Principal Crops Average Prices to Producers, 2006 – 2012
September 4, 2014 — 9:03

Have you ever thought of becoming a farmer? If so, what would you grow on your farm?
Below is an analysis of the crops that are grown in Kenya and a breakdown of how much the producers g0t in Kenyan shillings per 100kg between 2006 and 2012.

The most interesting numbers as you can see are clearly from growing pyrethrum which has a very high return per 100kg.
Refer to this past post of flower farming in Nakuru County. Clearly, the money still lies in the flowers although their production has significantly reduced.

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Major Causes of Death in Kenya 2010 – 2013
September 1, 2014 — 9:06

The Real Estate Market in Nairobi.
August 21, 2014 — 10:18

Moving houses is something I have found to be most fascinating and as a friend told me, it is quickly becoming my hobby. An expensive hobby time and money wise but I guess that is the thrill!

ToLet

For me, moving houses is proving to be one of the most fulfilling data collection and analysis project I have ever done. I have paid for information on the housing sector so many times, I have been in the depth of misleading information and I have used previously collected information to find houses with no need for a housing agent as we will see below.

The most famous real estate websites in Kenya are www.olx.co.ke, www.buyrentkenya.com, www.property254.co.ke, www.expat-blog.com, www.capitalfm.co.ke among others. Well, these are my 1st data sources. This is where you get the agent contacts from. Important to note is that when you look through these sites long enough, you will realize that these are the same agents who advertise different houses on the different spaces.

The most annoying of the experience with working with house agents is the fact that the agents will advertise a very amazing house at a very “unbelievably good” offer, and this offer normally lasts until an hour before you view the house as mostly “ahh, I am sorry madam, the house was reserved just an hour ago by someone else but I have other houses just like that one.” No he doesn’t! Well, this is the first agent whose number you should lose, well.. if you are not into the kinds of people that will play you.

Below are some of my findings from the housing market and I must mention that after reading Freakonomics, for sure housing agents and the Ku Klux Klan… same logic!

Space

The greatest fraud of the upcoming Nairobi real estate market especially on newer houses/apartments is space.

In my search for a new home, I visited the apartments in mention on the twitter post below:

these are 3 bedroom apartments that go for about KES 90,000 but once you go in, you probably will not pay anything more than KES 70,000. The rooms were all small and very squeezed bedrooms and bathrooms and the architect probably needed to be fired before the foundation was dug. As Leonard Mudachi’s frustrations on designs show in this tweet:

Most of the newer house designs look the same, a shower head right atop the toilet seat, all in the struggle to squeeze in an extra feature.

Still on space there is one trick; an entire apartment block of two bedroom apartments is fine. Another of three bedroom apartments is fine too. Problem comes in when you find blocks of two and three bedroom apartments as very often, the two bedroom has been converted into a three bedroom at an extra cost.

Trees

If you are like me, trees are one of the most important things when it comes to making a home.

This is my current home, at least for the next few hours and as you can see, I literally live in a forest!

Soon to be former home :-(The reasons for my moving is what my friend describes as “soon there will be no apartment standing in Kile, the apartment economy is the tablet of the technology scene!” This house was built in 1976!

This is beside the point but generally, houses that have trees in site, not sight tend to be a lot more specious. In an estate where there are some trees, old or newly planted the house designs tend to also leave some space for a flower pot if you wish.

In places where all you see is concrete and cabro, the houses are generally smaller even though with “modern finishing.” Case in point, the apartments in the tweet above.

Owners  and house pictures

The most disappointing thing about looking for a house online is when i started to notice a trend of some kitchen  or bathroom pictures looking very familiar. Some of the pictures were actually recycled, posing a nice kitchen to be that of another house while it is not and for those like me who love to cook, kitchen space and setting is very important. Too important.

