Accounting reports by London-based Exotix and Kenya’s Equity Investment Bank have come out to reveal that Uchumi Supermarkets made a loss of Sh. 459 million in the 2013 and 2014 financial years. However, uchumi Supermarkets, through its sacked CEO Jonathan Ciano used the revaluation of its properties to conceal these losses. “After stripping out the revaluations, we calculate that Uchumi would have reported a Sh123 million loss in 2013 against the Sh357 million profit it reported and a Sh336 million loss in 2014 compared to the Sh384 million profit it declared,” Exotic analysts say, adding that they expect the retail chain to make a Sh413 million loss because of an even weaker top-line performance and increasing overhead costs.

The Exotix says that Uchumi’s decision to include the revaluations as part of its income had the effect of obscuring the true status of its financial position — moving it from loss-making to profitability.

Though a normal accounting practice, the International Accounting Standards (IAS) require that revaluation for companies that are not in the property business and which are not tax deductible, flow through the income statement after the net income.

Uchumi reported Sh14.6 billion sales for 2014 and Sh14.27 billion in 2013, a marginal 0.6 per cent increase while loyalty points stood at Sh92.8 million in 2014 down from Sh98.04 million a year earlier — indicating a decline in purchases from the regular customers.

Total revenues were Sh14.46 billion in 2014 from Sh14.37 billion a year earlier, a 10.6 per cent increase.

The information memorandum on the November 2014 rights issue that raised Sh896 million indicated that Uchumi had four registered properties, including the parcels of land where its Ngong Hyper and Langata Hyper branches are located and two parcels of land along Thika Superhighway.

The parcels of land, totalling 20 acres, are held under Uchumi’s property management subsidiary Kasarani Mall Limited and were valued at Sh2.2 billion at the end of June 2014.

The retailer has since reported a half-year loss of Sh262.3 million for the six months to December 2014 compared to a net profit of Sh106.9 million recorded for a corresponding period a year earlier.

Uchumi directors denied any accounting irregularity, insisting that everything was above board. “Uchumi Board did not overstate its profits, based on revaluation of its property holdings. International Financial Standards require a company to state the true value of its property when reporting its finances. We therefore complied with the requirement,” Uchumi chairperson Khadija Mire said.

The accounting revelation comes a week after the Uchumi board sacked Mr Ciano and Chadwick Omondi Okumu, the chief finance officer, and suspended human resource manager Michael Kibe.

It was quite obvious that the National Bank of Kenya had to be the next on the news after Uchumi Supermarkets – and in the news for all the wrong reasons!

However you look at it, the problem at the bank begins with the CEO seat and the choice of appointment that brought in the current CEO Mr. Munir Mohammed. Was this choice objective?

On one hand, the board may come out guns blazing in defense of the bank and the CEO in the face of mistreatment of staff allegations and illegal monetary dealings. But how many of these board directors are independent? How many have arrived at the conclusion that everything at National bank is honky dory independently, without selfish interests? How independent are they?

The questions though do not just end here! We must ask why a CEO can find it right to carry their entire clan to the company and, or companies they are serving. For instance, if you are a CEO or Chairman to the Board, does that elongate your call to serving ‘your people’ or serving the institution you have been elected to serve?

How can a company with such an asset base be posting mediocre results in such a booming financial Industry?? If this is answered, National Bank of Kenya will start to crawl forward. But from the Investor perspective, my expectations from National Bank of Kenya are at their lowest level at the moment.

If the government held on to Safaricom in terms of Management and Board, would we be getting the kind of value from taxes and dividends from the company as Tax payers? NSSF should give some autonomy to the companies they own or have stakes in. Further, the government must also do the same if our Public Investments are to be expected to bear fruit.

As of now cronyism is the top qualification for some of these outfits, of which National Bank is threatening to evolve into.

Developing Africa’s human capital is critical to the continent’s future growth given it has one of the world’s biggest youth demographics. Although enrollment to schools and higher learning institutions in Africa is rising, the quality of education offered is still low. Employers often complain of half-baked graduates, whilst young people struggle to find jobs.

Dubai-based Edulink Consultants recently invested US$3m in a new college in Kenya. Edulink chief operating officer, Dr Raj Gill, talks to How we made it in Africa about what Edulink International College brings to the Kenyan education sector and how to deal with Africa’s education challenges and unemployment.

What gaps have you spotted in Africa’s education sector and how big a problem will this be for the continent’s future growth?

There are many gaps, mainly the mismatch of what is being produced by the various institutions and what is required by industry, commerce and other businesses. Also, when we set up and were looking for staff, we found many candidates who had impressive qualifications and resumes, but had difficulty in explaining what they could actually do and how they could contribute.

Without a quality-educated workforce, there will be very little growth and it will be limited and short lived. To have sustainable levels of growth there must be a constant supply of a good, educated workforce that will be required at all levels, in the crafts, vocational and professional fields. These depend upon each other; a shortfall in one will hamper the capabilities of others.

