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China In Africa: It’s a Numbers Game

8 min read. Over the past two decades, China has grown into the undisputed champion of Africa’s infrastructure financing needs but as the popular adage goes, there is no such thing as a free lunch.

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China’s growing global dominance got a publicity boost this April 2019 with the latest Forum on Belt and Road International ( BRI) Cooperation. The annual event brought world leaders from 37 countries, 5000 delegates from 150 nations and representatives of 90 international organisations to Beijing for the BRI conference that culminated in a resolution to continue strengthening ties and promoting global growth and economy through policy coordination among participating economies, infrastructure connectivity, trade investment and industrial cooperation

To Africa in particular, China has become a significant economic partner. China has catapulted from being a relatively small investor in the continent to becoming Africa’s largest economic partner, providing infrastructure and investment loans that have helped the continent record massive expansion of roads, rail and other utilities. Obviously, the forum is crucial in strengthening existing relationships and opening new opportunities for cooperation.


To date, it is difficult to understand the full extent of China’s blueprint in Africa due to the data knowledge gap that exists. This vacuum has fueled urban legends and sensational stories, everything from charges of neocolonialism, persistent yet unfounded rumor that Chinese firms use convict labor en masse, to even a Chinese settler colony in Africa. However, to dispel or confirm these narratives Africa must take a critical review, audit and examination of its principal relationship with China and what it portends for Chinese influence and footprint in the continent.

Trade

Since the turn of the 21st century, China has catapulted from being a relatively small investor in the continent to becoming Africa’s biggest economic partner. Africa-China trade increased from $13 billion in 2001 to $188 billion in 2015—an average annual growth rate of 21 percent. China has far surpassed Africa’s longstanding trade partners such as France, Germany, India, and the United States. According to a McKinsey and Company report dubbed Lions and Dragons in 2015, total goods trade between China and Africa amounted to $188 billion—more than triple that of India.


Statistics from the General Administration of Customs of China, in 2018, indicate that China’s total import and export volume with Africa was US$204.19 billion, a year-on-year increase of 19.7%, exceeding the overall growth rate of foreign trade in the same period by 7.1 percentage points. Among these, China’s exports to Africa were US$104.91 billion, up 10.8% and China’s imports from Africa were US$99.28 billion, up 30.8%; the surplus was US$5.63 billion, down 70.0% year on year. In December last year, China’s total imports and exports with Africa were US$18.27 billion, up 15.5% year on year and 2.1% month on month. Among these, China’s exports to Africa were US$9.55 billion, up 3.9% year on year and 3.0% month on month; China’s imports from Africa were US$8.72 billion, up 33.7% year on year and 2.2% month on month; the trade surplus was US$840 million, down 68.7% year on year and up 13.5% month on month. In 2018, the growth rate of China’s trade with Africa was the highest in the world.

China and Infrastructure

China has a long history of infrastructure investment in Africa, and this remains the country’s most visible legacy to this day. In the 1970s, China constructed the 1,710 km Tanzania-Zambia railway (Tan-Zam Railway completed in 1976), which linked landlocked, mineral-rich Zambia to the Indian Ocean. China’s aid for the project consisted of a nearly one billion interest-free loan, over one million tons of machinery and materials, and 50 thousand laborers to undertake construction efforts. Zambia’s first president, Kenneth Kaunda, hailed China’s support, and claimed the railway served as “a model for south-south cooperation.”


However, one of the megatrends of our times has been the growing presence of China in Africa’s infrastructure sector. Over the past two decades, China has helped to meet some of Africa’s infrastructure financing needs and is now the single largest financier of African infrastructure,financing one in five projects and constructing one in three mega projects.

Most funded projects are in the Transport, Shipping and Ports sectors (52.7 per cent), followed by Energy and Power (17.6 per cent), Real Estate (15 per cent, including industrial, commercial and residential real estate) and Energy and Power (13.1 per cent)

To date China has participated in over 200 African infrastructure projects. Chinese enterprises have completed and are building projects that are designed to upgrade about 30,000km of highways, 2,000km of railways, 85 million tonnes per year of port output capacity, more than nine million tonnes per day of clean water treatment capacity, about 20,000MW of power generation capacity, and more than 30,000km of transmission and transformation lines.

Foreign Direct Investment

China is poised to become Africa’s largest source of Foreign Direct investment. At the current growth rates, China will be Africa’s largest source of FDI stock within the next decade. China’s financial flows to Africa are around 15 percent larger than previous estimates. This discrepancy is found because official figures, which rely on banking-system data, do not cover informal money-transfer methods often used by smaller businesses. These methods include “mirror transfers,” in which a local payment is made into the Chinese account of an associate or family member, who in turn makes a local equivalent payment in Africa to the beneficiary’s bank account.

Aid

China is the second- or third-largest country donor to Africa Chinese official development assistance (ODA) and other official flows (OOF) to Africa together amounted to $6 billion in 2012. Chinese foreign aid expenditures increased steadily from 2003 to 2015, growing from USD 631 million in 2003 to nearly USD 3 billion in 2015. The United States promised somewhat more—$90 billion in the same period—but Chinese aid is more sought after. Unlike Western assistance, which comes mainly in the form of outright transfers of cash and material, Chinese assistance consists mostly of export credits and loans for infrastructure (often with little or no interest) that are fast, flexible, and largely without conditions. Thanks to such loans, the International Monetary Fund estimates that, as of 2012, China owned about 15 percent of sub-Saharan Africa’s total external debt, up from only 2 percent in 2005. And McKinsey & Co. reckons that, as of 2015, Chinese loans accounted for about a third of new debt being taken on by African governments. 

Debt

Most of China’s loans to Africa go into infrastructure projects such as roads, railways and ports. China’s loan issuance to Africa has tripled since 2012. New debt issuance by Chinese institutions to African governments increased dramatically in the past five years, rising to some $5 billion to $6 billion of new loan issuances each year in the 2013–15 period. The McKinsey report suggests that in 2015, these loans accounted for approximately one-third of new sub-Saharan African government debt. Most of these loans are linked to infrastructure projects, such as China EXIM Bank’s $3.6 billion loan to finance the Mombasa-Nairobi Standard Gauge Railway in Kenya. From 2000 to 2017, the Chinese government, banks and contractors extended US $143 billion in loans to African governments and their state-owned enterprises (SOEs).


