New subject: {Disarmed} Re: [NewVisionKenya] Fwd: [africa-oped] Bulk of KenyanWealth Owned by Foreigners

20 Jun 2008

      This is an interesting research study. That "Kenyans" own only 31% of "Kenya's" wealth!!! I wonder if there is anybody else perturbed by this fact like me - if at all it is true; and I have no reason to doubt the EA Standard!

Apart from South Africa and Nigeria which have enacted laws that restrict the % of stake foreigners can own in banks, Ethiopia too has some interesting laws. There are sectors like banking, broadcasting and air-transport (for aircrafts of less than 20 seating capacity) that are reserved exclusively to 'domestic investors'. There are also sectors (like telecoms) where an investor can only co-invest in partnership with the Government (e.g. currently ZTE/ETC are rolling out a US$ 1.5billion national fiber backbone!!!).

One can easily dismiss these Ethiopian (or Nigerian or SAfrican) policies as 'repugnant' - until this 'Kenyan' experience hits you!

Wams thanks for sharing!
SO

--- On Wed, 6/18/08, Margaret Gichuki <Wams2006@gmail.com> wrote:

From: Margaret Gichuki <Wams2006@gmail.com>
Subject: [NewVisionKenya] Fwd: [africa-oped] Bulk of Kenyan Wealth Owned by Foreigners
To: "KCA" <kca_main@yahoogroups.com>
Cc: NewVisionKenya@yahoogroups.com
Date: Wednesday, June 18, 2008, 6:37 PM

---------- Forwarded message ----------
From: nmatunda <matunda@hotmail. com>
Date: Jun 18, 2008 3:03 PM
Subject: [africa-oped] Bulk of Kenyan Wealth Owned by Foreigners
To: africa-oped@ yahoogroups. com

For many years I have tried to make the point made by Kamau Ngotho
below! I am glad that someone has done some research that exposes the
fallacy of Kenyans "owning" Kenya. Yet, looking back on events of the
past, Kenyans have killed and maimed fellow Kenyans in the pretext that
some have eaten more.

The real culprits (and we need a national solution for this) are foreign
ownership and skewed wealth distribution

Read on!

By Kamau Ngotho

The bulk of Kenya's wealth is in foreign hands, according to
statistics obtained exclusively by The Sunday Standard.

If Kenya were a cake to be shared out, Kenyans would only lay claim
to 31 per cent of the country's total wealth. The rest would go to
foreigners.

Agriculture, tourism and banking, which combined bring in the
country's largest earnings, are in foreign hands. Last year, tea,
tourism, flowers and coffee earned the country Sh140 billion, nearly
half of the annual national budget. Of this money, only 31 per cent
ended up in the country � as tax and real earnings to the
nationals.

And shareholding in the richest 20 companies that trade at the
Nairobi Stock Exchange is foreign.

The skewed distribution of wealth between foreigners and Kenyans
puts paid to all efforts since independence to hand control of the
country to its citizens.

Tea growing, which earned the country Sh43.5 billion last year, is
concentrated in the hands of six leading agricultural companies
whose shareholding is largely foreign. Up to 78 per cent of earnings
from tea went, therefore, to foreigners � leaving the balance for
Kenyans.

The Big Six in the tea sector are Unilever Tea Kenya, Kakuzi Ltd,
Williamson Tea Company, Kapchorua Tea, Limuru Tea Company and Sasini
Coffee and Tea.

The British-owned Brooke Bond Group holds 43.1 million shares of the
total 48.8 million shares issued in Univeler Tea Kenya. The same
group owns 54 per cent of the total 3.9 million shares issued in
Limuru Tea Company.

In Kakuzi Ltd, foreigners have a total shareholding of 68.3 per cent
of the total 19.6 million shares issued. They hold the shares
through Bordure Ltd and Lintak Investment Ltd, with 35.1 and 33.2
per cent shareholding, respectively.

Britain's Williamson family has a controlling majority shareholding
in both Williamson Tea and Kapchorua Tea companies. In Williamson
Tea, it holds 67.2 per cent of the total 8.8 million shares issued
through their company, Ngong Tea Holding PLC.

