The Kalonzo Musyoka Factor

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A recent quick survey I carried out amongst Nairobi voters brought me face to face with one reality that cannot be ignored. I will present it in the form of a question; how many voters will shift to President Kibaki in the event that Kalonzo Musyoka is NOT the ODM-Kenya presidential candidate and it turns out to be Raila Odinga instead?
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Also published today

Little known secrets about the Safaricom cash machine

Quip for the day;
From my experience the people who really know it all frequently answer questions with the words, "I don't know."
Kumekucha
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According to my survey a sizeable 30 per cent of the vote in Nairobi hangs on the balance and could go either way depending on whether Raila or Kalonzo is the ODM candidate.

I find this analysis fascinating because although Nairobi is not the entire country, past trends have clearly shown that it affects how the rest of the country votes. I would love to do a survey covering the whole country to measure this Kalonzo Musyoka factor, only that I do not currently have the resources or capability of doing so, and besides most of those outside Nairobi do not have access to email.

Kalonzo Musyoka also has a number of other things going for him. One is the powerful support he has from the high and mighty in the country who would favor his candidature over that of Raila Odinga. The truth is that there are still too many Kenyans who are unsettled about a Raila Odinga presidency.

I questioned some of the respondents to my survey as to why they found a Raila presidency so unsettling and their answers were so vague that clearly one has to look elsewhere for the real reason. Most voters said that Raila is not suitable for the presidency (one actually said he is not "presidential enough").

As I have been saying in this blog for a long time now, propaganda is a very powerful tool and it has done its' work pretty well in this case.

Back to the question I started with. These undecided voters waiting for the ODM presidential nominations, are they large enough in number to decide the presidency? Raila supporters say "No" while supporters of Kalonzo say a loud "Yes."

Kumekucha says that this is probably the ideal situation for those in ODM to start considering a compromise candidate that would keep both Kalonzo and Raila supporters firmly in ODM.

(To read more about the Kalonzo Musyoka you don't know, visit our archives by clicking on the link at the beginning of this article.)

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Little Known Facts About The Safaricom Cash Machine

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Anybody who is interested in studying business management and strategy will do well to take a close look at Kenya's two cell phone companies namely Safaricom and Celltel (formerly Kencell).

There are many mistakes that Kencell made right from inception the main one being the controversial per second versus per minute billing, but for the purposes of this article I would like to focus on a simple strategy that has worked for decades and for many businesses all over the world, which Safaricom is successfully pursuing.

Let us start in India, shall we. About 3 decades ago everybody in India knew that detergents were for the affluent and the mass-market preferred bar soap. A company called Nirma came along and challenged this long held belief and started manufacturing detergents targeted at the low end of the market. They made a fortune.

Let's come back to Kenya in the 90s. Banks were making easy-no-risk profits from government treasury bills, which at one point yielded returns of up to a staggering 80 per cent. So some shortsighted bankers who believed that the party would never end felt that the low end of the market was unviable to serve and a nuisance. Minimum balances required to maintain saving accounts were steeply hiked and thousands of accounts were closed (many Kenyans could not afford to run current accounts with the steep charges of those days and so everybody used a savings account like a current one). The bankers justified it all with the return on investment calculation per customer. After all TBs as they fondly came to be known were bringing in 80 per cent guaranteed no risk returns. Shareholders enjoying record windfall profits (thanks to the TBs and stupendous bank charges) did not question the long-term wisdom of this strategy.

For a time most Kenyans felt totally frustrated. Smaller banks tried to go for this market but recent bank failures of local banks were still fresh on the minds of many, so it just couldn't fly. Along came a small new unknown bank called Equity Building Society. They carefully targeted customers who required a bank to receive their salaries and then also aggressively went into the financing business for the mass market. The "nuisance clients" that the big banks had chosen to throw out of their banking halls. Within a very short time Equity (which had hurriedly been renamed Equity Bank) had gained the full confidence of the masses. After all people who were able to loan money so easily would surely not collapse, was the feeling amongst the public.

Today you know Equity Bank as the fastest growing bank in the region. But there is a new kid on the block and he's not even a bank.

Investigations by this writer indicate that the new M-Pesa money transfer service by Safaricom is rapidly becoming the most profitable business for the mobile phone provider. But M-Pesa is more than just a money transfer service. You can save money and keep balances in your account without the annoying monthly ledger fees that banks are fond of charging. And there's more; emerging evidence suggests that many Kenyans wary of the insecurity countrywide are now carrying their cash in safaricom sim cards. So even if your cell phone gets stolen, when you arrive where you are going, all you need to do is borrow a cell phone and you can then easily access your M-Pesa account the minute you insert your sim card into it.

For those who understand banking well, you will know that a major challenge for banks has been the question of maintaining branches which has tended to eat up profits tremendously. The situation has not been helped by the poor road networks and the mounting insecurity in the country, which makes every branch outside Nairobi a very high risk preposition. With Safaricom's M-Pesa, the company has a branch in every small retailer in every small town who carries the M-Pesa sign.

My teenage son has this expression which he uses to mean that somebody is so way ahead that nobody can ever catch up. He says, "It's all over." Actually for Safaricom versus the competition, it is all over. Not only is the cell phone company a very profitable communications concern, but now it is also a fully-fledged bank as well, serving a huge mass market.

What this means is that the Safaricom finance department has started doing what banks do. That is customer balances not required immediately are invested elsewhere for hefty returns. How about being in the market for overnight lending to banks and financial institutions?

When the Safaricom IPO finally happens, don't even waste your time looking at the prospectus and pretending to analyze this cash machine.

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