017 to ascertain the Bank’s Convention on accreditation supports the country’s Convention’s financial mechanisms. green finance The accreditation paves way for the preparedness in managing climate Climate Change efforts for sustainable growth. Others include Adaptation Fund, Bank to receive funds from the Green change programmes. (UNFCCC) and The GCF Panel reviewed KCB Bank Least Countries Development Fund, Climate Fund (GCF) for on-lending to The Bank is the first lender in Kenya is the main processes, procedures and compliance Global Environment Facility (GEF). beneficiary institutions involved in the and private sector entity to receive Convention’s financial mechanisms.

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“With this customer centric approach, recommendation and closed the Luckily, right from the start, the brand our clients get our undivided attention showroom for about two months just out had a digital presence which made it and extensively benefit from the expertise of precaution to give ourselves enough easier to switch to a virtual environment of our skilled personnel,” says Nafal. time to rethink our business model,” he after people began hunkering down It is not just the comfort of an exclusive says. in their homes to reduce the spread of showroom customers seek, it is the coronavirus. uniqueness of a well-tailored suit made to “We introduced what we call an the highest quality that can be accessed e-appointment where clients are taken locally. KShs200,000 through exactly the same process from “There is no luxury without uniqueness. the comfort of their home. It has turned Their suits, which retain a sense Our clients want to be unique. That’s why out to be very convenient for our clients,” of sleek, classic, yet sophisticated at Quintessence Tailor, we offer custom Nafal says. elegance, will set you back between made suits where our clients select their The pandemic’s effect on fashion KShs80,000 and KShs200,000. fabric, their lining, and their buttons and brands around the world has become can even get their name embroidered on apparent as numerous companies their suits among other options,” he said. permanently close their stores or file for To make these standout unique bankruptcy. pieces that boast of luxurious fabric, Back in May last year, fashion brand Quintessence Tailor partners with Our clients want to be unique. Victoria Secrets announced it was closing Dormeuil, a French textile company which That’s why at Quintessence a quarter of its stores in the USA and creates and designs luxury fabrics as well Tailor, we offer custom made Canada. as bespoke suit service. suits where our clients select H&M will also close 250 of its stores It also partners with London’s Holland their fabric, their lining, and globally this year as COVID-19 drives & Sherry, a supplier of bespoke fabrics their buttons and can even get sales online. The brand, which was around the world. their name embroidered on their founded in Sweden will accelerate plans Even amidst the pandemic, Nafal suits among other options,” to increase digital investment. reckons that the appetite for luxury goods is still high. The brand’s target market includes affluent gentlemen who are well travelled and are looking for both quality and value for money. These are mostly corporate executives, bankers and lawyers who usually purchase their suits abroad, Nafal says. According to the Knight Frank Wealth Report 2020, there were 42 Ultra High Net Worth Individuals (UHNWI) in Kenya FASHION in 2019. That number is projected to rise afal Hassani-Mohammed to 48 by 2024. The report describes these knows his suits. As he UHNWI as people worth over US$30 should, because he million. Kenyan luxury N is the Founder of When the pandemic hit the world and Quintessence Tailor, caused untold economic upheaval, every an African luxury fashion brand that sells company’s first priority was to protect the brand Quintessence entirely customized bespoke suits, shirts health and safety of its employees. and shoes that exude pure elegance. “This unprecedented situation created So exclusive is Quintessence Tailor a lot of uncertainty in our business, from Tailor staying afloat that the brand only serves one or a the discontinuity of the supply chain to maximum of two clients at a time at a disruption of the market caused by the their showroom located at One Padmore stay at home recommendation,” amid COVID-19 place in Kilimani, Nairobi. “But our priority was the safety of Their suits, which retain a sense of our clients and staff. Therefore we sleek, classic, yet sophisticated elegance, followed the stay-at-home government will set you back between KShs80,000 Nafal Hassani-Mohammed, Founder of Quintessence Tailor, the exclusive and high pandemic and KShs200,000. end fashion brand that sells bespoke suits, shirts and shoes.

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↓ KCB Bank, is the first bank in Kenya to finance the first road under the Annuity Programme which was started in 2015.

TRANSPORT the implementation of the project,” the PPP statement continued. With the government set to commission First annuity the road before the end of the year, officials at the National Treasury are now more buoyant and confident in this financing model. According to a public notice on road paves their website, over 81 road projects in the education, transport, and energy sectors are set for annuity financing programs. These include the University of Embu way for more PPP Hostel Project, Moi University hostel project, upgrading to bitumen standards KCB Bank is the first bank in the country to finance the of gravel and earth roads, rehabilitation first road under the Annuity programme. Financing this and reconstruction of bridges, culverts, and programme aids in bridging the existing infrastructure gap road intersections. Speaking during the June 2020 inspection tour of the road, KCB Director hen the road annuity programme was Corporate Banking Peter Kathanga said started in 2015, it immediately ran into that the bank acknowledges that the road headwinds. infrastructure gap has continued to grow W Kenyan contractors felt it was due to increased demands and hence the designed to lock them out at the need for a paradigm shift in financing road expense of foreign contractors, notably Chinese development. contractors while commercial banks were wary of the “We take pride in being the first bank program. in the country to finance the first road The then Cabinet Secretary for the National Treasury under the Annuity Program. We are shelved the program in 2016 as the Government went happy to be part of the solutions to unlock back to the drawing board to improve the unique idea private investment in public infrastructure for the development of crucial infrastructure. development and the potential this will Road construction is an expensive undertaking that have in catalyzing economic development,” often forces the Government to take long-term loans as Ministry wouldn’t be depending solely on the signed for the construction of the Ngong- Mr. Kathanga said. it struggles to find a balance between delivering high- budget allocation from the exchequer,” the Cabinet Kiserian-Isinya road. “Our aim is to help bridge the existing quality public infrastructure at minimal cost. Secretary said during an inspection tour in 2017. The road construction contract was infrastructure funding gap. We are Under the annuity program, private sector players are “Under the Annuity financing model, the awarded to Intex Raf Construction Through this program, road confident that this would greatly accelerate engaged to design, construct and maintain roads based consultants and contractors design and Company at a cost of KShs8 billion and construction in the country would development while freeing up public funds on agreed periodical payments by the government. construct the roads while financing is done by financed by KCB Group, in 2018. be accelerated, because the for other projects.” The administration had settled on the model to help bankers with guarantees from the government. Formally referred to us Lot 33, Transport Ministry wouldn’t be As the road to the launch of this first fulfill its ambition to upgrade 10,000 kilometres of Insurance companies will insure the works the project comprises of a total of 91 depending solely on the budget annuity developed project comes closer, roads facing a public funding shortfall. while performance guarantees will be provided kilometres comprising of the following allocation from the exchequer,” the government can only look back with The framework involves the formation of a by the banks, ” Johnson Matu, chairman of the roads; Kajiado – Imaroro, Ngong – pride and take the learnings from this first consortium consisting of consulting engineers, infrastructure committee at the Kenya Private Kiserian – Isinya. project to set the foundations for future contractors, financiers, and project managers to Sector Alliance (KEPSA) told the World Highway “The project was selected for PPP, and the cost of using traditional projects that will open up rural economies, implement road projects. in a past industry event. development as a PPP because it proved procurement methods. ease traffic jams in the city and provide A payment modality is then agreed on between “The contractor has the advantage and that it would generate value for money “Projects that generate a positive value decent and affordable accommodation for National Treasury (through the contracting authority, assurance that payment for work done will come to the government if done as a PPP for money are considered the best projects students. which can be the Kenya Urban Roads Authority in time. This will be based on the progress of the rather than using traditional methods to be undertaken as PPPs since there is “We are proud of this road annuity (KURA), the Kenya National Highways Authority work, unlike the previous experiences that ended of procurement,” said the Public-Private optimal risk allocation, that allocates risk project. It is historic in public (KeNHA) or Kenya Rural Roads Authority (KERRA), the up with many contractors on the losing end after Partnership Unit. to the party best suited to manage it. Other infrastructure development in this country contractor and the participating commercial bank. work,” he added Value for Money is determined as than the provision of value for money, the as it showcases that we can successfully The company that constructs the road is then paid a After a year-long hiatus, stakeholders were the difference between the costs to the involvement of private party results in execute development under the annuity semi-annual reimbursement from the National Treasury brought back to the table and the first deal was government for doing the project as a improved service delivery and efficiency in program,” CS Macharia noted. at a uniform rate over an agreed period. “Through this program, road construction in the country would be accelerated, because the Transport

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HEALTH

of 600 million doses based on two doses per expressed interest in the COVAX Facility. individual disbursed in phases. An initial 30 Eight higher and middle-income countries As we prepare million doses are expected to start arriving in will self-finance their own participation, communities, countries by March with the aim of covering while lower-middle income and low-income it is the duty of COVID-19: 3% of the general population, prioritizing countries will access the vaccines at no cost government, the mainly healthcare workers and other priority through the Facility. The vaccines distributed public health groups and then expanding to cover additional by COVAX will have received WHO Emergency and scientific Will Africa get vulnerable groups, such as the elderly and Use Listing authorization and as such will have community, those with pre-existing conditions. Most of undergone stringent validation of their safety as well as the doses are expected to arrive in the second and effectiveness. However, vaccine nationalism policymakers the short end half of the year. These timelines and quantities is threatening the COVAX initiative. and donors to could change if candidate vaccines fail to meet The COVAX initiative has raised US $6 billion in consider low- regulatory approval or production, delivery and pledges but needs an additional US $2.8 billion risk approaches of the vaccine funding face challenges. in 2021 and WHO and partners are urging with high yields. To make sure that vaccines are transported and countries and donors to contribute and help end stored adequately to remain effective, WHO, the pandemic globally. stick again? Gavi, UNICEF and other partners are working Africa Medical Research Foundation says that with countries to support their readiness to it is important to engage communities early on Kenya among receive vaccines by mapping existing cold chain in order to drive up acceptance when the time countries in which equipment and storage capacity as well as comes to administer the shots. trials are being providing technical support for countries to be “As we prepare communities, it is the duty conducted in race ready to receive and manage the vaccines. of government, the public health and scientific to beat virus According to the WHO vaccine introduction community, as well as policymakers and donors readiness assessment tool, African nations are to consider low-risk approaches with high yields. on average 42% ready for their mass-vaccination Top of this is to create effective mechanisms for campaigns, which is an improvement on the early community engagement as partners in the starting point of 33% tin November 2020. research process, not merely recipients of the However, there is still a long way to go to reach results. Communities must be first in science for the desired benchmark of 80%. its products to have acceptance and demand,” As the largest vaccine buyer in the world, says Amref in an article authored by Githinji procuring more than 2 billion doses annually for Gitahi, Lolem Ngong and George Kimathi. frica may have been spared left behind as countries in other regions need urgent access to safe and effective routine immunization and outbreak response The Kenyan Health Cabinet Secretary the worst of the COVID-19 strike bilateral deals, driving up prices, the COVID-19 vaccines.” on behalf of nearly 100 countries, UNICEF is Mutahi Kagwe told The Standard newspaper pandemic when one WHO warned on January 21. The COVAX Facility – which is co-led by coordinating and supporting the procurement, that the government has already procured the A compares data from As of that date, 40 million COVID-19 vaccine the Coalition for Epidemic Preparedness international freight and delivery of COVID-19 AstraZeneca vaccine, which will be arriving as the continent with that doses have been administered in 50 mostly Innovations (CEPI), Gavi, the Vaccine vaccines for the COVAX Facility. This is the early as February. from other parts of the world. Or may be high-income countries. However, in Africa, Alliance, and WHO – has secured 2 billion biggest, most sophisticated ground operation “The first group to get the vaccine will be not. Only research can tell us why Africa’s Guinea is the sole low-income nation to doses of vaccine from five producers, with in the history of immunization. UNICEF is essential workers especially health workers. It picture looks the way it does while time will provide vaccines and to date these have only options for over 1 billion more doses. stockpiling one billion syringes and buying 10 will be on a voluntary basis…we will not force tell what the future will look like. been administered to 25 people. Seychelles, “COVAX is on track to start delivering million safety boxes so that used syringes and anybody,” Kagwe said. But the biggest debate among key players which is a high-income country, is the only vaccine doses and begin ensuring global needles can be disposed in a safe manner by According to the CS, the Government has is whether Africa will once again be left one on the continent to start a national access to vaccines, said Thabani Maphosa, personnel at health facilities, thus preventing ordered 24 million doses of the vaccine. behind in the race to vaccinate populations vaccination campaign. Managing Director, Country Programmes, the risk of injuries and blood borne diseases. Rwanda health offivcials have also indicated Covax where rich nations have already lined up to “We first, not me first, is the only way to GAVI.” This massive international “UNICEF has put in place a global network that the nation is in line to receive vaccines by Africa is banking have the first go. end the pandemic. Vaccine hoarding will undertaking has been made possible thanks of freight forwarders and logistics providers March. on the multi- The World Health Organisation has warned only prolong the ordeal and delay Africa’s to donations, work towards dose-sharing to deliver vaccines as quickly and safely as Uganda’s ministry of health announced national COVAX that the worst fears - that poor nations recovery. It is deeply unjust that the most deals and deals with manufacturers that possible as part of this historic and mammoth in December that it has ordered 9 million Facility has would be left behind - is already taking vulnerable Africans are forced to wait for have brought us to almost 2 billion doses operation,” said Mohamed Fall, UNICEF Eastern doses of COVID-19 vaccine amid surging new already secured place. vaccines while lower-risk groups in rich secured. We look forward to rollout in the and Southern Africa Regional Director. “This infections in the country. two billion doses While the development and approval of safe countries are made safe,” said Dr Matshidiso coming weeks.” invaluable collaboration will ensure that we The ministry said in a statement issued of vaccine from and effective vaccines less than a year after Moeti, the World Health Organization In Africa, the coalition has committed to have enough transport capacity in place for here that the vaccines will cover 20 percent five producers, the emergence of COVID-19 is a stunning (WHO) Regional Director for Africa. “Health vaccinating at least 20% of the population delivering COVID-19 vaccine doses, syringes of the country’s total population of 45 million with options for achievement, Africa is in danger of being workers and vulnerable people in Africa by the end of 2021 by providing a maximum and safety boxes to the front-line workers who people. over one billion ultimately protect the millions of children who “Plans are underway to secure additional more doses. depend on their vital services.” doses of the vaccine to cover more people,” All the 54 countries on the continent have said the statement.

