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If you ask me – Kenya is ripe for a formal Futures and Commodities Market/Exchange.

It was reported (and I paraphrase), that we have had a 561% increase in milk production since 2003 – exponential growth! The milk handling agencies are hard pressed as to what to do with all this milk ( Duh – seriously!!!!!) There is talk of an expected bumper harvest in Eastern Kenya (note that this is an area that is usually drought- stricken, but thanks to donor seed provision programs, people are actually talking about bumper harvests), prices of food are falling due to surplus in markets and farmers are complaining of losses……

Flip- side: People are dying of hunger in some areas in Kenya.

Where is the balance? Isn’t it about time we had a Commodities market in Kenya? I believe so….

For those that know I am out of Financial Markets for now – and intend to make that a permanent phenomenon. For those that do not know – this post here will help shed light on that….

I think I have had enough of Margin Analysis, Month End Close Cycles, Reconciliation and what not – for now! I don’t rule our ever working in Financial Markets now or in the future in some capacity, because after all, I have a flair for (I am just saying lol! :D ), but my passion is elsewhere and I intend to give that 110%, heart and soul.

Nway – that being said – I find it entirely difficult to dis-engage myself from what is going on in markets, or my friends make it difficult for me to do so hahaha! Someone ( I will not mention names :-) ), told me I have 2 options concerning my “relationship” with markets – either get a restraining order or get married to them…..I chose neither and instead decided I will have an “affair” with markets ( NYSE, Futures, Commodities and Derivatives et al) and hope “my guy” ( what I am currently immersed in, doesn’t get jealous.

If you are a proactive mind out there that believes we can get to getting to a commodities market – please begin the “Think- Tanking” Process and holla at me to join you. Seriously!

There is not a good reason for having such losses and food asymmetry in the country when we can manage our resources, potentially very effectively with a commodities market.

Please take a minute to read my blog post on Futures Markets in Africa and subsequent comments and I think a lot of us think its about time – now for some action!

So, my poor blog has been thoroughly neglected, but I have been on a good cause! Happy 2010 people! Maybe a little late in coming seeing as its February and all :-)

It’s been a hectic busy and very eventful 5 months (that is how long I have been back), but I feel like I have been here forever – nimekuwa mwenyeji tena – complete with driving amidst mad matatu drivers on bad roads, sitting in a matatu with blaring music I do not understand ( ama ni uzee? Lol!) It is a little different when you are back visiting for a few weeks, and it is a totally different scenario when you are back for a little longer – as in my case. I say “back for a little longer” because I have yet another part of my “relocation” that I will be going on in the near future that will be my next 4-5 years. That will be talked about when it happens.

Holiday season was very eventful and exciting! All of us were home together for the first time in 10 years. And it was an experience I would not trade for anything! Then its amazing that 10 years ago, we were kids and this time around, there were grand-kids for my mom- talking-too-much, running around grown grandkids!!! Blessings, blessings! Of course, for the first time in many years, I got to enjoy my holidays, winter – free! No winter coats, no scarves, mittens, no snow, no ice – just good weather! (Though it rained a little too much this time around) –Bliss!

I am very humbled and pleased to announce that, together with some people near and dear to my life, heart, dreams, visions and goals, we have founded a Foundation that is geared to developing young female entrepreneurs. We are specifically targeting young disadvantaged girls and our goal is to equip them with a skill and training that will alone enable them go “out there” and be self sustainable. We are absolutely not training the young girls to go out there and look for a job, though that is a choice they will ultimately make for themselves – there is a very serious paradigm shift going on globally and Kenya has not been left behind.

Entrepreneurship is it!

My Doctoral Research is on Female Entrepreneurship as I had alluded to here so, as you can all see, I am finally, finally, after many years in Financial Markets, beginning to live my passion and that is something that I am profoundly grateful for. Baby steps but I am very confident that our vision at the Foundation is coming alive in a big way!

So besides fine tuning documents for registration and grant presentations, building our initial office facilities (read haggling with Kenyan Fundis that are seasoned to look down on wanawake), extensive travel, getting sick three times, serious networking ( I have talked to people I have never thought I would talk to and folks – its been quite an adventure) – it’s been fun.

I am very picky and detail oriented but I was occupied with other things and didn’t have the time to sit and type up constitution, drafts etc so I had someone do that for us – BIG mistake! Gosh – I got the first drafts and I used very many little words (bearing in mind I am the “polished type” that doesn’t curse). Yaani there were so many mistakes, I wanted to beat someone up! Then I realized, well, I better do this myself – and that put me about 3 months behind schedule because I was basically re-working a lot!

We are working on the Corporate Blog for the Foundation (as we work on the website etc) and I should send a link in a few weeks – so much to do! By the way, for those that do not already know, Social Networking is the in-thing. Yaani nowadays, you can do some facets of business efficiently via just a corporate blog (if well thought out) and even on Facebook. I am not surprised, because I have seen first hand what and how such avenues as Facebook and Blogs can be used in a very powerful and positive way.

Of course, we have issues we have to deal with, like any organization, but we are taking it one step at a time and realizing that Rome was not built in a day. We are taking the things we have to deal with in stride and in line with our mission and our vision.

As Executive Director, boy, the curve balls come each hour! And I realize that people want answers from me! It is greatly shaping me and with each day that lapses I am learning so much. I am no longer in a position where I can just leave and hope that someone gets the job done for me – I have to go out there and get things done. Very exciting, nerve wrecking BUT fulfilling! I knew it wasn’t going to be a piece of cake when I resigned from my Treasury job in the US, and it was something I knew I wanted and had to do – so help me God.

My Mom deserves special mention here – she seriously has been there so so so so much! I WOULD NOT have been able to do this without her support: emotional, moral, spiritual, networking (she knows everyone!) and financial support! She keeps telling me I can do it – and that keeps me going!

There are going to be subsequent posts concerning this (moving back), coz there is so much I want to write about but cannot do so in one post so watch out for, but be patient – Lol! And I hope I will actually get to doing that.

There are 2 things that I want to quickly mention though.

My friend ( and my once roommate in Kansas when we were in Grad School) and I were going for a latte at Savannah in Down town Nairobi and walking down the streets, we bump into this guy that was also living in the same city with us that now works with my friend in Nairobi. During dinner, as we caught up, we were amazed at just how many of us that were living abroad are now back home either working or running our own businesses.

The beginning of the end of brain drain? Maybe.

But one thing I am thankful for is that I am not back to Kenya to “look for a job” per se. I think that would be a very exasperating and novel idea for me right now.
I personally know of about 10 Africans (in professional jobs in the US, UK and Canada) that have been back to their countries in the past year. And I know of a good number that are returning in the coming months.

The second thing I want to note is that I have observed and gladly enjoyed the fact that there are a good number of young Kenyan women “doing their thing” back here. Some are married and have families, some are single and have no children, and some are single parents. In all these situations, I have had an opportunity to interact, in my three months back, with some seriously fierce Young African Women who know what it is they want in life and are going after it. The complacency that was previously held about and concerning us is just simple no longer in existence.

There are still some weirdly insecure and sick men and women out here, that still perceive young women or just women in general in the patriarchal idiocies that defined our (African women’s) place in society, but like I like to say – there are some things that are so etched in people’s DNA’s hakuna haja trying to change them.

A man, a grown Kenyan man, we were consulting on some technical aspects of the Foundation at one meeting told us there are some things a Kenyan Woman cannot simply do and needs a man to do them. We thought it was a joke in bad taste and let it slide that time considering the business at hand – big mistake! (Out of the 7 Trustees, 4 are women). That guy said the same thing in a subsequent meeting and we respectfully told him we no longer needed his services – chauvinistic idiot! I wonder if he has a wife or daughters!

And surprisingly, these self proclaimed, know it all, save the world men are the same ones that have no issue whatsoever with a woman picking up the check all the time, paying for their indulgences etc. They only feel the need to assert and affirm their man-ness to other people (and perhaps themselves!) when they are dealing with a woman who reads into their BS and refuses to indulge their nonsense! Bure kabisa!

Such thinking simply has no place siku hizi!