In 2015, the China-Africa Research Initiative (CARI) at John Hopkins University identified 17 African countries with risky debt exposure to China, potentially unable to repay their loans. It says three of these – Djibouti, Republic of Congo ( Congo-Brazzaville) and Zambia – remain at risk of debt distress derived from these Chinese loans. In 2017, Zambia’s debt amounted to $8.7bn (£6.6bn) – $6.4bn (£4.9bn) of which is owed to China. For Djibouti, 77% of its debt is from Chinese lenders. Figures for the Republic of Congo are unclear, but CARI estimates debts to China to be in the region of $7bn (£5.3bn). Angola is the top recipient of Chinese loans, with $42.8 billion disbursed over 17 years. Yet, Chinese loans are currently not a major contributor to the debt burden in Africa; much of that is still owed to traditional lenders like the World Bank.

Business

According to the McKinsey report , there are about 10,000 Chinese-owned firms operating in Africa today. Around 90 percent of these firms are privately owned. State-owned enterprises (SOEs) tend to be particularly in specific sectors such as energy and infrastructure, the sheer multitude of private Chinese firms working toward their own profit motives make Chinese investment in Africa a more market-driven phenomenon than is commonly understood. Chinese firms operate across many sectors of the African economy. Nearly a third are involved in manufacturing, a quarter in services, and around a fifth in trade and in construction and real estate. In manufacturing, an estimated 12 percent of Africa’s industrial production—valued at some $500 billion a year in total—is already handled by Chinese firms. In infrastructure, Chinese firms’ dominance is even more pronounced, and they claim nearly 50 percent of Africa’s internationally contracted construction market.

One-third of Chinese firms based in Africa reported profit margins of more than 20 percent in 2015. They are also agile and quick to adapt to new opportunities and they are primarily focused on serving the needs of Africa’s fast-growing markets rather than on exports.

Agriculture

According to CARI China has acquired 252,901 hectares of land in Africa. Cameroon alone accounts for 41% of all lands actually acquired: driven by two large purchases of existing rubber plantations (over 40,000 hectares each) in 2008 and 2010.China has also established 14 agricultural centres across Africa.

China has also taken an increasingly hands-on role in its work and investment related to African agriculture, leasing and developing land and in many instances being accused of “grabbing” large swathes of it. But as Deborah Brautigam’s reports the assumptions about China’s role in Africa are often not borne out in reality and the areas of land “grabbed” for investment are small compared to the vast areas identified by some.

Security

Over the past decade China’s role in peace and security has also grown rapidly through arms sales, military cooperation and peacekeeping deployments in Africa. Today, China is making a growing effort to take a systematic, pan-African approach to security on the continent.

China is now the second-largest contributor to the peacekeeping budget. Chinese personnel have served on missions in Africa for decades, but until 2013 they were small contingents in unarmed roles such as medical and engineering support. China now provides more personnel than any other permanent member of the Security Council – they numbered 2,506 as of September. Chinese peacekeepers now serve in infantry, policing and other roles in Africa.

In 2017, China established a 36 hectare Djibouti military facility.with a ten-year lease at $20 million annually. It has been described as a support base for naval anti-piracy operations in the Gulf of Aden, peacekeeping in South Sudan and humanitarian and other cooperation in the Horn of Africa, but has also been used to conduct live-fire military exercises.

Labour and Population

The number of Chinese immigrants in Africa has risen sevenfold in under two decades, The Annual Report on Overseas Chinese Study said the African continent was home to more than 1.1 million Chinese immigrants in 2012, compared with less than 160,000 in 1996, adding that 90 percent of the current total arrived after 1970. Initially, most labourers coming to Africa were from retail industry but today with the closer relationships with Africa, Chinese intellectuals and skilled professionals have settled in Africa.

The number of chinese workers by the end of 2017 was 202,689. In 2017, the top 5 countries with Chinese workers are Algeria, Angola, Nigeria, Ethiopia, and Zambia. These 5 countries accounted for 57% of all Chinese workers in Africa at the end of 2017; Algeria alone accounts for 30% of the numbers. These figures include Chinese workers sent to work on Chinese companies’ construction contracts in Africa (“workers on contracted projects”) and Chinese workers sent to work for non-Chinese companies in Africa (“workers doing labor services”); they are reported by Chinese contractors and do not include informal migrants such as traders and shopkeepers.

Media

There has been a significant increase of Chinese media on the African continent in recent years. This has taken place across various levels, including infrastructure development, training of journalists, production and distribution of media content, and investing directly in African media houses and platforms. The increased media footprint is widely seen as a way for China to extend its ‘soft power’ on the continent. But this is not the first time that China has established a media presence on the continent. As far back as the 1960s and 1970s, Chinese media was active in Africa.

However, since 2012, state-run media outlets have also pitched up in the continent, among them the Africa bureau of China Global Television Network (CGTN based in Nairobi) and China Daily Africa newspaper. China also takes African journalists to Beijing for training, while state-linked firms have made investments in local media outlets including buying a 20% stake in South Africa’s Independent News and Media firm (INMSA). The Beijing-based StarTimes Group has also become one of Africa’s most important media companies, increasingly influential in the booming pay-TV market. As it spread its foothold in Africa, the company has embarked on a project to provide solar-powered satellite television sets to 10,000 villages across Africa.

*****

China has not “taken over Africa”; she has merely joined with earlier groups of imperialists in grabbing a part of the African bounty. As a newcomer, her presence is more visible, but not yet as substantially deep-rooted as the long-standing European imprint.

She comes with two key differences: first, China does not yet have the military and diplomatic capacity to replace any of those Western powers in physically securing and enforcing the various trade routes and treaties needed to keep the global trade machine, upon which they all depend, running. Second, therefore, this venture cannot be implemented remotely, but by human displacement. Even a settler-overlord project may not work. What could work is one where millions of Chinese people are steadily shipped over to “yellow” Africa as a continuation of the anti-black ethnic cleansing and encroachment the Asians began centuries ago in South Asia.

