.....things. What a week!

There's been a lot this past week, and then there's been this...

"This is it. This is it. This is really it. This is the final curtain call." -Michael J. (march 5 2009)

And that was it.

Sounds as if it was a prediction.

Remembering the beautiful Neda

We've seen the green colour, the defiant crowds, the wounded, people trying to take cover from uncontrollable weapons of the Basij militias and police run away from the angry crowd. We've heard voices of people demanding for their rights, not only from that messed up election but also from unfair treatment of many. But, all that don't speak volume or didn't even come close to that touching, heartwarming moment of the graphic video of Neda, dying on the street. People who came to her rescue begged her to respond to them. Neda didn't and will never respond again. She went quietly and became the international icon of many who want their voice to be heard.

Neda has become the new face of Revolution. The beautiful 26 yrs old University student, is one of those who died trying to fight so that...they can be heard. That's all they wanted, a chance to speak up their mind. No word if she's the only woman who died in this on going chaos, or is there any other? There is a vast majority of female protesters, yes, female protesters, in the upraising against this regime. The beautiful face of Neda represents hope, light, justice, peace and so on and so forth. The young, beautiful people like Neda with their addiction to all things technology, are becoming the voice of the future if not a bright future. But why do they have to be provoked, poked and incited in a way that will cost their lives or other people's,? There is no way to engage them so they don't feel left behind and then retaliate? Young people tend to power a lot of things, be it elections or any kind of movement against the elites, the mullahs, lords of the world who think they can't be touched. However, I think time has changed. It's a speak up moment. Wahusika with their right minds should've known that.

The fate and political lives of Ahmadinejad and Mousavi were in Ayatollah's hands. Eventually, he was the one to decide the election, he has the last say. Him. Wouldn't it be fair to then, satisfy the wish of many? This obviously sounds like it comes from a mediocre person but, what's the point of voting then if the election can be decided by one person or a group of few people? This happens not only in elections but everyday. Regular people are not given a chance they deserve to speak up and share their opinions when it comes to decision making, for their own country.
But, you know what? no matter who decides the outcome of the election, if it's the Ayatollah or the supreme court. If people want to get their message across they'll do it. And the people of Iran did just that. Neda took with her the voices of the downtrodden.

Open Letter to IMF

I saw this letter today and it stimulate my mind. I think we can debate about the necessity of our government to disclose Tanzania debt to the people of Tanzania. Also before our government decides to borrow any money from International Financial Institutions, the people of Tanzania should be informed through Bunge. At the end of the day it's not the government which end up to pay the tab, it's the people of Tanzania.
Enjoy the Peace from Mwalimu Mati

Mr. Dominique Strauss-Kahn
Managing DirectorThe International Monetary Fund
700 19th Street, N.W.,Washington, D.C. 20431
For the attention of the Board of Directors
Through W. Scott Rogers, IMF Resident Representative to Kenya.

Dear Sir,

Re: Loan request by the Republic of Kenya for US$100 million
We understand that the Kenya government has applied for an emergency credit for US$100 million to cushion its currency from the International Monetary Fund. We also understand that this application is due for consideration at your next board meeting. The Partnership for Change is concerned that while Kenyans continue to demand accountability from the Government of Kenya on our public debt, the government continues to ignore the public and continues to borrow and indebt the poor people of Kenya.

The position of the Partnership for Change is that transparency requires that Kenyans know what they owe, to whom they owe, and for what purpose they have a debt. The Partnership for Change wants no further contracting of international debts unless and until the government of Kenya accounts to the people of Kenya through parliament by tabling the complete list of all loans and debt registers for the period 1963 to date for public scrutiny. We also want the law amended before any further borrowing, so that it is illegal for the government of Kenya to borrow without prior parliamentary approval and full debate on the merits of the borrowing. We request that all future lending to Kenya be pegged to accountability and transparency. We submit that that most of the debts that Kenya is listed as owing are bogus, corrupt debts, which have impoverished Kenyans who repay these debts annually to the tune of 24 per cent of our national budget. The effect of making poor, starving Kenyans pay these unconscionable debts can easily be described as a crime against humanity.

It is in this context that we write to your organisation as hereunder.