There are other pleasant things going on in my non-business life that I don’t want to blog about yet, but boy, am I glad to be back!

Happy goings everyone and do not let anything stand in the way of doing what it is you want to get done. The major thing begins with YOU taking the first step.

Be bold and have a great year!

It has been an extremely busy past 2 months for me. I resigned from my lovely Treasury Analyst position in the US of A, packed up, eeehh, tried to pack up the past 5 and ½ years in a few packages and got ready to relocate, ran around with my sister to get ready for her wedding day, attended a WONDERFUL, the most awesome wedding I have attended in my life and watched my sister get married to a wonderful man then got on a flight and began my 30 hour journey to Kenya. I slept a lot on the way and I made a note to myself to make sure I get richer real soon to avoid flying coach on such long journeys :D

I will blog about some specifics of all these events later – soon – hopefully. For now I want to talk about my woes trying to use my MasterCard Debit Card in Kenya.

Last time I was in Kenya, I did not have to use my card extensively because for one I was there for only 3 weeks and secondly I had carried some USD with me that I exchanged on arrival. The one time I used my card in Kenya, it worked like a charm ( In Nakumatt) – so I assumed I was going to have the same smooth sailing experience this time around.

I had only about USD 200 on me when I arrived in Kenya, that I exchanged for Ksh and with what I am working on right now ( I will also blog about that soon hopefully), that really didn’t last me for long. So I run out of Ksh and I go to a Bank and try to get some money from an ATM using my MasterCard Debit Card. ( My Visa Credit Card – ( I only have one credit card since I refused to get sucked into the fiscal irresponsibility that we tempt ourselves into by having cards we do not need). So my Visa Credit Card is paid off every month and since I am going to be around for a while – I am not intending to put any balances on it – that is how I planned it period!) – Well long story short, after a trip to Barclays, Stanchart, KCB, NBK etc, I was still Ksh-Less! At one of the aforementioned banks they simply told me “we cannot allow you to use our ATMs” – How rude! And, they didnt even give me the option of getting Ksh via Cash Advancing my Card!

One very nice and helpful young man at NBK and a college buddy of mine via Face book directed me to Southern Credit Bank (they deal with MasterCard) and well – I am thankful to them…. :-)

It made me really consider being a MasterCard Rep to Kenya – Why aren’t our Banks multifaceted and deal with multiple card companies? Seriously – there is nothing special about Visa – or maybe Visa has just done a good job of branding their image in Kenya. Plus now I will have to get used to carrying around wands of cash! I know that we are yet to get to being a cash-less society – but this little experience made me realize just what vast avenues we have yet to address in our financial markets! Such exasperation, such little annoyances that really could be deterring vast potentials out there!

Other issues irritating me are PEOPLE NOT KEEPING TIME! . Anyone that knows me, knows I am always on time! At work in the US of A, I am the one that would get to meeting rooms and call people still at their desks running late for a meeting!

Last week I had a breakfast meeting scheduled with a person helping me out with some of the things I am working on. The meeting was supposed to be at 8am because I had other things to attend to as well on that day. You can imagine my HORROR when he calls me at 915am telling me he is on his way – and finally showed up at 1030am! Gosh! SO, I had to get on the phone and begin canceling most of my other engagements for that day!!

SO right now, I have a bout of Malaria going on – I have been feeling crappy since Sunday – so I might not be very lucid and a little grouchy typing this…Hehehe! But I guess that’s why they call it acclimatization!!! I intend to get well real soon because I have a lot of things to get done!

That’s all for today – Happy goings!

Reflections…

I have been having an amazing time just being, reflecting on things, planning for and just bonding with my inner self – A very, ummmhhh, awakening experience I have been having.

I was happy ( very relative term), when the financials for Goldman Sachs, JP Morgan, Citi and BofAmerica were released last week – Net Income in the Billions, makes me know that I am not in this profession in vain :-) – that there is hope for the global meltdown after-all.

I have also received some very good news – news that will be affecting my next few years and I am so looking forward to ” getting at it ” – Bits and pieces and LOTS of work I will be doing here shortly, but it is both a feat and a challenge that I am going to be embracing, giving it all my all, excelling at – so help me God :-) !!!

I have been feeling very “grown up” the past few weeks and I guess its because I have been eating well, getting enough sleep, having plenty of me-time, staying away from negativity ( from negative blogs, news, TV etc), and just taking some time to enjoy being me – My short term “solitude” is really paying off!

I have also been really thanking God for where I am in my life, where I am going, my family and for generally being able to keep my head above water in this crazy world ;-) .

Here is one of my favorite pieces of poetry. It is by Rudyard Kipling, an English Author and Poet.

Happy goings all and remember to always strive for the more excellent way. I went to a high school where our principal did an awesome job of scaring us away from failure. My Mom also did a wonderful job of threatening myself, my brother and 2 sisters away from mediocrity – so the way I see it – well, you all see it! :-)

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

If you can dream — and not make dreams your master;
If you can think — and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two imposters just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ‘em up with worn-out tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”

If you can talk with crowds and keep your virtue,
Or walk with kings — nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run –
Yours is the Earth and everything that’s in it,
And — which is more — you’ll be a Man, my son!
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Rudyard Kipling (1865- 1936)

I read in the Daily Nation that the Central Bank of Kenya intends to bring into effect an automated check clearing system with the maximum value of checks being capped at Kshs 1 Million as from October 1st 2009.


This will effectively reduce the number of days it takes for a check to clear from four to one – I like! When I worked in Banking in Kenya a while back, and on those days when I had to cover for someone in the Clearing Department, one of the most common occurrences was people constantly stopping by to check if their checks had cleared ( e-banking, mobile banking etc had not quite hit yet and to think that was just a few years ago!) This will definitely lead to efficiencies and also curtail check kiting to a large extent.

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Many people were Skeptical when the Check Clearing for the 21st Century Act (Commonly referred to as Check 21) was signed into law in the US 2003 and ultimately became effective end of 2004.

Around this time I was working in banking in the US and yes, we underwent all kinds of training, trouble shooting, etc to address the upcoming switch.

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Check 21 basically enhances the efficiency of the check clearing process in the US banking system. The law facilitates check truncation by the creation of substitute checks and process check information electronically. Substitute checks can still be sent to parties that want to receive paper copies and they are deemed legally the same as the original checks. This is only applicable to US based checks – foreign checks still have to go through the foreign collections process through intermediary banks.

What this basically means is the time that it takes for checks to clear is significantly reduced. In the US, under Regulation CC – Availability of Funds and Collection of Checks , banks have the right to place checks presented under “holds” up to 11 days until the funds clear, as long as the 1st $100 is made available next day ( I am paraphrasing this Reg coz I don’t want to go Fed Reserve Legal Jargon!

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What this has translated to is this: Using Checks these days is becoming more like using your Debit Card for a vast majority of merchants. For example – at Wal-Mart, Kroger etc, people will present checks, cashiers will run the check through scanners that will record the check info via the MICR ( Magnetic Ink Character Recognition), hand the paper check back to the customer, have them sign an authorization slip and you get home, check your balance on-line and the check has been processed!

Effective and efficient – give or take! But, in my opinion the good outweighs the “bad”. Plus I know that most senior citizens with grandfathered accounts still need their paper checks sent to them – cant blame them – its what they were used to for as long as they had banking going on.
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In my opinion, Check 21 is a success and I hope the Central Bank of Kenya’s automated check clearing system will be a resounding success!

So today, we are on an Excessive Heat Advisory till kesho jioni and for the next few days *sigh* It is HOT!….I know it is pretty hot out there because today when I was leaving my house at 715am the temperatures were 82 degrees. Driving back from lunch, temperatures were 102 degrees! BUT, as usual, I am wearing hose –it is summer so it is the sheer kind.

A little information about me and hose, or is it hose and me?

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If there was an award or a club for Panty Hose wearers – I would be a triple Platinum awardee. I just am so into panty hose – I am not talking about shapers or those other “suck it all in” kind of hose – just your regular wear to work kind of hose.