The Africa of the ordinary people must therefore assert itself and force its concerns on to all public agendas. The struggle now is to hold a public conversation independent of these various imperialists and their allies.

Sources: McKinsey and Company report. Compiled by Mdogo.

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The author is an analyst based in Nairobi, Kenya.

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Preeclampsia: The “Silent Killer” Stalking Expectant Mothers

9 min read. Ten million women develop preeclampsia each year around the world. Worldwide about 76,000 pregnant women die each year from preeclampsia and related hypertensive disorders. And, the number of babies who die from these disorders is thought to be on the order of 500,000 per annum, according to the World Health Organisation.

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A recent study has revealed that expectant mothers in African countries, especially Uganda are more likely to die with preeclampsia condition compared to their counterparts in other East African countries.

Preeclampsia is a pregnancy disorder characterised by hypertension especially after 20 weeks of pregnancy. It can be dangerous to both the mother and the unborn baby. Gestational pregnancy may increase the risk of premature birth of the baby, increased birth weight of the baby, cesarean delivery, and preeclampsia.

Bulk of government health facilities in the country are struggling to manage the condition since most of the critical drugs needed to manage the condition are not stocked, simply because the government has not prioritised the condition.

The condition is the second cause of maternal deaths worldwide.

Preeclampsia: The “Silent Killer” Stalking Expectant Mothers

The study done by the Health Action on the situation on reproductive health commodities revealed that only 25 per cent of health facilities in Uganda stock Magnesium Sulphate as compared to 71 per cent in Kenya.

Magnesium sulphate is a mineral that reduces seizure risks in women with preeclampsia. A healthcare provider will give the medication intravenously.

The study conducted in four countries (Kenya, Uganda, Tanzania and Zambia) revealed that facilities in Tanzania and Zambia were not any better as far as the stocking of the commodity is concerned with 45 and 40 per cent respectively.

During the commemoration of world Preeclampsia Day on May 22 in Uganda, health facilities in Lira – a city in the Northern Region of Uganda – called for support from the government to enable them to handle mothers with the condition.

About 10 million pregnant women around the world develop preeclampsia each year. Out of the total 76,000 women die from preeclampsia and related hypertensive disorders. Additionally, the World Health Organisation (WHO) estimates the number of babies who die from these disorders every year to be on the order of 500,000.

In developing countries, a woman is seven times as likely to develop preeclampsia than a woman in a developed country. From 10-25 per cent of these cases will result in maternal death.

Preeclampsia should be detected and appropriately managed before the onset of convulsions (eclampsia) and other life-threatening complications.

Administering drugs such as magnesium sulfate for pre-eclampsia can lower a woman’s risk of developing eclampsia.

In developed countries like the US, pregnant women are commonly followed by a healthcare specialist (doctor, midwife or nurse) with frequent prenatal evaluations. In other areas of the world with little access to care and lower social status of women for instance in Africa, traditional health practices are usually inadequate to detect preeclampsia early.

Hypertensive disorders of pregnancy commonly advance to more complicated stages of the disease, and many births and deaths occur at home unreported.

Poor women in remote areas are the least likely to receive adequate health care. This is especially true for regions with low numbers of skilled health workers, such as sub-Saharan Africa and South Asia.

Although levels of prenatal care have increased in many parts of the world during the past decade, the WHO reports that only 46 per cent of women in low-income countries benefit from skilled care during childbirth. This means that millions of births are not assisted by a midwife, a doctor or a trained nurse.

But why are women in Africa dying of this condition yet it can be prevented?

Dr Annettee Nakimuli, an obstetrician-gynecologist at Mulago Hospital in Kampala and lecturer at Makerere University did research to answer that question.

She says although the condition affects women worldwide, in African women, it is more common and particularly severe. It also occurs earlier in pregnancy and can recur in subsequent pregnancies.

Dr Nakimuli reported that at Mulago Hospital where she works, 15 per cent of pregnancies develop life-threatening complications such as preeclampsia, hemorrhage, obstructed labour and sepsis.

She describes herself and her colleagues as being “on the front line” in the battle against death in pregnancy and childbirth. She did a study in 2017 in collaboration with Cambridge’s Department of Pathology and Centre for Trophoblast Research to unravel why a complex disease is so much worse in Africa.

But why would women of African descent suffer so much more from preeclampsia than other women? “There was an assumption in Africa that there was a socioeconomic reason, like poverty,” says Nakimuli. “I was convinced that there was something biological.”

She recruited 750 mothers at Mulago Hospital to what is the largest genetic study of pre-eclampsia conducted in Africa. She collected blood and umbilical cord samples and, in Cambridge, ‘typed’ the DNA to look at all the genetic variation.

“It was kind of a high-risk project, but my determination kept my hope alive. I wanted to find big things.” She says

The findings of the study revealed that killer-cell immunoglobulin receptors (KIRs), genes that protect African women against pre-eclampsia are different from those that protect European women.

KIRs recognises proteins called MHC on the invading fetal cells. Certain combinations of maternal KIR genes and fetal MHC genes are associated with pre-eclampsia, whereas other KIR genes appear to protect against the disease.

Moreover, the risky combination of maternal KIR and fetal MHC proteins occurs at a much higher frequency in sub-Saharan Africa than anywhere else in the world.

From the study, Dr Nakimuli together with other researchers will be researching to understand the biology of preeclampsia.

“We think that women of African ancestry may have these risk genes because of certain beneficial selective pressures, otherwise why would genes that kill mothers and babies be so common in the population? People with the gene that causes sickle-cell anaemia can fend off malaria – perhaps something similar is happening for KIR genes? And so now we are starting work to see whether the genes are protecting against infections such as measles, HIV and malaria.” She says

She also pointed out a lack of awareness and understanding of the condition as a barrier to treatment.

