Why Kenya is 'up for sale'

Kenya is a fascinating country; you never run out of fun.

There is always something to keep us busy, and it’s not just from comedians; there is fun and entertainment even in the economic space.

The most recent fun was in selling Kenya’s choicest assets – Safaricom and the NCBA Bank.

These are the latest; many others have been sold smoothly. There are as many supporters of the sales as opponents, each with their own reasons.

It gets more entertaining when we are not selling part of Kenya to outsiders; we are selling part of it to Kenyans.

That is what Initial Public Offerings (IPOs) are all about.

The latest is Kenya Pipeline, whose offer period has been extended.

That extension is a coded message; the demand has been low. That is easy to explain; either we have no money, or the price is too high. On the money side, falling inflation explains it.

On the price, only the market will confirm who is right. Determining the offer price is not an exact science. It’s about supply and demand, future prospects of the company in terms of growth and our sentiments or emotions.

The best price gives you maximum subscription and more capital.

The low subscription could point to a feeling in the market that the price is too high. Efficient market theory reminds us that you can’t cheat the market.

History is also a factor in the Kenya Pipeline IPO. Many stock owners have burnt their fingers with Mumias Sugar, Kenya Airways and others.

A majority are playing wait and see. Is the low subscription a coded message for the trust in the government, the chief salesman in the IPOs?

It’s an ominous sign, with other firms queuing for IPOs and the projects they are to fund. Remember the infrastructure fund?

What many are not saying is that Kenya has always been on sale or up for grabs. The Portuguese wanted a piece of it; they were around for 200 years.

This link has not been exploited in tourism beyond Fort Jesus. Curiously, the Portuguese stayed longer in Angola and Mozambique, leaving only after about 50 years.

Their failure to leave a legacy after 200 years has never stopped fascinating me. Next came the Arabs, who ran the Portuguese out of town. They remain part of Kenya’s racial mosaic, mostly along the coast.

Curiously, Arab countries have shown renewed interest in Kenya lately. What’s driving this interest? Geopolitics or economics?

Local politics? Are they getting into the economic space left by the contesting US and China? Is the political system in the Gulf States our attraction? Are they exploiting the uncertainty in our economics and politics?

It took another 400 years before the Britons got their stake in Kenya through conquest. They stayed for a short period of time and got deeper into the interior, unlike the Arabs and Portuguese.

Beyond trade, they settled and farmed. Within this period, they transformed the country in their image through the governance system, names, religion and traditions like marriage.

Their most successful ownership was not land; it’s owning our thought process.

And after 60 years, they have muted the anger towards colonialism.

After independence, the appetite for Kenya never ended. The ownership was transferred to new political leaders. They partly transferred some land to the original owners.

The Britons, through agreements and treaties, had blurred who the original owners were. And a new concept crept into our lexicon: willing buyer, willing seller.

Voters regularly change leadership and ownership.

We have had five presidents, each with a different economic philosophy. What ties all of them together is the ownership of Kenya. Who owns the factors of production beyond land and plots?

Who owns the capital, from buildings to factories? Who owns the expertise that runs businesses? Who originates entrepreneurial ideas?

Some think the big posts in the government, like ministers, are indirect indicators of “ownership.”

Add the cosy relationship between politics and economics. Without major firms like Google, Meta, and Toyota, among others, government positions have a premium in Kenya.

One other attraction to Kenya since the Portuguese is our openness. You can easily buy and sell the factors of production.

The 2020 constitution was not “nationalistic” enough. Kenya is still in the making and has no core owners. Every election redefines this ownership. Why else are polls so hotly contested?

Some argue this openness brings in capital, expertise and talent and sets our economy apart. It also drives vices like corruption and makes it easy to influence the economic and political issues from outside.

Others argue it penalises the unsophisticated citizens, who can’t participate in these transactions. It would be interesting to list who the key players in IPOs are.

Who are the key exporters and importers? Who studies abroad? Who are the key investors in Kenya? What percentage of Kenyans own and regularly use their passports?

Kenya‘s strategic location attracts more buyers and sellers. Once in Kenya, you have access to the rest of East Africa. Weather is a silent attraction, and so is the regulatory regime, which is now an issue for most entrepreneurs.

The sophisticated Kenyan economy makes it easy to buy and sell firms and other assets without drama, with some anonymity. Think of the stock exchange, bonds, futures and other sophisticated financial instruments.

Land has slowly lost its lustre. Financial assets are in ascendancy, making buying and selling more anonymous, and I guess fun. Add the use of the phone to do financial transactions.

The national pessimism makes lots of citizens uninterested in “big” economic issues, leaving a few players busy and rich. The rest of us are spectators, just like in the English Premier League.

Clearly, buying a piece of Kenya has never been easier. Who are the new owners and sellers? Tracking wealth transfers and distribution in Kenya in the last 60 years would be a good pastime and could yield a few surprises.