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Not for the faint hearted: THE TRUE STATE OF OUR ECONOMY

 

The Kenyan economy was already on its knees by the time covid-19 landed on our shores.
We already had companies shutting down and thousands of jobs were lost.

1. KENYA POWER:
– In May 2013, it was reported that Mama Ngina was Kenya Power’s 4th largest individual shareholder with 2.2mn shares trading at Sh16.55 a share.

– After 7 years of mismanagement and fraud, KP’s shares now trade at Sh1.90 with Sh25bn+ lost in value.

– I have asked you several times on this platform….have you checked your electricity bills lately? Ehe…..
Well, Queen Bee is trying to recover her money…and you dear Kenyans, mtalipa…mpende msipende!

2. TRANSCENTURY:
– Transcentury was listed on the Nairobi Stock Exchange (NSE) in 2011, at Sh50 per share.

– By 2013, the shares were at Sh35.
As of 2020, the shares are now trading at Sh1.80, with plans to exit NSE.

3. HOUSING FINANCE:
– Housing Finance seemed poised to ride the ‘housing boom’…….
However, with a weakening economy, even the roughly 25,000 mortgage holders have struggled to stay afloat.

– HF’s shares hit a high of Sh37 in 2014 before dropping to the current Sh4.00/share.

– There are increasing cases of payment defaults and slow uptake of new units.

4. KENYA AIRWAYS (KQ).
– In June 2013, Kenya Airways made a Sh7.86bn loss and announced that shareholders would not receive a dividend for the first time in 14 years.

– With annual revenues at Sh98.8bn, KQ was the third largest firm in sales behind Kenol Kobil and Safaricom…
As we speak, KQ is, as usual, appealing to the government to rescue it via cash injections!

– KQ shares were suspended from the NSE in July 2020.

– This week, Kenya Airways announced a Sh14.33bn net loss for the half year to June 2020.
This brings the airline’s total losses over the last 7 years to Sh108,050,000,000 even as the government moves forward with a nationalisation plan.

5. HOME AFRIKA:
– Home Afrika shares rallied to Sh25 per share when it listed in July 2013.

– By September of the same year, the share price had fallen by 50%.

– It’s been a downward slide since then, with the firm cycling through CEOs, struggling with unfinished projects and its shares now trading at a mere 44 cents!

6. SAMEER GROUP:
– In October 2013, supply difficulties led Bridgestone to end its partnership with Sameer Africa.

– In 2016, the NSE-listed Sameer Group closed its Yana Tyre manufacturing plant.

– In May 2020, Sameer shut down the distribution business, and in the process, 125 jobs were lost.

7. TATA CHEMICALS MAGADI:
– In May 2014, Tata Chemicals Magadi Soda, founded in 1911, announced that it would scale down its operations leading to a loss of 200 jobs and Sh4.4bn in forex earnings.

– The company blamed high operating expenses including power costs, for its woes.

8. HSBC:
– In July 2014, the Hong Kong Shanghai Banking Corporation (HSBC), formally exited Kenya, three years after it set up operations.

9. SUGAR COMPANIES:
– It’s a well known factor that 5 government-owned sugar firms owed about Sh100bn in loans, as mismanagement and dumping of illegal sugar escalated:

1. Nzoia Sugar: Sh37bn
2. Miwani Sugar: Sh28bn
3. Muhoroni Sugar: Sh27bn
4. Chemelil Sugar: Sh5bn
5. Nyanza Sugar: Sh3bn

– The money is owed to the government, banks, suppliers, Kenya Sugar Board and cane farmers.

– As of September 2014, the iconic Mumias Sugar had been looted dry.
At its peak, the NSE-listed firm had 60% of the market, Sh2.6bn in profits and a share price of Sh60.
Mumias is the story of corporate looting at its finest.
As Mumias failed, 70,000 farmers uprooted their cane and thousands of jobs were lost.

– We saw Sh12.5bn in loans defaulted and Sh72bn+ in stock value erased, not to mention billions in failed govt bailouts.

– To add salt to injury, the workers who gave their all to Mumias, received Sh20,000 each in terminal dues in Dec 2019.

– It should never be forgotten how the then MD, Evans Kidero and his successor, Peter Kebati, ignored repeated calls by auditors and the company’s board of directors to seal gaping corruption loopholes.

10: EVEREADY:
– In September 2014, Eveready announced it would shut down its Kenya manufacturing operations and instead import products from Egypt.

– 99 employees at its Nakuru manufacturing plant lost their jobs as a result of this shut down.

11. CADBURY
– In October 2014, Cadbury’s shut down its Kenya manufacturing operations.

– The move saw 300 people lose their jobs.

12. TELKOM:
– In early 2015, Telkom Kenya had 1,600 employees.

– By December 2015, the company had let go of 500 employees in a layoff, with more leaving in latter years.

13. DUBAI BANK:
– In August 2015, Dubai Bank, founded in 1988, was placed under receivership when it was found to be insolvent with over half its loans, including Sh495mn owed by Cyrus Jirongo, deemed irrecoverable.

– Dubai Bank went down with Sh1.7bn in depositor funds.

14. CHASE BANK:
– In April 2016, Chase Bank was placed under receivership amidst claims of financial impropriety, putting 1,300 jobs and assets of over Sh100bn at risk.

