Traders face more costs in new City Hall licensing fees

Nairobi County governor Evans Kidero (L) prepares to sign the County’s finance bill 2013 in his office on September 04, 2013. Looking on are his legal advisor Gad Awuonda (center) and County finance secretary Gregory Mwakanongo. Photo/DENISH OCHIENG 

By KIARIE NJOROGE

In Summary

• Provisions of the Finance Act assented to by governor Evans Kidero last month would take

Switching bank accounts made easier

People wait to be served at a National Bank branch in Kisumu on September 2, 2013. Sadly, we do not have independent and credible customer satisfaction data. FILE 

By CAROL MUSYOKA

In Summary

• The regulator should take the lead in researching on, and publishing, customer

I will shop at Westgate the very day it reopen

Flags fly at half-mast in Nairobi this week: Tragedy will not put Kenya down, its entrepreneurship is unmatched across the world. Photo/Salaton Njau 

By SCOTT BELLOWS

In Summary

• Kenya is fully open for business thanks to its people’s ability to

How to attract high-end commercial tenants

Pacis Centre along Nairobi’s Waiyaki Way. Design and space are among features multinationals look for in commercial buildings when they are leasing. FILE 

By EVELYN SITUMA

In Summary

• Good finishing and designs are key in attracting upscale tenants.

Last year, I met a property investor who had just completed building his commercial office block in

Treat debt collectors well, but keep fraudulent agents at bay

When in debt and the creditor decides to send the collectors, do not compromise, but negotiate new repayment terms. Fotosearch 

By Isaiah Opiyo

In Summary

• Negotiate with decorum, knowing these agencies are employees, not

West Pokot farmers get fertiliser boost in food security drive

A farmer sprinkles fertiliser on his land. Photo/FILE  NATION MEDIA GROUP

By BARNABAS BII,

In Summary

• KVDA also sets aside 25,000ha for sugarcane farming scheme to

Uhuru appoints head of Nairobi global arbitration union

President Uhuru Kenyatta at a past function. Photo/FILE  Nation Media Group

By GALGALLO FAYO

President Uhuru Kenyatta has appointed the head of the Nairobi Centre for International Arbitration Board, clearing the way for creation of an out of court commercial disputes resolution unit.

Arthur Igeria, a partner at corporate law firm Igeria and Irungu Advocates, has been appointed the first chair of the board for a three-year term.

His appointment sets the stage for the centre to hire staff including its president, deputy president, registrar to the arbitral court and 15 members who will act as judges.

The international arbitration centre will boost Nairobi’s bid to become a global financial services hub, a quest that has been bogged down by Kenya’s slow and expensive court processes often cited as a major shortcoming for the city’s attractiveness.

International firms that open shop in Kenya often sign clauses that provide for resolution of disputes in London or Mauritius, which have well established arbitration mechanisms. The arbitration unit is the product of a law that came into force in January and led to the establishment of a board in June.

“With the appointment of the chair of the board we can now meet and formally start performing our mandate which is to establish a centre with an international standard,” Lawyer John Ohaga told the Business Daily on Friday in a phone interview.

Mr Ohaga was appointed to the board in June together with KEPSA chief executive Carole Kariuki, Esther Kmyenje-Opiyo, Jimmy Munyanja, Emmanuel Ugirashebuja, Patrick Kihara Njuguna, Allen Gichui and Collins Namachanja. 

Among the first duties of the directors is to appoint a registrar who will secretary to the board and in charge of running the centre.

Obath earns another board appointment

Patrick Obath has been appointed Unga director. FILE 

By NEVILLE OTUKI

In Summary

• The Unga job is Mr Obath’s third board appointment among firms listed at the NSE including Kenya Power and Standard Chartered Bank.

Patrick Obath has joined the club of directors who sit on multiple boards of firms listed at the Nairobi bourse after Unga Group made him a director.

Unga deepened board changes with the appointment of Mr Obath after it tapped Mary M’Mukindia, a former CEO of National Oil Corporation of Kenya (Nock), and elevated Isabella Ocholla-Wilson as chairperson.

The Unga job is Mr Obath’s third board appointment among firms listed at the Nairobi Securities Exchange (NSE) including Kenya Power and Standard Chartered Bank.