I have all kinds of hose – but my “usual” hose is a Hanes, Control Top, Sandal Foot, Gentle Brown – won’t give the size here lest creative minds begin to visualize my assets. I am petite so jijazie. It took me forever to experiment with shades and the Gentle Brown is PERFECT – you can usually not tell I am wearing hose…..I have been wearing some kind of hose for as long as I have NOT been wearing a Kamisi (which I believe is something like Form 1 second term or on those occasions when my Grandma gives me eyes to suggest there is attire I am missing) – does anyone still wear a Kamisi?

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Aside:

When we were reporting to Form 1 at our beloved high school – we were sent a list of appropriate things to buy – one of the items was Kamisi – so most of our mothers fully complied and armed us with those. Most of my friends ditched those after a quick term in favor of “bikers”. Plus my school was “liberal” in that we were allowed to carry “home clothes”. I think the rules stated “3 simple dresses”, but coming back in second term, most of us had suitcases full of all kinds of attire.

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Other kinds of Hose you will find in my drawers are – Jet Black (which I will wear with my dark colored pant-suits), Hanes – the very sheer (which is what I mostly wear in the summer with skirts), and Toeless (for the peep toe heels) etc…

A typical hose shopping replenishment trip will take me about 5 minutes – I know where to get it and what I want…Easy!

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People have asked me if I am not uncomfortable in hose even in the summer – to which end I hold: NEVER, plus I wear good quality sheer hose that only accentuates my body instead of it being a “drag”. There are those drab, heavy kinds – but I have never developed a fancy for those.
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When I began my first “official” job after college, I worked in a bank and I did the whole “ I don’t wear skirts” kinda thing seeing as my college years were spent in an assorted collection of jeans – then I discovered, there is nothing that can rival a well tailored, well outfitted skirt suit. Complete with a good pair of heels and accessories ( my usual diamond right hand ring and earrings ( I am not that into necklaces unless they are simple or bold depending on the look I want – most days I am usually without neck jewelry) – priceless look!. And I actually look really nice in skirt suits.

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I have all kinds of colors of skirt suits – from the conservative black, navy blue, brown and grey to the bold purple, royal blue, red etc. I toyed around with the idea of buying a pink suit (because I saw some awesome pink heels on sale – yes I have my priorities right) – but I have never really been a pink kind of girl – so I bought the shoes and wear them with other things….
And with my wearing of short skirt suits – comes the wearing of hose – I just like that look…..

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Now, jana I had hose issues….I was wearing peep toe heels so I had sheer toeless hose. As I was parking at work after lunch – I realized I had a run – on the front – and I was in a black on-the-knee length skirt – so the hose had to go. So I took off the hose in my car all the time praying my window tint is dark enough to “shelter” me lest passing by colleagues think they work with a “weirdo” hehehe! Oh – and I have never had such an uncomfortable afternoon being hose-less *sigh* :-(

Then I also started thinking – maybe I should have not put off shaving my legs jana evening – I am usually ok going by for 2 weeks – but that quickly changes when you are in a short skirt and bila hose….So anyway – I made it through the afternoon but it made me wonder just how accustomed one can be to things so small.

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I worked at a Bank here and when I worked at the Branch – hose wearing was mandatory – no biggie for me, but apparently a big bother to 95% of the women. One teller was once sent to the nearest store – Walgreens – to purchase and wear hose before returning to work.

In Nairobi – at the Bank where I worked, wearing hose was not mandated but 95% of the women regularly shopped for and wore hose. We even had one of those mamas that goes to Turkey or Dubai and owned several exhibitions make deliveries of hose (good quality hose) at the bank – how convenient!

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The hosiery debate is a huge one and each has their side – my side is stated with enough finality – how do you not wear hose! But at the end of the day – to each woman her own. It’s what works for you – and you should be able to feel comfortable with what you are wearing.

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But here is a link to an interesting article on hose wearing – I don’t condone some of the pros associated with hose wearing like not taking care of the feet coz they are “hidden” by hose. Hose in my opinion, needs to be enhancing your look, not hiding un- kept toe nails, non- moisturized skin and generally un-attended to feet! I have regular pedicures – self or done at a nail salon and you will NOT catch me with unsightly feet, unpolished toes etc just coz no-one can see them.

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Being confident as a person is about tending to those “hidden” things that no-one can see – be it clothes, issues, thoughts, habits etc
Try have a cool summer everyone – hydrate and take care of those things no-one can see. :-)

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The Hosiery Dilemma

My Kenya

Today – I said a prayer for Kenya, I thought about the country that gave me my Me-Ness! God Bless Kenya :-) !

I have a personal philosophy; I believe that you cannot change a society by mere giving – I believe that you change a society by enabling its members to be participants in economic development. I believe that you can only effect sustainable development by building capacities in men and women in ways that will ensure they are able to earn their own livelihoods. This is my cornerstone for my passion for entrepreneurial activities, entrepreneurship research and specifically female entrepreneurship.

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Many years ago, fresh from high school, equipped with a diploma in computer studies, I had an opportunity to work for an entrepreneurship development center in Kenya as I got ready to go to college. The center basically did project proposal appraisal, but mostly geared its efforts towards issues facing women entrepreneurs in one rural part of Kenya. I was immediately drawn into that vision and that sparked my interest for business, entrepreneurship etc.
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For undergrad, our Business class was required to write a thesis/paper either based on our industrial attachment experience or on a business area of interest to you. I didn’t really gain much from my internship experience so I wrote a 120 page paper on Integration of Women in Entrepreneurship and did a case study of one specific Metropolis in Kenya. I knew that this was just the beginning of things to come – and I was right.

When I was working on my MBA a few years ago – my focus on what it is that I wanted to do say 20 years from today was even further accentuated….Not that I am going to write it here….Lol:-)

All, all and all need to know are that I have an immense zeal for female entrepreneurship activities in Kenya – name it – R&D, training, understanding role conflict, motivation for business, issues in running businesses, success factors, micro financing, public private partnerships etc and all those other things that will ensure that women are well placed to be able to engage in entrepreneurial activities.
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A while back I read Prof Muhammad Yunus’s, Banker to the Poor and was totally floored. Honestly, I had heard only briefly about the then, Dr Yunus and his Grameen Foundation and the work they were doing among women entrepreneurs in Bangladesh. After reading the book, then listening to a series of interviews he did after that, I totally understood why he had won the Nobel Peace Prize.
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One of my favorite books is End of Poverty, Economic Possibilities for our time by Jeffrey Sachs – Prof Sachs simply says that we CAN alleviate poverty, and do it in our time, not our great great grand children’s times – paraphrasing the book would be an insult – its one of those you have to read to draw your own paraphrases. He stresses the need to work towards attaining the MDG’s – Millennium Development Goals, among them Eradicating extreme hunger and poverty – no man, woman or child should die because they are hungry or because of Malaria :-(
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I have a hypothesis – hear me out:

Attaining the MDG’s first has to begin with an empowered society. I believe that sustainable development requires a fully participative population – that you have men and women that are WILLING and ABLE to earn their livelihoods in some way.

Aside:
You know when people talk about earning a livelihood – most people have images of people waking up, dressing up in suits and going to a job or driving an expensive car or sending their kids to the best schools in the country. Well, fortunately, that is not the case being referenced to as far as the MDG’s are concerned.

What we need is that people will be able to feed their families, allow children to have some kind of education ( so that they don’t vote for some way ward politician because he has offered them a pack of Unga etc), have access to health care and be treated equally in the things that be…

So back to my hypothesis, it is about time, specifically in Africa that people were able to have a “decent” livelihood going on – something that will only be possible if the WILLING are ALLOWED to earn their livelihoods. By “allowing” I mean, access to resources and an environment that fosters “participation” – just to be short, since this we can discuss for elongated periods of time :-)
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Dr. Dambisa Moyo, a Zambian Economist, has been fueling some global discussions about Foreign Aid to Africa. A friend recently recommended her book, Dead Aid: Why Aid is not working and how there is another way for Africa to me. I got the book, but I have yet to read it – Yaani I have SO much going on, BUT, I shall be reading the book from next weekend – that has been placed on my calender :-) – So I am not going to comment on the contents of the book yet.