“There’s a general lack of awareness and understanding,” explains Nakimuli. “There isn’t even a Ugandan word for preeclampsia. The closest people get to describing the condition is ‘having hypertension which is different from other hypertension when you’re not pregnant’. It becomes a mouthful.”

Together with other researchers, they developed a format of awareness messages in which a radio presenter would play a real-life testimonial – such as a woman relaying the complications of her pregnancy – and then invite listeners to reply to a related question by sending a text to a toll-free number. Each respondent would subsequently receive an SMS socio demographic survey to complete.

“What makes preeclampsia such a challenge is that it has been impossible to predict or prevent,” explains Professor Ashley Moffett, from Cambridge’s Department of Pathology and Centre for Trophoblast Research, who is an expert on the disease.

“It’s been called the ‘silent killer’ because many women cannot feel the danger signs that their blood pressure is rising until it’s too late. Even when it is detected the only course of action is constant monitoring, and ultimately the only cure is delivery sometimes at too early a stage for the baby to survive,” adds Moffett.

However, during the release of the research study in the four countries in Zambia, Mr Denis Kibira, Executive Director, Coalition for Health Promotion and Social Development (HEPS) who conducted the study cited lack of enough blood pressure (BP) machines, designated preeclampsia ward, a postnatal ward, and inexperienced health workers to handle women with the condition as some of the challenges.

For instance, Lira Regional Referral Hospital in Uganda which receives about 100 expectant mothers daily for antenatal care, has only one blood pressure machine yet it serves nine districts in the region.

Mr Jino Okot, the in-charge of Ogur Health Centre IV, most health workers do not have the necessary skills to administer magnesium Sulphate and the government should do something to improve the situation of the mothers.

“Most of the health workers do not have the skills to diagnose preeclampsia. Some of them do not even know how to mix and administer. The Ministry of Health should understand that health workers need training if we are to ably manage the condition,” Mr Okot said.

Mr Edmond Acaka, Lira District assistant health officer-in-charge of maternal and child health, appealed to the Ministry of Health to come to the rescue of the district by increasing its budget to accommodate more of the commodities.

While Ms Beatrice Nyangoma, communications officer for HEPS-Uganda, asked the Ugandan government to consider regulating prices for magnesium sulphate to improve affordability and availability.

Mr Kibira while releasing the data to health journalists in Zambia in September said different levels of facilities were picked in each country. The methodology used consisted of a questionnaire and a qualitative survey component. Data collectors were trained in June 2018 (Tanzania), July 2018 (Kenya and Uganda), and August 2018 (Zambia).

The levels of health facilities visited in Kenya were level 3 and 5, in Tanzania: ‘Dispensary’ and above (country level 1-3), in Uganda: ‘Health Centre III’ and above (country level 3-7), and in Zambia: ‘Health post’ and above (country level 1-4).

The study conducted across sectors (public, private and mission) hospitals in urban and rural areas in 169 facilities in Kenya, 126 in Tanzania, 145 in Uganda and 237 in Zambia also revealed there was a large variability of supplements per type and country.

The mean availability of these commodities was 36 per cent in Kenyan health facilities, 29 per cent in Tanzanian, 37 per cent in Ugandan and 34 per cent in Zambian health facilities.

The data collection tool assessed the availability of 55 SRH commodities at the moment of data collection in each of the 677 study facilities.

Only in Zambia were all these supplements such as calcium gluconate, ferrous salt, folic acid, zinc, and oral rehydration salts commonly available (70-84 per cent overall) except calcium gluconate, which had an overall availability of just six per cent.

Calcium gluconate was also poorly stocked in other countries, with availabilities of 28 per cent in Kenya, 17 per cent (Uganda) and two per cent (Tanzania).

Oxytocin, used to induce labour and for the prevention and treatment of postpartum hemorrhage, was stocked relatively commonly (47-91 per cent), except the private sector in Kenya (27 per cent) and Zambia (20 per cent).

Zambia was leading with oxytocin stocks in facilities at 94 per cent followed by Kenya at 84 per cent. Tanzania third at 78 per cent while Uganda was the least with 64 per cent.

Gentamicin, used to treat pneumonia and neonatal and maternal sepsis,was moderately available in all countries (overall, 60-81 per cent), except for in Tanzania (23 per cent).

While the availability of dexamethasone, used in the management of pre-term labour to improve foetal lung maturity, was considerably lower, ranging from 11 per cent (overall, Tanzania) to 50 per cent in Uganda.

According to the World Health Organisation, the full intravenous magnesium sulphate regimens are recommended for the prevention and treatment of eclampsia.

“Magnesium sulfate is a lifesaving drug and should be available in all health-care facilities throughout the health system. The guideline development group believed that capacity for clinical surveillance of women and administration of calcium gluconate were essential components of the package of services for the delivery of magnesium sulfate,” says the WHO.

The international health agency states that in settings where there are resource constraints to manage the administration of magnesium sulfate safely in all women with pre-eclampsia, there may be a need to accord greater priority to the more severe cases.

The availability of medical devices from the study was inconsistent across the countries.

Speculums (metal or plastic device that is used to open the vagina enough to see inside were available at 85 per cent of the public facilities of Kenya, 84 per cent of Tanzania’s, 89 per cent of Uganda’s and 64 per cent of Zambia’s public facilities.

The private sector showed lower availabilities at 45 per cent of Tanzanian, 82 per cent of Uganda, 72 per cent of Kenya and 15 per cent of Zambian facilities.

Ultrasound scans had availability levels below 50 per cent in all sectors (public and private hospitals) of all countries, except the mission sector of Uganda (57 per cent).

Foetal scopes were commonly available in the public sector of Tanzania (97 per cent), Uganda (96 per cent) and Zambia (80 per cent), but not in Kenya (35 per cent).

Availability in the private and mission sectors showed a more mixed picture, with availabilities ranging from 16 per cent (private, Zambia) to 96 per cent (mission, Uganda).

Safe delivery kits were not at all available in Kenya and Uganda, and only 16 per cent of Zambian facilities. Tanzania had a much more elaborate availability at 82 per cent of public, 32 per cent of private and 33 per cent of mission facilities.

