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Safaricom eyes new markets for M-Pesa : The Standard

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Safaricom is looking to introduce M-Pesa in new markets across the developing world in a move that is likely to boost the firm’s market share in the mobile payments sector across the world.
This follows the completion of the re-organisation that brings the M-Pesa brand under the full control of Safaricom and Vodacom.
“This is a significant milestone for Vodacom as it will accelerate our financial services aspirations in Africa,” said Vodacom Group Chief Executive Shameel Joosub yesterday.

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“Our joint venture will allow Vodacom and Safaricom to drive the next generation of the M-Pesa platform – an intelligent, cloud-based platform for the smartphone age.”
The announcement is a culmination of the process that began in 2017, when parent company and majority shareholder UK-based Vodafone Group decided to move part of its shareholding to its South African unit.
The transaction saw Vodafone Group move 226.8 million new ordinary shares in Safaricom valued at Sh268 billion to South Africa-based Vodacom Group Ltd, the firm’s local subsidiary.

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Part of the rationale behind the transaction was to give M-Pesa more autonomy as a brand and to facilitate its expansion to other countries, an expansion Safaricom is banking on to grow market share across the region.
“For Safaricom, we’re excited that the management, support and development of the M-Pesa platform has now been relocated to Kenya, where the journey to transform the world of mobile payments began 13 years ago,” said outgoing Safaricom Chief Executive Michael Joseph.

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“This new partnership with Vodacom will allow us to consolidate our platform development, synchronise more closely our product roadmaps, and improve our operational capabilities into a single, fully converged Centre of Excellence.”
There are more than 28 million active subscribers on M-Pesa, with over Sh1.7 trillion in transaction value, accounting for 99 per cent of Kenya’s local mobile money market.
The telecommunication firm is hoping to replicate this success in other countries, particularly those in sub-Saharan Africa with relatively underdeveloped fintech sectors.
“M-Pesa is hugely successful and enables millions of unbanked people in Africa to transfer money, pay bills and trade,” said Vodafone Group Chief Executive Officer Nick Read.
“With the rapid increase in smartphone penetration, the evolution into financial services and the potential for geographical expansion, we believe the next step in M-Pesa’s African growth will be more effectively overseen by Vodacom and Safaricom.”

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SafaricomVodacomChief Executive Michael JosephM-Pesa

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Ex-CIC boss Gitogo paid Sh154m on early exit

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Ex-CIC boss Gitogo paid Sh154m on early exit

Tom Gitogo
Mr Tom Gitogo when he was CIC Insurance boss. FILE PHOTO | NMG 

Former CIC Insurance Group #ticker:CIC chief executive Tom Gitogo was paid Sh154.4 million when he cut short his employment contract on October 9, 2019, the insurer has disclosed in its annual report.

The payout included Sh76.3 million in gratuity which was calculated at 31 percent of the annual basic pay for each year worked.

For the nine months he had served by the time of his departure, he was paid a salary of Sh55.3 million annually or Sh6.1 million per month and allowances running into Sh22.8 million annually.

In the previous full year (to December 2018), the two pay items had earned him a total of Sh74.8 million.

Mr Gitogo’s five-year contract was to end in February this year but he left before the end of his term for unexplained reasons.

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The company appointed Elijah Wachira to replace him in an acting capacity.

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Mr Gitogo joined CIC in 2014 when he replaced Nelson Kuria who retired after holding the chief executive position for many years.

He left days after the company repaid its Sh5 billion corporate bond on October 2, 2019.

Mr Gitogo had also initiated plans to sell the insurer’s 712 acres of freehold land. His term at CIC was turbulent, characterised by business decline across various performance measures.

The insurer’s market capitalisation, for instance, dropped 68 percent from Sh25.1 billion in December 2014 to Sh8 billion by the time he exited.

Mr Gitogo steadily bought the company’s shares and still held 11 million shares by December 2019 when he was ranked ninth among the top 10 shareholders, according to the annual report.