In Kapchorua tea, they hold 40 per cent of the 3.9 million shares
issued.

Sasini Tea and Coffee Ltd is 87.3 per cent owned by business magnate
Naushad Merali, a Kenyan. Merali's companies hold his shares in
these businesses: Legend Investments Ltd (51.7 per cent), East
African Batteries (18.7 per cent), Yana Towers (15.9 per cent) and
Swan Estates (1.04 per cent).

The reinvigorated tourism sector, which earned Sh42 billion last
year, is also foreign-owned.

And just as the Sh43.5 billion earnings from tea sector ended up in
foreign pockets, so did the Sh42 billion that came from tourism.
Tourism earnings went into three directions: Hotels, airlines, and
travel/booking agents, in that order. Of Kenya's 290,000-plus
tourist hotel bed spaces, foreign hoteliers own 74.3 per cent of it.

Tour flights to Kenya are entirely in the hands of foreign airlines.
It is all the more foreign-dominated in the traditional tourist peak
periods of Easter and Christmas, when there are no scheduled flights
to Kenya's tourist hub of Mombasa. During the two seasons, tourists
arrive in Mombasa in chartered jets arranged by European tour
operators.

A tea-picker at work.

Foreign companies stationed in European and American capitals also
entirely control hotel bookings and transfers. Where internal travel
is concerned, foreigners too, dominate by owning 7 of the 11 leading
local tour travel firms.

At the end of the day, tourism in Kenya remains a foreigners'
enclave with indigenous Kenyans left to scratch the surface on petty
trades like selling curios and prostitution.

After years of lobbying, last year the European Union set aside
Sh250 million to economically empower indigenous Kenyans to get a
fair share of the lucrative industry. Seven projects were targeted
to tilt the balance in a programme called Tourism Diversification
and Empowerment Project.

But a spokesman at the Nairobi EU office said the money is yet to be
released as project proposals submitted are still under evaluation.

The only hotel chain listed on the Nairobi Stock Exchange is the TPS
Serena. The Aga Khan Fund for Economic Development holds the
company's majority shareholding through its company, TPS Holdings
Limited.

Horticulture, which earned Kenya Sh28.2 billion last year, is the
country's third largest foreign exchange earner. It, too, is a
foreigners' affair. Indigenous Kenyans mainly come in as casual
labourers on the flower farms.

Of the 44 certified companies dealing with horticulture products, 26
are foreign-owned. But an even bigger irony is that the leading 10
players in the industry � all foreign-owned � bag 83 per cent
of the
total income from the sector.

Flower farming (floriculture) is the key plank in Kenya's
agriculture sector. Seventy six per cent of Kenya's total flower
production is concentrated in foreign-owned flowers farms around the
Naivasha area. The big three are Homegrown, Sulmac and Oserian.

Late last year, Kenya overtook Israel and Columbia as leading
exporters of cut flowers. But you would not know that from the
world's leading flower auctions in Amsterdam and London. Why?

Foreign flower exporters in Kenya have registered their companies
abroad � mainly in Amsterdam � and sell flowers they have
grown in
Kenya under a foreign label. In that case, while flowers from a
local company are sold in Amsterdam as flowers from Kenya, Dutch
companies growing their flowers in Naivasha sell theirs as flowers
from Holland.

The consequence of it is that flowers owned by Dutch companies
receive preferential treatment at the auction, including exemption
from the strict EU-imposed export rules.

Flower auctions in Amsterdam and London account for 65 and 25 per
cent of Kenya flower sales respectively. Of the approximate 60,000
tonnes of flowers exported from Kenya last year, 37,000 tonnes were
sold in Amsterdam and London auctions as flowers from Holland.

The statistics can make it look like the entire flower industry in
Kenya is one big conspiracy against indigenous people. Foreign air
charters, the only ones used in flower transport, charge the highest
rates in Nairobi. Freight charges on flowers from Kenya are twice
those in the capitals of Kenya's nearest competitors Israel,
Columbia and Costa Rica.

There are also 40 to 45 per cent higher than in Egypt and South
Africa, Kenya's two biggest competitors on the continent.