Three years ago, when he was the junior senator for Illinois, US President Barack Obama, famously said in Nairobi that ‘while corruption is a problem we all share, here in Kenya it is a crisis – a crisis that is robbing an honest people of the opportunities they have fought for – the opportunity they deserve.’ If he were to visit Kenya today, he might feel that the situation is no longer a crisis but has reached the tipping point. In fact, corruption in Kenya is no longer a crisis; if one understands crisis to mean that point where there is some hope of recovery should the government intervene. We believe that corruption in Kenya is akin to a terminal cancer that has become malignant, and the government doctors attending the patient are administering placebo treatment, allowing the cancer to spread institution by institution. Among these institutions are the treasury and the ministry of finance whose debt management leaves a lot to be desired.

Aggravating the situation, President Mwai Kibaki and Prime Minister Raila Odinga are in denial as evidenced by their public statements, that the corruption problem in the grand coalition is not serious. The consequences of their denial is that the fight against corruption is not a government priority and Kenyans continue to suffer as impunity for gross economic crimes becomes entrenched to the same extent as during the Daniel Arap Moi regime. Arap Moi’s greatest scandal, Goldenberg, remains unresolved and beneficiaries named in a judicial commission of inquiry remain in cabinet and public prominence. This despite promises by Mwai Kibaki and Raila Odinga.

Nothing characterises such impunity as the treasury or the ministry of finance. It is this department of the Kenyan government that is responsible for the unresolved scandal of the sovereign debt in the form of irrevocable promissory notes worth close to US$750 million dollars that were illegally issued, without legal consideration, to several phantom credit companies in the Anglo Leasing credit contracts. To date these have not been cancelled and the government that is asking you for emergency credit is actually negotiating payments of these bogus debts with the so-called financiers in Europe, in the full knowledge that no credit was delivered to Kenya and that the poor taxpayers are the ones who will eventually pay for these bogus debts.

To add insult to injury the Government is refusing to seek mutual legal assistance from international authorities who are willing to unravel the Anglo Leasing scandal with respect to their nationals. It is public record that among such authorities whose inquiries are being frustrated by the Kenyan authorities, and the Attorney General in particular, are the United Kingdom’s Serious Fraud Office. The Kenyan authorities have also yet to make a serious request for assistance of the United States department of justice, which has in its custody a US national who was involved in Anglo Leasing called Bradley Birkenfeld. The Kenya Anti Corruption Commission has no interest in international asset recovery.

Beyond the failure of investigative and prosecutorial bodies in Kenya, corruption is systemic because the ministry of finance and the treasury are not accountable to Parliament and can keep the contracting of such bogus loans, shielded from legislative scrutiny in breach of the External Loans and Credits Act which requires Parliament to be informed of such debt by the minister of finance. To date, for example, the detailed separate audits of the 18 security related contracts known as Anglo Leasing worth Ksh56.33 billion, have never been tabled in parliament.

But it is not just parliament that has been kept in the dark. The Central Bank of Kenya (CBK) has been side-stepped by the treasury for decades as it borrows recklessly, especially since the mid 1980s.

Section 31 of the Central Bank of Kenya Act states that the Central Bank shall administer any payment agreements entered into by Kenya, and shall be consulted by the government in negotiating any payments agreement. However in contravention of this law, the Central Bank has been kept out of the loop. Although in 2004, the Central Bank was lobbying for amendments to the External Loans and Credit Act to compel the government to consult it in all external loans borrowing, these amendments have never been enacted. So the situation in 2009 remains as it was in 2004. Although the permanent secretary for finance, Mr Joseph Kinyua, said that he issued a circular abolishing the use of promissory notes and to stop commercial credit agreements of the Anglo Leasing type, the government does not have to consult with the Central Bank before it borrows money abroad. In fact the government is not obliged to give full disclosure of external payment agreements it requires the CBK to administer. As regards external commercial public debt, the Central Bank is legally bound to pay without protest so long as the instructions given to the Bank by the government are proper and there are sufficient funds to honour the transaction without querying the underlying transactions.

This is what happened during the entire Anglo Leasing series of payments of commitment fees, principal repayments and interest servicing from 1997 to date. Unfortunately for the Kenyan people whose taxes are the guarantee for sovereign debt, these Anglo Leasing debts are secured by irrevocable promissory notes and legal opinions by Kenya’s attorney general, Amos Wako, which validated them giving consideration for sham contracts drawn by treasury whose sole purpose was to facilitate embezzlement of taxpayers’ funds. An investigation by the controller and auditor general, Evan Mwai, found that not a shilling in credit was ever provided by Anglo Leasing financiers to justify the issuance of promissory notes. Sadly provisions have been made in the current budget to pay some of these debts for money not received and which is certainly not owed. The budget is prepared by the treasury that has approached you for emergency credit.

