18 billion Traffic Jam.

A study by the East African branch of IBM has claimed that Kenya loses an estimated 18.3 billion annually to traffic jams. As the traffic backs up due to flooding and driver incompetence the economy is hemorrhaging money at presumably an even greater rate than is usually the case. Dont you love the fact that someone sat down to crank out the number of zeros lost to traffic jams? Its not only the carcinogens inhaled ever so deeply as you marinate in traffic, or the loss of confidence in Kenyan driving school instructors, it actually is bad for the environs. Isnt it comforting that there are observers of economic wastage and that the wastage in traffic jams have an odometer convertible into shillings. It is almost an annual bill on the economy for human incompetence and bad road policies. Kenyas incompetence wage bill stands at 18.3 billion. The study in my unlearned opinion is made up of too many assumptions to arrive at anywhere within a close distance of the correct answer. To purport to tell us how much the beloved economy is losing per second of a traffic jam means that if we assume that traffic moved ever s freely our economy would increase by a tenth. This assumes that there are some time based transactions which are lost due to inability to get to meeting places in time. These facts, even if true could be ameliorated by mobile phones, to either arrange for alternate meeting places or pay bills using phones. I believe communication advances would reach around the diminished horizons brought about by traffic snarlups. One assumption also needed to arrive at such a figure is the idea that we contribute to the countrys GDP at a measurable rate, steady rate. What about the people who are simply going home? Or people going to do activities that do not directly contribute to the GDP? (Like students?) Is productivity linear to the amount of time spent at work? Not always especially if you work in an office. Isnt most of the time wasted in meetings and chatting up your bosss secretary? Time isnt equal to money especially not in the office. An answer as to how much the economy loses to traffic jams requires a spurious elasticisation of costbenefit analysis. It is a mishmash of the unknowable with the immeasurable to arrive at the inaccurate. But still is comforting to have such a figure to comfort you as you are on Ongata Rongai during the downpour. As my dad always says: Statistics are not facts. They are numeric statements. WANGUSI RIGHT, NDEMO WRONG. CCK is split about its plans to cut the mobile termination rate by a further 35 % come July. The acting Director of CCK Francis Wangusi wants the rate to drop while Bitange Ndemo wants them to remain at their present rate at 2.21 shillings. The rates were frozen after Orange and Safaricom lobbied the president last year who directed that the rate be frozen for one year. It is a bit surprising that the most successful model of capitalism in Kenya epitomized by Safaricom is lobbying the government to intervene to maintain an artificially high termination rate. You would think

that disciples of free market economics would vouch for less regulation of the sector. Yet Safaricom and Orange both want the government to make sure that the voice segment remains their major business. CCK has already talked of dropping the interconnection fees to zero by 2014. Big business Americans say avoid change like dogs resist baths. They ossify into established complacency and ossify as the status quo. Companies spend all their time maintaining the status quo instead of looking to the future and generating new revenue streams. In a patriots history to the United States the writers use a lot of figures to illustrate one core truth. That as the legal bill of a company increases the greatest casualty is the research and development department. You cannot afford both lawyers and scientists on your wage bill. We must remember too that the government it has to be said has an interest in Safaricom and Oranges profitability since it is a shareholder in both enterprises. The interconnection rate obviously favours the established order and ensures that large players in the industry remain at the top. Safaricom recently took competitors Airtel and Yu to court over unpaid fees amounting to over half a billion. The interconnection fee has remained a barrier in the free movement of customers between service providers and has hurt smaller service providers who have to pay large amounts of revenue to industry leaders. The fee prevents companies from pricing their product as they want as it provides an overhead cost. By insisting on the fee, the government is picking winners and does not maintain impartiality. While keeping the rates as they are as will be good for some service providers, Kenyans will be the losers. By removing barriers in the voice market it will force companies to be more innovative with other services and seek alternative revenue streams. Safaricom recently posted results that showed that its data services and money transfer services have increased their percentage of return to the firms total revenue than last year. The voice segment has dropped from 72% of the revenue to 68%. Sometimes government should help companies innovate for the good of the nation. In Korea the military dictatorship forced companies into industries that they wouldnt have entered. When companies refused threats were used. LG was banned from entering into the textile industry like it wanted and instead shuffled into the electric cabling industry. Years later LG is a household name in electronics. Another example is Hyundai. It was ordered to start building ships by the government. They refused and were threatened with bankruptcy by the general at the head of Koreas dictatorship. She relented and went on to become one of the largest ship builders in the world. The government should similarly refuse Orange and Safaricoms claim to keep interconnection rates high. It will lead to increased innovation in other telecommunication areas, a fairer market place and better services. As Mr. Wangusi said to the Business Daily, the competitors who do not want the Mobile termination rate reduced fear competition. The lowering of the rate in July will according to a study done by the CCK be better for the whole economy. It is in the national interest to lower the rate. So it must be done.