I have however, listened to a couple of excerpts from Interviews she has done and read the NUMEROUS reviews about her all over the net.

Aside:

Special note is being made to her being an African Woman FIRST – then being a PhD in Economics among other academic credentials and professional qualifications.
Well – I am glad the world is finally coming to terms with what we have LONG known – that we African women can do whatever we set our minds to do :-) – and do it excellently – and we CAN do all that in Stilettos if we choose to :-) :-) !

Dr Moyo, basically says – there are other ways that Africa can get on the path towards sustainable development and keep going forward. She advocates such avenues as incentivising poor countries to access finance on international markets, supported by the tripod of micro finance, trade/FDI and remittances – Instead of GIVING, LOAN! I like!

I am not going to say that I buy into her arguments hook, line and sinker; but I do like the central idea which is – don’t just give aid, give aid to the right persons e.g to the entrepreneurs that need capital for raw materials instead of giving it to Governments without PRECISE stipulations on where the Aid money should be used. How many governments in Africa are misusing Aid Funds? Too Many! Mere giving is not going to change Africa if people are not presented with some kind of responsibility.
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I like that idea and like Prof Yunus and Prof Sachs, I know the day is coming when we will see an African Continent that is empowered. I also know that Female Entrepreneurship is well on its way to “officially” becoming the IT, that will transform the lives of so many families in Africa!

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I am intending to make my own contribution to this – as I best know how to :-)

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Edit:

A friend of mine ( thank you! ), this morning pointed it out that Prof Sachs and Dr Moyo recently had a fall-out as concerns the Foreign Aid Model and Africa. Prof Sachs ( once Dr Moyo’s professor at Harvard), seems to believe that the Model she is proposing i.e not depending on foreign aid for sustainable development is more suited for emerging economies and not the developing nations per se. And we wonder why Africa is still lagging behind in economic development! *sigh*

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I would like to say that my personal opinion is one where Africa will NOT have to depend of Foreign Aid – each Nation will have to curve out its only model to wean itself off Aid, but I believe we need to get away from the just receiving attitude we seem so complacent with and know we CAN use other available investment avenues to get onto sustainable development keep going from there :-) . I like what Dr Moyo says, she says Foreign Aid should be short, targeted and finite – not indefinite as we currently have it!

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In Sub-Saharan Africa, President Paul Kagame of Rwanda, has been a strong proponent for African Nations to begin weaning themselves off Foreign Aid by building up Savvy business Ventures and developing and embracing smart economic policy – I like that!

Rwanda may be depending on Aid right now, as does the rest of Africa, but at least we have a President that is thinking progressively and long term in terms of sustainable development for his country. They may not get there today – but it is a commitment they have emarbarked on – Slowly but surely! I can bet in the near future – Rwanda will be so worth watching economically speaking – if it isnt already! I dont care what political views Kagame holds, all I can see is that he is thinking smart policy for his country.

I wish we had more such progressive leaders in Africa!

So the Fed Reserve reports that the economy is “slowly” getting better. NFP (Non- Farm Payroll) numbers being released are evidencing better than expected results – that, even considering downward prior month (s) revisions and an increase in government jobs (though temporary because this relates to the upcoming US census)

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That is good news, that we have signs of “improving” economic conditions especially considering the bearish sentiments many of us have held for a while and still hold on to.
Now all we need to do is ensure the cyclical factors that promote sustainable economic progression i.e. employment numbers, manufacturing, retailing etc, keep getting better right? – I would say that is just part of the equation. Let me explain:

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Today, driving back to work from lunch (it’s a beautiful day to waste inside eating lunch at the cafeteria downstairs or at my desk. There is nothing quite as good as driving with windows rolled slightly down, moon roof open listening to some IL Divo). Nway, I was driving back and took a little detour to enjoy the fine weather for a little longer and there was a wreck on one of the streets and cops has sealed off part of it – meaning all cars were being re-rerouted into some residences and eventually back into the streets after a series of turns.

The neighborhood was HORRIBLE! But the cars parked on the sidewalks and a tiny parking lot in the midst were EXPENSIVE cars. And, there were Auction Signs by a couple of the houses – that is not even an oxymoron – it is total madness and doesn’t begin to make economic sense! As I finally wound back on the main street – I kept thinking about how badly the banks were blamed in the Sub-Prime Mortgages drama that has changed global financial markets forever!

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Don’t get me wrong – I know now like so many others that there was some “creative finance” going on as concerns lending and hedge fund management, market and financial disclosure, mark to market analysis, regulations, leveraging of firms as concerns equity and the overall financial health of the previously financial giants.

BUT – I also have to go back to the issue that ultimately; things have to begin with personal financial responsibility. I think so many of us are trying to keep up with whatever (coz it really is a lot of things), and then blame everyone else but ourselves when things go south!
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Why would you want to buy a house or a car that you obviously cannot afford and know that you will still not be able to afford 2 years from today no matter what you do? Should it matter that the bank has “qualified” you for $ 300K, yet you only make $ 30K a year? How do you propose you are going to afford to make your mortgage? And why then would you go ahead and get a $ 50K car on top of that because your local car dealer sent you a “pre- approval” thing in the mail? How does a person live in such a neighborhood, yet afford to drive such an expensive car? Kuna Kitu! And in my opinion I choose to, in the spirit of being “nice”, call it BS – people need to get reality checks already!

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Aside:

When I was in grad school – I shared a house with a friend of mine also in grad school and from Kenya – that was the wise thing to do – split the bills, make your tuition and graduate debt- free – and we did just that! After graduation 2 years ago – we both began to live “normal” lives, she moved to a different state for work and we both began doing other things without being haunted for years to come over school loans.

My life was “normal” until I had a case of serious identity theft that put my financial life in a very interesting situation. An employee at my then bank sold info to a third party – that’s as bad as it can get! Basically that means someone has your SSN (Social Security Number), Date of Birth, Address and all those other details they need to be “you”

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One day – I was checking my balance online before going shopping and the balance was in the RED in many digits! ALL the money was gone – e-checks had been presented and paid from both of my accounts and my bank REFUSED to do anything about it!

I still have court cases regarding that to date! (And it’s been two years!) I think I should blog about things I have learned from that experience!

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But seriously that’s what you do – live within your means as you work to expand your means. We can blame the banks for the Sub-Prime, predatory etc lending we have going on – but the bottom line – No-one was forced to take out a loan they couldn’t afford.

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So Geithner and Bernanke are working economics that they have probably not worked before in a bid to ease the effects of the recession, but in my opinion, if the personal responsibility does not kick in real fast – no economic theory – however tried and true and edge cutting will last in the long run.

I can understand the injections into the markets, I can understand why some things have to be reformulated – but I can’t understand why anyone thinks that just because his/her job has been saved – then things are obviously going to get better!

Indices mean a lot on the macro- picture – that’s it. Just because the Dow closed at a decent level, NFP numbers are not so bad, the markets are somewhat bullish, the NYSE is buzzing, the USD is gaining strength etc, doesn’t mean there is going to be food on my table if I don’t do something to put that food there!

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Nway – that’s what I wanted to say today – no economic theories from me. ;-) I hope everyone has a lovely Memorial Weekend/Weekend.

Mine is going to be busy – I have a 4 day “weekend” and I decided I am going to get at least the Introduction to my Comprehensive Research Proposal done. You see, if I intend to move from PhD Student to PhD Candidate anytime soon – I better get some writing going on. So I will be doing just that – personal responsibility!

Have a responsible weekend! :-)

So, Kenya’s Finance Minister, Uhuru Kenyatta, has basically issued gag orders for Senior Treasury Officials – no-one is supposed to comment on policy issues, and he, Uhuru, will serve as spokesman, sole spokesman for both the ministry of Finance and the State corporations under it – notwithstanding the fact that those are supposedly autonomous bodies. Technocrats in Treasury are barred from communicating directly with parliament as well.

Pardon my long sentences – its how I would say it if I was speaking.