“The board is pleased to announce the appointment of Patrick Obath on the board with effect from September 26,” Unga said in a statement on Friday.

Mr Obath, 59, previously served as managing director of Kenya Shell. He joins the likes of Daniel Ndonye, Francis Okello, Carol Musyoka and Peter Munga who sit on three or more boards of firms listed at the NSE.

Corporate governance guidelines provided by the Capital Markets Authority allows individuals to sit in not more than five public listed companies at any one time.
 

Influential businessmen Jeremiah Kiereini and Richard Kemoli quit Unga’s board last year in response to a directive by the Capital Markets Authority (CMA) barring the two and six others from holding directorships in companies listed on the NSE.

They were barred on alleged governance breaches at CMC Motors. Their exits created room for Mr Obath and Ms M’Mukindia to join the miller’s board

Helb website crash locks out public varsity loan seekers

Higher Education Loans Board service hall at Anniversary Towers in Nairobi. The agency’s website crashed last slowing down processing of student loans. FILE 

By DAVID HERBLING,

In Summary

• Students set to join public institutions of higher learning unable to apply for funds online.
• The students are required to apply for the education loan online after Helb discontinued the manual application in 2010.

The Higher Education Loans Board (Helb) website has crashed since last month, locking out nearly 30,000 students currently joining public universities from seeking funding.

The students are required to apply for the education loan online after Helb discontinued the manual application in 2010.

The system failure has seen the bulk of the freshmen fail to receive funding for fees and accommodation as the board struggles to support the large number of applications it had received since the government adopted the double intake policy in 2011.

“The Higher Education Loans Board acknowledges the challenges currently being experienced by students seeking to apply for loans online via our web site www.helb.co.ke,” said chief executive Charles Ringera in an interview with the Business Daily.

“We are rapidly working on an emergency solution to this challenge and we urge all our clients to bear with us,” he added without giving timelines.

The website crash has seen Helb extend the deadline for submission of loan applications for the second time in a month to October 31. The earlier cut-off date was August 31 before it was moved to September 15.

Last month, Helb said that only 1,000 students had successfully applied for loans, reflecting the weight of the financier’s website meltdown.

Failure to get Helb support means thousands of students, who are fully dependent on government loans, will stay out of campus longer before they can join their self-financing counterparts in the lecture halls.

(READ: Loans hitch locks out University of Nairobi students)

The majority of applicants for Helb loans are needy students who depend on the money to buy food, stationery and pay rent during their stay on campus.

The freshmen are expected to pay about Sh30, 000 for the year for tuition besides medical, registration, activity and computer laboratory fees.

Undergraduate students each receive between Sh35,000 and Sh60,000 loan annually from Helb alongside a bursary of up to Sh8,000. This translates to a minimum of Sh140,000 and maximum of Sh240,000 for a four-year course.

The public universities admitted 53,010 students and Helb was expected to fund about 32,000 of them.

Some universities like Karatina and Kenyatta have already enrolled their batch while Moi and University of Nairobi will register their lot next month and in January respectively.

“I have been sourcing upkeep money from relatives. I’ve been trying to open the website at midnight and early mornings since mid-August,” said Virginia Wanjiku, a first year student who reported at Kenyatta University on September 2.

More cement plants boon for building sector, say architects

Members of the AAK tour the Savanna Cement plant in Athi River on September 27, 2013. Photo/Ponciano Odongo 

In Summary

• Architectural Association of Kenya (AAK) chairman Waweru Gathecha said new plants would increase competition and stabilise cement prices.

Architects have hailed the setting up of more cement plants in Kenya as a boost to the building and construction industry besides supporting economic growth.

Speaking at Savannah Cement plant in Athi River, Architectural Association of Kenya (AAK) chairman Waweru Gathecha said the new plants would increase competition and stabilise cement prices.

“The more the cement firms the more the competition and advantage to the end users and all of us,” said Mr Gathecha who was accompanied by more than 50 members of the association on a factory tour.

Savannah Cement is the sixth and latest cement maker in Kenya.

Transferring technology

Mr Gathecha noted that the investors were creating many jobs in the country as well as transferring technology.