Advertised houses where there is only one picture, do not trust the advertiser. I repeat, Do. Not. Trust. The. Advertiser! Retreat. When the agent has no picture proof of the house he/she is selling, that means that they have no idea what they are selling and no matter how gorgeous, specious, fantastic or in a great neighborhood they say it is, ! you cannot trust them. Mostly the reason for this is, the house owners have not given them any permission to advertise or simply do not want to work with agents. If you can, as I did, get a photographic memory, drive around gate to gate and find the house.

Houses that were build and are managed by the owner are the best. Mostly, these are not as greedy as the construction agency and are always more spacious and well thought of.

Agents – fee/free

As you may know, I am in the data business and I do charge my clients for information. It is only fair that I pay for information and I have paid up to KES 10,000 for housing information from one agent (that i ended up not liking.) Some agents work for free as they get the commission from the house owners while others want you to pay upfront, normally KES 2,000. Others only ask you to pay after you find the house.

While we are in the business of rewarding people for their hard work and information, if you can, avoid those agents that bring up payment in their first 3 statements. These are mostly greedy and if you can, do not work with them unless you have somehow confirmed housing details and are willing to make the move.

Old vs new

Old houses are generally more spacious than the new houses. Newer houses have better finishing but most often poorer designs. In general, older houses were managed by the owners and as mentioned above, owners normally have the best interests of their investments. This is however not for all, but most of them ad I have easily sampled over 100 houses over the past two years.

The other fraudulent thing in the real estate system worldwide is that most houses are advertised more on their location not their features. A crappy house in a “popular neighborhood” sells better than a great house in a quieter less known place.

Balconies

Someone at architectural design school is going so wrong in so many places when it comes to designing houses and house balconies.

I once saw a great house whose bedroom balcony faced a classroom of the French School and one of the selling points for this house was, it has two balconies. The second balcony faced the apartments’ stairway.

Most apartments near the road have balconies facing directly to the road, which is a disaster for the house cleaner as this is an open call for a dusty and noisy house at any given point!

Some balconies however face the directly facing apartment’s balcony and unless you are in the mood for a little neighborhood chitchat across balconies, this is probably a big no no!

Some houses have greatly placed balconies and others simply dont, which often means a bigger living area space, well less outside.. depending on what you are into.

Some houses were most likely built by people who do not appreciate the idea of laundry washing and before you know it, you can only hang your laundry in the living-room balcony, pausing an aesthetics and movement challenge.

This said and done, I have found a new home that I like and that tends to do away with a lot of the above challenges so next time you are house hunting, I am your guy, very affordable!

Related post: Read this post Data for housing agencies, the steriotypes – 2012

Flower Farming in Nakuru County
August 5, 2014 — 10:35

Located 90 km from Kenya’s capital, Nakuru county in the Rift Valley is a great agricultural center, endowed with amazing touristic destinations with lakes and craters.

Agriculture is a major contributor to the Kenyan economy, with up to 22% stake in the Gross Domestic Product (GDP). The horticultural industry is one of Kenya’s economy fastest growing industries and another great contributor to the GDP, with 3% input to the GDP (approximately USD 1 billion annually to the economy). Of this, the floriculture subsector contributes 1.6%.

Kenya’s climate is very favorable for flower farming. Differences in altitude allow dynamic climatic conditions from the hot coastal plain up to the cool highlands. With a temperate climate prevails above 1500m with daytime temperatures ranging from 22 °C to 30 °C and night time temperatures from 6 °C – 12 °C. There are two distinct rainy seasons. The long rains from March to June and short rains during September and October.  The rainy days are restricted to 60 – 80 days, giving a chance to excellent radiation most of the year, which is ideal for the year-round growing of quality flowers.

Nakuru County is Kenya’s floriculture center, contributing highly to the employment and economic development of its people. According to the Lake Naivasha Growers Group (LNGG), there are 73 flower farms in the county, with Naivasha town accounting for 48 of these.