The availability of antiseptic was similar in Tanzania (65 per cent), Uganda (61 per cent) and Zambia (63 per cent), but lower in Kenya (24 per cent).

Vasectomy and tubal ligation kits were mostly unavailable in the four countries, with all overall availabilities below 10 per cent

Mr Kibira said most of the sexual reproductive health commodities were unavailable in most facilities because the governments were not budgeting enough for them.

“These are essentials that each country should have in place but most countries are not considering them as a priority hence the stock-outs,” he said

In the recommendation, Kenya was asked to adopt a multi-sectoral approach in the

provision of health services and commodities, especially in the rural and hard to reach areas, by integrating and bringing services closer to the population.

“County governments should include all the drugs as essential medicines by making budget available for their purchase,” recommends the study.

For Uganda, the government has been asked to actively seek out strategies to reduce the cost of high-cost SRHC such as magnesium sulphate, for instance through offering subsidies.

“Strategies to improve the SRHC supply chain must be actively sought to ensure that commodities are delivered on time and in the quantities ordered. Healthcare providers to receive additional training on SRHCs, especially in the private and mission sector facilities,” states the study.

The Zambian government has been urged to increase the number of trained staff, and improve the knowledge of existing staff and also improve the supply chain of the commodities.

For Tanzania, inadequate availability of SRH commodities, frequent stock-outs, poor logistic management, and limited community knowledge constituted major factors contributing to the problems experienced with accessing SRH commodities in the country

The government was, therefore, asked to ensure all the commodities on the international Essential Medicines Lists (EMLs) are also included in the Tanzania EML and sensitise communities about SRH services and commodities.

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Food Trends in Kenya (2007- 2017)

4 min read. Rising food prices in Kenya have an adverse effect on the country’s development as a whole.

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The right to food as stipulated in Article 43 of the Constitution of Kenya recognises that all Kenyans have the right to be free from hunger and to have adequate food of acceptable quality. But we are still hungry.

Kenya has had several droughts that have affected its productivity yields in agriculture over the past few years. This, in tandem with corruption, inefficiency and demographic bulge has put pressure on our current food systems. Food prices have therefore increased to the detriment of the consumer whose income has barely increased. 

Because of this, it is estimated that about 16 million Kenyan’s are poor, 7.5million people live in extreme poverty, and over 10 million people suffer from chronic food insecurity and poor nutrition. During periods of drought, heavy rains and/or floods, the number of people in need could double if this trend continues. 

Since 2007, the cost and volatility of many staple food commodities (maize flour, beans, carrot and milk) have increased tremendously. Adverse weather conditions and climate change, prolonged or recurrent droughts, shifts in local production, disease and consumption shocks, inflation and changing informal trading patterns, are rapidly redefining food affordability and transforming food consumption, production and market dynamics.  

The Consumer Price Index  – a measure of prices of a basket of goods over time –  has also increased since 2007 due to a steady increase in prices of food and non-alcoholic drinks. While the annual average of non-food Consumer Price Index (CPI) which includes alcoholic beverages, tobacco, narcotics, clothing, footwear, housing, water, electricity, gas and other fuels, furnishings, household equipment and routine household maintenance, health, transport, communication, recreation & culture, education, restaurant and hotels and miscellaneous  goods and services, has increased by 53.9 per cent.

Retail prices of food products have gone up by 83.3 per cent in the last ten years. During this time, 30 per cent of food commodities have tripled in prices. The prices of kerosene and petrol rose by only 15.73 and 28.23 per cent respectively over the same period. The slow rise in the fuel prices was mainly due to the decline in international oil prices that started in 2014 through to 2018. Government revenue and expenditure increased over the past years though expenditure grew at a faster pace resulting in the increase of fiscal deficit. 

Household spending

Data from Basic Report Based on 2015/16 Kenya Integrated Household Budget Survey, shows the majority of households spend  44.6 per cent of their budget on education. Food closely follows at 33.5 per cent. In male-headed households, expenditure on education accounted for more than half of the cash transfers while female-headed households spend a higher proportion on food. Nationally, 54.7 per cent of cash transfers received from government programmes was spent on education while 32 per cent was spent on food. In rural areas, 43.8 per cent of cash received was spent on education compared with 73.4 per cent in urban areas.

Shocks to Household Welfare

A shock is an event that may trigger a decline in the well-being of an individual, a community, a region, or even a nation. According to the economic survey (2017) the shocks which occurred during the five-year period preceding the survey and had a negative impact on households’ economic status/welfare. 

Three in every five households reported having experienced at least one shock within the five years preceding the survey. A sharp rise in food prices was reported by the highest proportion (30.15%) of households as the first severe shock. Most households reported that they used their savings to cope with the shock(s).

The severity of a shock is assessed to define the impact on the household’s economic or social welfare. This is a simple ranking mechanism from the respondent’s perception to assist in determining the effect of the shock. A severe shock has debilitating effect on the household economic or welfare status. 

Nationally, a steep rise in food prices was reported as a severe shock by the highest proportion of households (30.1%). Other shocks reported by households as severe were droughts/floods (27.3%), death of other members of the family (21.5%) and death of livestock (20.1%).

In urban areas, high proportions of households reported that they struggled with high food prices (18.6%) and the death of other family members (14.9%). Death of other family members was ranked as the first severe shock, by about the same proportion of households in rural and urban areas. Households that lost livestock through death or theft mainly resorted to selling animals, while those affected by high food prices reduced food consumption at the household level.

According to the derived poverty lines, households whose adult equivalent food consumption expenditure per person per month fell below Ksh 1,954 in rural areas and Ksh 2,551 in urban areas were deemed to be food poor. Similarly, households whose overall consumption expenditure fell below Ksh 3,252 and Ksh 5,995 in rural and urban areas, respectively, per person per month were considered to be overall poor. Further, all those households that could not afford to meet their basic food requirements with all their total expenditure (food and non-food) were deemed to be hard-core/ extreme poor.

