Tuesday, March 21, 2017

Kenya is launching the world’s first mobile-only government bond

Kenyan citizens will soon be able to buy government bonds on their cell phones. Kenya’s Treasury said today that the M-Akiba bond, the world’s first mobile-only government bond, would go on sale on Thursday after a delay of almost two years.

Kenya first announced plans for the bond, named after the Kiswahili word akiba or “savings,” in late 2015, as a way to give ordinary Kenyans access to the country’s capital markets. Investors can buy in increments as small as 3,000 shillings (about $30), compared to the minimum of 50,000 shillings individuals had spend to spend previously to buy government bonds.

“This product is for a mama mboga, farmer, employee, hustler or whatever,” the Treasury said in a press release at the time, referring to women that sell vegetables at small market stalls. A month after the announcement, M-Akiba was delayed over clearance issues.
Now, the bond will be offered on M-Pesa, Africa’s biggest mobile money network that got its start in Kenya, as well as other mobile money networks. Investors can buy and sell the bonds on the Nairobi Securities Exchange via their phones. Coupon payments will be paid directly to their phones. Like M-Pesa, both smart phones and basic features phones can be used.

The bond isn’t just about offering encouraging Kenyans to save. The Kenyan government needs a new pool of cheap money to finance large infrastructure projects and an upcoming election. Only 2% of government bonds in Kenya are bought and sold by individual investors.

Last year, the IMF called on Kenya to lower its budget deficit. The country’s financing gap, expanded to 9.6% of gross domestic product last year, compared to 7.2% the year before, according to the World Bank. This budget year, Kenya plans to raise 154 billion shillings ($1.5 billion) in external borrowing.

The case of Kenya: will technology deliver a free and fair election?

Often states fail when there are either perceived or blatant election malpractices. This in turn can lead to prolonged civil unrest.
Numerous cases exist across the continent. But I will use the Kenyan case to illustrate how election processes can be compromised, and then brought back from the brink with the use of technology.
Following the election in 2007 Kenya erupted into two months of unprecedented conflict. People were unhappy with the outcome which saw Mwai Kibaki of the incumbent Party of National Unity being declared the winner ahead of Raila Odinga and his Orange Democratic Movement. Many disputed the final tally.
To preempt a similar situation in future elections, a commission led by former South African judge Justice Johann Kriegler was set up. The Kriegler Commission made several critical findings. These included instances of double voter registration, widespread impersonation and ballot stuffing. It concluded that, as a result, it was impossible to know who actually won the election.
The report also made a number of recommendations. The main ones were that technology should be used in future elections to avoid manipulation of the process.
The Kenyan government acted on the recommendations and elections electronic systems had been put in place by the time of the 2013 poll. But it wasn’t all plain sailing. There were system failures which led to another contested outcome. This was finally settled by the Supreme Court.
As Kenya gears up for the next poll in August, questions are being asked about how well prepared the country is this time round. The issue has become a particularly hot topic in the wake of the government’s decision to allow for a backup manual system to kick in if the technology fails again.
This has raised concerns that the government will pre-emptively switch to the manual system raising the possibility that the vote will be rigged.
Types of voter fraud
The Kriegler report found a range of election malpractices. These included:
  • Double voter registration. This occurs when prospective voters register twice in different locations. These voters then manipulate the system by voting twice for the same candidate.
  • Impersonation. This happens when voters whose names are on the register don’t show up to vote but are listed as having voted.
  • Ballot stuffing. This is one of the most blatant election malpractices and involves the placing of pre-marked ballot papers into ballot boxes before voting commences.
A combination of all three led to high voter turnout in the strongholds of the two main candidates, leading to a skewed election result.
The report concluded that Kenya’s manual election system facilitated the malpractices.
The place of technology
The Kriegler report recommended a number of technological fixes to address some of the vulnerabilities inherent in the manual process. These included biometric voter registration, electronic voter identification and a results transmission system.
By 2016, the 2011 Elections Act had been revised to anchor the electronic systems in law.
Kenya now has some of the most advanced election technology in place. This includes a biometric voter registration process which involves capturing biological features such as the fingerprints of prospective voters. This means that at the end of voter registration the election body can electronically audit the records, picking out and deleting duplicates.
Biometric features captured during voter registration are also used on election day to ensure that those voting are indeed those who registered.
This process is known as electronic voter identification and requires that a voter presents their biometrics for validation prior to voting. Voter identification eliminates the ‘ghost-voter’ problem as the electronic voter identification equipment keeps a tally of the registered voters who actually turn up to vote.
It also eliminates the threat of vote manipulation by requiring voters to impress their fingerprints on specialised equipment which highlights inconsistencies between the electronic and manual tallies.
The final piece of technology recommended by Kriegler - the results transmission system - ensures that voting numbers from polling stations are not changed before they reach the tallying centres.
To avoid changes in the figures approved at the polling station, the presiding officer at each station is expected to transmit the numbers electronically through a secure mobile phone.
As such, the numbers are counted electronically in real-time as they stream into the tallying centres.
The results transmission system has the added advantage of preventing fraudsters from delaying the announcement of results so as to fiddle with the numbers to meet the magical 50%+1 threshold.
The way forward
The introduction of these technologies means that Kenya is now in a position to minimise election fraud and to guarantee a credible electoral process.
But concerns remain, particularly around the contentious amendment to allow for a ‘complimentary’ voting system to be put in place in the event of technology failure.
Will Kenya’s 2017 election process revert to pre-2007 status? Only time will tell whether Kenya has indeed become a mature democratic state or whether it will join the league of failed states.