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→ Vaccinations are not likely to begin in Africa until mid-2021.

frican governments will that need to be made and transported safety,” say Mckinsey experts in a new growth in Kenya, Tanzania, Uganda and have to overcome some around the world to concerns about safety, report. “In particular, without proactive Rwanda will significantly rebound after of the most difficult efficacy, and durability, to the challenges planning, underserved populations a tough year due to the ravaging effects A logistical challenges around storage, delivery and acceptability disproportionately affected by COVID-19— of COVID-19. faced by humanities in communities. including ethnic, minority, and Subran estimates that there will if they are to successfully deliver the “Governments will likely be expected socioeconomically deprived groups, as well be a “confidence shock” triggered by COVID-19 vaccine which is expected to to mount communication and education as rural populations—may face disparities the expected vaccination campaign, provide a recovery economic shock. campaigns to address the concerns in vaccine adoption.” boosting consumption, investment and Analysts at Mckinsey say that the global that consumers have about vaccine Global Insurance firm Allianz projects trade following the worst recession focus on the pandemic is shifting to how that East Africa will be the hotspot of in its recent history recording a -4.2 quickly and successfully vaccines can economic recovery in sub-Saharan Africa, percent GDP decline. be distributed, an effort that will be the posting an average growth of 5.1 percent in “A fast and successful vaccination largest simultaneous global public-health 2021 against a continental average of 3.2 campaign could lift spirits even more, initiative ever undertaken. Governments will likely be expected to percent. adding 2 percentage points to GDP The scale of the challenge is gargantuan mount communication and education Allianz SE chief economist Ludovic growth,” said Subran. “A botched ranging from the sheer volumes of doses campaigns to address the concerns that Subran said in December that economic vaccine campaign, however, would consumers have about vaccine safety,” work in the opposite direction.” Africa has reasons to worry, says John N. Nkengasong, the director of the Africa Centers for Disease Control and 1.5 billion Prevention (Africa CDC). It may take until October to “We’ve seen a scramble for access to secure the total 1.5 billion vaccine therapies before. It happened with HIV doses needed to reach 60% of the and H5N1 influenza, for example. Africa continent’s 1.3 billion people at a has ended up at the end of the queue cost of between $7 billion and $10 every time,” says Nkengasong in an billion. article published by respected science magazine Nature. “Yet the global amount if requested by the participant) economy depends on the continent by the end of the year. for its exports of raw materials, food, Additional doses to reach higher HEALTH In December 2020, UN Secretary energy and labour.” coverage levels will then be available General Antonio Guterres told a Nkengasong says that that it would in 2022. All deliveries are contingent special General Assembly meeting be “extremely terrible to see” rich upon several factors, such as regulatory on the pandemic, Guterres said the countries receiving COVID-19 vaccines approvals and country readiness. WHO guidance “should have been COVID-19 vaccines while African countries go without. “The arrival of vaccines is giving the basis for a coordinated global Africa’s hopes of receiving the all of us a glimpse of the light at the response.” vaccine are now pegged on the end of the tunnel,” said Dr Tedros poised to deliver global COVAX initiative which aims Adhanom Ghebreyesus, Director- to accelerate the development and General of the World Health recommendations were not followed. manufacture of COVID-19 vaccines, and Organisation (WHO). “But we will only In some situations, there was a to guarantee fair and equitable access truly end the pandemic if we end it rejection of facts and an ignoring of 5.1% growth for for every country in the world. everywhere at the same time, which the guidance,” said Guterres. “When COVAX has announced that it is means it’s essential to vaccinate some countries go in their own direction, the already planning for the first deliveries people in all countries, rather than all virus goes in every direction.” of vaccines in the first quarter of 2021, people in some countries.” Vaccinations are not likely to begin Africa in 2021 with the first tranche of doses – enough In December 2020, UN Secretary in Africa until mid-2021, according to to protect health and social care General Antonio Guterres told a Nkengasong. He estimates that it may But scramble by rich nations and logistical workers – delivered in the first half of special General Assembly meeting on take until October to secure the total nightmares to define success 2021 to all participating economies who the pandemic, Guterres said the WHO 1.5 billion vaccine doses needed to have requested doses in this timeframe. guidance “should have been the basis reach 60% of the continent’s 1.3 billion This would be followed by further for a coordinated global response.” people at a cost of between $7 billion delivery of doses to all participants in “Unfortunately, many of these and $10 billion. the second half of the year – targeting supply of doses equalling up to 20% of participants’ populations (or a lower

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↓ Reduced economic activity occasioned by the COVID-19 pandemic has caused tenants to look for more affordable housing due to job losses and pay cuts. In the current property market, patient capital is king

ith a sturdy Nissan pick-up and In Nairobi, the result has been emptied apartments experience living and working in as tenants sought more affordable housing due to job Githurai in Nairobi, Timothy losses and the pay cuts that came with the reduced W Kamau is a good person to go economic activity due to the COVID-19 pandemic. to if you need transport on that Despite the grim spectre of empty apartment side of the city. buildings in Nairobi and the weary departures to the Of the many transport jobs he has had since the countryside, the trends in the property market suggest COVID-19 pandemic began, the most memorable was that the long-term impact will be minimal. a trip he made to Makuyu in Murang’a, about 100 The short-term impact was reflected in routine kilometres from his base in Githurai 45. He was taking surveys of the property market, with the Hass Property a young woman back home, and the Index for the second quarter of 2020 pick-up was loaded with a few household showing that rent dropped in a majority items: a bed, mattress, a 6-kilogram of Nairobi suburbs and satellite towns as cooking gas cooker, clothes, utensils and a tenants asked for discounts. microwave oven. 47% The property firm reported that 47 The woman had been working in a of tenants surveyed per cent of tenants surveyed asked their casino at one of the malls in Nairobi asked their landlords landlords for discounts of between 25 and We have not seen a major and had been earning enough to rent a for discounts of 30 per cent, matching their own reduced between 25 and 30 drop in land values despite two-bedroom flat, although she had been incomes. hold since a squeeze on budgets meant they the challenges such COVID-19 world – an increase in city homes – and living alone, and was in relative comfort. per cent, matching “COVID-19 has resulted in the closure needed to conserve operational capital. commercial buildings may convert into city their own reduced and the tough economic When the casino was closed because of of many industries across the economy With workplace location pings dropping homes in the Kenyan capital. incomes. environment proving that the restrictions on social interactions to and thereby reducing incomes of business by up to 70 per cent at the peak of the investors still see this as the It is evident that the oversupply of office limit the spread of COVID-19, she stayed owners and employees who are in turn restrictions, there were increasing requests best bet over the long-term,” space in Nairobi will continue, but Kariba home and used her savings to survive. The exerting pressure on landlords to reduce from tenants to surrender their commercial said Ms Hassanali. maintains that investment in real estate savings ran out and she disposed of a few rents,” said Ms. Sakina Hassanali, Head of space, said Knight Frank in a report. in the capital remains viable, in the long of her household items to pay the rent and 4.8% Development Consulting and Research at “As at the end of the first half, the average term. buy provisions. Rent reductions were HassConsult. occupancy rate was at circa 73%, with that investors held on to their properties. “(That’s) because we are a growing She sold her gas cooker at KShs15,000, across the entire Rent reductions were across the entire certain districts such as Westlands having Around the world, some companies have economy. However, developers may need to half what she had paid for it, and paid the Nairobi Metropolitan Nairobi Metropolitan area, with Donholm higher occupancy rates,” said Knight Frank. considered making working from home look at 360-degree solutions where you not rent, but would eventually dispose of her area, with Donholm in in the east recording the largest quarterly The economic slowdown resulted in more permanent, leading to suggestions only build to sell but have a plug and play sofa set and a few other items as her place the east recording the drop – 4.8 per cent – while Kitisuru fewer developers completing construction that they may halve the office space they office model,” says Kariba. of work remained closed. largest quarterly drop recorded the largest drop compared to last Fewer commercial office buildings were need. Already, Kenyan corporates like Despite the movements in the market The television set was the last to – 4.8 per cent – while year – 7.7 per cent. completed in Nairobi over the review Safaricom and KCB have a majority of their because of the pandemic, the analysis by Kitisuru recorded go, with the money going towards the There was a slight resurgence in the period compared to second half of 2019. staff working from home. the real estate firms and investors like the largest drop transport back home, KShs3,500, and compared to last year third quarter of the year, HassConsult Still, HassConsult reported, there was Kariba Moko, Partner at Moad Capital Kariba suggests that the long-awaited this at a 50 per cent discount as the – 7.7 per cent. reported, as rents increased by 2.5 per only a marginal drop in the prices of land says there would be a dip in revenue bursting of the so-called property bubble transporter would ordinarily charge cent overall and 4.9 per cent compared to compared to last year, with the study generated from office space and the owners might not be happening soon. KShs7,000 for such a job. last year. they released in the last quarter of 2020 of commercial buildings would have to “With 26,000 mortgage loans in a Life back in the countryside will be much more “A few suburbs have backed the trend of falling rents showing that land was stable compared to convert the spaces for other uses, such as population of 50 million and real estate affordable than in the outskirts of the capital and this which still continue as tenants are negotiating for other asset classes. halls, screening rooms or even apartments. heavily backed by cash buyers, I’d put urban-rural migration has become the pattern for a discounts amid the tough economic environment,” said “We have not seen a major drop in On the residential side, he says: “There’ll my money on Aliko Dangote beating lot of wage workers who lost their means of income Ms. Hassanali. land values despite the challenges such be a rethink in how house designs are Bill Gates on the Forbes list than on because of the pandemic. Things were slightly different in the commercial COVID-19 and the tough economic made.” He says the company sees house Kenya experiencing a real estate burst as This has been replicated in other parts of the world, market, where there has been an oversupply of office environment proving that investors still customisations, where a homeowner envisioned by naysayers,” Kariba says. like North America, where thousands of Mexican space. see this as the best bet over the long-term,” reconfigures the interior of the house to Kenya’s young and upwardly mobile migrants went back to rural towns and villages in the Both Hass Consult and Knight Frank reported that said Ms Hassanali. suit their needs, becoming a key feature population with its constantly increasing land of their origin, with similar patterns reported in rental prices for commercial properties stagnated As news of potential vaccines emerged going forward. They have applied this idea need for solutions to meet their housing India, Madagascar, Indonesia and even Uganda. because most organisations put their requirements on in November and December 2020, and to their latest project, Tungo Place. needs means that property remains an area the end of the various reliefs given by the Nairobi could benefit from a to invest in, especially if there is patient Government loomed, the research showed phenomenon catching on around the capital.

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Biden’s Priorities How on Africa Asserting America’s commitment to shared prosperity, peace and drastic changes in the way things Biden will security, democracy, and worked right from the first week in governance as foundational office, among these the Dodd-Frank Act principles of U.S.-Africa part of which contains rules requiring engagement. disclosure from companies trading in Restoring and products that contain conflict minerals approach reinvigorating diplomatic from Africa. relations with African The other frontier that took up the governments and regional Trump administration’s attention was institutions, including the China. Africa African Union. “Under Obama, China in Africa was Ensuring the U.S. viewed as complex. In some cases, as an Experts project .S. President Joe Biden faces Government and U.S. Foreign enemy and in others as an ally. Under new U.S. an uphill task repairing Service reflect the rich Trump, China was viewed as the enemy. administration Washington’s relations composition of the American What we immediately saw was that U with the rest of the citizenry, including African we had to make a shift on some of our will shift gears world, not the least of diaspora professionals. policies that. They had to become a bit which is Africa. Continuing the Young more adversarial towards China,” said Biden took office on January 20 to find African Leaders Initiative Brown in a post-election podcast. “You a Department of State described in a U.S. and deepening America’s also saw that there was less support for Senate report as “plagued by a hiring commitment to engage institutional strengthening, civil society, freeze, a bungled ‘reform’ effort, proposals with Africa’s dynamic young human rights … so it was also how do to slash its funding by one-third, and leaders. we also make a little bit of a shift so persistent vacancies, all of which have that things were focused on trade and hampered its effectiveness.” investment. It went from trade and In Africa, approximately 20 vacant investment being one of the many to ambassadorial posts are evidence of the Joe Biden, the 46th president of the trade and investment being the most problems bedeviling the department United States of America. important.” entrusted with the duty of driving She estimates that some of the policy America’s foreign policy around the shifts that will occur toward Africa world. under Biden will include re-engaging USA ambassador to Kenya Kyle the Middle East and sub-Saharan Africa, campaign are any indication, democrats on and rebuilding relations with the McCarter is among a string of officials says that under Trump, “the United States the African continent will get some much- African Union and regional blocks who left their jobs ahead of the Biden seemed to jettison many of the values it needed victories.” such as the Economic Community Inauguration. most wanted to promote overseas — rule According to International Crisis Group’s for West Africa States (ECOWAS) and 20 Biden has promised to “bring to of law, democratic norms, and respect The new administration will have Chief of Staff, Brittany Brown who worked the Inter-Governmental Authority on In Africa, the presidency decades of foreign for citizens’ voices. Now, with Joe Biden its work cut out domestically on African affairs under Presidents Bush, Development. approximately policy experience and a demonstrated as president and Kamala Harris as vice and globally. Nonetheless, Obama, and Trump, foreign policy on “We’re seeing people who are old 20 vacant commitment to Africa.” president, this moment could mark a reset.” democrats on the African Africa has not shifted drastically in the last Africa hands in the U.S. coming into ambassadorial “We will repair our alliances and “The new administration will have its continent are eager to have an 50 years. leadership positions. One of the posts are evidence engage with the world once again. Not to work cut out domestically and globally. ally again. It however did under President Trump. other things I really hope will be of the problems meet yesterday’s challenges, but today’s Nonetheless, democrats on the African “Typically, things don’t change that much priority for these new teams coming bedeviling the and tomorrow’s. We will lead not merely continent are eager to have an ally again. from democrats to Republicans, especially is the importance of putting strong department by the example of our power but by the They also hope to have an administration on Africa. You see some small changes, ambassadors forward,” said Brown. “I entrusted with power of our example. We will be a strong that reevaluates how (and to whom) the but for the most part, our policy has been hope that we move to a more complex the duty of driving and trusted partner for peace, progress, U.S. government provides security sector wannabes,” says Togun. “It’s unlikely that relatively consistent at least for the last understanding of China again. China America’s foreign and security.” assistance, reprioritizes international the new administration will meet all of twenty years if not, you know, fifty years, hasn’t been all bad for the continent. policy around the Kehinde A. Togun, who has led accords, speaks with moral clarity, and these hopes and aspirations; however, if when it comes to Africa,” said Brown. There’s a lot of good things that China world. democracy and governance programs in no longer gives cover to authoritarian Biden’s statements and posture during the But President Trump went about making has done. Like the U.S., it’s complicated.”