Rising food prices in Kenya have an adverse effect on the country’s development as a whole. Key contributors, partners and relevant authorities in the food sector should continue to analyse food prices and related issues, put in place mechanisms to respond to early warning of disasters such as droughts, floods and other disasters and come up with strategies to avert the negative effects of high food prices in the future. 


Written and published with the support of the Route to Food Initiative (RTFI) (www.routetofood.org). Views expressed in the article are not necessarily those of the RTFI.

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Who Owns Kenyan Banks?

10 min read. While banks have begun to adhere to disclosure requirements spelt out in the prudential guidelines issued by the Central Bank of Kenya (CBK) much more needs to be done, particularly pertaining to competition policy and regulation to put checks and balances on the monopolisation of the banking sector in Kenya. 

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Banking in Kenya dates back to the pre-colonial periods. The first banks largely concentrated on financing international trade along the Europe-South Africa–India axis, but later diversified operations to tap the opportunities for profitable banking created by a growing farming settler community and pioneer traders in the local economy to whom they provided deposit and credit facilities. 

Indian money lenders operating quasi bank services as early as the 18th century were probably the first bankers but the first recognisable bank was Jetha Lila Bankers from India, which was established in Zanzibar in 1880. In 1889 the National Bank of India appointed the trade house of Smith Mackenzie to be their agent in Zanzibar. Smith Mackenzie had a Mombasa branch in 1887 which was taken over by the Imperial British East Africa (IBEA) in 1888.  The National Bank of India established its own office in Zanzibar in 1892. In July 1896 the National Bank of India established a branch in Mombasa renting premises from Sheriff Jaffer. 

In April 1909, the East Africa Post Office Savings Bank Ordinance was passed and in April of the following year, the Ordinance for the Regulation of Banks established in the East Africa Protectorate was passed.  The former Ordinance established the first bank in the formal sense while the latter enabled the National Bank of India to become the first commercial bank. By 1911 there were only three banks: The National Bank of India, The Standard Bank of South Africa that came in December 1910 which later merged with Anglo-Egyptian Bank Ltd to form Barclays Bank in 1926 and Kathiawad and Ahmedabad Banking Corporation which had a short-lived presence in Mombasa from 1910 to 1915. 

In 1920 the East Africa Protectorate was declared a colony of the British Empire and its name changed to Kenya. The new colonial starters helped the Banks grow rapidly mainly through European Deposits and Asian customers. The banking services were not available to Africans, the only banking sources for Africans was the Post Office savings bank which started in 1910 as a department of the Colonial Postal service, even then the service was only available in places where Officials of the colonial service were stationed and therefore did not reach the majority of Africans who resided in rural areas.

The steadily growing economy in Kenya would soon lead to an influx of new banks between 1950 and 1959. In 1951 the Dutch bank Nedelandsche opened a branch in Nairobi. It was followed by the Bank of India which opened its first branch in Treasury square in Mombasa on January 17th 1953 and the Bank of Baroda on December 4th of the same year with its first branch also in Mombasa. The Pakistan based Habib Bank AG Zurich Ltd came in 1956 while the Ottoman Bank and Commercial Bank of Africa (CBA) rounded off the rush by establishing branches in the country in 1958.

After Indian attaining independence from Britain in 1947 and the subsequent hiving off of Pakistan, India changed its name in 1958 to National Oversees and Grindlays bank later called National and Grindlays Bank following its merger with Grindlays bank another landing based bank which traced its roots to Calcutta India. By 1951 the Banks had expanded its branches considerably but employment opportunities for Africans in the Banking industry took a long time to materialize. Indeed, it was not until June 1963 a few months before the country attained independence that the first African manager of a Bank branch Peter Nyakiamo was appointed. 

After independence, the changing landscape of banking began to note the entrance of fully indigenous banks. In June 1965 the first fully locally owned Commercial Bank, the Cooperative Bank of Kenya was registered as a Cooperative Society; initially, it served the growing farming community. Cooperative bank as it came to be known commenced its operations as a Bank on January 10th 1968.  The first fully Government-owned Bank the National Bank of Kenya was established on June 19th 1968. In 1971, the Kenya Commercial Bank was formed following the merger of the National and Grindlays Bank, with the government owning a 60-per cent majority stake. It took the poll position as the largest of the country’s commercial banks in terms of deposits and number of branches.

The formation of the Government-owned Banks had the desire to fight the speeding of the provision of affordable banking services to the majority of the population. It also prompted Foreign-owned bank to take measures to remain relevant in the Kenyan markets and beyond.  Today, according to the Bank supervision annual report 2017, Kenya currently has 44 banks. 31 of the banks are locally owned while the remaining 13 are foreign-owned. Among the 31 locally owned banks, the government of Kenya has a shareholding in three of them, 27 of them are commercial banks and one is a mortgage finance institution, known as Housing Finance.

Kenya Banking Sector

Illustrated by Mdogo / The Elephant

Of the 44 banks, ten are listed on the Nairobi Securities Exchange with respect to the names of their shareholders namely Barclays Bank of Kenya Ltd, Stanbic Bank Kenya Limited, Equity Bank Ltd, Housing Finance Ltd, Kenya Commercial Bank Ltd, NIC Bank Ltd, Standard Chartered Bank (K) Ltd, Diamond Trust Bank Kenya Ltd, National Bank of Kenya and Co-operative Bank of Kenya Ltd. The shareholding structure of these banks constitutes, one that is state-owned, six locally owned and three that are foreign-owned. 

Together, they act as representatives of local, foreign, state, single and block shareholding in Kenya. 

In 2016, in the wake of the collapse of three lenders —Dubai, Imperial and Chase banks — precipitated by weak corporate governance practices that allowed irregular issuing of loans to politically connected customers, wanton insider lending and running of parallel banks, the Central Bank of Kenya issued orders for banks to disclose top shareholders on their websites. An outcome of this has been greater transparency and public trust. However, as this analysis illustrates, is a network of individuals, companies and banks who are the major shareholders of Kenyan banks.

Let us examine this?