I am not angry, and I suppose Uhuru has to do what he has to do to cover his ass; Now he can, after he gracefully appended his signature to documents, THE BUDGET, with errors to Parliament. Now he can, now that the errors were actually discovered; now he can since everyone is wondering just how some things can conveniently become “typing errors”. What if the “typing” errors were not “discovered”? I think we as a country are beginning to embrace new levels of shame – bila aibu!

My only question is – Alikuwa wapi? Forgive me, but – whatever dude!

For those of us that work in Finance, we KNOW for a fact the hair raising activities, double checks, triple checks, formulation of algorithms, backward testing of data etc that goes on before the Financial Statements are declared good – before the statements are rendered to be an accurate representation for the financial status of an entity – and that is even before the signing of the statements, and then the presentation of that happens and that is way before the auditing part begins!

SO forgive me if I don’t even begin to buy into Mr. Uhuru Kenyatta’s misplaced and reactive anger and measures – that is just a plain and lame show! As Finance Minister, you should have known better – or the people that work for you a.k.a, the people that are paid millions in tax payer money – should have advised you better! (If you choose to abdicate your responsibility and take that route)

This situation we have going on here – should not be happening! Bottom line – Ahhhh, Tuheshimiane tafadhali! And I am sure I have Finance PhD’s, MBAs, CFA’s, CPA’s, Economists, Analysts, your regular “Joe the Plumber” with no Finance technical know-how that will say, this here, is a bunch of BS!

I have had the opportunity to work in our financial markets in Kenya before I left for Grad School and subsequent career opportunities in “Diaspora”. And, I have always known at some point in time – I intend to return to Kenya because – just because. I won’t go into the reasons why – because that is a LONG story.

But, assuming, I would return, not go into entrepreneurial activity and end up working in our financial markets yet again – God forbid I have to deal with such nuances!
I think about it this way – I have worked pretty hard to know what I know today and what I keep learning each day – I simply do not have the strength to fight “forces” that will definitely seek to “gag” what I have worked so hard to understand and know!

You know, there is a very good reason why we will keep losing people that we have no business losing to other nations – it is such “Uhuruish” stances!

And before anyone goes telling me the noble thing to do is “make it work while you are home” – I beg to differ, I believe there is, always, a more excellent way! And this typing error business is simply not it! I am just saying! And like Kaasa – I have to wonder if I really want to…….

I know South Africa, through the Johannesburg Stock Exchange (JSE), and SAFEX (South African Futures Exchange) has a listing for Exchange – traded currency Futures and for Agricultural Futures respectively – and that’s about all I know about Futures Markets in Africa ( because maybe that’s all there is to know?)

I strongly believe that Africa can have a very robust and all that Futures Market if we are willing to work towards putting the mechanisms in place. I mean, we have the “items” that should warrant an active and thriving Futures Market. Take your pick from the following: Crude Oil, Gold, Silver, Cocoa, and Corn etc… We have them all! right? Right!

I have had some experience (both good and bad) concerning Futures Markets, commodities trading etc that make me believe, it is quite “easy” to get a Futures Market going in a lot of countries in Africa.

My most memorable experience concerns the Initial Margining process. Here we go:

So the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE), and I think all the other Futures Exchange Markets use the SPAN model in the initial margining process.

A while back, I was challenged at work to “try” replicating the model for our own purposes. So I began the process and quickly realized, yah, ok, this is going to be a long one!

Between figuring out how our commodities offset in terms of spread credits, to figuring out all the other factors in the model, risk arrays and scanning losses, outright margins, inter-commodity credits etc, my work was cut out!

A few months later, after: spending enough time on the New York Mercantile Exchange (NYMEX), ICE and Chicago Board of trade (CBOT) websites, creating a good number of spreadsheets, having continuous and incessant conversations with contacts I knew that had more knowledge on the workings of SPAN model than I did (that I was sure to thank later), I finally had IT – Yeeeeehhh!!

Then now, I had to translate that into something that means something for our business – a whole totally different story altogether. I was tried and tested, but I grew tonnes from the experience.

What is stopping us from getting on the learning curve to developing Futures markets in Africa? We already have Stock exchanges that are doing ok – how about getting the Regulatory machinations going so that some time in the future, we can have a Commodities Market going? We can learn the basics from the other World Futures Exchanges and build our own! I, for one, would just TOTALLY, love being on such a “band – wagon” ;-)

So 19 of the major U.S banks under-went stress tests to determine their capabilities and ability to survive in the event of a worsening recession. These banks hold about two thirds of assets, and more than half of the loans in the US banking system (Source: Bloomberg).

The ideal is for common equity to equal about 4% of a bank’s assets and Tier 1 capital worth about 6%

Aside:
Maybe its just me – but this appears to be just more modeling going on and unless we can seriously substantiate, using market data, how we are arriving at these factors – Ummmh, why do we think these are the stress tests that are going to prescribe, THE way forward? I think, and again, totally my opinion, I think these remain hypotheses that are just being proven – No?

When I decided to embark of doctorate studies, my sole intention was to research the US capital markets ( narrowed down to a very specific facet of course) – I quickly realized, that is not what I wanted to do and embarked in a different direction altogether – story for another day though).

So anyway, preliminary results indicate that BofA (Bank of America), NYSE: BAC needs to raise $ 34B, Wells Fargo needs to raise more capital etc. This in light of a perceived tentative recovery from the recession.

I can’t wait to see the final results – seeing as its “no comments” from all the banks that underwent stress testing.

So – this is a kind of comment/ rejoinder to my post and comments thereafter on and off the blog – mostly off the blog – coz that’s all we seem to talk about these days – Why didnt anyone say something before the Lehmans, Bear Stearns etc began the tumble to being obsolete? Or did someone say something and just got ignored in the spirit of keeping with the Bullish Market trend everyone wanted to keep seeing?

At the weekend shareholders meeting for Berkshire Hathaway Inc NYSE:BRK.A , Warren Buffet, had a lot of things to say concerning executive compensation, industries he will not touch, a.k.a Newspapers :-) , Moody’s etc. A lot of shareholders wanted to know why Moody’s was still a major holding of Berkshire ( 20.4% stake held), despite the finger pointing on the ratings accorded to some previously major, now failed companies.

Now a while back a lot of companies, including those no longer existing or those currently in serious trouble financially were Triple- A rated by Moody’s

Well – simple minds inquire – if those companies were doing so great – what happened?

A lot of things – but the bottom line: too many assumptions derived from theoretical mathematical algorithms that probably do not work in practise. I tend to agree, and tend to think that sometimes in building up over-complex business models leads to the loss of the intrinsic values being modelled in the first place.

Business then tend to spend too much attention ensuring the models are working, results are being mirrored to projected forecasts and any deviations from the models, sometimes not adequately tested using real life market situations, are assumed to need “fixing”. I can bet, that somewhere along the line, a model picked up something on the non-perfomance of sub-prime mortages, but was probably ignored and the model ” corrected” to reflect the expected result – Home prices are supposed to rise, not decline.

They say these days, the most astute of companies are assidiously innovating – thats the only way to survive, let alone compete!

Warren Buffet had this to say on Moody’s:

……the company “eagerly sought stupid assumptions that enabled them to do clever mathematics.” As to why he didn’t exert his influence, he said: “I don’t think I’ve ever made a call to Moody’s. We don’t tell Burlington Northern what safety procedures to put in or AmEx who they should lend to. When we own stock, we are not there to try and change people……

And in any case – the Bullish trend had to be ” allowed ” to prevail right?

I like what he also said nicely, in a very simplistic way that most of us already know:

“If you need to use a computer or a calculator to make the calculation, you shouldn’t buy it,”

I believe in models, thats why I am in the line of work I am in ( and love it :-) ) – but I also believe, that if I can’t explain in words what my model is doing – I probably need to rethink it ;-)

As for Moody’s – the debate, speculation etc continues!

Trusting

Revelations 3:8

“I know your deeds. Behold, I have put before you an open door which no one can shut, because you have a little power, and have kept My word, and have not denied My name”

When God leads you to the edge of the cliff, trust Him fully and let go, only 1 of 2 things will happen, either He’ll catch you when you fall, or He’ll teach you how to fly!
‘The power of one sentence!
God closes doors no man can open & God opens doors no man can close.