The shares are currently worth Sh26 million, assuming he has not sold his stake.

Over his tenure, CIC’s earnings and shareholder funds also dropped, partly due to losses at its regional subsidiaries, competition and the weak stock market. After his exit, the insurer reported a Sh321.5 million net profit for the year ended December, representing a 33.1 percent decline from Sh480.9 million the year before.

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Clean cooking tied to cost and mindset

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Clean cooking tied to cost and mindset

cooking gas
Many households in East Africa cannot access clean cooking fuels, largely because of cash constraints and outdated customary behaviour. FILE PHOTO | NMG 

A huge portion of East Africa’s population cannot access clean cooking fuels, largely because of cash constraints and outdated customary behaviour.

While some households believe they lack the purchasing power to acquire cleaner technologies, mainly done through upfront payment, some communities have clung onto the belief that only traditional energy sources prepare meals well.

What most of them are not aware of is that topping up cook stoves daily with kerosene or charcoal cumulatively costs a lot more than using cooking gas, for instance. Besides, cleaner technologies have a higher calorific value, meaning more heat is generated to cook meals faster and suffer lower energy loss compared to traditional options.

Access to cleaner options is a question of affordability and mindset.

Therefore, to address the heavy reliance on dirty cooking fuels in the region, a blended approach should be pursued. Governments should roll out fiscal incentives aimed at dialing down prices of cleaner alternatives and enabling more households to afford them.

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At the same time, private investors should tap into this vast market by offering cleaner solutions with flexible repayment plans with which low-income customers are comfortable. Awareness campaigns to educate rural populations on the advantages of cleaner fuels and trigger mindset shifts are also needed to guide this transition.

Indoor air pollution amid poor ventilation is a silent death-trap inside the walls of poor households. Chronic exposure to smoke while cooking often leads to respiratory complications, exerting pressure on healthcare facilities, yet this can be avoided.

Based on World Health Organisation (WHO) guidelines, “clean” fuels and technologies in the context of indoor air quality and household fuel combustion include electric cookers, liquefied petroleum gas (LPG), natural gas, biogas, solar, and ethanol-fuel stoves. On the opposite end of the spectrum are the so-called dirty fuels since they emit smoke and mostly relied upon by households in villages, peri-urban and informal settlements. The list includes charcoal, coal, crop waste, dry dung, kerosene and wood.

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In Kenya, clean cooking fuel access rate stands at a paltry 10 percent, yet this is the best performance in the region, according to the International Energy Agency (IEA).

Uganda fares worse off, with only one percent of the population having access to clean options while Tanzania’s access rate is three percent and five percent for Ethiopia.

In most of these countries, population has been growing at a fast clip, outpacing growth in the number of households gaining access to clean cooking. This has somehow slowed down the fight against energy poverty not only in East Africa but the entire Sub-Saharan Africa.

It is, therefore, encouraging to learn that the Kenyan government is reviving plans to distribute 6kg cooking gas cylinders and burners to low-income families in villages at subsidised rates.

The Mwananchi Gas Project, though hit by delays since 2018, is a commendable move meant to wean poor households from use of dirty wood fuel and paraffin by making gas equipment affordable to first-time buyers. There should be no more delays in its implementation this time around.

The International Energy Agency has grouped Kenya, Uganda, Ethiopia, Tanzania, Nigeria and DRC in the bottom 20 list of countries with lowest access to clean fuels globally. The agency indicates that 44 million Kenyans still use dirty fuels in one way or another, with this number being much higher in Tanzania (54 million) and 98 million for Ethiopia.

This grim picture calls for strategic and speedy interventions, involving public-private partnerships to turn around the fortunes, alongside support from development partners.

Already, Kenya has a funding arrangement with the World Bank to supply efficient cooking appliances powered by clean fuels to households located in marginalised areas, largely in northern Kenya and the coast.