Flower farming in Kenya dates back to 1928, which started with the introduction of pyrethrum, a flower used in the production of natural insecticide. For an extended period of time, Kenya was the biggest producer of pyrethrum in the world, producing up to 90% of the world’s pyrethrum up until 1998, a position that has since been taken over by Tasmania, Australia. Pyrethrum production used to be at over 18000 metric tonnes (MT) per annum, a number that has drastically reduced to about 200 MT per annum.

According to Mr. Nyang’au, a former pyrethrum farmer in Nakuru County, the major contributors to this decline have included:

  • Poor farmer remuneration
  • Mismanagement of funds at the board and farmer societies
  • Introduction of synthetic insecticides to the market. Synthetics might be cheap but are not only environmentally unfriendly but this introduction also competed with the farmers’ natural options.
  • Pyrethrum farming is very labor intensive and this means that small-scale farmers who depended on school breaks for cheap labor from their children and students were not able to cope during school terms.
  • The introduction of other cash crops, whose timing coincided with the declining times of pyrethrum production also pushed these numbers further down.

While pyrethrum farming has seen a decline in Kenya, countries like Rwanda are making an entry into the market with pyrethrum farming which has started to see sustainable income for the farmers. This is a clear indication that there is still great potential in investing in pyrethrum flower farms, especially for the small farmers as the demand for the produce by manufacturers of natural insecticides is still set to be on the increase.

The Nakuru County governor, Mr. Kinuthia Mbugua constituted a task force in 2013 to investigate the decline of the pyrethrum farming in the country, with a mandate to suggest action plans that would be taken to revive the subsector throughout the country, to attract new interests among farmers to get into pyrethrum farming.

In the agricultural sector, floriculture in Kenya is the second largest foreign exchange earner after tea. The floriculture sub sector has seen a great increase both in exports, local sales and profits. Contributing up to 1.6% to the country’s GDP, with unvalidated statistics showing that in 2012, the floriculture industry exported 123,511 tons of flowers valued at KES 42.9 billion. The flower industry is one of Nakuru County’s biggest employers both directly and indirectly with over 500,000 people (including over 90,000 flower farm employees) depending on the floriculture industry.

The vast area of Naivasha constituency is covered in green houses that are used for flower farming. Kenya is the leading exporter of rose cut flowers to the European Union (EU) with a market share of about 38%. Approximately 65% of exported flowers are sold through the Dutch Auctions to the European market that includes Holland, United Kingdom, Germany, France, and Switzerland; and although these exports did not start until as late as the 1970, the flower industry has enjoyed great attention around the world especially for the good quality of flowers grown, leading to a maintained average growth of 20% per annum.

Naivasha constituency is the most convenient location for flower farming due to its proximity to Lake Naivasha, given the high water demands in flower production; both in irrigation and maintenance of the farm machinery.

Naivasha being 1880 m above sea level gives the area an ideal climatic condition for floriculture. The main flowers grown include: roses (53.6%), Easter lilies (26.5%), Arabicum (4.1%) carnations (3.1%), and Hypericum (1.98%). Other flowers cultivated include, Gypsophilla, Lilies Eryngiums, Arabicum, Hypericum, Statice, and a range of summer flowers.

In the recent past, the flower farms have come under a lot of pressure on issues of overdrawing water from Lake Naivasha (although this is not conclusively proven as the lake keeps rising and falling), water pollution, poor employee working conditions and remuneration. Some of the problems have seen Karuturi, one of the largest cut rose producers in the county, at 6 billion stems of cut rose for export a day, come under receivership and face management hardships.

According to Mr. Eddy Verbeek, General Manager at Florensis Kenya, there are various challenges that are faced by the Kenyan flower industry.

This varies from downturn in the European economies, the flower industries’ main market, resulting in the reduction of sales prices or static at best. Escalation of the production costs in Kenya in the same period including fertilizers, chemicals, fuel, power and labor in the order of 8-10% per annum. This results in minimum profit margins that can’t sustain re-investment and expansion.