Just obtaining a qualification will not be enough, they have to gain good experience and also be life long learners. The rapid changes in information and communications technology (ICT) and manufacturing technologies will drive major developments in all fields of business and will continue to form the bedrock of development for at least the next 20 years.

You recently opened Edulink International College in Kenya. How will your offering be different from what is already available in the market?

We believe that education is one of the most important pillars in wealth creation for nations to lift people into middle-income levels. Our aim is to produce graduates ready for work, hence our motto “education that works”. We want to produce lifelong learners who have the core skills and competencies in the fields they will choose. We believe that ICT is now the general-purpose toolkit for all professions and this will form a core skill in everything we do. Africa is no different from other parts of the world.

If the continent builds its infrastructure and communications base, supported by a well-educated workforce, then the recipe for development will largely have been put together and foreign investment inflows will increase. This is exactly what happened in the South Asian tiger economies, and China, and is rapidly taking shape in Brazil and India.

Describe the challenges you face in your Kenyan operations?

Lack of appropriate qualified staff, especially teaching staff, that will be able to meet the new regulations that have come into force for higher education institutions is a challenge. Other hurdles include non-streamlined procedures for business set up, and the length of time it takes to obtain approvals. Kenya needs to improve transparency in its processes and provide “one stop” services for investors from overseas who feel overwhelmed by some very archaic processes and some deep-rooted practices that belong in the last century.

Do you have plans to set up more training institutions in Africa?

Yes we are always exploring, but the business climate has to be suitable. Our decisions to start other institutions will be based on regulations, the business climate, the availability of a suitably qualified workforce, and of course how quickly we can set up an organically-grown locally sustainable business.

There are not enough jobs in Africa for the continent’s burgeoning youth population. What next after they get the best training and skills?

This is the classic chicken and egg scenario. I believe that in Kenya, and many other African countries, the flow of investment for industrial development has already started. This is being largely driven by local demand [as] the population is moving towards a middle-income economy. There needs to be a parallel process of improving infrastructure, better education, streamlined business start up procedures, and a serious effort to eliminate graft. Additionally, confidence building and the security situation needs to be better addressed.

The training and skills developments will also form a part of this concurrent process and there will be a lot of fine-tuning required for the different strands along the way. Adjusting one strand will require additional inputs in many other inter-connected areas. This is a continuous process. Building of confidence for investors and public-private partnerships will have to [be] addressed. Government can show the way by aligning all their processes, but they cannot undertake the task of the private sector, nor can any significant progress be made without having seamless processes in the various government departments that are charged with nation building.

NIC Bank has partnered with Junior Achievement (JA) Kenya and Craft Silicon Foundation to launch an innovation award category in the annual secondary schools’ Student Entrepreneurship Competitions.

Dubbed the High School Innovation Challenge, the competition will encourage students who are members of JA clubs in over 300 high school in the country to develop transformational innovative solutions that will affect positive change in the financial sector to benefit individuals and communities across the nation.

“As an innovative Bank we are constantly working with various partners to come up with solutions to reach out to all our customers, including the youth. We believe the youth are a key segment in our society and we need to ensure they are well equipped with the right tools to empower them in all aspects of their lives, including finances,” said NIC Bank Group MD John Gachora.

Junior Achievement Kenya Executive Director John Wali, noted the initiative was an opportunity for the participating youth to play a role in shaping their future and that of their peers by coming up with innovative ways to educate on something noble as personal finance.

“This programme presents the students with a platform to influence financial literacy in their community. It offers participating students an opportunity to engage in the development process and bring their ideas to life by finding day-to-day solutions,” said Mr Wali.

Craft Silicon Foundation CEO Mrs Priya Budhabhatti acknowledges the partnership between NIC Bank and Junior Achievement Kenya in this productive initiative of mentoring students and the youth particularly in technology and financial sectors.

“As a technology company and Foundation we are cognizant of the fact that ICT has become the differentiating factor locally and globally in terms of social economic development and we have taken the bold initiative of extending the opportunity to not only the students in formal education, but also the youths in the informal settlements who might not afford post-secondary education,” said Mrs Priya.

She noted the foundation had rolled out a flagship project offering free computer education program. This has positively impact the lives of over 7000 students across seven slums in Nairobi. “We are happy to be part of this partnership as more students shall benefit from our technical experience. We can clearly affirm that the future is always bright for those who embrace innovation,”

This partnership is meant to harness raw talent and spur innovation. As experts in our respective fields – technology sector, financial sector and mentorship – the three partners have the opportunity to plant the seed of innovation and reap rewards in the future.

The three partners will later in the year launch a University Boot Camp where top students, totaling 200, from 14 campuses will participate in a tech challenge to find solutions in the financial sector using technology