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February 23, 2019

Foreign Investors Have More Faith In Kenya Than

This week, two things of note occurred; one, a bunch of misguided Kenyans set upon fellow citizens in an orgy of destruction and plunder, in the coastal area of Lamu and in the Rift region of Baringo. Second, a battery of foreign investors oversubscribed Kenya’s first Eurobond four-fold, offering close to Sh700 billion against the up to Sh174 billion Kenya was seeking.

While the second instance demonstrates enormous confidence in Kenya’s fortunes by foreign investors, the first one, and the angry but divergent reactions of Kenyans that followed, demonstrated a worrying lack of faith in the national experiment that is the Republic of Kenya.

The Financial Times of London, a newspaper, reporting on the success of Kenya’s Eurobond, said: “Kenya’s debut $2 billion bond breaks Africa record (for a debut entry into the international markets) amid strong demand from pension funds, insurers and sovereign wealth funds seeking higher-yielding assets."

The point is that these investors are willing to bet money invested for retirees and future generations from their countries on Kenya, fully expecting to get their money back and at better interest rates than they would have realised at home.

Contrast this with the running theme in Kenya’s national conversations over the last few weeks. It has been one of garrulous disagreements, threats and sensational claims that the country is going to the dogs.

A newcomer seeking to educate themselves about the country through newspaper headlines and social media debates would be forgiven for thinking this is a banana republic.

So, why are shrewd investors betting their money in this seemingly cauldron of ethnic strife and destitution, a sure path to parting with their hard-earned money?

My take is that they are applying common sense and focusing on the important issues while we are busy arguing over small, inconsequential matters.

It is why in 1884 European powers could sit around a table in Berlin to partition Africa amongst themselves, and in 1893 Waiyaki wa Hinga was buried alive in Kibwezi, Mekatilili wa Menza of Malindi was exiled to Bungoma, Koitalel arap Samoei was assassinated and the Kager were being neutralised long before they begun realising they were victims of the same policy to fight back together. Yet earlier, they would have fought each other bloody battles over minor fiefdoms.

It is why, when Che Guevara, a Latin American revolutionary, arrived in the Congo in the 1960s to help fight what he saw as American imperialism, the ragtag fighting groups he found pigheadedly refused to consider they could be pawns in the US-USSR tug of war over control of uranium fields. Instead, they told Che Guevara that their grievances were with the neighbouring tribe and that they had been enemies for many years hence the fight. Frustrated, he left.

It is why, before the World Cup begun, Cameroonian players, being one of the five squads representing Africa in the global showcase, refused to board their plane to Brazil demanding heftier perks. They have so far performed dismally and are already out after two games, the last a humiliating 4-0 thrashing by Croatia, in which indiscipline saw one of them sent off and two others (team-mates) fight on the pitch – embarrassing an entire continent. These players from the get go could not see the bigger picture and the opportunities such a global platform offered them to sign lucrative contracts with different clubs. Instead, they chose to focus on short-term individual needs.

Back to Kenya; our singular narrow-mindedness when it comes to discussing national issues and possibilities that can be achieved collectively has helped us only to consistently miss the bigger picture and waste time, resources, lives and property over worthless short-term chest-thumping rights.

Incidences like the Lamu and Baringo ones, and countless others, end up costing us greatly – either we donate willingly to the Red Cross for relief to the victims, or we fund our government through taxes to mobilise security forces, and house, feed and resettle the affected.

This lack of focus is what keeps us poor, and somewhat naïve. Too much effort is spent on meaningless politicking. Thus, instead of attending the currently ongoing county budget hearings to give our opinions on how devolved resources should be spent this year, we will be talking national politics revolving around two irredeemable views, only to turn around and accuse county governments of lacking priorities when they go ahead to spend the money as they deem fit.

Similarly, not many of us will ask how this $2 billion (Sh174.82 billion) we have just borrowed through the Eurobond will be spent, and on what.

Which is probably why, instead of lending money to the Crown of England like Angola is doing to its former colonial master Portugal, we are still borrowing from the London Club.


The writer comments on topical business issues.

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