Although Vision 2030 anticipates that the agricultural sector delivers a double digits growth per annum, the sector is paying for well over 45 different taxes, permits and levies to various government bodies. In the new devolved system, most of what is ailing the industry is that, “with the devolved government, it looks like the counties are coming up with new licenses, levies and permits for the same things we already pay to national government.” Instead of just adding new ones the counties should focus on harmonization and rationalization of the licenses, permits and levies.

The sector is embracing the newly devolved county government. It has the potential to work closely on a county level to make floriculture flourish. The issues that farms in Nakuru have are different than the farms at Mt. Kenya or Coastal regions. Working with a county government instead of national government could be an advantage.

With the new devolved system of government, the Nakuru County government has a task to ensure that the flower industry maintains its profitability without bearing too much burden on imposed taxes even as they push to increase their revenue collection. The result of this would be a balanced ecosystem where the flower farms are able to maintain their profits and their employees since if otherwise operation costs are heightened, this would be transferred to the customer which in effect might lead to reduced sales and whose ripple effect might be loss of jobs and livelihood to the citizens that depend on the industry.

Effect of Terror Attacks on Tourism in Kenya
July 23, 2014 — 15:13

The role of the Tourism sector in Kenya’s economy can never be overstated: Contributes 14 per cent of Kenya’s GDP, employs 12 per cent of the work force and it is Kenya’s largest foreign exchange earner after Tea and Coffee.

It is therefore fundamental that the government plays its part to aid in growth of the sector and fully exploit its potential by undertaking infrastructure development; encouraging private sector investment in tourism-related facilities like accommodation and restaurants; and minimizing security threats.

There is no denying that the recent wave of terror attacks in the country have been an obtrusive stain in the government’s security efforts (existing or not), but just how bad an effect have they had on Kenya’s third biggest foreign exchange earner?

Tourism Arrivals and  Terror Attacks in Kenya

Source: ICTA and KNBS

Comparing tourist arrivals and terror attack numbers over the last 3 years with the years divided in quarters makes for interesting viewing. The tourist arrivals number should ideally be growing steadily but that has not been the case. The terror-attack wave from the fourth quarter of 2011 does not help at all as the numbers really start to plummet.

The security situation needs to improve drastically to save the sector from short-term and long-term damage because, as it is, Kenya’s tourism sector continues to ail: one travel advisory after the other.

Funding for Higher education in Kenya.
July 21, 2014 — 11:26

Is Funding for Higher Education, keeping up with the enrollment trends?

The Higher Educations Loans Board was established in 1995 with a critical mandate to disburse loans, bursaries and scholarship to Kenyan students pursing higher education in recognized institutions. The board gives loans to students at affordable rates, which are repayable once they secure an income.

In the last few years the number of students enrolled in Kenyan universities – public and private – has increased from 177,618 in 2010/11 to 324,560 in 2013/14 and significant increase of 82%. The student numbers have grown faster in public universities at 98% in the same period compared to 27% in private universities as shown in the chart below.

Public-private uni

 

Source: Kenya Economic Survey 2014 –KNBS

The next step is to analyze the resources that are allocated to fund education in Kenya as well as help students’ access the loans provided by HELB.

The funding for public universities in Kenya comes in two main streams; first, universities get money that is collected as fees from students who learn in these institutions. Secondly, they also get transfers from the Ministry of Education to top up the revenues generated as fees in the institutions. One thing to note is that over the past few years the total budgetary allocations per capita (total university expenditure per student) has been declining showing a case of increasing number of students in public universities that is not commensurate with the money funding their education as shown in the chart below.

university budget

Source: Kenya Economic Survey,2014 and the Budget Expenditure Estimates

The next area of analysis is to see if the funds available to HELB will ensure the increased number of students still have access to loans and scholarships. Data between 2010/11 to 2012/13 shows an increase in per capita allocations to HELB as shown in the next table. However, there is a drop in 2013/14 which could be explained by the 53% increase in the number of students but only a 7.8% increase in the expenditure to universities for that year.

