Alphabet Soup L, V or W?

Without doubt he stands alone as being Kenya’s first ever celebrity investment banker. The  author of the book  “Any One Can Be Rich,” a regular columnist on several publications and owner of the  website www.rich .co.ke where thousands of  Kenyans rely on his analysis to make informed descisions about the the NSE; Nairobi Stock Exchange. Sticking with theme of ‘Soko’; The Marketplace, it was only natural for us to yearn for his insight on ‘soko la hisa’; the stock exchange.

We live in an information centric world. The efficiency of markets and the value of goods are as a result of the flow and speed with which information is shared. Aly hinted at the monopolisation of this information that leave market prices skewed in favour of the informed few at the expense of the ignorant many due to the common practice amongst brokers to leave orders unfulfilled or worse executing orders without consent of clients. The digitisation of the stock exchange as well as media initiatives have brought much improvement to this arena.

The sad story about international trade between Africa and the rest of the world is its extractive and supply side nature. Africa’s role from the days of slavery has been and continues to be centred on the exterior rather than the interior. For example Kenya grows world renowned coffee but Kenyans’ themselves don’t have a ‘coffee drinking’ culture, hence there are no internal mechanisms of price control in coffee to mitigate external price volatility. Growth in Africa is driven by external demand leaving Africa at the mercy of the buying states who determine the price due to the fact they are the largest purchasers. This translates to our economic growth being dependent on demand from Kenya coffee buyers. It is a commodity based as opposed to a value addition economy.

There is a revolution in Africa being driven by the mobile phone. There are 800million people in Africa  and 300million have mobile phones. The relationship between the ruler and the ruled is changing. The story of the mobile phone has produced great innovation, convergence and lubrication of social networks .Khan tells an interesting story of an incident that happened as he was driving from Mombasa to Nairobi, his car breaks down and this little boy comes up to him and says “I know Latin.” After testing him he finds out he can speak candid Latin. So there in the middle of nowhere lies a boy with unique skills and knowledge, unless he is connected to others who can utilise these resources they will be wasted.

‘Trickle down’ economics has so far not worked in Africa.  Africa’s resources have not helped the local population, it seems to have benefited an elite. Aly gives the example of Nigeria, which has earned billions of dollars worth of oil revenue and yet the people of the Niger delta still live in pre-colonial conditions ,only that their health is worse because of all the pollution. The opposite case exists in Malawi where farmers who constitute the majority of the population were given subsidies by the government, greatly enhancing wealth distribution. This is where the revolution begins getting people connected, getting them talking and eating well, only then can they start ‘living.’