AAK is an umbrella body of architects, quantity surveyors, town planners, engineers, landscape architects, environmental design consultants and construction project managers.

New plants including Cemtech, the Indian cement firm majority-owned by the Sanghi Group, and another by Aliko Dangote, Africa’s richest man, are reported to be in the pipeline.

The professionals and consultants were visiting the plant for the first time since it opened last year.

The association called on cement makers to make quality products even as competition rises.

Quality control

“It takes time to polish quality and quantity in manufacturing. We ask investors to put in place quality control systems despite the huge competition in the country,” said Ben Okoth, AAK secretary engineers’ chapter.

Mr Okoth appealed to the government to find ways of addressing the high cost of energy and called on cement makers to embrace modern technology to save energy.

“Clinker is the main ingredient of cement but cannot be produced locally due to the high cost of energy…. It is much cheaper to import it yet it can be produced locally,” said Mr Gathecha.

The architects said they were confident that the government would invest more in roads and bridges across the country to boost cement consumption as it seeks to attain Vision 2030.

Home Afrika stock tumbles to half of listing price

NSE chairman Eddy Njoroge (from left), Vision 2030 Secretariat director-general Mugo Kibati and Home Afrika chairman Lee Karuri during the bell ringing ceremony, marking the company’s debut at the NSE on July15, 2013. Photo/Salaton Njau 

By CHARLES MWANIKI

Home Afrika stock has fallen to just over half of its listing price of Sh12 signalling a sharp decline in value for the shareholders.

The pioneer on the Growth and Enterprise Market Segment (Gems) of the Nairobi Securities Exchange (NSE) joins two other recent listings in trading under the initial offer price.

“The real-estate firm has seen its share price drop sharply after announcing that it would issue a REITS (Real Estate Investment Trusts) to fund one of its developments,” said Standard Investment Bank (SIB) in a note to clients.

SIB had noted in an earlier report at the beginning of the month that there was investor concern since the firm had not stated whether it had adequate funding for its planned projects and could need to borrow or raise funds through a rights issue.

(READ: Home Afrika sets Sh2bn target in first REIT issue)

Transcentury, which listed at Sh50 in 2011, is now trading at Sh30 per share and Britam, too a 2011 listing, is at Sh8.10 from Sh9. Longhorn, which listed in 2012 at Sh14 per share, is now trading at Sh13.

Home Afrika’s share price has been on a gradual fall since its debut in mid-July when it traded at a high of Sh25, though on thin volumes.

The share has an almost 50 per cent downside on its listing price. But investors who bought at the Sh25 price are looking at a sharper drop of 76 per cent, attributed to price correction as well as selling pressure from shareholders.

Analysts had predicted that the firm’s relatively high price-to-earnings ratio was not sustainable.

“The price at listing was deemed expensive on the basis of the high price-to-earnings and price-to-book ratios, and the fall in the share [rice is a reflection of the market correcting this,” said Kestrel Capital analyst Kuria Kamau.

Other shares that listed at the NSE in the last three years have returned mixed results, with some remaining below their listing price even as the market enjoys an extended bull-run since mid-2012.

Liberty Holdings (formerly CFC Insurance Holdings), which listed in 2011, has gained to Sh11.90 from Sh6.15. CIC Insurance, which listed in 2012, has gone up to Sh4.55 from its listing price of Sh3.50 as has Umeme, which has appreciated to Sh18.50 from its introductory price of Sh8.80.

The NSE-20 Share index has seen a gain of 0.5 per cent to 4746 points between July 15 when Home Afrika listed and September 25.

Overall investor wealth at the bourse has increased by Sh32 billion to Sh1.756 trillion in the three months.

Home Afrika’s market value meanwhile has dropped from the Sh10 billion reached on its NSE debut to Sh2.51 billion at the close of trading Friday.

‘Nation’ stock trade pushes turnover at NSE to new high

A broker trades at the NSE. The stock market turnover for the first half of 2013 stood at Sh73.3 billion. FILE 

By CHARLES MWANIKI,

In Summary

• NSE turnover in August rose by 86pc to Sh21bn compared to July’s Sh11bn.
• Previously, the highest monthly turnover at the NSE was Sh16 billion, achieved in May this year and August 2010.