15. KARUTURI FLOWER FARM:
– In May 2016, two years after being put under receivership, flower giant Karuturi laid off 2,600 workers. It had struggled for years to service a Sh400mn debt owed to Stanbic Bank.

– I just don’t want to imagine the agony that the 2,600 workers went through after they were fired.

16. SOFTA:
– In 2016, Peter Kuguru, founder of Softa Bottling Company put out feelers for a strategic partner but later shut down his factory.

– At one point, the 20-year old company had 10,000 workers working in over 1,000 depots.

17. BRITAM:
– In 2018, Britam laid off 110 of its employees.

– The company recently announced a Sh2.4bn half-yr loss.

18. DEACONS:
– In November 2018, the NSE-listed fashion retailer went into administration after it collapsed into insolvency with debts of Shs1,000,000,000.

– In May 2019, the chain shut down all stores bringing to an end a 60-year presence on the Kenyan market.

19. IMPERIAL BANK:
– In April 2019, KCB paid Sh10B to acquire Imperial Bank.

– The bank collapsed in 2015 as rampant theft by the management, in collusion with regulators led to the loss of over Sh35bn in deposits, impacting hundreds of jobs, livelihoods and Sh70bn in assets.

20. NAKUMATT:
– CEO Atul Shah tried every excuse to explain its failure – from the 1998 fire to the Thika Road demolition to the Westgate attack.

– The supermarket chain, established in 1979, was once a landmark across many towns in East Africa.

– The reality for Nakumatt, which went down with over 60 outlets, 7,000 jobs and Sh30bn in supplier debt, is however a lot more simpler.

– It appears that it was never really a supermarket by the time it came tumbling down.

– Nakumatt’s fall is linked to money laundering and poor corporate governance.

– The disruption that happened following the closure of Charterhouse Bank was a major factor for its downfall.

21.CHOPPIES SUPERMARKET:
– In September 2019, Choppies supermarkets announced plans to close down its 12 stores and exit Kenya

22. MOBICOM:
– Since 2000, Mobicom had been Safaricom’s biggest dealer, raking in over Sh5bn annually.

– In 2010, Mobicom switched to Telkom.

– As the Telkom-Airtel merger fell apart in September 2019, Mobicom laid off over 800 employees citing unfavourable conditions.

23.FINLAYS FLOWER COMPANY:
– In October 2019, Finlays Flower Company Ltd, announced its exit rendering 1,700 workers jobless and taking with it a Sh1.8bn annual contribution to the Kericho county economy.

24. SPORTPESA:
– In October 2019, Sportspesa laid off all 400 workers, a month after Betin laid off 400 of its own.

25. AIR AFRIK:
– IN October 2019, Air Afrik announced 200 job cuts in Kenya.

26. SECUREX:
– In October 2019, Securex announced that it would let go of 222 workers.

27. SILVERSTONE AIR
– In November 2019, Silverstone Air announced that it was getting rid of all its pilots and crew, with an imminent shutdown of its operations.

– In January 2020, the airline announced operational redundancy.

28. UCHUMI:
– 45-year old Uchumi, whose name was once interchangeable with ‘supermarket’ went public in 1992 and the shares hit a high of Sh52 in 1995.

– In 2015, the chain had 4,500 employees and 40 branches.

– As we speak, Uchumi is no more.

29. TUSKYS:
– Tuskys hasn’t fared very well either. As family squabbles take centre stage, the supermarket chain has lurched from crisis to crisis with the only plausible end in sight being a strategic investment partner or an Uchumi-like meltdown.

30. SHOPRITE:
– In April 2020, Shoprite closed its Waterfront Mall store in Karen followed by its Nyali store in early August where it laid off 115 employees.

31. TULLOW OIL:
– Having discovered oil in the South Lokichar Basin in March 2012, Tullow Oil embarked on an early export pilot scheme in June 2018.

– And even though the $12mn earned went into offsetting production costs the dream of oil riches lingered in the air.

– In Dec 2019, Tullow Oil ran aground, management stepped down and the stock lost 50% of its value.

– In Jan 2020, the company announced 325 layoffs before presenting GoK with a Sh204bn invoice and plans for a possible exit later in the year.

– Kenya’s oil dreams remain just that…..dreams!

32. EAST AFRICA PORTLAND CEMENT:
– In May 2020, East African Portland Cement announced layoffs after a Sh3.2bn loss in 2019 and a negative asset position of Sh9.5bn.

– A softening construction sector had taken its toll on this company.

33. MEDIAMAX:
– In June 2020, Mediamax announced it was letting go of about 100 employees followed by Nation Media Group also announcing layoffs.

34. UNILEVER:
– In August 2020, Unilever intimated that it may scale down its Kenya operations significantly.

– This means that more than 60,000 Unilever Tea workers are about to lose their livelihoods.

By August 2019, things were already difficult and 15 listed companies announced that they were not making enough money signalling tough times ahead.
2020 materialised all their worst fears.

At the end of 2019, over 7,000 employees had been laid off from notable employers who cited restructuring, reduced profits, hostile business environment, and high cost of labor and production as the reasons for the retrenchment of workers.

As a nation, we are not doing well economically. I wish the President is brave and honest enough to tell us the truth and not lie to us that the economy is growing despite the covid-19 pandemic just to agitate for his political agenda.

Kenya is sick! Kenya is in ICU!
You can’t rig the economy!


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