As if that were not enough, the permanent secretary for finance and other senior treasury officials have told civil society representatives that there are false entries in the country’s national external debt register. These were apparently inserted between 2001 and 2004 and cover the Anglo Leasing type 18 security related contracts. It would appear that despite having cleaned the external public debt register in 2001, after hiring Lazard Brothers the Government of Kenya in just a few years loaded the external public debt register with close to US$1 billion worth of fictitious credit and debts.

Treasury’s pathetic stewardship of our public resources threatens to cost Kenya billions of shillings. If the debt register contains false entries, Kenyans have no way of knowing how much they owe to external creditors and on what terms. In effect the permanent secretary, Joseph Kinyua has disclosed that there is a multi billion shilling hole in our books comprising what are obviously unconscionable debts.

Kenyans are aware that the largest component of our public debt is to the World Bank and the IMF. We want the World Bank and the IMF to lend responsibly and not to continue impoverishing Kenyans. What Kenyans would like to see from the World Bank and the IMF is comprehensive debt relief, with immediate cancellation of our debts to your organisations. Millions of Kenyans are wallowing in abject poverty and indeed are starving, unemployed and destitute. Without transparency in this matter of national debts, there will be little point in continuing to maintain the fiction, now being put about by your institutions, the International Monetary Fund and the World Bank, that the government of Kenya has the capacity or will to unravel this shameful system failure and corruption scandals. Kenyans must stop the abuse of borrowing powers by the treasury. We do not want to borrow US$100 million from the IMF. The Government of Kenya should be reminded that they have provided for a similar amount US$100 million to repay bogus Anglo Leasing and Ken Ren fertiliser factory debts in the current budget 2008/2009. Ken Ren fertiliser factory is a phantom project for which annual payments are being made by the treasury to a bank in Austria and a bank in Belgium. They should use those funds to ‘cushion the currency’. The IMF and the World Bank should not assist the

Government of Kenya in scamming Kenyans.

We therefore respectfully urge you:

1. Not to approve the request by the government of Kenya in its present form.

2. To insist that the following conditionalities apply before the request is considered:

The Government of Kenya immediately demonstrates austerity measures, including the reduction of the number of ministries to a reasonable number such as 13 (the size of cabinet at independence). Kenyans cannot afford to maintain a bloated cabinet of 93 ministers and assistant ministers. There are currently 43 ministries in the grand coalition government, many of which have no developmental added value and are mere sinecure positions for the president and prime minister to fill.

• An audit of the external public debt register be made and issued to the public through the national assembly.
  
• A report on pending legislation and threatened proceedings against the government of Kenya on the basis of sovereign debt be made and issued to the public through the National Assembly
  
• Immediate retirement in the public interest of the permanent secretary, treasury and the head of debt management and immediate replacement of the two persons with Kenyans with appropriate credentials who can easily be found from within the Kenya public service.
  
• All wasteful expenditure is removed from the national budget estimates to be presented to Parliament in June 2009 and that the estimates to reflect 60 per cent in development expenditure and 40 per cent in recurrent expenditure.
  

• Provision by the government of Kenya of evidence that it has requested mutual legal assistance for international asset recovery and has taken action to seize proceeds of corruption in Kenya.
  

3. To consider comprehensive debt relief for Kenya, by canceling our current debts to your institutions in order to alleviate the suffering of millions of poor Kenyans and to enable Kenya to meet crucial Millennium Development Goals.

4. Peg all future support to the government of Kenya to accountability and transparency in the borrowing and implementation of the funds advanced.We trust the International Monetary Fund Board of Directors will consider the opinion of those who will inevitably be taxed to repay whatever loan the government of Kenya obtains, regardless of whether or not they obtained any developmental benefit from it.

Yours Faithfully,Mwalimu Mati

Weekend Digest: How Often Do You Think About Your Retirement Plan

The notion that I am too young to think for retirement plan has no chance in the world we’re living today. Historical Tanzania doesn’t have a long history of a variety of financial vehicles mainly because the state was in charge of the economy and the private sector was largely absent. The post 1985 period witnessed a lot of economic reforms and liberalization which saw the private sector gain strength and become the main vehicle of development.