The Nairobi Securities Exchange (NSE) monthly turnover hit a historic high last month largely on account of Nation Media Group’s stock transaction, setting the stage for 2013 to become one of the most active years for the bourse.

Data released by NSE shows turnover in August rose by 86 per cent to Sh21 billion compared to July’s Sh11 billion, with the main catalyst being a one-off Sh6.1 billion block trade of NMG shares.

Previously, the highest monthly turnover at the NSE was Sh16 billion, achieved in May this year and August 2010.

“The main movers were NMG (Sh6.1 billion), Safaricom (Sh2.8 billion), East Africa Breweries Ltd (Sh2.6 billion), KCB (Sh2.5 billion), Equity Bank (Sh1.8 billion) and BAT (Sh1.5 billion).

Foreign investors heavily traded in these counters leaning on the ‘buy’ side (Sh15 billion),” said NSE. The bourse said that the vibrant trading was a reflection of increased investor confidence in the Kenyan market.

The total market turnover for equities up to the month of August stands at Sh105.3 billion and has already outstripped the 2012 full-year total of Sh86.8 billion. The market is on course to beat the previous yearly high of Sh110 billion registered in 2010.

The Capital Markets Authority, in its 2013-2017 strategic plan, put the target for a combined bonds and equities turnover at Sh1.04 trillion for 2013, rising to Sh6.83 trillion in 2017.

(READ: Regulator plans to raise NSE’s capital)

The bond and equities combined turnover in the year to August stood at Sh425.76 billion compared with a full-year total of Sh652.5 billion in 2012, Sh523 billion in 2011 and Sh593 billion in 2010.

Market observers have expressed optimism that the last quarter of the year will see a continuation of the upbeat market activity that has driven turnover up, backed by the continued appetite for stocks by foreign and institutional investors.

“The market is still driven largely by institutional investors, both local and foreign, with retail participation beginning to return. Long-term outlook is still quite positive,” said Kestrel Capital chief executive Andre DeSimone. 

Forex traders have also pointed at inflows from the oversubscribed Treasury infrastructure bond issue, which attracted bids of Sh37.63 billion against the Sh20 billion on offer, as a potential source of liquidity to drive up the activity in the NSE bonds market.

The surge in equity market trade volumes has already brought benefits to market players, helping to lift stockbrokers’ half-year profits by double and even triple digits.

Brokerage income

The intermediaries’ financial statements for the first six months of the year revealed wider profit margins, mainly as a result of increased brokerage income, which is derived from trading turnover

Foreign investors grow their stake in Uchumi four-fold

Shoppers at a branch of Uchumi Supermarket in Nairobi. The retail chain’s share has gained 9.8 per cent over the past year to Sh19.75. FILE 

By GEORGE NGIGI, gngigi@ke.nationmedia.com

In Summary

• CMA filings show that foreign investors owned 26.23pc of Uchumi this July, up 20.68 per cent in March.
• The firm's share has gained 9.8 per cent over the past year to Sh19.75 and was the top performer in the 12 months to March.
• Analysts say investors expect Uchumi to perform better in the medium term, after making significant investments in branch expansion in the region in the past two years.

Foreign investors have grown their stake in Uchumi Supermarkets four-fold in the year to July encouraged by expected earnings and flat share price movements.

Filings with the Capital Markets Authority show that foreign investors owned 26.23 of the retail chain this July, up 20.68 in March and 7.57 per cent in July last year.

Uchumi’s share has gained 9.8 per cent over the past year to Sh19.75 and was the top performer in the 12 months to March when it attracted local investors including Nairobi governor Evans Kidero, Jimnah Mbaru and the supermarket’s CEO Jonathan Ciano.

Dr Kidero, a former Mumias Sugar Company CEO, owns 234,577 shares in the retail chain while Mr Mbaru, who owns Dyer & Blair Investment Bank, has 256,900 shares down from 756,989 in March.

Analysts say investors expect Uchumi to perform better in the medium term, after making significant investments in branch expansion in the region in the past two years. In October, the company announced it would open at least eight new branches in East Africa by 2014.

