#FRONTROW: Kenyan regulators should worry us all

If there’s any unconventional or potentially disruptive idea out there, Kenyan regulators will find a way to sniff it out and make sure it goes nowhere. They will issue statements to denounce it and ‘warn the public’ against engaging with it, they will send legal notices to cease and desist, they will raid offices where the ‘wayward thinking’ is hosted with the media in tow and condemn it in the strongest terms possible.

Take the fact that Safaricom could be forced to spin off M-Pesa as a stand-alone company and keep it at an arm’s-length. The telco has been accused of abusing its market dominating position for longer than anyone wants to remember, and the money transfer service has often been at the heart of the debate.

The Communications Authority (CA) therefore got some foreign consultants to recommend what is called functional separation.

“The two businesses would be required to operate in separate offices, with separate staff below board level, separate branding, separate accounting and separate business operations and support system, customer support systems and management information systems,” the report by Analysts Mason says.

It doesn’t want them broken into two separate legal entities, so what is the point of this? I am not a legal expert or a financial guru, but I am having difficulty understanding how M-Pesa being hived off Safaricom would reduce its market dominance.

“Who is about to break up Google? Who’s breaking up Amazon?” Safaricom CEO Bob Collymore posed last week. “Why do you have this pigmy mentality that it’s too big. I keep saying that Kenya and Africa need to have a lot more Dangotes and Safaricoms and MTNs.”

 It is a reasonable expectation, but don’t expect Kenyan regulators to see sense in the same way the rest of us do.

That is why the Central Bank of Kenya warned Kenyans against virtual currencies and effectively killed several startups. “No entity is currently licensed to offer money remittance services and products in Kenya using virtual currency such as Bitcoin,” a public notice read.

It also explains why the Kenya Film Classification Board is obsessed with regulating morality rather than supporting the film industry. The board’s CEO Ezekiel Mutua has a hashtag running whenever he leaves the house.

UNIVERSITY EDUCATION

Consider the Commission for University Education decreeing that only students with C+ and above are eligible for university education and any bridging courses must stop forthwith. “Those commission people are archaic and stuck in the 19th century,” one lecturer told me.

“They load lecturers with huge documents to fill, we spend more time fulfilling their requirements than teaching and innovating.”

 Instead of freeing up professors to challenge students, their regulator is burying them in paperwork because that is the Kenyan way.

ICT Cabinet Secretary Joe Mucheru finally spoke up, assuring Kenyans that Safaricom would not be broken up and innovation would not be punished.

“You shouldn’t be dismantling it, you should help to build others,” Collymore said at a Financial Times summit. This should be painfully obvious, but not around these parts. Not when you’re dealing with the same agency that proposed that users of public Wi-Fi register with the government.

“We will license the Kenya Network Information Centre to register device owners using their national identity cards and telephone numbers. The identity of a device will be known when it connects to Wi-Fi,” the head of CA, Francis Wangusi said in 2015. The proposal was speedily knocked out for being ridiculous, but someone actually thought this would have been a brilliant idea.

If anything is successful in Kenya, it happens in spite of bumbling bureaucrats, not because of them. A friend who found an ingenious way to cut down home broadband costs down to Sh500 a month spent two whole years awaiting licensing from CA.

NEIGHBOURING COUNTRY

In that time, his capital dried up and some of his investors pulled out.

Another friend trying to earn a degree and currently doing a bridging course has been plunged into limbo after the CUE’s directive.

Yet another who once ran a Bitcoin startup had to move his business to a neighbouring country after his operation became illegal overnight.

I don’t know why the word ‘regulation’ excites Kenyans of a certain kind. Fuel prices, drones, the media, betting, or just about anything you can think of will not survive government’s meddling.

You can’t innovate, experiment, or move forward before you meet a State-imposed roadblock or are required to get some useless permit.

You can’t pay lip service to the clichéd, ‘enabling regulatory environment’, when you’re systematically blocking progress at every turn.

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What will the current governors do after 2022?

Some of the country’s top politicians will be out of the job in 2022. Assuming the likes of governors Hassan Joho, Isaac Ruto, Peter Munya, Evans Kidero and William Kabogo among others are re-elected this August and serve second terms, what will they do next? They are constitutionally barred from running again and are unlikely to run for lower seats such as senator or MP. A school of thought that is forming among some political minds is that these governors might come together and determine who becomes the next President of Kenya. Think about it, they already have grassroots support in different parts of the country, they have styled themselves as defenders of devolution and they share a common interest.

The Council of Governors organises an annual talking shop where the heads of counties lobby together. While Deputy President William Ruto, Peter Kenneth, Gideon Moi and others are already considered front runners for the presidential race then, this governors’ coalition might just change things completely. The obvious next question is who might lead a ticket like this and how they would work out the ethnic maths to increase their chances of winning. This should be interesting to watch.

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The irony of Morocco’s bid for Ecowas

Somebody needs to show the Moroccan government a map. Specifically, point out to them that they are in North Africa. For whatever reason, the kingdom has formally requested to join the Economic Community of West African States (Ecowas) as a full member. In a letter to current Ecowas chair President Ellen Johnson Sirleaf of Liberia, it said it was “to crown the strong political, human, historical, religious and economic ties at all levels with Ecowas member countries”.

 I think Morocco has just woken up and discovered it is in Africa and has become rather excited by the discovery. This request comes just a month after the country was re-admitted into the African Union, decades after it voluntarily withdrew. In all fairness, the North African nation has maintained institutional relations with Ecowas for several years as an observer. If they keep this up, they might just apply to join the East African Community as well!