It is a new year and one in which we are digesting some late news from some of Kenya’s development partners who have had challenges outside the country that may have an impact on the country’s development plans.
We have De La Rue PLC, one of the leading currency printers in the world, including of Kenya’s banknotes series. The company, with which Kenya invested £5 million (over Sh500 million) for 40 percent of a joint venture in 2016, has now undertaken a restructuring of its currency and automation divisions and sold its identity business. It also announced an unexpected half-year loss, a new CEO, and suspended future dividend payments to manage its debt levels.
There is also Tullow Oil which first discovered oil in Uganda in 2006 and later in Turkana, Kenya in 2014. From this find, Kenya exported its first oil shipment with much fanfare in August last year and another is set for next month. But in December, Tullow revised down its global production forecasts and announced leadership changes including a new CEO and a new exploration director.
Back in 2010, there was a proposal for Tullow Oil to cross-list on the Uganda Stock Exchange where it would be worth four times all the listed companies in Uganda put together. But in 2019, Tullow’s share price fell by 70 percent during the year. A missed opportunity.
Then there is CMC di Ravenna who underwent a restructuring that they call a Composition Plan in Italy and which some Kenyans call a bankruptcy. They have been working on Itare Dam which they have now abandoned, but which they indicated they were ready to complete and this would be hastened if Kenya paid them Sh335 million for work already done. They also appointed new CEO and reconfirmed their General Manager who is yet to show up in a Kenyan court to answer to charges in cases relating to the Kimwarer and Arror dams.
There was also the case of Geothermal Development Corporation which it has been reported were paid Sh1.4 billion by Stanbic Bank. This was to recover amounts that had been paid to a firm, the Chinese Hong Kong Offshore Oil Services (HOOSL), that had not performed on a drilling project which the bank had guaranteed. There is not much known about the company, but last year the Economist had a story about companies in China that pretended they were state-owned to receive preferential banking facilities.
There is a potential danger to all this secrecy around Government partnerships overseas. Nigeria is grappling with a case in which a British Virgin Islands company with which it engaged for a gas supply deal has now been awarded almost Sh1 trillion ($9.6 billion) by a London Court.
Meanwhile, more details about the SGR contract are yet to be shared with Kenyans a year after the President had promised this in December 2018. This came after the Government had denied a Daily Nation report that assets like the Mombasa port would be in jeopardy if Kenya defaulted on its SGR loans. But Kenya’s Petroleum and Energy ministries have also withheld information about their dealings with Tullow which is a UK-listed company that regularly shares updates on its exploration, production operations and finances.
We now have to look elsewhere for details on such deals. The Chinese Embassy in Nairobi opened a new Twitter account in March 2019, which coincided with the arrival of their new ambassador, Wu Peng. This is part of a global push in the age of Twitter communications by President Donald Trump, and the BBC identified 55 twitter accounts run by Chinese diplomats and embassies with 32 of them created in 2019.
Perhaps we shall learn more about opaque deals and partnerships that Kenya has signed.