Dividend payout

In recent years African retail has attracted interest from investors keen to take advantage of the continent’s economic growth, which is creating a growing middle class and a new breed of consumers.

This is what is attracting foreign investors to Uchumi while its rival Nakumatt plans to invite a strategic investor from outside Kenya.

(READ: Foreign investors double Uchumi Supermarket stake)

South Africa’s retail giants Massmart, Edgars and Foschini have committed to opening outlets in Kenya next year. Massmart, which is a unit of Wal-Mart, is expected to take a 50 per cent stake plus one share in Naivas which would give the world’s largest retailer a foothold in Kenya.

Uchumi’s profit grew 20.4 per cent to Sh485.9 million in the year to June on rising sales, which stood at Sh14.2 billion up Sh13 billion a year earlier.

Increased interest in the stock started last year when the retail chain announced a dividend payout of Sh0.3 per share after a 10-year drought. It maintained the same payout this year.

Uchumi, which closed shop briefly in mid-2006 after failing to pay creditors, has returned a profit for four years in a row compared to a loss of Sh1.2 billion in 2005, signalling that its turnaround strategy is working.

The firm’s management said the declaration of the dividend is a show of confidence in its prospects underpinned by expansion plans. It targets to raise Sh1.5 billion through a rights issue in the second half of 2013 and open more stores.

Uchumi’s sluggish share, which has shed 10.9 per cent in the past six months, has seen local shareholders who had bought the stock on the cheap cash in.

CBK board taps new chairman to replace Ndung’u

Central Bank of Kenya governor Njuguna Ndung’u at a past function. The governor is to focus on policy under new rules. FILE 

By GEORGE NGIGI, gngigi@ke.nationmedia.com

In Summary

• Members elect Dr Wagacha interim chair in bank restructuring to boost performance.

Njuguna Ndung’u has been replaced as the chairman of the Central Bank of Kenya (CBK) following the passage of a controversial law seeking to trim the powers of the governor and foster good governance.

Economist Mbui Wagacha has been elected as the interim chairman awaiting a formal appointment by the President as per the rules passed last year. This is the first time this has happened since Independence in 1963.

The governor, however will continue chairing the Monetary Policy Committee (MPC), meaning the board’s role will be administrative.

“The appointment is not gazetted. He was elected by non-executive directors as an interim case,” said Prof Ndung’u in an email response to the Business Daily. “I will chair the MPC.”

The separation of powers makes the chairperson answerable over the management of Central Bank as an institution while leaving the governor with the role of making policies to ensure macro-economic stability of the country.

“They changed the law to have the CBK board chaired by a different person who oversees the performance of the governor and the bank,” said Dr Wagacha while confirming the interim position.

Last year, Parliament reviewed the Central Bank Act separating the chairperson and the governor while expanding the membership of the board.

As per the act the chairperson shall be appointed by the President through a competitive process and approved by Parliament. The chairperson will occupy the seat for a four-year term renewable only once as is the case with the governor. The appointment of the board is to be staggered to ensure continuity.

Currently, the board is also not fully constituted as per the new Act as it has four directors against the requirement to have eight non-executive directors besides the chairperson, governor and principal secretary.

“That will happen as per the terms which call for competitive sourcing; so I believe they will have to advertise,” said Dr Wagacha.

However, the Act is silent on how the directors are appointed only stating they must be Kenyan citizens, knowledgeable or experienced in monetary, financial, banking and economic matters or other disciplines relevant to the functions of CBK.

Under the separated powers, governor acts as chief executive of the bank answerable to the board and is the representative of the bank in public.

The battle over whether to have a separate chairman or not has raged on since 2009 when the proposal was expunged from the draft constitution, in part following CBK protests.

The Treasury supported the move though with then PS Joseph Kinyua saying: “There is conflict of interest in having a chief executive who is also the board chairperson.
”

MPs amended the CBK Act following the 2011 currency depreciation crisis claiming conflict of interest.

Did the listing suspension of CMC undermine shareholder interest?

CMC Holdings showroom on Lusaka Road in Nairobi’s Industrial Area. Photo/FILE 

By Robert Bunyi

What is a market? A market is commonly understood to be a physical place or medium, such as an electronic exchange, where buyers and sellers congregate to trade.