The mass cook stove distribution drive is part of a wider programme that aims to roll out clean energy solutions to underdeveloped communities under the Kenya off-grid solar access project (K-OSAP). The project aims to support a transition from low efficiency baseline stoves to cleaner improved cooking appliances and fuels.

This is certainly a welcome approach and rollout should be done in a transparent and efficient manner.

On its part, Ethiopia is running a National Biogas Programme aimed at providing hundreds of thousands of Ethiopians with biogas digesters.

Such nationwide policies are expected to bend the curve and shrink the number of people without access, providing clean cooking solutions to around half of the region’s population by 2030. To this end, as countries commit to universal electricity access targets for their populations, the same should be the case with clean cooking fuels.

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Star power: Why celeb marketing sells

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Star power: Why celeb marketing sells

human nature
Marketing often captures the very essence of human nature. FILE PHOTO | NMG 

Watch an hour of news on your favourite television station. From CNN to Al Jazeera to NTV, you will see intermixed between news coverage various commercial advertisements trying to get you to purchase or build your awareness about their brands about everything from cooking fat to body lotion to types of drinks.

Invariably, positioned between logos, messaging and product details, often a famous face pops into the advertisement to promote the product. On television, radio, social and print media, we see or hear our well-known comedians, news presenters, singers as well as sports men and women.

But why do businesses use famous faces and voices to push their products and services? Surely the average consumer of media understands the nature of paid endorsements.

Celebrities often know little to nothing about what they are paid to advocate. Despite our conscious understanding of paid spokespeople, advertisers continue to put famous people before us.

Why? Because it works. Research by Michela Cortini, Antonella Vicenti, and Riccardo Zuffo demonstrates immense power that celebrity endorsements work. But why does logic- defying celebrity marketing work?

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Marketing often captures the very essence of human nature. We like to think of ourselves as logical, rational and ethical beings. Our pro-self-bias makes us believe that we make excellent decisions about our plans, purchases, and peers.

But marketers selling a drink or sauce in a long, tall, and thin container sell more than those selling the same drink or sauce in a short and thicker container that holds the same millilitres. Surely humans as rational beings would notice that both containers hold the same quantity. But, no. We make most decisions with our subconscious emotional primordial urges.

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Likewise, even the most holy and ethical man who loves his wife with all his heart will still buy a product with a desirable waist-to-hip ratio attractive woman on the product packaging and not realise his reason for choosing that purchase.

Stephen Colarelli and Joseph Dettmann’s seminal research highlights that our human choices in marketing behaviour accentuate primary processes in biological and social evolution critical in survival, natural selection and sexual selection.

Inasmuch, we still retain our ancient preferences for sweet, fatty, or salty food and advertisements that showcase these urges succeed in food sales even though in the modern era of excess, consumptions of these nourishments are less useful and can be harmful to our health.

Also, successful advertisements showcase wide open vistas that bring out our ancient subconscious landscape preferences for savanna-like environments where humans first emerged.

But why does the use of celebrities in advertisements yield higher consumption of the products or services by viewers?

Our brains make powerful associations by what we see or hear around us.

Ancient humans lived in small family clans of no more than 150 members. Our brains became very good at distinguishing faces and immediately classifying them into safe or dangerous and similar or dissimilar. So, faces that we see regularly through the media and films trick our minds and they get categorised into safety because our brains are engineered to survive in ancient times with viewing only a small number of faces categorised into safety rather than the modern onslaught of faces through media.

We may even see a news presenter or a television star’s face more often than our own real-life neighbours.

Then we see those same famous faces or hear those same voices alongside a particular product or service and we feel in our subconscious like we can trust that product even though our conscious logic knows that the celebrity was paid for the endorsement.

Politicians use the power of association all the time. As an example, politicians will show their competitors in advertisements with subtle background movements in the frame mimicking movements of snakes to associate their opposition with human beings’ deep innate fear of serpents.

In summary, celebrity and association marketing carry powerful effects in advertisements. Be aware of your own ancient subconscious emotional urges and avoid falling victim to irrational purchasing decisions.

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