At $400 a day, inspection and storage charges at Jomo Kenyatta
International Airport are the highest in the world. So is the
freight charge of $1.85-$2.2 per stem.

Flowers sold in Kenya's name are inspected stem by stem at the JKIA
at the cost of 12 Euro cents a stem. Those grown in Kenya but
marketed by overseas-accredited companies are only inspected in bulk.

On average, it costs upwards of $1 million to set up a typical
flower farm on a half acre spread , which in turn brings in a
$50,000 a year.

Kenya's fourth leading export earner, coffee, is equally depressing
on the ownership scale. The majority of small-scale coffee growers
in Kenya sell coffee raw from the farm, earning less than 10 per
cent of what the finished end product earns in foreign markets and
in a foreign label.

Though touted as an agricultural country, the other large-scale
agricultural activities in Kenya are also foreign-owned.

Rea-Vipingo Plantations, which deals mainly in sisal and dairy
farming is 77 per cent owned by the Robinson family of England. They
hold the shares through REA Holdings PLC, Unibuckle Holdings Ltd and
REA Trading Ltd.

Del Monte, world famous for pineapple products, is entirely a French
affair and sells its products with the label "Made-in-France" .

The question of who owns Kenya's wealth sticks out like a sore thumb
in the banking sector. The leading two banks with a combined market
share of 71.4 per cent are Barclays Bank of Kenya and the Standard
Chartered.

They are foreign-owned. Barclays Bank plc of London owns 68 per cent
stake in Barclays Bank of Kenya.

Standard Bank Africa, a London outfit, in turn owns 81 per cent
shareholding in Standard Chartered Bank.

To avoid domination by foreign banks, Nigeria and South Africa
enacted laws on percentages of shareholding a foreign bank could own.

Foreign ownership is also the same cord that runs through key blue
chip companies listed on the Nairobi Stock Exchange.

At the East African Breweries, British-owned Guinness plc holds 63.5
per cent of the total equity, leaving Kenyans to scramble for the
rest. Guinness shares are held in the names of Diageo Kenya Ltd and
Diageo Netherlands B.V.

In the Nation Media Group, the Aga Khan holds 28.2 million shares of
the 35.6 million shares issued. The Aga Khan's shares are held in
the names of the Aga Khan Fund for Economic Development and Amin
Nanji Juma. In Kenya Airways, Dutch company, KLM, holds 40.6 per
cent equity.

In Total Kenya Ltd, French companies Total Outre-mer and Elf Oil
Kenya Ltd, own 77 per cent of the total shareholding, while in BAT
Kenya Ltd, Molensteegh Investment BV of London, holds 68 per cent of
the total shareholding.

The question of who owns Kenya's wealth generated a national debate
in 1968 when the National Council of Churches of Kenya published a
paper entitled: "Who Owns Kenya's Industry?" In the paper, the late
Anglican Bishop, the Rev Henry Okullu, regretted that five years
into independence, "the compass needle had not moved in the
direction of indigenous ownership of Kenya's wealth."

Thirty-seven years later, the Rev Okullu would turn in his grave to
note that the needle has drifted even further away.

__._,_.___ 

Recent Activity

 1
New Members

 1
New FilesVisit Your Group 

Yahoo! News
Odd News
You won't believe
it, but it's true

Best of Y! Groups
Discover groups
that are the best
of their class.

Check out the
Y! Groups blog
Stay up to speed
on all things Groups!
. 
__,_._,___

Re: [kictanet] [NewVisionKenya] Fwd: [africa-oped] Bulk of Kenyan Wealth Owned by Foreigners

Shem Ochuodho

bitange＠jambo.co.ke

wesley kiriinya

Shem Ochuodho

Brian Longwe

Alex Gakuru

Joseph Manthi

Odhiambo Washington

Brian Longwe

alice

Sylvester Kisonzo

Shem Ochuodho

John Walubengo

Shem Ochuodho

Alex Gakuru

Leonard Mware

Jotham Kilimo

Odhiambo Washington

Joseph Manthi

Sylvester Kisonzo

Brian Longwe

Sylvester Kisonzo

Leonard Mware

Gakuru , Alex

Bill Kagai

tags

participants (14)