The National Bank of Kenya’s two key shareholders are the National Treasury of Kenya and the National Social Security Fund (NSSF). The NSSF holds 48.1% of the ordinary shares as well as 20.7% (253 million) of the non-cumulative preference shares in the Bank. The National Treasury holds 22.5% of the ordinary shares as well as 79.3% (900 million shares) of the Bank’s non-cumulative preference shares. The remaining 29.5% of the ordinary shares are held by the general public through the NSE namely, Kenya Reinsurance Corporations, Best Investments Decisions Ltd, Co-op bank custody a/c 4003a, Craysell Investments Limited, NIC Custodial Services a/c 077, Equity nominee Ltd a/c 00084, NBK Client a/c 1( Anonymous) and Eng. Ephraim Mwangi Maina who has 0.3% shares.

Kenyan Banks: Shareholding

Illustrated by Mdogo / The Elephant

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Co-operative Bank of Kenya public and was listed on December 22nd 2008.

Shares previously held by the 3,805 Co-operative Societies and unions were ring-fenced under Co-op Holdings Co-operative Society Ltd which became a strategic investor in the Bank with a 64.56% stake (3 Billion shares), followed by Gideon Maina Muriuki with 1.9% shares, Kenya Commercial Bank nominees a/c 915B 0.8% shares, NIC Custodial Services a/c 077 0.7% shares,Stanbic Nominees Ltd a/c Nr  1030682 0.5% ,Aunali Fidahussein Rajabali and Sajjad Fidahussein Rajabali 0.4%, Amarjeet Balooobhai Patel and Baloobhai Chhotabhai Patel, Old Mutual Life Assurance Company,Kenya Reinsurance Corporations and Standard Chartered Nominees Resd a/c ke11443 hold 0.3% shares each. 

Co-op bank custody a/c 4003a (anonymous) has shares in two banks, National Bank of Kenya and Standard Chartered.

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On 31st December 2014, Equity Group holdings PLC  finalized an internal restructuring that culminated in its conversion into a non-operating holding company, Equity Group Holdings Limited (EGHL) in order to further meet its objectives. The Bank arm was founded in 1984 as Equity Building Society (EBS). In 2006, the Bank was listed at the Nairobi Securities Exchange where it has become the largest Bank by market capitalization. The listing also attracted Helios, a strategic investor, to invest USD 185 million in 2007. 

Arise BV is the top investor at Equity Bank Limited with 12% shares. Aris-constituting Norfund, FMO and Rabobank-paid kes17.6 billion for a share of Equity Group Holdings KES147 billion market valuation. Aris took over the shares held by Norfininvest.

Other shareholders include James Mwangi and British American Investment Company Kenya Ltd with 127 Million shares, Standard Chartered Nominees with 121 Million shares, Equity Bank ESOP 117 Million shares, Standard Chartered Kenya Nominees Ltd a/c 107 Million Shares, Fortress Highlands Ltd 101 Million shares, Equity nominees Ltd a/c 93 Million shares, Stanbic Nominees Ltd a/c and Aib Nominee a/c Solidus Holdings Ltd hold 92Million shares. 

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Kenya Commercial Bank, Eastern Africa is the oldest and largest commercial bank started its operations in Zanzibar as a branch of National Bank of India In 1896. The bank extended its operation to Nairobi in 1902, which had become the headquarters of the expanding railway line to Uganda. In 1975, The Government of Kenya acquired majority shareholding and changed the name to Kenya Commercial Bank. In 1988, the Government sold 20%of its shares at NSE through an IPO that saw 120,000 new shareholders acquire the bank. The National Treasury is the top investor at Kenya Commercial Bank with 17.5% shares, followed by National Social Security Fund (NSSF) with 173 Million shares, Standard Chartered Nominee a/c with 69 Million shares, Standard Chartered Nominees Ltd a/c with 63 Million shares,CFC Stanbic Nominees Ltd a/c with 61 Million shares, Standard Chartered Kenya Nominee a/c with 58 Million shares, Standard Chartered Kenya Nominees Ltd a/c with 52 Million shares ,Standard Chartered nominees a/c ke002382 with 46 Million shares, Standard Chartered nominees a/c ke9688 with 45 Million shares and  Standard Chartered Kenya nominees non-resd a/c 9069 with 36 Million shares.

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Amalgamated Banks of South Africa (ABSA) Group Limited formerly known as Barclays Africa Group Ltd has the highest shares, 68.5% at Barclays Bank of Kenya, followed by Standard Chartered Nominees Resd a/c ke8723 e with 75 Million shares, Standard Chartered nominees resd a/c ke11401  with 46 Million shares, Kenya Commercial Bank Nominees Limited a/c 915b with 41 Million shares,Standard Chartered nominees resd a/c ke11450 with 38 Million shares, Kenya Commercial Bank Nominees Limited a/c 915a with 34 Million shares, Standard Chartered nominees a/c 9230 and Standard Chartered nominees non-resd. a/c 9913 hold  23 Million shares, Goodwill (Nairobi) Limited a/c 94 with 21 Million shares and the Jubilee Insurance Company of Kenya Limited with 20 Million shares.

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Standard Chartered Bank Kenya Limited was established in 1911 with the first branch opened in Mombasa Treasury Square. The Bank was listed on the Nairobi Securities Exchange in 1989. The public shareholding is just over 25% (remainder held by Standard Chartered PLC) and comprises over 30,000 shareholders. Standard Chartered Holdings is the top shareholder with 73.5% shares and operates as a subsidiary of Standard Chartered Holdings International B.V.  Standard Chartered Holdings (Africa) BV is an Overseas UK company opened on 17 May 2002. Kabarak Limited follows with 3.5 Million shares, Co-op Bank Custody a/c 4003A with 1.9 Million shares , Standard Chartered Kenya Nominees – a/c KE002382 and Standard Chartered Nominees – resd a/c KE11450 they both hold 1.7 Million shares, Standard Chartered Nominees – a/c 9230 they both hold 1.5 Million shares, Kenya Commercial Bank Nominees Limited – a/c 915B and Standard Chartered Africa Limited, they both hold 1.4 Million shares, Old Mutual Life Assurance Company Limited  with 1.3Million shares and Standard Chartered Nominees – resd a/c KE11401 holds 1.1Million shares. 