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TRAVEL the necessary adjustments to ensure the safety of Inchcape has continued to experience a removed, and others had to be included Few facts of the customers and staff. However, the most significant demand for luxury cars. The company to ensure they were operating in a safe task was to find ways to adjust to the new normal recorded a significant number of sales environment. Defender 110 while ensuring that their customers were able to units compared to 2019. During the pandemic, the digital space Hill Descent Control (HDC) get the services they need. “Right now, we are just about 5 or came in handy with online activations. Assists you with tricky descents by Individuals, corporates, NGOs, Diplomats, and 6 units shy compared to what we did A virtual launch was held as well as an maintaining a constant speed and Government institutions are key customers for in 2019. Compared to the rest of the exclusive 5-day test drive where a limited applying braking separately to each luxury brands such as the Landrover series, BMW, companies, we had a better run in 2020,” number of customers got an opportunity wheel. Hill Launch Assist ensures the vehicle doesn’t roll backward as 2020: and Jaguar from Inchcape Kenya. According to says Hussein. to experience the car. it pulls away on an incline. The car Hussein, customers are not only looking for cars Like other companies, Inchcape had Digitization of services, especially in also utilizes Gradient Release Control, that make a statement whose utility can serve their to make some changes to maintain marketing and customer services, has which is designed to prevent the vehicle The year of needs. No shoe fits all, but in this business, and customer delivery, especially during been vital for luxury brands. Hussein accelerating too quickly on a steep incline when the driver releases the customers rarely walk in the showroom and buy the pandemic. Many customers were says they had to ensure that the car- brake. what they see. They prefer to build their cars. already in the purchase process and had buying journey is not entirely dependent “Most of the conversations we are having with to be catered for. Car manufacturers on face-to-face interaction, hence the All Terrain Progress Control (ATPC) our customers is on style, taste, among other such as Jaguar and Landover made new introduction of virtual tours. This is a state-of the-art optional system. the defender It enables you to set and maintain a specifications. Hardly do customers walk in and changes and standards that had to be Interestingly, the company sold out the steady speed in challenging conditions pick what we have. The interesting thing about this incorporated in the showrooms across limited stock launch series, including the such as slippery surfaces, including is the processes of building the car, choosing the the world, which applied here in Kenya 2-liter and 3litre limited petrol versions. mud, wet grass, ice, snow and dirt roads. different types of specifications and combinations too. According to Inchcape Kenya, the next Operating like a conventional cruise and luxury they need to make that suits them, that’s the joy of Hussein says Inchcape had to change stock will include the 90 series, with control system, it functions between 1.8km/h and 30km/h, enabling you to this process,” Hussein explains. how they were handling the cars, the a shorter wheelbase. It will have some maintain full concentration on the terrain There has been an increase in demand for luxury facility, and one-on-one interactions. variations in diesel engines and other ahead. cars in recent years. In spite of the pandemic, Some elements in the vehicles were additional specifications. cars Coil Suspension And Electronic Air Suspension The coil sprung suspension system combines double wishbones at the he launch of the Land Rover Defender front with an advanced multi-link rear 110 was one of the most anticipated suspension, to create an agile and car releases for 2020. Fans of the responsive chassis. A comfortable and capable drive is ensured by Electronic T Land Rover series and James Bond Air Suspension. Select from an access Movies were about to have a treat height of 40mm below normal ride of a lifetime as the launch could have featured both. height, to an extended height of up to However, the COVID-19 pandemic cut short the 75mm. For extreme off-road conditions, excitement as the company had to scale down the a further extended ride height of 70mm is available. Even across unsteady surfaces official launch. Despite the pandemic, they launched it provides exceptional wheel articulation successfully as buyers had waited long, snapping up and poise. the cars. According to Hussein Ibrahim, Managing Director of Inchcape Kenya, 2020 began on a high note as the company experienced significant growth, especially from January until March when the COVID-19 pandemic hit. The company had to make

The company sold out the limited stock launch series, including the 2-liter and 3litre limited petrol versions. According to Inchcape Kenya, the next stock will include the 90 series, with a shorter wheelbase. ↑ Hussein Ibrahim, Managing Director Inchcape Kenya.

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Savannah, Nairobi is never short railway system that will connect Declaration on the conservation of new innovations. Add to the the capital city and 10 satellite of the iconic mugumo (fig) tree upcoming modern apartment towns to help ease traffic along Waiyaki Way. buildings, office blocks, hotels congestion within the city. The imposing tree dominated and shopping malls on every The project is part of the national news when the corner of the city and the Nairobi Metropolitan Transport government opted not to cut it regeneration efforts become Master Plan that is aimed at down to pave the way for the clearer. carrying out modernization ongoing construction of the President Uhuru Kenyatta has and expansion of underutilized Nairobi Expressway. consistently taken a personal railway transport to reduce With the Presidential TRANSPORT interest in ensuring that Nairobi congestion on city roads. declaration in place, the giant becomes a better, more habitable The system consists of tree has officially been adopted city that taps into its reputation new diesel mobile units and by the Nairobi Metropolitan Modern Nairobi battles to reclaim lost President Uhuru Kenyatta as a regional and continental commuter rail buses. In addition, Services (NMS) for preservation has consistently taken trade hub. the Nairobi Central Station as a beacon of Kenya’s cultural a personal interest in The President has been keen will serve as the nerve center and ecological heritage. ensuring that Nairobi on infrastructure development of operations connecting to “Indeed, we had this becomes a better, more which has resulted in the on- 10 stations in satellite towns, recognition world over of the habitable city that taps going construction of the Nairobi including newly built stations ‘Green City in the Sun’ but into its reputation as a Expressway which will cross the in Donholm and Pipeline unfortunately, over the years we regional and continental city from east to the west and the residential estates. abandoned it and we are here Green City trade hub. rapid bus transport system now President Kenyatta said to reaffirm and to declare our Massive efforts by the public and private sector are on course to under design. the railway transport will be commitment as a country and in the sun tag improve Nairobi’s image that for years, has had a reputation for heavy The Nairobi Metropolitan Area extended to Jomo Kenyatta as a people to our environment,” traffic jams, neglected public amenities and ailing garbage collection Transport Authority (NaMATA), International Airport (JKIA) by the President said. 55.79mn with the support of Institute for 2021, allowing air travelers an The President said the iconic Nairobians spend a Transportation and Development alternative mode of transport tree, which is estimated to be hen the railway builders customer needs. Sarit Center has been lately lighthouse in the horizon of countless whopping 55.79 minutes Policy (ITDP), is already drawing to and from the airport without between 125 to 150 years, links created a port on a swamp expanded to house over 500,000 square dreams that root deeply on this continent.” in traffic. on detailed field studies to suffering the frustration of being Kenyans with the country’s past, that’s today’s East Africa’s feet of space defined by retail shops, offices, For all of its swanky developments, develop an integrated service caught up in the traffic jam. present and future. W financial services medical facilities an expo center of global Nairobi has long carried a reputation for plan for BRT and regular bus “We have invested in The Head of State said the capital, they wouldn’t standards and other utilities attracting over its heavy traffic jams, neglected public services in the metropolitan area. rehabilitation of the Nairobi ongoing construction of the have imagined that in a hundred years, the 25,000 visitors every day. amenities and ailing garbage collection Nairobi’s planned bus rapid Railway station as well as access JKIA to Kikuyu expressway, railway depot would have exploded into one “We want to be able to meet the demands system. transit (BRT) system will offer roads with additional stations to which will be ready in 2021, of Africa’s most important cities. of our customer base by providing them An increase in the number of private an efficient, time saving public be constructed and will serve an is aimed at easing traffic The span that the city occupies was with world-class facilities so they can find vehicles, has turned Nairobi’s traffic into the transport mode. The system estimated 40,000 passengers a congestion in Nairobi, adding described by the British colonialists as a everything they need here,” Sarit Centre worst only after Mumbai according to an covers Nairobi City County day,” he said. that by preserving the fig tree, brackish swamp which was occupied on Finance and Operations manager Atul Shah article in Down to Earth, a magazine that and the adjoining counties of Kenyatta said the government the country is demonstrating different sides by the Kikuyu, the Kamba said in a recent interview. focuses on environment and development. Kiambu, Kajiado, Machakos, and has prioritized the development the possibilities of actualizing and the Maasai peoples. Also nearing completion is the iconic “Nairobians spend a whopping 55.79 Murang’a. The interconnected of the urban commuter rail and development while at the One hundred and twenty years on, Global Trade Center, a city within a city minutes in traffic. It is estimated that the BRT lines are named after to reduce traffic congestions and same time preserving the Nairobi is poised for a leap into another concept which boasts an office tower rising congestion leads to around KShs. 58 million Kenya’s Big Five animals: Simba boost the economy of the city. environment. growth era for a city that four million people 184 meters, the highest in East Africa, which ($5.6 million) a day of loss in productivity (Lion), Kifaru (Rhino), Chui On Christmas Eve, the “There can be no greater now call home. is coming already equipped with state-of- and as many as 13,000 people get killed in (Leopard), Ndovu (Elephant), President reiterated his significant symbol of that From the swanky malls to modern offices, the-art software/hardware facilities; the 103 road accidents every year,” says a report in and Nyati (Buffalo). commitment to the restoration commitment than our presence international conference facilities and to 116-metre serviced apartment community, the magazine. To drive urban renewal, of green spaces in Nairobi and here in front of this fig tree that an ever-growing infrastructure network, which is the highest in East Africa holding There are however, massive private and President Uhuru Kenyatta the improvement of the city’s was here long before Nairobi Nairobi has grown in a century from a the largest capacity and the 143-metre public sector efforts to improve this image. formed the Nairobi Metropolitan environment. ever was… clear indication that swamp into a city that never sleeps. Luxury 5-star Hotel. Many private sector efforts to keep Service and appointed Major The President said through it is possible for us to live with Take the Two Rivers Lifestyle Center “GTC represents an overall upgrade Nairobi’s image have been undertaken. General Mohammed Badi to the various environmental nature, it is possible for us to that sits on approximately 9.7 acres and of urban lifestyle in Kenya with its four From the 500-lot underground parking head it. Already, the re-carpeting conservation projects being preserve and conserve, while which is billed as Africa’s seventh largest benchmark elements of invaluable flows of bay constructed by the Holy Family of roads in city estates is ongoing rolled out across the city, Nairobi at the same time develop our to Sarit Center, East Africa’s first enclosed global elites, intelligence, and capital,” Avic Basilica in the Central Business District to and plans for the establishment was on course to reclaiming its infrastructure rapidly and our mall which dates back to 1983 and which MD Wong Yong said. “As an emblem of the the buzzing digital innovation hubs that of the mass transit bus line are at ‘Green City in the Sun’ status. capacity to ensure that our has been refurbished to reflect modern era, it will be remembered as an everlasting earned Nairobi the nickname the Silicon an advanced stage. He spoke in Nairobi’s citizens live decent clean lives In November 2020, President Westlands suburb where that each and every person is Kenyatta launched a commuter he unveiled a Presidential entitled to,” said the President.

22 | | 23 TRENDS&INTEL TRENDS&INTEL distance of about 40 kilometres between Mlolongo on Mombasa Road and Uthiru on Waiyaki Way. This congestion comes at significant economic cost. The Nairobi Metropolitan Area Authority (NaMATA), which ranks Nairobi as the fourth most congested city in the world, estimates that the economy loses KShs. 100 billion annually. This loss is as a result of the delays and fuel wastage as more time is spent on the road. The Institute of Economic Affairs (IEA), on the other hand, projects that traffic jams in Nairobi cost KShs. 50 million daily, in lost productivity. The traffic congestion has been linked to the growing number of motor vehicles on the roads. Residents prefer using personal vehicles even for distances that they can use on public transport. This is because of the absence of a reliable and scheduled public transport system in Nairobi and many parts of the country. However, all this may soon change if ongoing efforts to decongest the city are anything to go by. In recent days, there have been attempts to facilitate free flow of people, goods and services across the city. TRANSPORT This saw the creation of NaMATA, Traffic congestion in Nairobi is linked to the growing number of the state agency mandated to oversee motor vehicles in the city. development of an integrated, efficient, effective and sustainable public transport system within the Nairobi Metropolitan The Nairobi Metropolitan Fresh Area that covers Nairobi, Murang’a, The Nairobi Commuter Rail System is Area Authority (NaMATA), Kiambu, Kajiado and Machakos counties. operating daylong hourly trains serving the which ranks Nairobi as the Ongoing initiatives to make decongestion city and its environs. It will be operated fourth most congested city of traffic a reality include: construction from the Nairob Central Railway Station in the world, estimates that attempts at of the Nairobi Expressway spearheaded and expanded to cover the rest of the city. the economy loses KShs. by KeNHA, introduction of the Nairobi The BRT run by NaMATA is meant 100 million annually. Commuter Rail Service by Kenya Railways to provide residents with a scheduled, he traffic congestion in and the planned Bus Rapid Transport reliable, bus-based commuter transport Nairobi is one of the (BRT) system championed by NaMATA. All system. With dedicated right of way, it will decongesting memories that many this is geared towards enhanced mobility, help facilitate faster transport. first-time visitors to the which is meant to facilitate economic However, despite these sustained T city often take away. activity in the city, which serves as the hub efforts, critics have warned that the During rush of the region. Nairobi Expressway, being a toll road, will Nairobi roads hour, as the city rushes to and from Upon completion, the 27 kilometer only serve those who can afford it, and Traffic congestion has been workplaces, traffic grinds to a halt. The Nairobi Expressway will be a dual not necessarily address the congestion linked to the growing number gridlock worsens when it rains, further carriageway, stretching from Mlolongo on problem. Residents have also taken issue of motor vehicles in the roads slowing down movement. Mombasa Road to James Gichuru junction with the KShs. 100 fare levied on all routes of the city. Residents of the city The Kenya National Highways which links to the exit to the western served by the commuter rail. prefer using personal vehicles Authority (KeNHA) estimates that it part of the country. The uninterrupted Alongside all these efforts, IEA has even for distances that they can takes up to two hours to drive across movement on the toll road is projected to also recommended recognition of non- use on public transport the city, from one end to the other significantly cut the travel time between motorized transport as an alternative during rush hour. All this to cover a these points to just 20 minutes. means of mobility.