I received the caption above from one of my friends and it actually is one of those that made sense to me. Maybe because I am trying to sift through a lot of things right now, but most because this year – yes, the 4 months that we have been into it – I have seen so much of my plans actually translate into results!

I am a Christian and I live my life that way – I simply believe there is a God out there! I believe it is my belief in something that is Greater than I am that I am able to be Who I am….But I shall write about that maybe some other time.

As we approached the end of 2008 – actually around my birthday in November, I sat myself down and WROTE down what it is that I want to get done in 2009. My list had 5 things – that’s it. Because I believe that most of the things I wanted to get done were mere details in the 5. And I have actually seen the “things” happen. Some are already off the list – signed, sealed, delivered!

I could have said – it is because I am such a meticulous planner (which I am), focused about what it is I want to do – long term and short term (I am that too) or whatever else; but seriously, there was and still is something at play that gives me the strength to fly all over without getting weary, give my all in my work and current research, realize when some things are not working, be brave enough to venture off that path and embrace new things etc

Some call it, I don’t know – I don’t know! I call it Divine Intervention. I call it God’s favor.

Liquidity Management

This is going to be a short post because I am still composing the long form of what I want to write.

I have been having very interesting conversations with a group of friends on this Forum, at work and elsewhere concerning all things: Futures and Commodities Trading, Equity, Inflation, The Fed Reserve, Mortgages, Foreclosures, rising levels of unemployment, the TARP ( Troubled Assets Relief Program), FX etc.

Myriad viewpoints, similar consesus; things will tend to get worse before they get better :-(

Why? Because of the cyclical workings of the economy – You see, JP, Wells Fargo, BoA etc, may report better than expected earnings ( yes its earnings season), but if the very core that should continue supporting the reportedly improving economic conditions, i.e people remaining employed , is not yet sustainable, then the recovery will also be very cyclical and sporadic in the long run. Foreclosures are still going to go on, credit card default is going to keep going higher etc.

We have also been talking about the pressure that listed companies have as concerns short run returns; volatility on the NYSE is forcing such companies to go to great lengths if only to somewhat keep their stocks at a “decent” level – whats going to be the long term effect of such reactive policies?

My colleagues and I also sat in on a conference call exploring credit ratings agencies, fixed income options etc. It was interesting, but not shocking to learn that most companies these days are not really relying on the the standard company ratings. So , you firm may be Aaa, by Moodys, but that will not necessarily translate to a favourable credit standing with potential business partners. Made me wonder what extra due diligence would be done by firms in the future – or even right now!

I hope to write up something more comprehensive about this soon enough…..

But as one person did aptly observe, do not put all your eggs in one basket – It just might happen to be the Lehman Basket! Have a wise Investing day!

Quintessential Self

The Preface:

In 2005 – some day, something happened and I was thinking about stuff and I found myself thinking out, silently at first, then loudly, then on paper and it went something like this:


I may not always be the quintessence of focus, but I am clear to make it plain where I want to go

That then became the “official mantra” of how it is that I had been and continued to live my life. That has become a statement that has enabled me keep my head above water, if I may. It allowed me the freedom to put myself out there and live my life with renewed panache. So interesting what bold declarations can do about one’s thought processes and options then embraced! Imagine, just by thinking about what I was doing and not doing in that little one sentence, I have been able to easily (very relative term), sift through the I want and I don’t want in my life.

My late Dad used to tell us the most important thing in one’s life is owning it – mistakes and all. When we were younger, we felt he was being overly over the top, then as we grew older, we began to, gradually, appreciate the power that’s in truly and fully owning your life. That means being in control of those things in life that you can actually control e.g. how you spend you money, who you choose to date, religion, work ethics, attitudes towards relationships ( family, colleagues, strangers, neighbors etc). It also meant, being in stride about those things over which you really cannot fully control – we all know those are a subjective list.

Dad was the kind of person that would have the heartiest conversation with our next door neighbors farm worker about cows, fertilizer, weather, etc then drive off a few blocks and have a very spirited discussion with the next door politician (and actually be politically correct), go to work and chair a meeting on the current energy/oil woes and what the company would do about it then meet up with one of our friends and talk “young people lingo” just like that! Like he got the picking up the phone and saying “ni Fathe”!

Dad always said, not in so many words, and usually through my mum, if you have boyfriends, I need to meet them. I guess that’s a smart way to keep tabs of which little boys are trying to lie to your daughters. That applied to my brother – who also needed to bring his girlfriends home. You see with my Folks, the story applied to all four of us, the three girls and the boy! In the many years of growing up, Dad has only kicked out one boy from our house – and it was someone that was trying to “declare” what he thought he felt for me – the nerve he had, but I have to admire him being brave. Lol! My Dad simply got tired of seeing him at our house and one day he simply told him “ young man, get out of my house and don’t come back” – sounds mean – but I still am glad many years later for that! Some people just don’t get it!

So my Dad got to meet a lot of our friends, and the people we dated. And actually, he became very good friends with a lot of our friends. I didn’t know how much till at his funeral, when a lot of our friends showed up from all over the world!

I think in writing or thinking about the quintessential self – it has to begin with what is important to you – which is what I do.

Seriously, most times when you actually sit and roadmap what it is you want to get done – it seems to be a lot more manageable – maybe it’s just me? I like to plan that which I can plan for and I even cater for contingencies e.g. in my yearly financial plan, I know what I want to spend each month and on what and I also have a “miscellaneous category” with an amount in it. But suprises do happen ( over those things you have control over) along the paths of life – and when those come around, at least I have a feeling of what the anomaly might be – Thank God for Excel and Access!

There is this quote from e.e Cummings that I like:

“To be nobody but yourself in a world which is doing its best, night and day, to make you just like everyone else, means to fight the hardest battle which any human being can fight, and never stop fighting”

I think I want to explore my quintessential self and yes – I choose to do it on a blog, my blog! Why? Because I want to and I can! :-) If along the way, someone finds it a good read, the more the merrier. I believe the world would be a better place if we all strive to be who we are, not what the other person is, or what the other person thinks we should be.

The quintessential self – that’s what should be the focal point for all – I believe, and I am sure a lot of people out there share this sentiment.

Dad’s Legacy

Next week marks 4 years since Dad passed on.

This year is different though, it is the first year that we have thought and talked about it without feeling sad; Not because we are now used to it or we don’t miss him anymore, but because we know it is well. We still don’t get the “why then”, but we have been able to move beyond him not being here to even higher echelons that are the legacy he left behind :-)

Like we always tell everyone – you don’t get over it; rather you learn to live with it…

The core of what Dad was and still is, at least according to us, is embedded in the illusion that so many people held about him. You see he came from a “lineage” that was not supposed to “make it” – BUT, Bless the Lord, that he defied ALL odds, all doubts, all cynicism, all lineage protocol, all that bunch of whatever he was supposed to conform to and became his own man!

He became his own man that got himself an intelligent, resilient woman a.k.a Mama :-) , to run the race that is life with. Together, they weathered the storms of life and raised 4 kids that turned out pretty good I must say. They raised us to believe that we are the masters of our own destiny, that we can become whatever it is that we want to become and our lives are solely in our own hands. I strongly believe that we are what we are today because of that. Even in the times when we were in the doldrums, our faith did not falter.

Forget the faltering of purpose, forget the missteps; together we always, always found a way to eventually step together in sync. Heck, we are not infallible and what counts in life is the ability to step right back out there – which we have done!

At his celebration of life, 4 years ago – my friend asked me to write something that he would use to finish up the DVDs of the celebrations. I was jet-lagged, exhausted from the myriad preparations and things that had to be attended to, and had to get back on another 28 hour plane journey and back to work, school and my Sis P just a few days after the funeral.

So, what I wrote was very spontaneous – I think I was perched on one of the street benches along a street in Eldoret, writing on some scrap paper from a snack I was eating, but this is what I wrote:

A life lived to the fullest
A Kaleidoscope
That God can turn around
To build to that state that epitomizes His excellence
To cherished affection, wisdom, warmth and a firm foundation
To a life well lived
A Testimony
That God reigneth

That of course, doesn’t begin to adequately summarize the life we celebrate – but it give a hint of what we are saying!