Helb per capita

 

Kenya still has a very low transition rates between secondary schools into tertiary institutions. It is expected that the Government together with private sector players will continues to push for higher intakes over the foreseeable future. However, this could be a challenge to the institutions if the resources available to keep the students in school is deficient.

 

 

 

 

 

 

 

A working nation but is it saving for a rainy day?
July 16, 2014 — 7:57

Kenya is a country that has a high age dependency ratio as an aging population is dependent on their working children and relatives to support them. This is in addition to other dependents who are of working age but are not engaged in any income generating activities and are dependent on the same providers. This has led to a debate on Kenyans planning for life after retirement which means saving for retirement benefits when still in active employment. However, majority of employed Kenyans are actually in the informal sector and do not have regular incomes which makes periodic savings a challenge. According to the Economic survey 2014, 88% of people employed in Kenya are in the informal sector. In addition the proportion of informal jobs created every year is over 80% and increasing in size compared to formal sector jobs.

In the light of these developments the government has been pushing to get more people in the informal sector to take up health covers and start saving for their retirement. The recommendation to register more people under the National Health Insurance Fund (NHIF) and the National Social Security Fund (NSSF) has also been complemented by some private companies who have developed some products to tap into this huge market.

So how has the enrolment into NHIF and NSSf played put so far?

According to the National Health Insurance Fund the number of  people in the formal sector registered under NHIF rose from 1.8 million in 2008/09 to 2.7 million in 2012/13,a 49% increase in the 5 years as shown in the chart below.

Formal sector members

In the same period the number of NHIF members from the informal sector increased from just over 376,000 to 1.1 million. A 196% increase over 5 years. This is quite an impressive increase over the period. However the share of members from the informal sector in relation to the total NHIF membership was still under 30% in 2012/13 despite making up 88% of the workforce. This is an indication of the scale of need for health insurance in Kenya.

NSSF

 

The chart below shows the share of people registered with NSSF that are employed. Over the last five years that number has been varying between 29%-32% and it does not seem to be rising. While we don’t have data on the numbers brought in by the Pension ya Mbao scheme. Available data shows a stagnation in pension plans uptake.

registered nssf

What does this mean? Only a third of the employed (Formal and Informal Sectors) have some sort of pension benefits to look forward to and this could be an indication that the dependency rates in Kenya could remain high if we incorporate the large proportion of the unemployed and the old.

 

Visa Requirement For Kenyans Visiting COMESA Member States
June 25, 2014 — 11:47

World Cup 2014: Can Africa Defy History?
June 18, 2014 — 11:35

So the 2014 FIFA World Cup is here.

Maradona’s “hand of God” goal, Roberto Baggio’s penalty miss against Brazil, Bergkamp’s wonder goal against Argentina, Zidane’s sending-off against Italy; Every football fan has their own most memorable World Cup moment.

For African teams though, the World Cup has been a forgettable outing. Apart from 1990 when Cameroon, led by the hip-shaking Roger Milla, took the world by storm and probably in 1982 when Algeria looked destined for greatness but were undone by a disturbing case of match-fixing between West Germany and Austria, the rest have been disappointments.

In the 2014 edition, Algeria, Cameroon, Cote d’Ivoire, Ghana and Nigeria will be flying the African flag. With all five African participants having played at least once as of today, the African record reads: Played 5, Won 1, Drew 1 and Lost 3.

Cote d’Ivoire were the only winners beating Japan with Nigeria drawing against Iran and Ghana, Cameroon and Algeria loosing to USA, Mexico and Belgium respectively. Not the best of starts and if these early results are anything to go by, Africa is treading the far too familiar path of failure at the global showpiece.

A tribute to the late Carey Eaton, CEO One Africa Media
June 12, 2014 — 12:20

DataScience LTD lost a friend, the man that gave us our first shot and believed in our work.

The world has lost a change maker, a man that worked hard to grow everything and everyone.

Carey, because you believed in us, others have and will continue to.

Rest in peace.careyThe DataScience Team.