The Institute of Economic Affairs, projects that traffic jams in Nairobi cost KShs. 50 50 million million daily, in lost productivity. 24 | | 25 FEATURE FEATURE

Family

Starting a family business is no mean feat. Yet, they are the significant majority of firms around the world. It is estimated that globally, family owned companies contribute between Businesses 70 per cent to 90 per cent of the world’s Gross Domestic Product

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Rwathia Distributors is started working in the business entrepreneurial ventures but one of Kenya’s oldest family with a lot of leeway from his grew into huge multinational business success stories father to make the leap if he corporations,” says Paul Ouma, where the second generation wants. Coach, and Founder of the seamlessly and successfully Starting a family business Institute of Family Business. took over the running of the is no mean feat. Yet, family In Kenya, about 70 percent of Secrets of building a great firm from the founders. businesses are the significant the privately-owned companies Another sterling family majority of firms around the are family-owned. success is the security services world. According to a report firm, Securex. Tony Sahni It is estimated that globally, by Asoko Insights on East studied in Kenya and the family businesses contribute Africa’s family-owned family business United Kingdom and after his between 70 to 90 per cent of business landscape, family- studies, he tried his hand at the world’s Gross Domestic owned businesses within the different businesses in the U.K. Product. agriculture, food, and beverage Well defined family values and leadership structures, and then in Kenya. “When you look at the US, sectors together represent the innovation and trust are often the bedrock of some After several years doing Canada, India, Australia, 80 to second-largest concentration successful family businesses business elsewhere, he 90 per cent of the companies in of leading businesses in the discovered that his father’s those countries were founded country and are estimated to security services business, by an entrepreneur who had earn more than $10 million a usinessman Maina Gikonyo is socialising at whiskey tasting sessions started half a century ago in passion, who set up a business year. not famous. His name might hosted by Kenya’s century-old brewer for 1970, was always tugging at his and ran with it. Walmart, So, how does one grow a hardly ring a bell. those who love a sophisticated twist and a heart. BMW, Hyatt chain of hotels business from a dinner table B In any event, his tale to their tipple. His dad, Kishora Lal Sahni, and Samsung, are some of the conversation into a forceful given and surname are He deserves a seat at the table at Kenya’s embraced his son when he businesses that were started as brand? so ubiquitous that they can be found in century-old brewer and one of Kenya’s sought to join the business, and In a November 2020 KPMG practically every village in Central Kenya biggest companies. Rwathia is KBL’s the resulting tag-team created barometer from a study in or families with roots in Central Kenya. largest distributor, supplying in the region a more powerful force that has Africa, family businesses But the grey-haired, soft-spoken, and of 600 bars, hotels, and clubs and turning grown the business both in were in agreement that unassuming Gikonyo, who sits at the helm over a significant percentage of the reach and scale. (See separate it is important to build of Rwathia Distributors, is a household beverage maker’s distributor business. story). It is estimated that relationships based on trust name at Kenya Breweries Ltd, one of East Rwathia is a family business but not in The odyssey has only just globally, family with all their stakeholders Africa’s foremost blue-chip firms. the strictest sense of it. begun. Tony’s youngest son businesses contribute (employees, the community, You will find Gikonyo easily weaves in It is owned by a group of families studied Electrical Engineering, between 70 per cent customers, and suppliers) and and out of corporate conversations with whose original locale is Rwathia location did a business management to 90 per cent of not just with family members. Jane Karuku, the Group MD and CEO in Kangema, Murang’a County, about 118 course, then, on his own the world’s Gross In addition, 65 per cent of East African Breweries Limited (EABL) kilometres north of Nairobi. The board is volition, pursued a Masters respondents agreed that the Domestic Product. at business growth and development chaired by Maina’s father, the indefatigable in Counter-terrorism and emotional bond among family sessions. He’s equally at ease while 105-year-old Gerald Gikonyo Kanyuira. Organized Crime. Now, he has members is powerful and often >>>

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integrity, respect, or religion. successful family businesses owned businesses do not just Ramco is the oldest family- should provide education develop the business strategy, run business in Kenya. It for both the family and the but they also define and dates back to 1948. Today company. develop expansion, growth, it is chaired by one of the “Formal education is financing and marketing original entrepreneur’s important, but the natural, strategies to enable them to The Africa sons, with members of the informal education from grow,” he says. “In addition, Free Trade third generation holding top parents to children where entrepreneurship is taught Agreement management positions. they see the excitement of after students graduate from is going According to the KPMG entrepreneurship from the either tertiary or other higher- to provide survey, most African family onset often leaves a lasting level formal education systems. African family businesses are relatively young impression,” says Wanjagi. It is my view that it should businesses compared to their counterparts To ensure seamless, informal be taught earlier, and should with many in other regions around the family business education from include project-based learning.” more world. parents to children, the next Ultimately, successful family “This provides a great generation should be integrated businesses demand a certain opportunities, opportunity for African family into the family business as soon level of accommodation from but they businesses to learn best as they are old enough to be the founder, like the eldest will need practices from older and more involved. Sahni allowing Tony the money, to ensure established family businesses “When it comes to the next space and time to do his own that they are which, if implemented, generation’s formal education, research and travel the world ready for this could enable African family the first step is finding one in search of innovative new growth, the businesses to thrive and or two leaders from the same solutions, or Gerald Gikonyo increased continue to drive economic (next) generation who can be allowing his son Maina to come competition growth across the African champions, who can convince into Rwathia Distributors and and the need region,” says the report from the others in their generation that to bring in the new knowledge Family businesses need to build trust, not just with family members but also with employees, stakeholders and the community. survey. “The Africa Free Trade it is important, relevant and and technology on which the to be more Agreement is going to provide worthwhile. The forming of a company’s growth was founded. innovative.” >>> helps them maintain a positive When you delegate, you need to and trust to grow the business. African family businesses with ‘Next-Generation Education self-concept in their family have structures, and this pushes Antoinette Wa-Tindi, many more opportunities, but Committee’, choosing the best, Drafting a Most family businesses in Africa are relatively business. you to create organisational or Membership & Partnership they will need to ensure that brightest, and most interested young compared to their counterparts in other family charter is There are two main ways departmental structures. As you Director at the Association of they are ready for this growth, to lead the process,” says regions around the world. very important family-run enterprises operate: establish these structures, then Family Business Enterprises the increased competition and Wanjagi. for family they are either owner-managed governance comes in because (AFBE), says that this involves the need to be more innovative.” Business leaders or their businesses. or owner-controlled. Owner- the organisation needs to be having a family constitution, The generations in families children can learn strategy, It’s crucial for managed means that the governed. That’s where you shareholder agreements, a also form great building finance, operations, technology, addressing company’s owner or founder now say, look, I need to have family council, and holding blocks for family businesses. marketing, and governance in obvious holds an executive role in the an advisory board and a board regular family meetings. These Some family business leaders business school. things, like business, maintains oversight, of directors. These people will are some of the effective ways deliberately pursue this course The growing generation by tasking their children with learns soft skills training in compensation, and makes critical operational help the founders to run the to address the interactions decisions on its daily business better,” says Ouma. between family and business. simple assignments at the areas such as communication, and codifying management. At a CEO’s summit for “These are the structures business premises over the formal ways to conduct them.” Owner-controlled means African family-led businesses, and practices that many family weekend or during the school complex problem solving, that the founder has brought Darshan Chandaria, himself businesses globally and even holidays. benchmarking global firms in in professional talent of senior a second-generation Kenyan locally have put in place. They “The last thing on young the same industry, and family managers to run the business. business leader, said; have proven to be an ideal way business owners’ minds is what business decision making The owner or founder has a say “Drafting a family charter of addressing how or when a to do when they’ve finished processes. in the strategic direction the is very important for family member is eligible to join the running their businesses. Strategy, Wanjagi says, is 65% company takes. businesses. It’s crucial for business, how conflicts between You must begin with the end critical for the success of any In addition, 65 per Experts say that family addressing obvious things, like family members are addressed, in mind if you are to build a business. cent of respondents business founders and leaders compensation, and codifying and the responsibilities and multigenerational business. Due to the COVID-19 agreed that the need to have a vision and them.” roles of each family member in That is how the founder is able pandemic, most businesses, emotional bond a strategic plan to grow a Setting up suitable family the business,” says Wa-Tindi. to manage succession. It’s a including family-owned, among family modest family business into a governance structures is In addition to developing relay race,” says Ouma. have seen the importance of members is powerful powerhouse. important because it ensures governance systems, family According to Dr. James embedding technology within and often helps them “You have to move into a unity and focus among the values form the basis of what is Wanjagi, a part-time consultant their operations and developing maintain a positive situation where you’re not the family members who are also important and how issues are at Strathmore Business School a digital strategy to drive the self-concept in their one doing everything. So you the business owners. This handled. These values are based and founder and CEO of Iricon business forward. family business. have to learn how to delegate. enables them to have discipline on the founder’s beliefs, such as Training and Consultancy, “Most successful family-

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The available houses are too This will be achieved through whilst creating an appetite for improve a home guarantees the expensive for most Kenyans, partnerships with various mortgages. borrower a tax relief on interest Banking on multi- against huge demand for low- stakeholders including county For now, the Kenya Mortgage paid to the registered financial cost houses.” governments, landowners, Refinance Company (KMRC) institution of up to a maximum Kenyans need about 200,000 developers, and financers like has been tasked to provide of KShs300,000 per annum. new houses every year, but only KCB Bank Kenya that provide secure, long-term funding to Handing over the house to generational mortgages to 50,000 units get built, most end-user mortgages. lenders (banks, micro-finance, your offspring will soon be an of them beyond the reach of a To qualify for and SACCOs), diaspora added advantage. majority of Kenyans. multigenerational mortgages, value preposition mortgages, The cumulative effect of a number of circumstances and development of the catalyze homeownership this is that Kenya has a deficit come to play. Lenders analyze multigenerational mortgages. of approximately two million the risks involved against the Charles Hinga, Principal have found that the children units, according to the National collateral— the house. A family Secretary State Department of wealthier parents are more Housing Corporation. must demonstrate capability for for Housing and Urban likely to become homeowners. This shortage is largely repayment for the entire loan Development, sees In this situation, wealthier driven by a rapid population tenure. multigenerational mortgages parents spare their children the growth rate of 2.5 per cent The need for multi-general among the innovative financing 18 years of saving it would take per annum. With over 97.1 per loans also calls for the solutions that Kenya can use to save enough for a deposit for cent of the population earning developers to build the houses to unlock and accelerate home a home by making the deposit below KShs100,000 per month in ways that can accommodate acquisition. themselves and leaving it for the according to the Kenya National various generations within a It will first be implemented child to pay off over time. Bureau of Statistics. home. through the tenant purchase In Kenya, all the The resulting situation is It is also attractive for lenders, schemes, which will allow for conditions are present for that most Kenyans are not well says economist Tony Watima, as multi-generational payment a slightly different form of capitalized to afford mortgages. it provides “a feasible and viable plans, “where the number of intergenerational mortgage, “We don’t have a good supply way of homeownership as the years to retirement are not where families live together, of affordable low-cost houses. prices of the house continue considered as would be the case share resources and pay for About 35 per cent of houses rising beyond what most when applying for a traditional Kenyans need about the house together, with the developed are in the upper- households can afford.” mortgage.” children inheriting the house income bracket, while 48 per Creditors should appreciate This adds to the compelling 200,000 new houses and the debt. cent of houses supplied are the fact that the risk is shifting advantages to paying mortgages every year, but only First, there is great demand. in the middle bracket, yet the from aging wealthy, but riskier such as tax relief for mortgage 50,000 units get Although major urban areas demand of the houses is in the borrowers to family members borrowers. built, most of them Intergenerational ost banks offer most common characteristics have high demand for houses, low bracket,” says KCB Director who are coming of age. In Borrowing money from a beyond the reach mortgages are only up to 90 per of home ownership in urban the available houses are beyond of Mortgages Sam Muturi. this way, the overall risk can registered financial institution of a majority of an increasingly cent mortage areas – the fact that the buyer of reach for most Kenyans. This “In the outer Nairobi be lessened for the lender, to purchase a home or to Kenyans. global trend that M financing a home is most likely to leave it deficit continues to rise due to metropolis, the cheapest house and over the to their offspring. fundamental constraints on you can get is KShs.4 Million, the government years, researchers have noticed From his observations, both the demand and supply this is still way too expensive and its backers is an interesting trend. Kiplang’at says: ” We are living side and is exacerbated by for most Kenyans,” he says. considering to get It usually involves one in the age of multigeneration an urbanization rate of 4.3%, Part of the solution more Kenyans into member of the family, usually families. In Nairobi, we have a equivalent to 500,000 new city to this is the affordable home ownership the father or the mother, sizeable number of communities dwellers per annum. housing programme by the paying the deposit and then the living together with their adult “The demand for a multi- Government, which aims to children paying the monthly children who have come of generational home purchase increase home ownership fee, says Kiplangat Cheruiyot, a age. Developers must therefore has risen in the past few years especially in urban areas where Research Officer at the Kenya review their housing designs to as families are finding it more only 26.1 per cent of people Bankers Association. cater for these generations.” financially feasible to live own the homes they live in In the world of property It might be a relatively new together and share resources,” according to the 2015/16 Kenya financing, such arrangements phenomenon in East Africa, but says Elizabeth Costabir, CEO of Integrated Household Budget are called intergenerational intergenerational mortgages is BuyRent Kenya. Survey (KIHBS). mortgages, an idea that the an increasing global trend that From his point of view doing This program which is Government and its backers in has seen added acceptance in research for the Kenya Bankers largely private sector driven the push to get more Kenyans other jurisdictions, notably the Association, Kiplangat observes: but robustly facilitated by the owning homes is increasingly United States and Europe. “Ideally the housing challenge government, aims to develop considering. In the United States, it is in Kenya, and the same can be 500,000 housing units to ease The intergenerational known as the Bank of Mum and said of the wider East Africa, is the demand for affordable mortgage depends on one of the Dad (Bomad), and researchers that we have similar situations. houses. Kenya lacks a good supply of affordable low cost houses with the highest demand being in the low income bracket.