Unlike before, youths in Tanzania have access to a lot of financial vehicles that they can use or utilize retirement plan

Tanzania treats its labour force bracket as that belonging to the 15-64 ages category. However, for the sake of this article, I will focus on 24-50 years (because most individuals are matured or leave a more stable life at this age and beyond]. Why 50? Because beyond 60, your chances of making use of a variety of financial vehicles that I will address in this article are very slim or you won’t be able to guarantee efficiency, or minimize risks etc.

Investment planning for retirement should be an important element for every adult regardless his or her present financial situation. Planning for retirement is a comprehensive process for determining how much money you will need at the time of retirement.

Planning also helps you to identify the best ways of saving for retirement given your financial situation. A lot of people feel that retirement planning is important when you cross 40 years of age or you have to be employed in order to think about it. But nowadays you can’t afford to wait until forties; people should start thinking of retirement planning in their twenties and thirties. In this generation the increase of different retirement vehicles such as Umoja Trust Funds (UTF) have made these schemes more lucrative for investors.

A proper financial planning for retirement requires a long period of time, that is, from the day you start working until well beyond your actual retirement date. Money saved in the early part of the life has more time to grow than money saved during the late stage of life. Also young investors can look for investing in more risky instruments such as put all his/her money in common stock offered by companies such as NMB, TOL and many others. They have time on their side which provides an extra cushion to absorb the risks and hence lower the risk.

Planning is an important part when talking about savings for retirement. You need to project your future expenses based on the current expenses (for example living expenses, travel and leisure, medical and other routine annual expenses). Since it is a very long term plan, it may not be very accurate in the beginning; however as the time elapse you will be within the margin of error. Individuals should treat it as a flexible and dynamic plan which can be revised based on changes in projected goals and current earnings.

Individuals need to review their investment plan every now and then and if necessary, make changes to accommodate any additional needs. A good retirement plan requires your active monitoring and long-term commitment.

Once you have thought about an investment plan, your investment allocation would depend on the amount of money that you wish to save, the return you are looking at, your age, current income and your degree of uncertainty that you can handle in regards to a negative change in the value of your portfolio.

There are many different models used for selecting asset for your investment portfolio; however, the actual allocation could be different on a case by case basis depends on many factors.

Investors below 30 years: These investors have long way to go for retirement. They can afford to invest in higher risk assets such as common stock in order to get better returns (historical common stocks have high risk and high returns). This group can invest up seventy percent (70%) of their savings in the stock market and put the rest in safe instruments like fixed deposits offered by majority of the banks here in Tanzania or precious metals such as gold, diamond and etc. If it happens an individual in this group has enough money to invest on real estate then it’s wise to do so. Historical real estate produces a good return over the period of time.

Investors between 30 and 40 years: Investors in this age bracket can look for balancing their retirement portfolio by investing in real estate such as (frame za maduka au ofisi, houses etc) for rent. Also they can invest some of their retirement into stock market; however it shouldn’t be more than 50 percent. This is due to the fact that as the investor age elapse he/she need to reduce his/her exposure toward high risk assets such as common stocks. Other financial vehicles which can benefit this group is including fixed deposit account.

Investors in the 40 to 50 years age bracket: These investors should go for a more balanced approach towards risky and safe investment. They should reduce exposure in stock market to 30 percent or 40 percent of the total investment portfolio. They should look for investments in safer investments like property for rental, and other fixed income securities such as fixed deposit account.

Investors in above 50 years age bracket: These investors are very close to their retirement. They should gradually reduce their exposure in common stock instruments to less than 20 percent. Based on their needs they can look for investments that secure a regular monthly income.. Investment such as real estate, fixed deposit securities can be another option for this group.

The real secret here is to start investing early and investing regularly in life, whatever small the amount may be. Investing early gives time to your investment to grow by way of compounding and investing at regular time intervals make you ride multiple opportunities in the market.

Many people value stocks of former state owned enterprises based on their perception on how these SOEs performed in the past. It should be noted many of these, besides banks or insurance were not efficient in operations and were heavily subsidized.

There are few things that you should consider before purchasing any common stock :( a) Performance of the company, how does the company performed over the period of time. (b) Perception of demand for that product. For instance TCC and TBL many don’t consider competition in the future, regulations etc. (c) Management structure of the company.

REMEMBER HISTORICAL PERFORMANCE OF THE COMPANY DOESN’T PREDICT THE FUTURE.