Luvei Times Kenya's Social Online Magazine

Kengen development plan has no sparks

Kengen monopoly is retrogressive to Kenya's economy

In two mama mbogas mama Ciku and mama Atieno are selling tomatoes and mama Ciku finds that mama Atieno had lower prices she would immediately embark on a mission to find out what her secret was. Was it her source? Was she using cheaper transportation? Was she targeting higher volume sale thus she could do with less profit per unit tomato but sell a larger volume? Was she using tomatoes to lure customers and then sell them other goods? These are some of the questions that will come to mind in mama Ciku’s world. On the other hand if Mercy operating a cyber café finds that Simon next door has a lower hourly rate than hers will elicit similar tribulations. Was Simon using nefarious tricks like using slow computers so that the clients have to stay longer. Or did he use his negotiation skills to get a lower rent thus reducing his overheads? This are some of the questions that will Mercy will be jostling around in Mercy’s world. These scenarios are some examples of business people grapple with in the world of everyday Kenyans the famous wananchi or “my people” as many politicians like to refer to them.

Kengen monopoly

Enter Mr. Eddy Njoroge CEO of Kengen the national company that has the monopoly of distributing power in Kenya. His company is facing a massive problem in terms of competition from Ethiopia. Electricity from Ethiopia costs 4 cents per unit while that of Kengen is not 8 cent per unit or 40 cents per unit but a whooping Sh 2.40 per unit !!! That is 6000 % more. In the mwananchi’s world one would ask what is the catch do they have lower overheads, tax incentives, better technology, cheaper inputs, larger markets? One would even venture that they were using more nefarious methods like using prison labor but we are not in mwananchi’s world we are in Eddy Njoroge’s world; let’s call it Eddy’s world. His instinct is to petition the government, which has created his monopoly, to stop the process of buying from Ethiopia because this would lead to its (Kengen’s) downfall (thank you for your insight Captain Obvious) (“Ethiopia’s low-priced power alarms KenGen” The Standard December 01, 2009). This would be like buying tomatoes from mama Ciku yet next to her mama Atieno is selling similar tomatoes at a cheaper price.

Nairobo Stock Exchange

Eddy Njoroge is the whiz kid behind the still mystery shrouded Trans-Century. This group is perceived, rightly or wrongly, to be profitable because of its connection to the powers-that-be and not their business acumen. With this kind of thought process I think more and more credence is being hipped on this perception. This is not an attack on Eddy but on his principles and thought process. Unfortunately most of our politicians and current establishment are firmly entrenched in Eddy’s world. Not only is Eddy the CEO of Kengen but he also is the Chairman of Nairobi Stock Exchange (NSE) another institution that has a very low public opinion. This way of thinking has very tangible results according to the industrial secretary, Mr. John Mosonik, talking during a media briefing on the Jitihada program the high costs of electricity are making micro, small, and medium enterprises less competitive than their Asian counterparts (“High power costs stifle SME growth”, Daily Nation Business News December 15, 2009). This is costing hardworking Kenyans both an opportunity to earn a living as entrepreneurs and robbing of more Kenyans jobs.

Do you as an investor feel confident in an institution whose CEO is more concerned about trying to use the government to keep it afloat instead of making the company more efficient in delivering services? I would certainly have no confidence in such a company.