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eter Ngumbi Mulei was an avid business and have a legacy,” says Kevin. and shrewd businessman, At the time, they only had 12 employees, selling wood carvings and within three years they had grown to P in Tanzania, Zambia, 200 employees and changed the model of Uganda and South doing business by going to shops to take Africa and running shops, but he had one orders instead of shop owners coming to the shortcoming – he had not gone to school and shop, which excited the customers. always came up against a language barrier. As the wholesale business grew, Kevin He made a promise to himself to ensure wanted to replicate something he had grown his children and his siblings go to school so to like when he was in the United States. that they would not have to face the same “When I was in the States then we didn’t problem. have supermarkets in Kenya. I would get Peter had started out in business in very fascinated at how you would walk in a Nairobi in the 1960s with a retail store whose supermarket, select something on your own, success had resulted in the opening of eight look at it and put in a basket compared to more in the nascent estates in the capital what we were used to at the shop, where you city. But the lack of an education and the had to point at something for the shopkeeper struggle to keep up with the operations of the to give you and if you took too much time to nine shops was too much for Peter, and he consolidated his Making businesses and went back to Machakos People were in 1968. He linked wondering how up with his friend and they set up a one can have the Mulleys combined retail and opportunity to wholesale store. go all the way to The supermarket chain Mulleys, His family was America to get was a dream that began with growing and as an education and its founder to ensure his family soon as his three come back and sons - Kevin Mulei, lived a comfortable life. The be a shopkeeper. Eric Ndonye and They made fun success of the retail chain has Stephen Kyalo - of us. perhaps surpassed his dream, finished secondary school, he kept his with 10 branches spanning four promise of giving counties from Machakos, Kitui them a good education and sent them to the make a decision they would be very angry,” Mulleys supermarket, United States of America to study. says Kevin. run by the Mulei Makueni to Nairobi brothers who have They all finished their university studies To make this a reality, Kevin rallied his built their father’s and came back to help their father with the brothers and some of the management legacy. business, which caused a stir as many were team on a mission across the country surprised that they had gone so far to study for benchmarking from the existing only to come back to Machakos to help their supermarkets. They studied the top tier father run a shop. retailers at the time – Nakumatt, Tuskys, “People were wondering how one can have Naivas and Uchumi - to see how they could the opportunity to go all the way to America also get there. to get an education and come back and be a In 2008, the brothers came together and shopkeeper. They made fun of us. However, bought a piece of land in Machakos town and our goal was to take our business from one put up the building that would house the generation to the next which was unheard supermarket. of in our area. We were determined to grow “Unfortunately, we built it with our own our business from a small business to a big money instead of going to the bank so by the >>>

34 | Kevin Mulei, CEO Mulleys Supermarket. | 35 MAIN STORY MAIN STORY 10 120 Over the next seven years, the The Mulei’s started the Peter Mulei Management supermarket grew to 10 branches spread and Mentorship program which has so far seen Kevin Mulei out across the four counties of Machakos, more than 120 beneficiaries gain mentorship, and his Kitui, Makueni and Nairobi. training and exposure into the retail business. siblings managed to needed at least half a million worth open a branch of coins in the supermarket, and each year for had to shut down again and sort eight years, out the issue. They had another which has now issue on the third day but got given them the hang of it from then on and the confidence everything continued smoothly. to go on an The next 11 months saw the expansion business grow and led to the drive across opening of another branch in the region. Machakos town near the bus stop, which made it convenient for travelers. Over the next seven years, the supermarket grew to 10 branches spread out across the four counties of Machakos, Kitui, Makueni and Nairobi. The growth of the supermarket has been progressive with the Mulei brothers ensuring Mulleys supermarket has grown progressively with the brothers ensuring that they can be accessed conveniently. that customers can access the >>> time of finishing this huge building, we of the business owner and brought to supermarkets at their convenience. had no money to buy goods. Because it a modern and global outlook the Kevin says they are guided by the we had a good relationship with our same way Tusker Mattresses had been fact that today’s customer is very every opportunity we get especially in the business and generate the suppliers at the wholesale shop, some renamed Tuskys. sophisticated and always seeking during the school holidays. Though next generation of retailers, the of the companies managed to bring us On the first day of They were basking in the glory and value for money. they have a choice to do what they Mulei’s started the Peter Mulei goods,” says Kevin. operations, the cash enjoying the proud moment but would They have developed a model want to do, we are encouraging Management and Mentorship With the supermarket taking shape machines failed and they soon get a taste of the reality of running christened AVA – availability, them to study something that is in program which has so far seen and ready for launch, the Mulei had to shut down, with long a supermarket. visibility and accessibility – line with the business,” Kevin says. more than 120 beneficiaries gain brothers knew it was time to put their queues of shoppers waiting On the first day of operations, the as an essential tool in retail Running a family business has mentorship, training and exposure house in order before opening the doors to check out. cash machines failed and they had management. They thus place their had its fair share of challenges into the retail business. of the supermarket. to shut down, with long queues of stores near bus parks. such as gaining confidence from Kevin Mulei and his siblings “We had to divide the roles so my shoppers waiting to check out. The Mulei brothers have investors, financiers, suppliers, managed to open a branch each brother Eric Ndonye was in charge of To manage the situation, they had managed to build their father’s among others. They negotiate these year for eight years, which has now marketing and logistics, Stephen Kyalo “People were saying we would have to sell the baskets with products at legacy and this came about because by remaining united and focusing given them the confidence to go took over the responsibilities of finance done so well if our father was alive, discounted prices and had to shut down he got them started on the business on building their father’s legacy. on an expansion drive across the and I became the CEO and I handle but our dream was so big and we kept to sort the issue. The following day, the at an early age, which they are also “Muleis is a close-knit family and region. They have already made human resources,” he says. pushing on. Five months later we issue of machines was sorted and they doing with their children, to ensure we consult with each other daily. investments in good systems and They were on the final stretch of opened the doors of our supermarket,” were ready for another day in business, they understand the business and However, there is a perception bringing onboard professionals preparations to open the supermarket says Kevin. but there was another setback. can carry on the family legacy. that comes with family-owned such as consultants to assist in when in 2009, their father passed on. December 2010 will always be a “Everyone came back to shop and “Just like our father did, holding businesses as some of them are the expansion drive. However, the The situation brought about a lot of memorable day not only for the Mulei’s everything was going great, then we our hands and introducing us to prone to conflict hence investors success of the business has been uncertainty as many felt that they but for the Ukambani region as they realized we didn’t have enough coins,” the aspects of business, moulding tend to shy away from such largely attributed to their unity. would not be able to continue building got to witness the opening of the first They had only KShs40,000 worth of and coaching us in the retail world, controversies, but the good thing is For them, the task ahead is to the business without their father’s supermarket in the region owned by coins, which is too little when you are we are now doing so with our most businesses in the world today continue building the business while presence. The sons had to pick up the one of their own. running a busy supermarket, and had children, by incubating them in sprung up from family businesses encouraging and incubating the next mantle from their father and were The Muleis settled on Mulleys as ran out of them within half an hour. the business world and exposing or they are family-run,” says Kevin. generation of Muleis to take up the determined to build his legacy. the name, which retained the roots They realized that day that they them to the business world in To maintain professionalism mantle when the time comes.

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At the beer distributor, this has been While they have navigated other storms, while riding on the advertising that others in the form of software to manage stocks the COVID-19 pandemic has hit the have invested in. better, among them a system developed businesses the hardest as social distancing Maina hopes that just like those of his with the help of East African Breweries and restrictions on gatherings left bars and generation who joined the business, the A society in business Limited that helps with that aspect. restaurants closed and hotels empty. Staff third generation of the Rwathia group of The caliber of staff employed now are were laid off as the trucks that distribute companies will join them and bring in new Rwathia Group was and has lived on the firm belief He is now the only one in different from that at the time they started to the 600 bars in Rwathia’s territory ideas and ways of running the enterprise. formed by like- that he did not need a house in the family who is in the upper the business. One of the biggest successes remained parked in the yard. The Rwathia group has also deemed it the leafy suburbs as long as he echelons of management, along over the years, Maina says, has been the At the time of the interview, business fit to go beyond the original investment minded clans and had property in the city. with his father, the chairman of use of systems and trained staff to run the had picked up somewhat, spurred by the direction, Maina says. “We have realized families that today, Gerald is the last of a group the board. business. emergence of the cash-and-carry model of that in this business, we probably cannot stands firm as an of men who came to Nairobi Maina landed at Rwathia Before the modernization of the business, sales as opposed to the traditional model depend on the alcohol trade for a very long economic empire from Rwathia, a location in almost by default as he had the salesmen were the truck drivers, and of service in bars or restaurants, known in time. We have started diversifying so that Kangema, Murang’a, right come back to Kenya in 1990, all they would do is drive to the bars and the industry as on-trade. The going was not we don’t put all our eggs in one basket,” he before Independence looking at a time the economy was offload the products. Now, they go in, collect yet good, though, as only 180 bars, less than says. aina Gikonyo does to make money. They started on a downward trend, with data and keep tabs on how the bars are a third of the 600 in their territory, had They now supply the Kenya Defence not stand out in by establishing businesses in economic growth at 2.2 per doing. reopened. Forces, have contracts in six counties for a crowd, but the African locations of the cent and reducing, and an Maina has also overseen the growth of COVID-19 aside, Rwathia Distributors’ the Last Mile electricity connection project, M when the top city – Eastlands and Pumwani economic depression that had the distributor’s territory from Kamukunji, future is dependent on a variety of factors, and a project to install smart meters for the management hawking vegetables in the Asian been brought on by a severe Pumwani, Shauri Moyo and Eastleigh to from Maina’s point of view, as it is part of Nairobi City Water and Sewerage Company. at Kenya Breweries Limited quarters. drought, high inflation and the the whole of the CBD and Upper and Lower an industry that is perpetually targeted for Given the large number of original meets him, they treat him with From hawking, they Maina Gikonyo, MD of Rwathia Distributors suspension of foreign aid. Ngara. The number of trucks that ply the tax increases by the Treasury. investors and the fact that some of them a certain measure of respect, went into retail shops and While he had hopes that routes now stands at 14 from an original Currently, Excise Duty on alcoholic were polygamous, some of the third even reverence. then restaurants and when things would improve with five in 1995. beverages increases every year, “and this generation Rwathia investors are people his They have very good opportunities to do commerce the imminent change of Working with the manufacturer, the will not change in a long time.” age while others are much younger. reasons to pay attention to in the emerging Central government with the advent distributor also supports the businesses He also shares the concern of others It might be difficult to predict with any the grey-haired man. He is the Business District opened up Jobs were not easy to of multi-party democracy, that they serve with promotions, campaigns, in the alcoholic beverages sector who are accuracy how the Rwathia Group will go Managing Director of Rwathia after Independence, built come by. It was easy for was nearly a decade away, he staff training and sometimes getting banks worried about the impact of parallel import but theirs will certainly be one of the most Distributors, the oldest and one commercial buildings. The me to get convinced to was encouraged to seize any to give them credit to finance growth. of high-end spirits without paying duty notable stories in the history of Nairobi. of the biggest alcohol beverage group now owns a number of come into the existing opportunities that came his way. distributors in Kenya. notable buildings in the city businesses and try to “Jobs were not easy to come For the last 15 years, Maina centre: Magomano Hotel, New help the older parents by. It was easy for me to become has led the operations of Kinangop Hotel, Timboroa convinced to come into the and directors as they the distributor serving bars, Hotel, Alfa Hotel and Rwathia existing businesses and try restaurants and hotels within Distributors, and a string aged,” says Maina. to help the older parents and While they Nairobi’s Central Business of bars, restaurants and directors as they aged,” says have navigated District and the area around nightclubs. Maina. other storms, Pumwani, Kariokor and Ngara. Rwathia is a big location and enterprises that has stood firm Managing the relationships the COVID-19 Rwathia Distributors is based the investments were made by without its tussles spilling over between the generations has pandemic has hit in a large compound on Quarry members of clans or families into the public. been fairly easy as the fathers the businesses the Road in Pumwani, a few metres who would entrust a number of Even as the founders grew were more than willing to let hardest as social from the Kariokor Muslim individuals with their money. old, says Maina, they brought their sons into the business Cemetery. The warehouses were “You’d find that a business their offspring into the and they recognized the distancing and built with beer in mind: the like Rwathia Distributors has businesses to learn by a form shortcomings they had, chief restrictions on columns are shaped like beer around 400 shareholders but of apprenticeship how they of which was the lack of formal gatherings left bars bottles with the cornices on the each group was brought by a were run. Maina himself joined education. and restaurants pillars shaped like bottle tops. certain person from their village the business in 1995 soon after “I can imagine that they closed and hotels Maina serves at the behest who would be trusted to collect coming back home from studies saw something lacking in empty. Staff were of a Board of Directors whose money, even from villagers, and in the United States. themselves, a void that we came laid off as the trucks chairman is Gerald Gikonyo as little as KShs50 or KShs100 “When I came to Rwathia, and filled up. The younger that distribute to Kanyuira, his father, who to come and invest their money I was the youngest director at generation has always felt the 600 bars in clocked a century this year. for them,” Maina explains. the time. Most of them were appreciated when they came Rwathia’s territory Gerald is a sort of an eccentric, Rwathia is not therefore, our parents and they were quite into the businesses and true snuff-taking old man who strictly speaking, a family advanced in age. Some of them to form, we have been able to remained parked in operates from a hotel in the business, but has been admired have since passed on and only instill a level of sophistication the yard. CBD, one of many properties for the way the founders one is left, my father,” Maina that was difficult for them,” says owned by the Rwathia Group, created a formidable range of says. Maina. Rwathia Distributors is one of the oldest and biggest alcohol beverage distrubutors in Kenya.

