Dear All,
I am in Malaysia.  This country's development is awesome.  Their
e-applications are indeed something we all aught to learn from.  You can
see the positive energy to move their country out of poverty in their
eyes.  We must find ways to emulate these people and move away from self
interest that is tearing our country apart.

Prior to my travel here, I made some statements regarding local ownership
of ICT investments with the aim of reviewing our policy.  This is what I
am employed to do and I am still consulting with stakeholders to see how
to advance the policy change.   Specifically, I argued as follows:
•       The drop in Foreign Direct Investment (FDI) in our sector is as a result
of rigid policy on ownership of investments;
•       We must work toward attracting FDI if we have to sort out unemployment
of our youth which has reached crisis levels;
•       Large ICT multinationals have requested exemptions to this policy and
would rather have the local ownership through the stock market;
•       That those who have in the past purported to have the capacity to raise
sufficient local capital have failed and cannot raise new capital thus
compromising the competitiveness of these firms;
•       Protectionism leads to poor service and uncompetitive environment;
•       The problem of local equity participation can be summarized by the
experience we went through during the search for the SNO – promises of
non-existent funds and extortionism;
•       The absence of local equity participation in some foreign banks did not
stop Equity Bank from growing phenomenally;
•       There is no threat to domination from foreigners since local firms have
made great strides to eventually partner with multinationals from points
of strength (read KDN/Altech; Safaricom/Onecom partnerships) and it is
encouraging to see other local firms such as Access, Jamii, Wananchi etc
coming up strongly that we don't need to require multinationals to seek
for partners up front at the expense of our unemployed youths; and
•       My liberalist economic approach is what in my view would make our
country considering that some decisions we made along the same lines have
greatly impacted all our lives.
Take for example the liberalization of International Gateways.  There were
threats to our lives that we could not survive to see the benefits.  These
were threats made by those who benefited from illegal terminations of
calls through Telkom Network leading to losses in excess of one billion
shillings per year.  I am surprised that this move pains some people to
date when we are enjoying lower tariffs with a more efficient Telkom.  I
have no regrets on Telkom reforms at all and I am sure you all know that I
never run from any responsibility.

The Libyan matter has never been an issue before considering the fact that
this are standard MOUs that we sign regularly whenever we market Kenya out
there as an investment destination.  Yes I signed the MOU and the two ICT
items in the MOU, that is, Telkom Kenya and Teams never went to Libyans
since they lost in the bid process and rejected by local investors
respectively.  In the same MOU were Energy items and of course Grand
Regency but MOUs are not sale agreements.  We sign lots of these MOUs and
even today here in Malaysia I have had to sign two.  These are public
documents accessible to any Kenyan and there is nothing to hide in the
course of serving our country.

I have never in my life met Moi and as far as I am concerned I have never
crossed his path either in his business or himself as a person.  The
decision to extricate the Government from the Econet saga in my view saved
the tax payers a great deal of money.  I was not there when this matter
started and I still do not understand the whole transaction but it makes
great sense to remove the Government from any liability.  If such a
decision did not favour anybody, then the courts can settle and in any
case, this matter is still sub judice.

Back to policy.  If you have noted, we are launching an average of two ICT
firms per a week.  Large BPO multinationals have told me to my face that
until we sort out the local ownership issue, they are going elsewhere.
These are firms that employ in excess of 30,000 BPO agents.  Investment in
the sector runs into billions of shillings which people like myself cannot
even dream of raising even 1% (and this is true for many of us in Kenya).
Do we let such opportunities slip by because we want to be nationalists?

Regards


Ndemo.





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