Through out we played this song, Redeemer Savior Friend – Link at the bottom of the post.

All, we are saying is this – We forever Thank God for the time He allowed us to have with Dad – and for the man he made him to become!

And – most importantly, for the biggest lesson we learnt from it all – that it is always the right time to do the right thing, that you have to live life on your own terms, that people’s opinions sometimes matter, but God’s will should always prevail, because that is what counts.

I guess for me, that’s why I find it so easy to walk away from things that are not edifying my mind, body and spirit, it is in that truth that was engrained in me that my life, is my own – period! That I shall make mistakes – but I will learn from them, that crap will be swung at me – but I don’t have to take it, that if I decide to win – I shall win! Now tell me if that isn’t the greatest lesson of all – instilling confidence in your “people”

And I believe that’s one of the many reasons why this year, as we celebrate his 4th memorial, I am not sad, I am very happy for the lessons he left with us and for allowing us to become the strong people we are today.

Cheers to Dad’s legacy :-)

Listen to the song if you have time :-)

Redeemer Savior Friend

Several emerging – market economies including Brazil, Chile, Czech Republic, Indonesia, Turkey and South Africa have adopted inflation targeting as their institutional framework for conducting monetary policy.

 

 

Initially adopted by New Zealand in 1990, the norms surrounding the inflation targeting regime have been so powerful that virtually all Central Banks have declared that maintaining price stability with inflation in the “low single digits” is their only mandate. The desire for zero or very low inflation rates is therefore the focal point in both developed and developing economies.

 

 

In Africa, South Africa and Ghana have adopted an inflation targeting monetary policy. Kenya is quickly moving towards adopting inflation targeting monetary policies to ensure inflation levels are reduced and maintained at low levels. This will imply a shift from a money-growth targeting framework to inflation targeting framework in Kenya.

 

 

The IMF has supported the Central Bank of Kenya’s plans to reform the monetary operations framework including the introduction of Inflation targeting – under certain conditions including:  further develop its data collection, analytical capabilities and infrastructure, institutional and statistical reforms – specifically, the arithmetic basis of computing the CPI (Consumer Price Index).

 

 

I am very interested in this paradigm shift in Kenya’s monetary policy. A few questions come to mind including the following:

 

 

  • Will Kenya’s macroeconomic environment benefit from a shift from a money-growth targeting to an inflation-targeting
  • Which factors are systematically associated with Kenya’s decision to adopt an inflation targeting monetary framework?
  • What structural trade-offs (if any), will need to be addressed as concerns monetary and fiscal policy in Kenya.
  • How should Kenya go about the shift from a money-growth framework to an inflation targeting framework?
  • What lessons can the Central Bank of Kenya learn from emerging economies that have successfully adopted inflation targeting frameworks?

 

 

Should Kenya even move towards adopting inflation targeting or should the CBK explore other alternatives to inflation targeting e.g. real targeting approaches where policies are geared toward “holistic” macro-economic development including job creation, poverty alleviation while maintaining moderately low inflation levels?

 

I hope to find answers to these questions in the next few years…..That is a journey I have embarked on…… :-)

Mentors….

Some day, I hope someone can stand and say – “Cynthia mentored me well”. Sometimes all you need in life is one person that believes in you; believes in you enough to want to bring out the best that you can possibly offer. That usually can make all the difference in someone’s life. My note below speaks, in a long convoluted kind of way about 2 men that truly mentored my banking career path.


  

They inspired me, they believed in me and they pushed me to be what I am today and what I am yet to become – I believe the best is yet to come! I truly believe they were God-sent and came into my life at the right time!


 

 

I had a great mentor when I first embarked on my first “real job” out of college a few years ago.


 

It so happened that our crop of “young Turks” a.k.a. – freshly minted college grads that were recruited into B.O.B in that particular year were the result of a “wind of change” that blew in the bank’s philosophy concerning employee standards. Plainly put, they were getting rid of the old school of thought! I think that’s as nice as I can get.


 

So we waltz in, full of ideas, eager to begin making a living away from our folks. We of course are sent to different branches of the Bank in different cities in Kenya. I land at one of the smaller branches in Nairobi and I am ok with it – though I had really wanted to go to the head office a.k.a home office. Of course we are being paid peanuts compared to our predecessors, who were basically given ultimatums – voluntarily retire, or you have no job! But its ok – most of us know this is just a stepping stone – if you play your cards right :-)

 

Some Asides:

On one of my interviews, I had secured a place to stay, paid the deposits required and basically prepared myself to move in (Yah, I was that confident about getting the position!). I also was vehemently determined not to live with relatives or my parents friends or my friends etc. I was determined to make it “my life” from the onset!

I left the Interview – my last interview, walked on to my next appointment at the Embassy of Italy in Nairobi (I was a busy woman though not “officially” employed! Lol!), and got “the phone call” as I prepared to cross, rather forcefully cross our beautiful Nairobi Streets – I still “miss” the intermingling of human beings with cars so fearlessly on Nairobi Streets!

The phone call basically said – return to B.O.B and pick up some forms to be delivered to the Kisumu Branch the day after tomorrow, where you shall also have your medical screening – The rest is History!

When I was finally ready to begin working at B.O.B, a month after that last interview, My Mummy, made the trip with me amidst my protesting that I was a grown woman :-) , I guess also make sure she knows EXACTLY where to find me. Lol! So we get to my new home and she makes sure I have the basics  etc….Oh how sweet! And she was even more assured when she noticed there was a 24-7 Askari on premise :-)

Some day when I am a mother, maybe I will understand what she was going through Much like understand what she went through putting my younger sister P_____ on a plane to the US of A, by herself a few years earlier!.

 

 

So my first day at the Bank is big fuzz – we had a branch manager that liked to take his time – and he did take his time before seeing me J . I learnt the basics, the bank systems, what’s kept where, who is who etc.

 

Another Aside:

 

At the end of my first week, this man, with his desk right next to mine,that had barely said two words to me the entire week walks up to me during Chai ya Saa Tisa ( Afternoon Tea) after the Bank doors close and offers to buy me a beer  – Like that is supposed to what – get me impressed? I can buy my own- whatever-I drink Thank You!– I think I gave him “the look” coz he volunteered to extend the offer “maybe next week”.

 

My second week begins, and my boss Mr. W_____, pulls me aside and tells me he has decided to do some things differently. That marked the beginning of a change in my career life. He was very diligent about making sure I understand what we are doing vs. just doing it. Instead of merely posting a foreign bill for collection, a letter of credit, FX transaction, Repo transactions with the CBK etc – he made sure the concepts were ingrained in me. You see there is a big difference waltzing out of business school with theories and actually putting those into actions! He allowed me build that bridge effectively and efficiently and confidently – at am amazing speed! I am forever grateful to Mr. W_____! That’s as much as I can say! I remember a day during a transition of the bank where only three of us worked – we were dog tired at 3pm – but we managed!

 

My branch was amalgamated into the Head Office three months after I joined the Bank ; And I found myself in uncharted waters – and in the very dreaded Reconciliation Department! However, I also quickly discovered that I was able to work in ANY of the departments – FX and Trade Finance, Business and Personal Banking, Clearing, Reporting etc at the drop of a hat – in just three months!!! I delved in and quickly figured out that I actually enjoyed all this foreign banking stuff a.k.a nostro and vostro account reconciliation, currency revaluations, CBK reporting etc and it also became evident to the “big boyz” upstairs.

 

My role changed from that of merely being a “doer” to that of being “consulted” on multiple issues. I quickly was separated from the “pack” and moved on to doing tougher things. Lol!