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OUR STORY Things cannot just fall into The number of Securex guards has grown from 200 in 1991 to 7, 000 currently. He started working at Securex Kirinyaga Road, and and employee welfare. place but also partly ventured out on his River Road to sell security It also helped that as own, setting up a hardware shop in services. he embraced his multiple As a young man, Tony Sahni dabbled in Gikomba, acting as an agent for Bajaj, “A lot of multinationals roles and worked to build various businesses in the UK, but none the Indian company, selling light bulbs didn’t want to deal with He gave the company, his father and seeking to compete with Philips, these people, and we saw me a lot of encouraged him and of them were ever the right fit, until he the Dutch multinational. He also a gap. So we approached guidance. He didn’t mind the ventures, came back home to Kenya imported chocolates and dabbled in that market, and we always told even when they turned event organization. scored. We grew very fast me what the out to be misadventures. he attempted coup by a section of the Tony was not always successful in that market,” he says. pros and the “He gave me a lot of Kenya Air Force in 1982 marked a but he sees these experiences as part He also developed a guidance. He always cons were, turning point for many people in of a learning process. In addition to strategy of going to every told me what the pros the country. For Tony Sahni and burning his fingers, he also realized customer and ensuring and then he and the cons were, and T his three sisters, a decision was those ventures were not his passion, that whatever time they let me make then he let me make my made by the family that they and he found that he always gravitated called, Securex would my decisions. decisions. I’m not saying I would pursue their studies in the United Kingdom. back to Securex, where he could see respond within two hours And I’m not made the right decisions,” All his sisters got into professional careers and some gaps in the business. and resolve the issue saying I made says Tony. got married and Tony tried out different things: he “A couple of people came to me and within 24 hours. the right Even when he made got into business selling tea and coffee to hospitals, said, ‘You know, why aren’t you looking Tony also took up the decisions,” the wrong decisions, the started a manufacturing business that did not work, at your own security business?’ That’s role of Chief Recruiter, says Tony. old man would ask him started a trading company and also got employed. when I started focusing,” he recalls. interviewing every person to draw on the lessons “And I learned a lot,” he reflects. “I mean, what I He became a research and who applied to be a learnt and move on. learned during those eight years in the UK, I probably development man and a salesman security officer and then Running a family couldn’t have learned in university. There was hands rolled into one. The research and ensuring that he kept the business founded by on experience and practical experience.” development involved travelling door open for any member of the staff one of the parents involves creating Something in him kept calling him back to Kenya, He started working at Securex but also partly to security exhibitions in the more to bring their issues to them. a balance, if that is even possible, where his father, Kishora Lal Sahni, had started ventured out on his own, setting up a hardware shop developed parts of the world – New “It was a very disorganized way between the filial relationship and the Securex, the security services company, in 1970. in Gikomba, acting as an agent for Bajaj, the Indian York, Taiwan, Shanghai - and seeing of doing it. There was no structure business relationship. Fights between “My heart was always here. So I said to my dad, company, selling light bulbs and seeking to compete things he could bring back to Kenya. around it. But slowly, things just fell in members of the family can be material ‘You know what? Enough is enough. My sisters are with the Dutch multinational. He also imported The sales involved going to downtown place,” he says. to the business as they can disrupt it or married. I will come back.’ That’s how I came back chocolates and dabbled in event organization. Nairobi, the neighbourhood of He credits the company’s growth to result in irrational decisions made on home,” he says. Gikomba, Kombo Munyiri Road, the focus on innovation, customer care the basis of emotions or vendettas. Tony Sahni, CEO Securex Agencies Ltd. >>>

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He doesn’t come and Tony’s wife is also part of the business, working in the 50 interfere with background and building processes and systems, and Securex has just the decision their son has now joined them. turned 50 making. So we have a great relationship in the office. >>> The father and son at the helm of customer care and attention to “My goal is to target the woman of Sometimes Securex managed to find a balance: employee welfare is struggling to the house who can go to work and the father carefully encouraging the understand how his Generation Z son check her phone and see what her we have son to make the right decisions and works. maid is doing with the children. If the arguments, but depending on his business acumen to “We do have our tussles as father child opens the door, the mother knows of this we still grow the company. and son,” he admits, “Because one immediately. So she can actually know enjoy whisky The elder Sahni is now 87 and thing I’ve got to realize is that this what’s happening in the house and she together,” says can no longer go to the office every new generation have a very different can focus on her work,” he says. Tony. working day. He goes to his corner way of working.” He reckons that the current mindset office at the modern, well-designed He is yet to get used to being told of security being a man at the gate will and fitted office at 9 Riverside about to state what he wants done without change, as technology will put users in three times a week but “he’s still hands dictating when and how it should be more control. on but doesn’t interfere with the done, and his insistence that office “You will see a lot of technology business.” hours start at 8am has been met with coming in. Things like remote “He doesn’t come and interfere resistance. monitoring. People are going to use with the decision making. So we have Tony has come up against the steep artificial intelligence. You will see a great relationship in the office. learning curve the older generation cameras. So if you need 20 security Sometimes we have arguments, but encounters in trying to work with officers, you’ll probably keep 10. But of this we still enjoy whisky together,” Generation Z. for the rest, you will use artificial says Tony. “My mindset, I have to now change intelligence, cameras, electronic locks, Tony’s wife is also part of the this. So I have to listen more because with remote monitoring companies business, working in the background the reality is they have a different way sitting and monitoring your site sitting and building processes and systems, of thinking. And even I need to adapt. in an office. So technology will play a and their son has now joined them. And I can’t keep on thinking the old big role, but people will never go,” he The youngest Sahni studied school way, because those things will predicts. Electrical Engineering at the not work in the future,” says Tony. Securex has just turned 50, and university, a business management The filial and business relationships while the growth can be credited course and then, without any push aside, the fundamentals of the business to Tony and his father, with their from his father, pursued a Masters remain, and Tony’s vision is for Securex combined personalities and in Counter-terrorism and Organized to be known less as the company that characteristics, the business has Crime. provides the ubiquitous guards at office evolved from being a purely family His father reckons that having buildings in cities and towns and more business to something else. While he so much of the family business in as the provider of security solutions. still drives the vision, looking at new the background at home, with both His next target is the middle class, products and innovations and leaving parents discussing the business, the and Tony spoke to Venture before his door open for employees in the grandfather in the mix and this going Securex launched Rafiki, a range of ways he knows best, he has ceded a on even when they are on holiday, affordable smart home products with lot of power to managers and is well somehow rubbed off on him, and his security and lighting solutions. The aware that the old disorganized way route back was almost natural. typical Rafiki security kit is a box with cannot work, and things cannot just It’s too early to say that the youngest an alarm system, door sensors, and a fall into place. Sahni will be taking over the business Closed Circuit Television system, with “We’ve got a very good team of eventually, says Tony. a mobile phone application to monitor managers. You hold them responsible, The man who grew the business it. It can be bought off their website give them decision making powers and from 200 guards in 1991 to the current and an individual can install it for they work for you. They run the show 7,000 by bringing in innovation, themselves. for you,” he concludes. The Sahni family Tony’s vision is for Securex to be known more as the provider of security solutions.

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Dr Fred Ogola, who teaches strategy and decision- making at Strathmore Business School (SBS). It is no wonder then that the rate of failure for family business has been startling, both locally and on a global scale. According to Deloitte, The challenges of family businesses only one in three family businesses worldwide can be summed up to governance Side-stepping successfully transitions from one generation to and succession. For many of these the next. businesses, succession is a point of The challenges of family businesses can be great vulnerability. Conflicts within the summed up to governance and succession. For family in the course of operations also the common pitfalls many of these businesses, succession is a point tend to spill over into the business. of great vulnerability. Conflicts within the family in the course of operations also tend to spill over into the business. of family businesses From his experience, which also includes running family businesses, common challenges include: preference for informality, a blurring of lines between family and business; and continuity, where those expected to succeed the founder end up having neither an idea of how to do this nor the desire to take it up. This is in addition to disregard for risk when starting and running a business, safe in the knowledge that if everything else fails, they could still go back to their other engagements. This causes many such businesses to limit their ambition without preparing effectively for success. As a result, family members find themselves in senior positions they are neither qualified for nor committed to. This sees these businesses getting stuck in their ways with the leadership staying on Family businesses need to formalize their operations to enhance their chances of survival. for far too long. Experts advise that businesses need to formalize fundamentals of running a family business. It their operations and processes to enhance their also includes a coaching programme for each chances of survival. family. “Appointments and procurement need to be Paul Ouma, the director of the programme, done formally, with contracts, even if it involves argues that for family businesses to succeed, they a brother. That way, if someone else takes over need to set up several structures that guide how ver the years, Kenya’s enterprise scene has been in future, they can still run the business. The members interact with the business and the assets treated to the good, the bad and the ugly of business should also have the best human it owns. This includes a family council, a board of family businesses. resource practices and avoid putting unqualified directors and trustee. O A few of them, from different industries family members in positions that can suffocate There is also the Association of Family and sectors have thrived through the business,” says Dr Ogola. There is also a need Business Enterprises that champions strong, successive generations while some have floundered after for strong governance structures and practices professionally-run family businesses that survive the founder’s demise. beyond having a board. through generations. This is through networking Others have been like one big soap opera, pitting the A growing ecosystem is coalescing around opportunities, learning resources and advocacy on owner’s kin against non-family management in public family-owned businesses to support them to matters affecting the businesses. spats, often grinding operations to a halt and posing thrive and circumvent these challenges. These Despite the many heart-breaking stories of reputational risks. Then there are also those that become include academic institutions, consulting houses failed family businesses, there are a number of the subject of never-ending court cases, of sibling turned and membership organizations. shining stars. Locally and globally, there are many against another. SBS runs a Family Business Executive examples of thriving family-owned businesses. “Running a business is challenging. Being family-owned Programme, where founders and successive These include Devki Steel, Ramco Paints, adds even more complexity. The root cause why family generations learn practical skills and insights Chandaria, Samsung, Walmart, among others. businesses are special and more difficult to run draws to sustain their businesses through generations. They provide inspiration that a family-owned from the complexity it presents, in the form of age, family These include strategy, structures, conflict business that is passed through generations is structure, number of people involved, their experience, resolution, risks, succession planning and other possible. economic status and education levels, among others,” says

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of entrepreneurship from the Some of the essential topics remains a big contributor onset often leaves a lasting in family business include to job creation, however, Dr impression,” says Dr Wanjagi. strategy, finance, operations, Wanjagi says entrepreneurship To ensure seamless informal technology, marketing and is not well infused in the family business education governance. education system to turn from parents to children, Strategy, Dr Wanjagi Kenya’s youth from job seekers the next generation should says is key for the success to into job creators. be integrated in the family of any business, and it will “Where it exists in the business as soon as they are be defined by how well the education system, there is no old enough to be involved. family business develops and tie-in to the family-business, “When it comes to the next implements it. there is no practical driven generation’s formal education, “Most successful family- approach where business Most successful the first step is finding one owned businesses do not just owners are routinely invited or two leaders from the same develop the business strategy, to share “street-smart” family-owned (next) generation who can be but they also define and best practices. We also do businesses do champions, who can convince develop expansion, growth, not teach the need for an not just develop others in their generation that financing and marketing entrepreneurship mindset as it the business it is important, relevant and strategies to enable them to takes a certain mindset to be strategy, but worthwhile. The forming of a grow,” he says. an entrepreneur,” they also define “Next-Generation Education Because of the COVID-19 He continues: “In addition, and develop Committee,” choosing the best, pandemic, most business, entrepreneurship is taught expansion, brightest, and most interested including family-owned, after students graduate growth, to lead the process. have seen the importance from either tertiary or other financing and “They would determine of embedding technology higher-level formal educations exactly what education within their operations and systems. It is my view that it marketing would be needed and the developing a digital strategy to should be taught earlier, and strategies to best way for it to be delivered drive the business forward. should include project-based enable them to to the family members The family business unit learning,” he says. grow,” he says. that would be interested in Family business is one of the biggest contributors to job creation. joining the family business. It’s the formation of an apprenticeship program that Successful family forms the foundation for Why family business understanding the business,” businesses should provide education says Dr Wanjagi. for both the family Still, there are scholars is a huge topic of already entrenched in family and the business. businesses who already have Formal education knowledge and experience is important, interest in schools working at family firms. So but the natural what more could they learn in informal education amily businesses are According to Dr James business students for the a class environment that the from parents to a very important Wanjagi, a part time business system education, business hasn’t taught them? children where aspect of the consultant at Strathmore it does not give them a clear They benefit by learning soft they see the F national Business School and, Founder picture of the environment in skills training, for example excitement of economy. They and CEO of Iricon Training which they will work. communication, they learn play a vital role in economic and Consultancy, the family “Successful family formal ways to conduct entrepreneurship development because they owned business segment, businesses should provide complex problem solving, from the onset are a big contributor to job which extends to a wide range education for both the family they get the opportunity to often leaves creation, skills growth and of industries, is a key driver of and the business. Formal benchmark global firms that a lasting trade and innovation. It is Kenya’s economic engine. education is important, but are in the same industry and impression,” says no wonder then, that they However, while the current the natural informal education learn more about the family Dr Wanjagi. generate a lot of interest not undergraduate business from parents to children business decision making only in Kenya but globally. education only prepares family where they see the excitement process. The next generation should be integrated into the family business as soon as they are old enough to be involved.