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Friday, March 17, 2017

MPs propose removal of Senate and have governors appointed

 A parliamentary committee has recommended that Senate be abolished. This, the National Assembly Budget and Appropriations Committee said, is designed to resolve the lingering concern of over-representation and a ballooning wage bill. The committee said the country cannot afford to maintain a high number of elected leaders at a time when Kenyans are complaining of over-representation and a soaring public expenditure on salaries. The committee has further recommended that governors be appointed instead of elected, a radical move that could attract a backlash from advocates of devolution. The committee said the current system has compromised the work of the Senate in providing a link between the national and county governments, hence the need to re-assess its necessity under the current constitutional dispensation. "On the issue of over-representation, the committee agreed that Kenyans are over-represented in the legislative bodies and recommends abolishing the Senate or strengthening it to carry out work similar to that of the Council of Governors," said the committee in its report tabled in the National Assembly yesterday.



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Marsabit Governor Ukur Yattani has decamped from ODM together with other elected leaders to back President Uhuru Kenyatta’s re-election.
Four Members of Parliament, 25 MCAs and more than 300 elders representing the 15 communities living in Kenya’s biggest county accompanied the governor when he visited President Kenyatta at State House in Nairobi.
The MPs were Roba Duba (Moyale), Chachu Ganya (North Horr), Nasra Ibrahim (Women Rep) and Joseph Lekuton (Laisamis) who excused himself before the meeting to attend to an urgent matter. Ganya, Nasra and Lekuton all belonged to ODM.
Mr Yattani becomes the latest in the list of governors and senior politicians to defect from the opposition to rally behind President Kenyatta’s re-election.
The governor said he was decamping from ODM to the Frontier Alliance Party, which supports the re-election of President Kenyatta. This effectively means Marsabit has no opposition pointman as the governor and the aspiring governor are all on the same side.
“We have decided to leave the Opposition because the people of Marsabit are very grateful for the work you have done for us including the tarmacking of the tarmac road,” said Yattani.
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Auditor-General queries IEBC's Sh2.14 billion legal fees

Auditor General Edward Ouko has questioned the electoral body's payment of Sh2.14 billion in legal fees.

According to a report tabled in Parliament Tuesday, the Independent Electoral and Boundaries Commission (IEBC) was unable to account for the money, which it claims was used to pay 68 advocates that represented it in the presidential and other petitions as legal fees.

Mr Ouko, in his report, noted that the commission, as at June 2013, had outstanding pending bills relating to legal fees totalling Sh1.05 billion and questioned why the polls body went ahead to pay them more than Sh2 billion.

"A sample test of the 68 advocates that the commission instructed to represent it reveals that they have been paid Sh2.14 billion as part of the pending bills since June 2013," reads the report.

"The procurement and payment of these private legal services were done without the approval of the Attorney-General, contrary to the law. IEBC has not provided documentary evidence of the cases represented and the payments made to support the payments in excess of the pending bills," adds the report.



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