 

And therein, came in my second mentor, a Mr. T_____ B_______. You see, he has LONG, unpronounceable names – so for the sake of Sanity, he agreed to people thoroughly shortening his names, else we were just going to call him “Nani!” Lol! The version of his names we used was actually his first name, broken into two shorter names……

 

Aside:

 

Mr. T______ was this short guy, very geeky and intelligent (yes you can be geeky and dumb!). He walked and talked hyper fast and expected that from the people he worked with. My close interactions with him began when the then, Reconciliation Manager was close to retirement. We had this one report, sent to the home office in Mumbai on a fortnightly basis – seeing as the bank had close to 3000 branches in India and a presence in 15 or so other countries – no-one volunteered to learn the reporting – But I did. Doing it for the first time – I realized I had made a big mistake – but there was not backing out now! The first report took me 14 – 20 hours to complete!! But with time, it made sense…and I was easily able to complete a report in 4 hours J

 

So, having delved into something complex, Mr. T_____ naturally wanted me on his team, team of 3, to aid in the development and implementation of a new reconciliation system. I worked LONG hours, Forget your 9am to 3pm bankers hours!  – I also worked Saturday 9-6pm. ( typically). I went to Church on Sunday  morning and went to the Office in the afternoon, I filed (for my own good lest docs disappear as I wait for other people to do their jobs!), I accompanied Mr. T_____ on training trips for other branches, and finally, I was able to run alone with the system J No mean achievement!

 

So when Mr. T_____ said some nice things to our “biggest guy” upstairs in the corner most office – a big step up awaited me – but it meant leaving Nairobi, and moving to Kisumu. I had only visited Kisumu previously but I wasn’t too opposed to relocating either. So I said yes. 3 months later, a complete shock to everyone else, I got ready to relocate.

 

Yah – culture shock! B.O.B Kisumu was WAY LAID BACK – the pace, the attitude, etc… I was used to FAST, and this wasn’t fast enough for me! PLUS – I had a colleague, Mr. S______ that totally DISLIKED me!

 

First, he couldn’t understand why “ a young girl” was sent to the branch to Head something, anything!, He had issues with my knee length or slightly above knee length skirt suits, he was pissed that I could work in any department, and was pissed that he was NOT my boss! Ha! What to do! He once tried to stop me from attending a cocktail party for the bank’s top clients, clients I HAD to get very familiar with, coz he felt someone “more mature” needed to attend – the nerve that man had! Too bad for him none of his anti – me schemes prevailed and I did have the last laugh!

 

I also discovered that some of my colleagues, the young Turks, did not know nearly as much as I did due to the work ethics that one Mr. S_____ had instilled in the Branch operations. You were basically supposed to DR and CR as told without undue questioning. W.T.H! Obviously, he had a lot of clout, judging from the subservient nature of most people. To this day, I still say shame on him for embracing such myopic and backward standpoints especially regarding people that were young enough to be his children!

 

Those that know me – know that I do not really care to speak a lot, but when I do, I do make my point very CLEARLY! And I guess I did…he learnt to tolerate my “Nairobi Attitude” as he told anyone who cared to pretend to listen to him J

 

My stay in Kisumu was short lived – I left to go to Grad School – but I made an awesome friend C_____ who basically taught me a few things about living in Kisumu City :-) that made my short stay totally worth it!

 

I thank Mr. W_____ and Mr. T_____ for believing in me and for allowing me my “me-ness” at the onset of my career! I am truly blessed to have met two amazing mentors like you!  Some day, all I can hope for is that someone will say something like that about me…….

A while ago, a group of my friends (from very diverse backgrounds) were having an e-discussion on Africa’s Investment potential. One school of thought proposed that Oil is the driving factor for many of Africa’s Investment Alternatives – a thought that was then quickly dispelled as not mostly true. Whereas that may be the case for Nigeria et al, it remains largely not necessarily true for a vast majority of the African States.

 

One of my friends then said:

I don’t disagree that these emerging economies could be a boon for the astute investor, but not because of the price of oil. 

 

And this was my response to that:

I totally believe in Africa’s Investment growth potential. I refuse to let the hyper-inflation in Zimbabwe, one lonely isolated and mismanaged economy, serve as a bench-mark for “Investment Environments in Africa” to the rest of the world.

And, I do agree that direct growth of investments in Africa has more do than just the price of oil. The versatile nature of contributors to growth ranging from mining, tourism, agriculture etc can help in dispelling this claim
That Investment opportunities in Africa have expanded over the past few years is no longer a matter of conjecture but rather an issue that a lot of analysts, venture capitalists and investors at large are exploring with a lot of gusto. For a continent that was often synonymous with political strife, ethnocentric skirmishes, disease and immense poverty, this paradigm shift is at the very least, very impressive.

A few Statistics;  In a United Nations Conference on Trade and Development (UNCTAD) report, Africa Recovery, it emerges that the profitability of foreign companies in Africa has been consistently higher than in most other regions in the world. Annual average FDI inflows rose from $ 1.9B in 1983 -87 to 3.1B in 1988-92, and then doubled to 6B in 1993-97.

In my opinion, inasmuch as this is a debatable stand point, when examined in the context of unique macro conditions of each particular region, expected rates of return on FDI vs. actual return, forecasted vs. real GDP, then we can lend credibility to that statement.

It has also emerged that a lot of Multinational Companies (MNCs) are setting base in Africa due to these very reasons. The scope is so high that studies are now being done on the effect of MNCs in Africa/ developing nations. We also have evidence of African based mining, food processing etc companies expanding into other countries leading to outward inflows of FDI up to $ 43B annually.

I can think of a few reasons that could help explain the rise in investment avenues and/or opportunities in Africa:

1. Macro – economic stability.

In a global economy plagued with negative to stagnated growth, even among G20 Nations, there has been a noticeable positive and consistent economic outlook in African nations (some). The trickle down effect may be negligible due to the strides that have yet to be made, but this does not negate the sustainable growth nonetheless.

2.  Re-shaping of political legal environments.

 

Private investments are directly co-related to the legal structure in a country. Efforts are being expended towards achieving a “free and fair” business environment that will then foster investment programs and initiatives.
3.  Regional integration

e.g. the African Union, East African Community etc. These have greatly increased the synergistic capabilities of individual member states through collective bargaining agreements, lifting of trade of trade barriers and providing a united front concerning economic fronts to some extent.

4.  A very educated workforce:

A lot of investment management professionals are educated in the USA and Europe and then return to their countries bringing with them fresh perspectives and outlooks, global mindsets and best practices that have virtually turned around private investment firms in many nations.

Whereas significant strides have been made in my opinion a core issue that still need to be re-examined is in regard to taxation. A major problem of doing business in Africa is:

Multiple taxation.

An importer will pay import duty and stamp duty then customs tax. At selling you will then have to pay a VAT (Value Added Tax) which is an average of 15% for most regions. That is the very least, and in most cases depending on the jurisdiction you are carrying out your business, you ma have to pay Local County or City Council Taxes. I feel that the taxation system can be better streamlined to allow revenue for governments while still encouraging investments and trade.

Indexing of Investment Funds

In investments, one major issue would be the fact that most Capital Markets in Africa with the exception to the Johannesburg Stock Exchange (JSE) have their investments funds and avenues indexed to a single measure which may not accurately reflect performance of portfolios. However, this may very well change with time. Many Capital Markets are now working on developing Indexes that will be reflective of different sectors and I can see how this is going to make these markets even more robust.

On a macro- level, what is really pushing investment growth in Africa is the tailoring of Funds to meet regional needs. Mutual Funds, to include Unit Investment Trusts have grown three fold in the past ten years. Why? People are familiar with this kind of Investment Avenue. Introducing this from a professional perspective makes it more “acceptable”.

I also see great potential for a Futures Trading Market in Africa – an area that has largely not been explored. Maybe one of these fine days, I shall be on the forefront to spearheading the creation and development of one.

The bottom line therefore still remains the creation of a free market based economy in the region. The African Growth and Opportunity Act (AGOA) was very instrumental to this end. This was basically a subtitle to the Trade and Development Act of 2000 aimed at creating incentives for African Countries to further their efforts towards market based economies. A lot of benefits were accrued by countries that actively harnessed the provisions of this Act – but that is something I will discuss at a later posting.

I see even more growth in the African Region. The Astute Investor already knows that and is actively harnessing the little gains right now.

 

Former UN Secretary General Kofi Annan said:

Africa’s Profitability is one of the best kept secrets in today’s world economy

 

That may very well be a phenomenon that is fast changing!

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