Standard Chartered Kenya Nominees Ltd a/c (anonymous)  has almost equal shares in two banks, Equity Bank limited and Kenya Commercial Bank.

Standard Chartered nominees a/c ke002382 (anonymous) has shares in two banks, Diamond Trust Bank and Kenya Commercial Bank.

Standard Chartered nominees a/c ke11450 (anonymous) has shares in two banks, Housing Finance and Barclays Bank of Kenya

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Stanbic Bank Kenya Limited (SBK) was established in 1958 when Ottoman Bank incorporated its first subsidiary in the region. In 1969, Ottoman Bank sold its Kenyan operations to National and Grindlays Bank (NGB Kenya) making its exit from the East African market. Stanbic nominees ltd a/c nr00901 is the top shareholder at Stanbic bank with 60.0% shares, followed by Standard Chartered nominees non-resd. a/c 9866 with 34 Million shares, Standard Chartered nominees non -resd. a/c 9867 with 13 Million shares, Standard Chartered Kenya nominees Ltd, a/c ke20510 with 9 Million shares, Standard Chartered Kenya nominees Ltd a/c ke002012 with 8 Million shares, Standard Chartered nominees Ltd non-resd a/cke11663 with 7 Million shares, Standard Chartered nominees non-resd. a/c ke9053 with 5 Million shares, the Permanent Secretary to the Treasury of Kenya with 4.3 Million shares, Standard Chartered nominee account ke17661 with 4.1 Million shares and Standard Chartered Kenya nominees ltd a/c ke23050 with 3.6 Million shares.

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Diamond Trust Bank Group is an African banking group active in Burundi, Kenya, Tanzania, and Uganda. It has operated in East Africa for over 70 years. It is an affiliate of the Aga Khan Development Network (AKDN) and the flagship of DTB Group is Diamond Trust Bank (Kenya), which was founded in 1946.  Aga Khan Fund for Economic Development is the top shareholder at Diamond Trust Bank with 16.5% shares, followed by Habib Bank Limited with 45 Million shares, The Jubilee Insurance Company of Kenya Limited with 27 Million shares, Standard Chartered Nominees a/c KE18965 and ,Standard Chartered Nominees a/c KE18972  have 5.2 Million shares, The Diamond Jubilee Investment Trust (U) Limited with 3.8 Million shares, Standard Chartered Nominees a/c KE002382 with 3.5 Million shares, Aunali Fidahussein Rajabali and Sajjad Fidahussein Rajabali with 3.3 Million shares, Standard Chartered Nominee Non Resd a/c KE11752 and CFC Stanbic Nominee Limited a/c NR1873738 have with 2.7 Million shares.

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Housing Finance Limited is a large mortgage finance company in Kenya. The company was established in November 1965, to promote a savings culture and homeownership among the citizens of newly independent Kenya. Major investors in the company include the Commonwealth Development Corporation (CDC), whose shareholding at one time was as high as 60%, and the Government of Kenya, which at one time owned 50% of the company. CDC has since divested from Housing Finance Limited and the Kenyan Government has substantially reduced its shareholding.

In 1992 Housing Finance Company of Kenya became listed on the Nairobi Stock Exchange. 

Britam Investment Company (Kenya) Ltd is the top shareholder at Housing Finance with 19.9% shares, followed by Equity Nominees Limited a/c 00104 with 44 Million shares, Britam Insurance Company (Kenya) Ltd with 33 Million shares, Britam Insurance Company (Kenya) Ltd with 23 Million shares,Standard Chartered Nominees Resd a/c KE 11401 with 14 Million shares, SCB a/c Pan African Unit Linked FD with 11 Million shares,Permanent Secretary Treasury with 8 Million shares,Kenya Commercial Bank Nominees Ltd a/c 915B with 5 Million shares,Standard Chartered Nominees Resd a/c KE11450 and Kenya Commercial Bank Nominees Ltd a/c 915A have 4 Million shares. 

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Investments & Mortgages Limited was formed as a private company providing personalised financial services to business people in the Nairobi area. In 1980, I&M, as the company was known at that time, was registered as a Financial Institution under the Banking Act. Following changes in the regulations of the Central Bank of Kenya, I&M became a commercial bank in 1996. In 2013, I&M Bank created I&M Holdings Limited, as the holding company of all the group’s businesses and subsidiaries. The holding company’s shares of stock are listed and publicly traded on the Nairobi Securities Exchange under the symbol I&M. Minard Holdings Limited is the top shareholder at I&M Holdings with 19.9% shares, followed by Tecoma Limited with 76 Million shares, Ziyungi Limited with 73 Million shares, Standard Chartered Kenya nominees Ltd a/c ke002796 with 41 Million shares. 

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Kenya Reinsurance Corporation has shares in two banks, Cooperative Bank and National Bank of Kenya.

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National Social Security Fund (NSSF) has shares in two banks, National Bank of Kenya and Kenya Commercial Bank.

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NIC Custodial Services a/c 077 (anonymous) has shares in two banks, Cooperative Bank of Kenya and National Bank of Kenya. 

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The National Treasury has shares in two banks, Kenya Commercial Bank and National Bank of Kenya. 

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The Jubilee Insurance Company of Kenya Limited has shares in two banks, Diamond Trust Bank and Barclays Bank of Kenya.

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Banks play an important role in the economy of a country. When banks efficiently mobilize and allocate funds, this lowers the cost of capital to firms, boosts capital formation, and stimulates economic activities. Thus, weak governance in the banking sector can have far-reaching consequences to the economy of a country. In the recent past, the banking sector in Kenya has witnessed a number of corporate governance issues that sent jitters among millions of bank customers resulting in a confidence crisis. While banks have begun to adhere to disclosure requirements spelt out in the prudential guidelines issued by the Central Bank of Kenya (CBK) much more needs to be done, particularly pertaining to competition policy and regulation to put checks and balances on the monopolisation of the banking sector in Kenya. 

Dataset

This story was produced in partnership with Code for Africa’s iLAB data journalism programme, with support from Deutsche Welle Akademie.

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