The Bitter Option Indeed!

Read another recent post by Chris: Is this what the government is doing with US dollars?

Safaricom strategy at the expense of Kenyans: Sustain big fat profits at all costs!!

It is now cheaper to call a Safaricom subscriber from rival Yu or Zain lines! Yep cheaper by a whole shilling than it is to call the same Safaricom subscriber from a Safaricom line. This is all in the latest effort by one of the most profitable enterprises in the history of East And Central Africa to further jack up their stinkingly huge profits. It matters little to them that Kenyans are going through the hardest of times hit by a free falling Kenyan shilling and inflation that is stubbornly pointing north.

You would think that such a creative company would find other more creative ways of sustaining their obscene revenues and profits. It may not be easy for most Kenyans to picture just how much money Safaricom is already making from Kenyans. And so let us take their revenue in the last financial year. If it was to be distributed to all Kenyans we would all get slightly over Kshs 2,000 each!!! Including your small two month toddler!!

But the really fascinating thing about Kenyans is that they have opted to stick with the bitter option and in effect frustrate the initiative towards lower calling tariffs. You would have thought that Kenyans would actively support low tariff networks like Yu, but it seems that it has all become an image game and everybody wants to show that they do not have any cash problems by sticking to Safaricom, no matter how bitter the experience is in reality.

Could This Crazy Story Be True?

As most of you already know, this blogger relies a lot on tips and information given in confidence to stay ahead in this game. I classify my informants into two general categories going by the track record of the reliability of their information. These categories are “reliable” and “unreliable.” And even then I try my best never to publish any information until I have verified it from at least two independent sources. It is always very difficult to verify some of the crazy tips I receive and most of it is impossible to check out.
When I cannot confirm the accuracy of a tip I will usually just file it away for future reference.

I always get amazed at how tips re-emerge many months later and turn out to be pretty accurate, even when they have come from very unreliable and untested sources.

I will never forget the most ridiculous tip I have ever received for the Kumekucha blog. It came a few months before the disputed 2007 presidential elections and it came from a source that was usually very unreliable. I was told that President Kibaki would steal the presidential elections and would win by a very thin margin of about 200,000 votes or less. That was ridiculous, I said to myself. Surely whoever crafted such a plan would see the blood bath that would result if anybody were to try out something so recklessly stupid. President Kibaki was many things but surely he would never sanction something as crazy as that, I told myself.

Still the warning bells went off in my head and I decided to sound off the tip with somebody who knew the president very well. Their reaction shocked me.

“It is very possible. He has done it before.” They went on to refer me to a little know story I had never heard of, about a parliamentary election in Nairobi in 1969 where Kibaki lost to a woman.

The second person I called gave me the right reaction I was looking for. They laughed. “You have to be careful about these sources of yours, that tip is more appropriate for comedy.” When we hang up, the person was still laughing. “You’ve made my day with that crazy story of yours,” they said.

Today I want to share a very crazy tip with you guys.

Months ago. When the Kenya shilling was still very firm against the US dollar somebody whispered something crazy into my ear. I shall call my informant the mathematician. Our conversation went something like this.

Mathematician:- Get out your calculator I have a story that is too hot even for Kumekucha.
KK;- Really?
Mathematician:- Imagine a situation whereby you wanted to raise a lot of money for an election campaign and you were in a position to manipulate the exchange rate. What would you do?
KK;- Am not sure, you tell me.
Mathematician:- The simplest way would be to accumulate all the dollars I would get my hands on, beg borrow and even steal. Cause the shilling to dramatically depreciate, cash in and then after a few months of crazy profits proceed to cause the shilling to recover. Mission accomplished. Check out that story.

To be very honest, I found this the most ridiculous story I had ever heard. Everybody knows that even the government can not really manipulate the exchange rate. And so I made only one call. When I am looking for information I never make the classic Kenyan journalist mistake of wanting to look intelligent. I play dumb and it works very well. And so the guy on the other end started giving me a long lecture on monetary policy at the end of which I was almost sound asleep. I was barely conscious enough to say my thanks and hang up. End of story.

But last night I started looking carefully at the chain of events that have taken place since the shilling went on a free fall. I paid special attention to the reaction of the government and especially the carefully choreographed events of the past week or so where Central Bank has thrown the ball to the Finance Minister who has promptly acted. Now as far as I know these are guys who should have been talking to each other behind the scenes since they came into office. Indeed there are those who believe that these conversations are carried out in the common mother tongue all these guys share so as to eliminate the possibility of any misunderstandings about the monetary policy going forward (but that is a story for another day.)

At the end of my careful analysis, I remembered that ridiculous tip I received months ago from the Mathematician.

And so when somebody called me to ask me what was happening about a new post, I decided to share with you good people, about what I am following up currently.

Will keep you posted on this ridiculous and very possibly false tip that has stubbornly refused to stay filed away with the other “absurd” tips.