This understanding is generally correct although the emphasis is on the trade rather than the congregation of buyers and sellers. To illustrate, imagine a market day in any of our towns where buyers and sellers congregate but no sale actually happens that day. If this was to occur then a market didn’t, exist rather a market place was in existence

Applying this thinking to the stock market, the market place is the stock exchange and the market is when a buyer and a seller of a share actually conclude a trade.

The Nairobi Securities Exchange (NSE) today has 50 companies that have listed their ordinary shares and if on a single trading day a trade occurred in each share, then that day would have had 50 distinct markets for ordinary shares.

In the case of CMC Holdings the situation is rather unusual in that the shares were suspended on 16 September 2011, which is 745 days or well over 2 years running without an opportunity to trade! That is a very long time for a market not to exist when there are willing buyers and sellers.

The reason we establish stock exchanges is to ensure a safe, smooth and orderly mechanism exists within which to trade in securities. Various rules and regulations as well as governing laws are put in place to deliver the framework that allows various actors to participate in this financial sub-sector.

The exchange will disseminate at the end of each business day the transactions concluded in each security. Each company will also release any information on its operations that is deemed necessary for investors to consider in arriving at what investment action to take with regard to a particular company.

The ruling price for a share will then reflect the aggregate view of the participants in the stock exchange. So if over a period of time the share price of a company maintains an upward trajectory then it is generally accepted that the market views a company favourably.

The key element here is that the company will at all times and in a continuous fashion release material information to the public and leave the investing public to draw its own conclusions as to appropriate price for its shares.

This process is particularly useful to those investors who are not very sophisticated as they will follow the market trusting that the more savvy investors will determine and drive the share price to an appropriate level.

Company management will also learn what investors think of their performance by reviewing movement in share price. This signalling effect from changes in share price is also used by other companies who are looking to acquire listed businesses.

The Al Futtaim takeover offer of CMC Holdings is priced at Sh13.00 which is 4 per cent lower than the last trading price of Sh13.50. For the ordinary investor the long-running suspension of CMC, robbed her of the opportunity to continuously asses and re-price the company’s shares.

The need for the initial suspension was clear but the maintenance of the suspension was unnecessary as long as the company continued to release relevant information.

This market price feedback would probably have given management crucial indicators of the options that exist within the exchange to plot a new path for the company.

Thanks to Al Futtaim we now know there is value in CMC but in a sense it is one sided as they are the only buyers in sight

Westgate attack earns Uhuru Kenyatta fresh support

President Uhuru Kenyatta addresses the nation following the Westgate attack. FILE 

By AFP

In Summary

• President Kenyatta has showed mettle that won him support beyond his tribal constituency.

Until the Nairobi mall carnage, President Uhuru Kenyatta was a beleaguered and divisive president. But his own bereavement and new clothes as commander-in-chief have earned him fresh support and, some say, a "get out of jail free card" for the International Criminal Court.

The deadly September 21 raid on the Westgate mall brings new challenges to the government, which now has to explain why it failed to act on repeated warnings and find ways to thwart future attacks.

But President Kenyatta himself, who lost his nephew and his fiancée in the siege, has showed mettle that won him support beyond his tribal constituency.

"I did not vote for him but I have to say he showed real strength and determination. I was proud," said Alex Odhiambo, a young taxi driver, said the day after The Head of State announced the end of the siege.

"This attack has been a tragedy for him too and people across the country have been impressed that his ability to govern was not affected," said Mwalimu Mati, who heads the government watchdog Mars Group Kenya.

In his speeches to the nation during the crisis, President Kenyatta spoke of his loss, called for national unity and vowed to punish the perpetrators.

"Whether the security operation was well handled or not has not yet been laid at his feet. He sent the right signals, looked in control. Presidential," said Mati.

Not only has the 51-year-old scion of Kenya's founding president earned his stripes, he is now likely to enjoy better support than usual from his traditional enemies.

As the country held its breath while the drama unfolded inside the mall, The President strove to cast himself as the leader of all Kenyans and not just the champion of his tribe's interests he has often been seen as.