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According to a report by Asoko family member in the business.” Insights on East Africa’s family- Explains Ms. Wa-Tindi. owned business landscape. FOBs In addition to developing within the agriculture, food and governance systems, family beverage sectors together represent Family-owned values form the basis on what is There are two the second-largest concentration businesses important and how the business main ways family of leading the country and are (FOBs) like any handles issues. These values are run enterprises estimated to earn more than $10 business, needs based on the founder’s beliefs million a year. such as integrity, respect for all operate; they could goal-setting Creating In order to grow from a modest regardless of the size or stature or either be owner strategies and a managed or owner family business into a powerhouse even their religion. you need to have a vision for the succession plan. Ramco is the oldest family run controlled. a multigenerational company and a strategic plan to Business in Kenya, it dates back achieve it. IFB describes this as to 1948. Today it is chaired by one moving from the bed sitter stage, to the main of the sons of the original entrepreneur, with business house stage. members of the third generation holding top “A bed sitter is everything acting as the sitting management positions. Succession planning is one of the major challenges 70% In Kenya about room, to your kitchen. That’s how start-ups According to a 2016 Family Business Survey are.” Says Mr. Ouma. You have to move into a by Price Waterhouse Coopers (PWC) only 24% family run businesses contend with across the globe. 70 per cent of the Experts say involving the owners’ children at an situation where you’re not the one going to do of family businesses in the study reported private owned everything. So you have to learn how to delegate. having a clear and communicated succession early age is a good idea that could have benefits in companies are “When you delegate, you need to have plan and by 2018 this figure had fallen to 17%. succession and continuation of the business family owned. structures, and this pushes you to create Succession planning is one of the major organisational or departmental structures. And challenges facing family businesses across the as you get into establishing these structures, then globe. governance comes in because the organisation “We have seen situations where from an needs to be governed. And that’s where you now early age, the owners take their children to the say, look, I need to have an advisory board and business premise over the weekend or during a board of directors. These people will help the the school holidays, they are given small tasks founders to run the business better. That’s how to do at the office, simple tasks like data entry, it works”. Mr. Ouma further explains. getting involved in deliveries, interacting with Setting up good family governance structures customers at the store front. The parents do is important because it ensures there is unity this to start getting their children involved in and focus among the family members who are the business at an early age.” Says Mr. Ouma. also the business owners. And this enables them The last thing on young business owners’ to have discipline and trust to grow the business. minds is what to do when they’ve finished Ms. Wa-Tindi explains that this involves running their businesses. But you must begin having a family constitution, shareholder with the end in mind if you are to build a agreements, a family council as well as multigenerational business. That is how the holding regular family meetings are some of founder then is able to manage succession. “It’s the effective ways to address the interactions a relay race.” Describes Mr. Ouma. between family and business. There is growing recognition of contributions aking the leap to start Business Survey conducted by their humble beginnings but grew to “These are the structures and practices of family businesses to our economy in general a business can be PricewaterhouseCoopers, family international business domination. that are many family businesses globally and which suggests an upward trajectory. We have daunting, and businesses are in robust health, Family-owned businesses (FOBs) even locally have put in place. And they have seen family businesses list on the Nairobi T rightfully so for with Revenues expected to continue like any business, needs goal-setting proven to be an ideal way of addressing how or Securities Exchange, others, like the Chandaria’s many reasons. growing for the vast majority (82%), strategies and a succession plan. when a member is eligible to join the business, have looked at diversification across the region For starters, there’s the lack of security compared to 84% globally. Ms. Wa-Tindi and Mr. Ouma are both how conflict between family members will be to accommodate the aspirations of the next that comes with being employed, then “As such, it can be said that family certified coaches who run training addressed, and responsibilities and roles of each generation. there’s the compounded fear brought businesses are the drivers of the programs in Nairobi that are geared about by the uncertainty of what the economies in which they operate.” Says at mentoring, nurturing and offering future holds. Not to forget the taxes Antoinette Wa-Tindi, Membership & strategic guidance to FOBs in the and businesses licences that need to be Partnership Director at the Association country. We have seen situaions where from an early age, the owners take paid, and of course, there’s the issue of of Family Business Enterprises (AFBE). Most of the known family run their children to the business premise over the weekend or during the having the capital to start and run the Paul Ouma, Coach & Founder of businesses in Kenya are in the retail school holidays, they are given small tasks to do at the office, simple business. Now when you add family to the Institute of Family Business (IFB) sector; Naivas, Tusky’s and Nakumatt. tasks like data entry, getting involved in deliveries, interacting with the equation, the idea seems scarier. says that some of the world’s biggest But we also have others in the customers at the store front. The parents do this to start getting their According to a 2018 Family multinational corporations, had education sector like Riara and Makini. children involved in the business at an early age.

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There are to a college student who has not to make it easier to log claims operated their bank account for conveniently and remotely for more than a year. Kenyans who are residing out of These assets ordinarily end up the capital Nairobi and outside the unclaimed due to the passage 51.9B country. of time, death of owners, loss of The authority has Jacob Owade, a consultant on contact, migration, mergers, and been successful unclaimed financial assets, sees KShs51-billion acquisitions, name changes, and and so far, it reunification as a continuous incomplete records. boasts of a trust occurrence and process rather than The authority has been successful fund value of over an event, and that ought to start with worth of and so far, it boasts of a trust fund KShs51.9 billion. more effort on the part of the UFAA. value of over KShs51.9 billion. “I think UFAA can do more to On the other hand, only KShs500 reach out to the rightful owners unclaimed million has been paid out to using traditional mediums such claimants. as newspapers and radio and This means that despite doing all aggressively combining that with it could to reunite owners with their social media outreach and education assets, and assets, UFAA still holds more money John Mwangi, the about unclaimed assets, how they than is allocated to run Nairobi, authority’s chief come about and who is a potential Kiambu, and Mombasa counties executive officer, owner of unclaimed assets,” Mr. that’s a bad for a financial year. While the law’s sees a way out of this Owade said. backers had argued that the money quagmire of surplus From observing UFAA, he reckons could be used for development cash lying idle in the that it needs to communicate more, thing by the government, that has not form of amendments educate more, and reach further into happened yet. to the law – the the corners of the country, and do all The Unclaimed Financial Assets John Mwangi, the authority’s chief Unclaimed Financial these frequently and consistently. Authority has tried reuniting owners executive officer, sees a way out of Assets Act - and “Education about unclaimed with their assets, but it still holds a this quagmire of surplus cash lying its accompanying assets is the most powerful weapon regulations. trust fund of over KShs51.9 billion, idle in the form of amendments to UFAA can use to increase awareness the law – the Unclaimed Financial He says the proposed about unclaimed assets and its core more money than is allocated Assets Act - and its accompanying amendments are mandate of reunification,” he says. to running Nairobi, Kiambu, and regulations. “geared toward One of the weak points in the Mombasa counties for a financial year He says the proposed simplifying the claim claim process is the requirement of amendments are “geared toward process but also a holder’s letter – a letter from the simplifying the claim process but maintaining proper institution that handed the asset over also maintaining proper check for check for the benefit to the UFAA. the benefit of the claimants.” of the claimants.” “Imagine my 70-year-old mother The authority has also a national coming from the village to chase up policy on unclaimed financial assets a ‘Holders Letter’ from a company to aid in the review of the Act and where my father left his assets 30 hat do Barack Obama Senior, Sauti Sol, financial assets it holds has been one of the strategies the regulations. years ago when he passed on. Do you Raila Odinga, JM Kariuki, and James deployed by the Unclaimed Financial Assets Authority In addition to the regulatory see how that can become a barrier?” Kanyotu have in common? (UFAA) to draw attention to itself and the reason it amendments, the Authority has Mr. Owade posited. W The government is holding exists. recently partnered with Huduma He argues that if a holder has financial assets that belong to each Since it started operations in 2014, UFAA has gone Centres to be used as collection turned over the assets and a claimant of them: shares in the case of Obama; unclaimed, about mopping up idle financial assets, which come centers. can verify that from UFAA website albeit miniscule, royalties for Sauti Sol; and shares from all manner of transactions: an employee who It has also partnered with and provide the required identifying that belonged to the patriarchs of the Odinga, Kariuki has unpaid wages in the form of unpresented payroll Safaricom to enable payment documentation, there is no need for and Kanyotu families. cheques, a beneficiary of an insurance policy of which through M-Pesa; as well as another administrative bureaucracy Talking about the big names whose unclaimed funds became due and payable over two years ago automation of the claims process to show that the assets belong to the >>> UFAA CEO, John Mwangi

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listed firms where it holds notable stakes law, says the best way to deal with on behalf of Kenyans. inheritance disputes is to do everything However, experts say that UFAA possible to make sure they never only holds these shares in a custodial happen. This means rethinking how capacity and this doesn’t grant them good estate planning works. authority to do anything other than that. “Where there is a dispute, UFAA After a prescribed period, the Authority would expect that the members present would dispose of these shares and hold their petition in a competent court of value as cash for the claimants to collect. jurisdiction which would adjudicate “The Authority will not get a seat on what would be considered fair and in these boards. UFAA is a holder of equitable. If not all the value of such last resort and they hold the shares in assets is claimed, UFAA has to rely on a custodial capacity. The ownership the judgment and hold the portion of the shares or any assets that are of value that remains unclaimed passed to UFAA never transfer to the in perpetuity in the hope that the Authority. They are held in perpetuity owners would either come in to claim until the rightful owner or their heirs or proactively search for them in an are reunited with the assets,” Mr. Owade endeavor to pass the value to them,” she said. said. Although, the law does not allow Experts encourage Kenyans to speak UFAA to get on the freely with their families boards of listed about their properties companies based on and also prepare and the shares received, the fill their wills detailing Authority feels it has what happens to their rights over the corporate Experts encourage assets upon their deaths actions of the reported Kenyans to speak to prevent family shares, such as a rights freely with their fallouts. issue, bonus issues families about their “List every asset in dividends among other properties and also your estate and store corporate actions. prepare and fill their the latest account With a number of wills detailing what statements, insurance high-profile succession happens to their assets policies, wills, trusts, disputes across the upon their deaths to and other important country, the Authority prevent family fallouts. papers in a place known spoke on its measures to the family,” Mr. to approach and handle Owade advises. “Talk claimants that are with your loved ones disputed on claims by more than one about your assets. Discuss more than family member or heir. insurance; include information about “The Authority does not engage in any bank accounts, which may show regular dispute resolution in succession cases. transfers for insurance premiums, and We rely on the courts to advise on the tax returns.” 26bn rightful beneficiaries,” Mr. Mwangi said. Other good financial practices for “We only deal with the appointed Kenyans to adopt to ensure their assets are Shares, worth over administrator by the Judiciary not declared unclaimed include constantly KShs26 billion, System. UFAA will require succession updating your know-your-customer (KYC) >>> claimant. that it had begun to move over 800 billion, had been reported unclaimed had been reported documents that are issued by the court. profiles, maintaining active accounts, and “If you have ever tried chasing up million units of unclaimed shares and were in the custody of reporting unclaimed and were Administrators are always identified and updating their beneficiary information documents in Kenya then you would that remained uncollected by owners institutions on instructions from the in the custody of listed so after due diligence, UFAA pays for insurance policies, retirement savings, be able to see how this requirement and beneficiaries to the Unclaimed Authority. reporting institutions the rightful appointed Beneficiary,” says and all other financial assets in case you’re can become a barrier to the claims Assets Trust Central Depository There was initially speculation that on instructions from the CEO. not available to claim. On the other hand, process,” he highlighted. Account. these shares would give UFAA new the Authority. Brenda Otumba, a Nairobi-based holders should always update their clients In August, the UFAA announced These shares, worth over KShs26 muscle to make decisions at several advocate with an interest in succession on their account status.

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KCBNEWS engage customers effectively, on Locally, he sees opportunity whichever channel is convenient for in the aggressive digitization of them. These solutions are delivered government services. This has been TECHNOLOGY through mobile, web, portable devices, further necessitated by the COVID-19 SMS, social media, among other I was once told that pandemic, which requires minimal customer touchpoints to facilitate we were not going physical contact. Already, the firm service delivery. It also supports serving sees the pandemic opening up to succeed and that I Tech customers who present themselves opportunities. physically at the premises. had better get back to “Luckily, our solutions are With just two staff members, the employment,” Hezron technology-based and were needed firm on a firm started building platforms. So recalls. Nonetheless, more during the pandemic, leading exponential was the growth, that by he soldiered on. to increased uptake of our customer the sixth month, its head count tripled. engagement and experience solutions,” mission to Today, Nouveta has 44 members of staff. he says. “We have had ups that have been an This was after the initial shock, opportunity to celebrate, and downs talking about and our solutions had when the pandemic struck, which saw enhance from which we have learnt. We have traction. They have been supportive a client halt services, directly affecting focused on building resilience in our including the senior leadership, who 19 staff members. The physical offices operations. We are not in this game always step in whenever there is an also stayed shut in compliance with to win, because there is not a start- issue,” he explains. containment measures to halt spread of customer stop whistle. We are in the business Together, the bank and Nouveta is the virus. of innovations and building clever, supporting service delivery for Nairobi Even as Nouveta aggressively pursues future-proof solutions that will not City County, which was anchored on the opportunities locally and beyond, it still experience need to be replaced in a few years,” he firm’s flagship solution - RevenueSure. grapples with the challenge of getting says. The firm’s approach is co-creating, In what was the firm’s biggest deal the right skill-set. implementing and co-owning solutions yet, it involved provision of an end- “Our culture has been to hire for with the client. to-end service delivery solution to not attitude and not for skill. We train It has not been smooth sailing only facilitate payments via mobile, them to do what we need them to do to for Nouveta. In its early days, it was web or bank, but also generate digital deliver to our clients’ specifications. We challenging getting a financial service certificates. are not concerned with CVs, and what partner. Many of those they approached “Working with Nairobi City County was studied in school. They just need were skeptical about backing a two- has forced us to rethink our strategy to have certain skills and attitudes,” year old startup. This led to cash flow and how we wanted to grow as a says Hezron, who has a science degree challenges. business. When we started, we had not and worked as a strategy consultant at “I was once told that we were not imagined that we would be a service a globally renowned consulting firm going to succeed and that I had better provider for a county. When we got and later in technology and customer get back to employment,” Hezron recalls. the opportunity, we went full steam services firms. Nonetheless, he soldiered on. ahead. We have learnt a lot on this Going forward, Nouveta has lined In 2018, the firm encountered what assignment. Our focus has been on up a number of solutions targeted at he describes as ‘an existential crisis’, not providing services to the county, while different industries that have gaps. This ↑ Hezron Muriuki, Founder and CEO Nouveta. growing as fast as projected. So bad was giving Nairobians a service they can includes a digital wallet for school fees, the situation that at some point, the access and use conveniently,” he says. a SACCO solution for serving members directors considered folding. A WhatsApp payment platform has and an aggregated platform for the The firm develops rustrated by the back-and- one roof using technology to be able to serve “We sat back and resolved to continue also been launched for Nairobi County hospitality industry. technology forth involved when seeking customers where it is most convenient for doing what we were doing. We were clear services. “Customer engagement and solutions to help services from public and them,” he recalls. that our strategies were solid enough to Though the firm currently operates experience is changing every day. The organisations F private entities, Hezron That marked the birth of Nouveta in turn around the business,” he says. in Kenya, Nouveta has its sights future looks very different from what engage with Muriuki set about 2016. Its name is a play on a combination of Soon the search for a financial partner trained on other markets in the East we have currently. Service delivery customers developing a solution, to make it easier. French and Latin words, which translate to that had the firm knocking on many and Central Africa region, as well as is moving away from face-to-face conveniently, “Paying for a service meant getting the ‘new life’. doors, led to National Bank in early Francophone Africa. interactions with technologies such effectively and invoice printed from the relevant office, “We sought to breathe new life in service 2018. This kicked off conversation that “We are attracted to markets that are as virtual reality. We envision a future seamlessly going to make the payment at a bank delivery. We wanted to integrate payments culminated into a strategic partnership under-represented when it comes to where organisations will anticipate outside the premises, photocopying the in delivery of service,” Hezron explains. that continues to date. technology solutions. Our solutions are needs before one knows that they need deposit slip, before submitting it. We began He adds that the firm’s goal is to develop “National Bank listened to us and very repeatable; we can go to any new them. We are focused on the impact of thinking of how to have all this done under technology solutions that help organisations realized that we knew what we were market,” Hezron says. our solutions,” he adds.