MUDAVADI MUST RESIGN. Russia had prior to the Crimean war given the Hapsburg dynasty unparalleled support. Twice it had sent its soldiers to defend the dynasty. The Russians had also fought on the same side as the AustriaHungary Empire against the Ottomans before and were fairly certain they could count on their allies support as they had in the past. So when the Crimean war between Russia and the Ottoman Empire broke out, Russia was surprised that her former ally had decided to sit it out. The Hapsburgs had first decided to be neutral, then they threatened their former allies with war and finally the Russians had to agree to lay down arms when the Austria-Hungary Empire threatened to enter the war. On the side of the Russias enemies. Speaking about their decision not to support their allies who had saved them in the past, the prime minister of Austria-Hungary said We will astonish them with our ingratitude. Raila Odingas camp is astonished at Mudavadis ingratitude. Odinga wants us to believe that he rehabilitated Musalia after the 2002 elections. As soon as they grow teeth, they bite the hands that fed them. Mr. Odingas camp in a statement called Musalia a conservative ingrate, who had been dumped in the dustbin of history. It was followed by a catalogue of scandals that the DPM was supposedly involved in. All this was a bit rich since these scandals were never a problem when he was the PMs running mate in the 2007 election. The accusation of ingratitude is also off the mark since Mr. Mudavadi refused to nomination by Kanu after losing out on the Sabatia Seat in 2002. He was willing to do his political penance and sit in the cold. The relationship between Mudavadi and the premier was symbiotic not parasitic as is suggested. Mudavadi did after all net him a sizable amount of votes from the western area. The DPM on his part put the wedge where it was sharpest by calling into question Odingas Achilles heel- his age. He asked the PM to retire along with Kibaki. Ingratitude knows no bounds. Mudavadi, who was described by Odinga as a good student, wants his teachers job. Their spokesmen have also been traded accusations and the fallout is now complete. If we are unlucky enough we will have that all American abomination of a presidential debate, where candidates will be allowed to pose and posture and regurgitate coached answers and will be judged on minutiae like suits. Then we will have a problem on our hands. Musalia dodged on a meeting with Odinga at his Sabatia Constituency. Musalia however should quit as DPM. His explanation for ditching ODM after countless assurances that he was in it to the end will cast aspersions on his character. The party did look like it would relent and allow an outbreak of democracy within its ranks and even accept his preferred method of nomination. He still ditched the party despite the attempts to placate him. Mudavadi clearly knew that his popularity within the party never matched that of the party leader and we must ask why he kept Kenyans speculating for so long. He now has a tag of coward that he has to shake in the run up to the election. They keep repeating it. It might stick.

He promised to magic 1.5 million jobs out of thin air if elected in what must be the most ambitious promise since William Rutos standard gauge railway promise. If he really is filled with new ideas, and wants to chart a new path for Kenyans why does he still hang on to the trappings of his old party? He must quit his DPM position as he quit his local government ministry. Both titles were earned by virtue of being deputy leader of ODM. It is deceitful to pretend and posture that he has the nations interests in remaining in the position of DPM. His reasoning for not relinquishing the DPM position delivered on a local television station required an acrobatic reading and interpretation of the National accord. His appointment is contingent on the nominating coalition partner who has asked him to step down. His argument that he was present for the Serena discussions of the accord, are easily nullified since his opposite number was never among the PNU discussion side. Uhuru was in parliament courtesy of Kanu but in the DPM position courtesy of PNU he is still a member of PNU despite quitting Kanu. Musalia held both positions because he was in ODM. He no longer is in ODM he should therefore quit. For the sake of his credibility and a new start he should resign. He must. A prolonged campaign period is a noose on the economy and suffocating for investors and the temperatures need to be toned down. Kenya is yet to lift itself from the quagmire of economic slowdown. We have a trillion shilling deficit, a war in Somali and the spectre of grand corruption hovering in the horizon. The market meanwhile needs firm direction and signs of stability. By such a public fallout, the PM and his deputy are not helping the situation.