'The perfect doctor's note'

The ratings agency Moody's said it was not all doom and gloom on the economic front either. It said it expected the attack to "galvanise a broader mandate and dull the international and domestic political effect" of President Kenyatta's impending trial at the International Criminal Court (ICC).

President Kenyatta was due in The Hague in November to face charges of crimes against humanity over the deadly tribal violence he is accused of having stirred after a disputed 2007 presidential election.

The Hague refused to postpone his trial after the attack but observers say he will be in a much stronger position to argue that he is now the guarantor of Kenya's unity and that the country needs his leadership.

"Kenyatta has the perfect doctor's note," a diplomat said.

With a string of key witnesses retracting or being compromised in dubious circumstances, the ICC case against President Kenyatta and his foe-turned-deputy William Ruto had already been losing steam.

Court bars NSSF from hiring new CEO pending case

Former NSSF managing trustee Tom Odongo moved to court on September 23 to block the fund from replacing him. FILE  NATION MEDIA GROUP

By GALGALO FAYO

The National Social Security Fund (NSSF) has been stopped from recruiting a new chief executive until a suit filed by the immediate former managing trustee Tom Odongo is determined.

Industrial Court Judge Nzioki wa Makau suspended the process on Monday until November 1 when he is expected to deliver his ruling on the case filed by Mr Odongo challenging his dismissal.

The fund in a newspaper notice invited applications for the position that is currently held in an acting capacity by Hope Mwashumbe.

(READ: NSSF starts search for chief to replace Tom Odongo amid row)

“The counsels for the NSSF and cabinet secretary have provided an undertaking not to fill the position until November 1, when the ruling will be delivered,” states the undertaking adopted by court as an order.

The lawyers representing Labour Cabinet Secretary Kazungu Kambi and NSSF took the undertaking which was adopted as orders of the court.

The undertaking follows an application by Mr Odongo through his lawyer Geoffrey Oriaro on September 23 seeking to stop NSSF from recruiting a new CEO until the suit he filed is determined.

NSSF started the process of replacing Mr Odongo who was sacked on July 22.

Mr Odongo had moved to court to block NSSF from replacing him and it remains unclear whether the fund won the right to proceed with his replacement.

(READ: Sacked NSSF boss moves to block hiring of new chief)

NSSF has published higher qualification standards for its next CEO in line with the draft NSSF 2013 Bill that is set to be discussed in Parliament amid opposition from employers and workers’ representatives.

Prospective candidates must now have a Masters degree in a commercial, management, or equivalent fields from a recognised university.

They also require at least 10 years of work experience at managerial level in pension, banking and investment sectors in an organisation similar to the size of the Sh130 billion NSSF.

(READ: State raises the bar for next NSSF boss, sets term cap)

The higher qualifications come as the government moves to enshrine the minimum qualifications of NSSF managing trustees in law for the first time

VAT raises inflation to 8.29 per cent

A man shops for milk and bread at a kiosk in Nairobi. Inflation rate surged to 8.29 per cent in September from 6.67 per cent in August. FILE 

Introduction of VAT pushed up Kenya's rate of inflation to 8.29 per cent in September from 6.67 per cent in August and marked the highest level in 15 months.

Data from the Kenya National Bureau of Statistics (KNBS) shows that food, electricity, transport, and housing recorded some of the highest price rallies since the introduction of VAT on more than 400 goods that were previously exempt.

“The implementation of the VAT Act and seasonal factors affecting supply of common food crops were the main causes of rise in the food index,” KNBS said in a statement.

The price of milk rose by the highest margin, with a 500ml packet of the commodity costing an average of Sh57.43 last month or 22.1 per cent higher compared to Sh47 in August.

The Kenya Revenue Authority introduced VAT –a consumption tax— on September 2 to simplify the tax code and raise Sh10 billion annually from the previously exempt items.

Purge exposes top parastatal posts as Kenya’s most unstable public jobs

Former Kenya Bureau of Standards (Kebs) boss Eva Oduor. Photo/FILE

In Summary
Since the Jubilee government took power, five holders of top State assignments have been sent home
There is need to revise the State Corporations Act to reduce