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← Bishop Joseph Ntombura or many churches, 2020 was the year in which spiritual INVESTMENT communion, one of The church has since taken another loan With National Bank of Kenya, the F the foundations on to build a second block and another to build relationship began in the 1970s. which they operate, a third block, and so confident is it about The Presiding Bishop also credits the good was challenged. With lockdowns and the demand for office space on that side relationship over the years to good Christians restrictions on social interactions came the Grounding of Nairobi that Bishop Ntombura says the who recommended the church to the banks. reality of reduced contributions from their current loan will be paid in full by mid-2022. At National Bank of Kenya, this was the congregations. The church has developed the Methodist late Reuben Marambii, who was the Bank’s For Reverend Joseph Ntombura, the Resort and Conference Centre on a large Managing Director. Presiding Bishop of the Methodist Church in the Methodist plot adjacent to the headquarters. The resort “He has been a very senior leader in this Kenya, the pandemic has proven true one of offers 100 ensuite rooms, 12 conference church and he knew it very well. It was not his foremost beliefs about how churches can rooms, a 25-meter swimming pool with a a very difficult thing for him to be convinced shape their future. children’s section and a gymnasium and that once the church was in need of money, it “I see the future of our churches being Church spa. There are also three lush gardens for did not require a lot of scrutiny,” says Bishop dominated by getting their own income. The weddings, graduation parties, birthday Ntombura. three pillars of churches are: they become parties and team building events. Managers at KCB Bank have similarly been self-supporting, self-governing, and self- “The investments that we are doing are supportive, he says. sustaining,” he says. in Kenya very good for the church in that we don’t Still, he says, the church is yet to achieve its He is in a good position to make that have to rely purely on our members to full potential in grounding itself on the three assertion, speaking from his office at the In a bid to become a self sustaining finance or to fund every project that the pillars, and banks will need to support them top floor of the first of three blocks at entity, the church has put up a church is running. The church has its own more. the Methodist Church’s headquarters on commercial block that generates income and sometimes it supports small “Our churches have a lot of land. We have a Oloitoktok Road in Kileleshwa, Nairobi. income going into expansion of the projects that we have in our branches or lot of assets that will require development or It is from this office that he has embarked church’s wings. It has also made other synods,” he says. improvement in order to generate income or on guiding the church that first landed in investments to ensure they don’t have Bishop Ntombura credits Bishop Ntombura credits the Methodist funds that can run the projects of the church to rely on members to fund projects Kenya with the missionaries in the year 1862 the Methodist Church’s Church’s good relationship with KCB Bank and avoid reliance on donor funds, which are in being grounded on the three pillars. good relationship with and National Bank of Kenya to the stability no longer there anyway,” he says. The Methodist Church realized early on KCB Bank and National that comes with an association that began Bishop Ntombura is acutely aware of the the need to become self-sustaining, and Bank of Kenya to the long before both came to be known by their change in circumstances in evangelization, embarked on developing a resource that stability that comes with current names and modern branding. where the churches in Africa are now almost all mainstream churches in Kenya an association that began “As far as KCB Bank is concerned, from expected to go back to Europe and spread the have had in plenty – land. long before both came to history, we tend to think that we began even Gospel in the same way it was brought to this With about 10 acres of land in a prime be known by their current before KCB itself was formed because the continent more than a century ago. location in the capital city, the church names and modern Methodist Church used to bank with a bank The church is yet to reach all corners of the first borrowed about KShs200 million to branding. called Grindlay’s, which was incorporated country and also faces the challenge of losing develop an office block, a purely commercial into the family of KCB,” says Bishop members to the newer churches with more building with the church only occupying the Ntombura. appealing methods and messages, which top floor. When everything was modernized, he says, attract the youth. It was a good decision made at a good KCB Bank and the Methodist Church arrived Over the last six years, the Methodist time. Companies were seeking to move out KShs 200m at the agreement that their relationship was Church has gone about missions and has of Nairobi’s crowded and traffic-jammed With about 10 acres of land formalized in 1994. Both know it was longer grown to cover 45 counties from 23 in 2013. Central Business District and quickly filled in a prime location in the because the church had been keeping, and “So it’s a church that is rapidly growing and the three-storey building. capital city, the church first continues to do so, its vital documents with expanding very, very, very fast,” he says. Opened in 2007, the building is now borrowed about KShs200 KCB Bank. He says that with the strong foundations occupied by a number of international million to develop an office Perhaps the most important of these now in place, the Methodist Church has a companies and with the loan taken from block, a purely commercial documents is the church’s Deed of Church great future, and Kenya is considered the National Bank of Kenya now out of the way, building with the church Order (their constitution), which is kept in a fastest growing congregation in Africa. the income generated has been going into only occupying the top special silver box that has been in the custody There are now synods in Tanzania and expanding the church’s wings. floor. of the bank since its existence as Grindlay’s. Uganda, Rwanda, the Democratic Republic of “We have many customers, both The box is of special significance during Kenya, while South Sudan has approached the international and local, and this is what the handover of power from one Presiding Kenyan synod to help growth in that country. mainly sponsors many of our mission Bishop to the next, akin to the handing over “We are actually seen to be a church of activities and is the main source of our of the sword to the Commander-in-Chief after the continent,” says Bishop Ntombura, and it income,” says the Presiding Bishop. swearing in, and it is returned to the safety of all starts from being well grounded at their the bank immediately after the ceremony. headquarters in Kenya’s capital city.

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Event Research Report for Membership Organization 2020. PURSUITS “Organizations everywhere found themselves scrambling to reinvent their in-person conferences and meetups into virtual events.” Some of the virtually held events included NBA2020 season, Sundance, Cannes etc. Although virtual events don’t offer the same experience as in person events it has been an opportunity to make the best out of the present circumstances. “Virtual events have been increasing in popularity for a while, but the social distancing requirements of COVID-19 have pushed them front and center,” says Zuhura Ogada, Chairperson Event Managers Association of Kenya. In the business realms, several organizations opted to hold their annual general meetings virtually to comply with the COVID -19 EVENTS containment measures. However, concerns have been raised that these events are devoid of the experience of actual meetings. Regional calendar One of the joys of attending conferences pre-COVID were spontaneous meetings, corridor chats, and drinks with like-minded events go virtual, people, says Diana Raiselis, a German Chancellor Fellow who researches nightlife with Clubcommission Berlin. marred with “A conference’s actual program is only one small part of an event — the post-session side chats, unexpected experiences, and cancellations spontaneous run-ins make up the rest,” she said. “I think it’s a >>> n 21st February 2020, Brazilian Machado) at Rio’s Sambadrome at a time footballer and Paris Saint- when his PSG teammates were at the verge of Germain superstar Neymar being eliminated from the champions league da Silva Santos Junior by Manchester United. It was, therefore, not O took to Instagram surprising when he issued a short cheeky to announce to his statement In the business realms, 144 million followers that he wasn’t going to “With immense joy I announce that I won’t several organizations opted attend the 2020 Rio Carnival, apparently to be at the 2020 Carnival,” Neymar said on to hold their annual general keep out of trouble. social media. “That way there won’t be any meetings virtually; to Rio carnival is the world’s biggest festivity controversy this time.” comply with the COVID -19 attracting up to 20 million visitors annually. In September 2020, the organizers of Rio The event that is held in Rio de Jeneiro, samba announced that there won’t be the containment measures. Brazil’s most cosmopolitan city draws millions carnival in 2021. Although lucky that they of domestic and international tourists to hosted their 2020 event, a lot of leading the beachside city every year. In Brazil, it is calendar events were canceled to contain the 1,000% a must-attend event for every who-is-who spread of coronavirus. In some instances, in entertainment and sports. For Neymar, it these events went online. Forbes Report that by May was the first time he didn’t attend in almost a Forbes Report that by May 2020, virtual 2020, virtual events were up decade. events were up 1,000% since Coronavirus. 1,000% since Coronavirus. In 2019, he courted controversy when “If COVID-19 threw a wrench into your he was spotted kissing and partying with organization’s event planning, you’re not Brazilian musician Anitta (Larissa de Macedo alone,” Wild Apricot says in the 2020 Virtual 58 | | 59 PURSUITS 1,000 Only around 1,000 pilgrims will attend the Hajj this year due to new crowd control restrictions put in place by Saudi Arabia. The holy sites in the cities of Mecca and Medina normally Perfectly in host more than 2 million people during the pilgrimage tune with In 2020, the annual pilgrimage to Mecca in Saudi Arabia only received a fraction of the regular number of worshippers. >>> question of depth or breadth,” Raiselis added, Namugongo Martyrs Day— held every 3rd of “there’s something about physically being with June to celebrate what is considered to be one your lifestyle other people and sharing an experience that of the largest religious gatherings in the world creates connection.” was cancelled. Similar views are shared by Philip Other leading events cancelled in the pearl CONTACT US TODAY: Macharia, CEO of Trendscope Events. “For of Africa included Nyege Nyege International [email protected] business events, networking is a major part Music Festival, Bayimba Festival, Uganda’s +254 (020) 440 0493/494 or +254 790 499 421 of conferences and it’s hard to allow for biggest multi-arts festival, Ekyooto Cultural [email protected] serendipity in online events, encounters need Festival, and Rolex Festival. to be somehow scripted.” Even Tanzania had event cancellations. +254 (020) 44 06334 or +254 742 651 598 In July, CNN Travel reported that Hajj, In April, Tanzania officially announced the *Terms and Conditions apply Islam’s most important annual pilgrimage to cancellation of the 2020 edition of the annual Mecca in Saudi Arabia received just a small Union Day celebrations. The day is marked to fraction of its regular number of worshippers, commemorate the merger of Tanganyika and amid concerns over the coronavirus. Zanzibar to become Tanzania. “Only around 1,000 pilgrims will attend In Rwanda, the 26th Commonwealth the Hajj this year due to new crowd control Heads of Government Meeting (CHOGM) was restrictions put in place by Saudi Arabia. The postponed. The meeting was scheduled to Even non-contact sports events holy sites in the cities of Mecca and Medina take place in Kigali in June 2020. like Safari Rally, Rhino Charge, normally host more than 2 million people “Our organization’s deep reservoirs of solidarity during the pilgrimage,” CNN reported. and expertise will be invaluable tools as we and Lewa Marathon were Across East Africa, many calendar events work together globally to ensure no country is postponed including cultural, religious, and business left behind. We look forward to welcoming the summits were either digitally delivered or Commonwealth family to Kigali for CHOGM once canceled. the pandemic has been defeated,” Rwandan In Kenya, the popular Carmel Derby and President Paul Kagame said. Rusinga Festival that celebrates the Samburu The Kagame administration also banned and Abasuba cultures were held virtually. the annual Walk to Remember and a night “We are heartbroken that our annual vigil at the national stadium, among the most gathering cannot take place, as it has for the significant events to mark the genocide. last eight years. We must keep on moving Ethiopia arguably had the most significant though. Therefore, we have considered the event cancellation. In April, Ethiopia’s views of many to go online for a different Election board indefinitely postponed the experience, with curation that includes election set for August saying the coronavirus an online campaign dubbed “going down makes it impossible to prepare. memory lane” on 17th December and a virtual It became the first major election in Africa storytelling session - in partnership with to be postponed because of the coronavirus. Goethe Institute - on 18th December 2020,” Several African countries had upcoming Ms. Anne Eboso, Rusinga Festival Organizer presidential votes in 2020, including Burundi said in a statement. and Tanzania. Togo was lucky to complete Other calendar events including Lamu its February 22 vote before cases spiked. In Cultural Festival, StoryMoja Festival, Lake some countries, political gatherings have Turkana Festival, Maulidi festival were been banned forcing players to engage cancelled. virtually. Even non-contact sports events like Safari The decisions to rejig these events must Rally, Rhino Charge, and Lewa Marathon were have been hard to make but for the greater postponed. good for everyone, we live to celebrate them Across the border in Uganda, the another day. For now, health remains a annual Festival of the Ugandan Martyrs— priority.

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