CEO's that will be going into retirement with Kibaki

By John Muchira

KENYA: As Kenya gears up for a historic transition next year, with the impending retirement of President Kibaki, the corporate world is also abuzz with successions.

In what is seen as a major shake-up in the corner office of leading companies and parastatals, the group of chief executives that assumed leadership around the same period President Kibaki took over as the country’s chief executive are leaving en masse.

The contribution of this generation has been phenomenal. Nearly all took over companies and parastatals that were struggling to remain afloat. Not only did they transform them, they also ensured their organizations became shining stars in Kenyans corporate world.

The group, which can fittingly be described as the ‘golden generation’ of Kenya’s corporate world, is exiting the scene after successfully transforming companies and parastatals that were either on their deathbed, or were on their knees to some of the most celebrated entities.

“Nearly all these chief executives who are leaving took over struggling entities have performed exceptionally well in transforming them,” said a senior partner in one of the leading audit firms.

He added that most are leaving because they feel they have achieved their objectives and the companies they led now need injection of fresh blood to maintain the growth momentum.

“Most of the chief executive officers were turnaround gurus who feel their job is done and most opt to leave when they are on top,” he noted.

Today, most of these organisations are blue chip at the Nairobi Securities Exchanges, they are the largest taxpayers, and they are among the best employers among many other traits.

As the exit, Business Weekly looks at this ‘golden generation’ and their role in the transformation.  

Michael Joseph – Safaricom

Michael Joseph, who exited from Safaricom in 2010, epitomised the corporate titans of the past decade. When he landed in Kenya in June 2000 to head Safaricom, a partnership between the Government and Vodafone, few Kenyans would have predicted that in a span of a decade, he would singularly transform the telecoms sector in the country.

Over the 10 years, Joseph bestrode the telecoms sector like a colossus setting the pace, defining and conducting the orchestra for other operators. In 2000, less than 20,000 Kenyans had a mobile phone.

By the time he was living in 2010, over 15 million Kenyans were talking on the Safaricom network.

During his time, Kenyans not only witnessed the launch of innovative and life changing products like M-Pesa but he also built Safaricom from a nondescript loss-making entity to the most profitable company in East and Central Africa and the top most taxpayer in Kenya. At the time he was leaving Safaricom, profitability stood at a mindboggling Sh19.5 billion. Bob Collymore succeeded him.

Evans Kidero – Mumias Sugar

In 2003, when Evans Kidero was appointed Mumias Sugar Chief Executive, the firm was just another struggling miller in Western Kenya.

Like its peers, the company was mainly concerned with survival and achieving short-term goals, particularly keeping farmers happy and contented.

However, Kidero presided over a period of aggressive growth and diversification at times to chagrin of farmers and politicians in Western Kenya who often complained the company was driven by the desire to make profits.

During his time, Mumias achieved significant milestones that include electricity generation and production of ethanol, bottled water and 34 megawatts of electricity — 26MW of which is fed into the national grid.

It was also under him that Mumias explored possibilities of a sugar project in the Tana Delta to end reliance on rain-fed sugarcane production and smallholder growers.

Today, the company, which is the biggest sugar manufacturer in East and Central Africa and accounts for 60 per cent of all sugar produced in the country, is an overbearing entity dwarfing other millers.

In 2003, when he took over, Mumias had recorded a loss of Sh500 million.Today, profitability stands at Sh1.76 billion, a dropped from Sh2.6 billion last year.Kidero was succeeded by Peter Kebati.

Reuben Marambii – National Bank of Kenya

When Reuben Marambii announced he would retire as NBK chief executive sometime this year after 14 years at the helm, the market was not rattled. Rather, many felt that after salvaging NBK from the jaws of collapse and returning to profitability, a change of guard was in order.

There is no doubt that Marambii was instrumental in the transformation of NBK.

When he was seconded to the bank from Central Bank in 1999, NBK was technically insolvent and was choking on bad debts amounting to a staggering Sh36 billion, declining customer deposits and waning confidence due to political interference.

In a span of 10 years, Marambii was not only able to save NBK from collapse but he also masterminded a successful turnaround that places the bank among the leading in the country.

Today, the bank boasts of a solid deposit base worth Sh56.7 billion, with loans and advances to customers standing at Sh28 billion, while gross non-performing loans have significantly declined to Sh1.2 billion.

The successful turnaround culminated in NBK paying its first dividend in 12 years in 2010.

The last time NBK had paid dividends was in 1997. Marambii was replaced by Munir Sheikh Ahmed.

Eddy Njoroge – KenGen

In 2003, when Eddy Njoroge was appointed KenGen managing director, Kenya’s electricity installed capacity stood at 780 megawatt, the bulk of which was generated from ageing hydro sources. Back then; only 700,000 Kenyans had access to electricity while sources like geothermal and wind were largely unexploited.

More critically, KenGen was a colourless parastatal operating in the shadows of Kenya Power and Lighting Company. But as he gears to exit the scene in July next year, Njoroge leaves behind a company in the limelight and one expected to play a crucial role in powering the nation and enabling the realisation of the Vision 2030.

Under him, KenGen has invested heavily in the diversification of energy sources particularly in geothermal exploration and rehabilitating of hydro plants. Today, installed capacity stands at 1,232 megawatts and will rise to 1,750 megawatts by 2015 when ongoing projects come on stream.

Under him, KenGen has also become one of the most efficient and profitable parastatals, with net profits standing at Sh2.8 billion. But his tenure has been marred by controversies particularly in areas of awarding tenders for the huge projects. The process of hiring his successor is expected to commence in January. 

Michael Waweru – KRA

Over the past decade, President Kibaki has religiously bestowed awards to leading taxpayers. This annual ritual is the brainchild of Michael Waweru, who retired as the Kenya Revenue Authority (KRA) Commissioner-General in March this year. Waweru joined KRA in 2003, a time when the authority was the bedrock of corruption and political machinations.

But during his nine years at the helm, he presided over significant reforms that streamlined operations and increased tax collections. Under him, KRA invested in automating its systems, tackling corruption and empowering staff. Among the reforms he spearheaded included the introduction of the Electronic Tax Register, the Simba system to eliminate bureaucratic controls and introduce efficiency among others.

These reforms have translated in growth in tax collection from less than Sh200 billion in 2002 to over Sh700 billion this year. Despite the significant successes, Waweru left before he could resolve the problem of VAT refunds. Waweru was succeeded by John Njiraini. 

Adan Mohamed — Barclays

Last week, Barclays Bank announced changes that saw Adam Mohamed promoted to the Africa office as chief administrative officer. Before his appointment, Mohamed was the bank’s managing director for East and West Africa.

Prior to his appointment to this position, Mohamed was the managing director of Barclays Bank Kenya since 2002.

Though at the time Barclays was among the elitist multinational banks, Mohamed presided over a period in which Barclays changed it business strategy to target both corporate as well as retail clients.

Under his watch, the bank opened branches in areas that it would otherwise never venture in all in search of growth.

This strategy worked with profitability increasing steadily over the years to Sh8 billion last year, a 23.8 per cent drop from Sh10.5 billion the previous year.

For the better part of the last 10 years, Barclays Bank has been the most profitable in Kenya and is the biggest contributor of profits to Barclays Africa (excluding South Africa) in the last three years. Mohamed was succeeded by Jeremy Awori.

Martin Oduor-Otieno – KCB

Over the past decade, the financial services sector in the country has recorded tremendous growth. Though growth has been across board, the transformation of Kenya Commercial Bank (KCB) is a clear case study in successful turnarounds and spectacular growth not only in Kenya but also regionally. The captain of KCB’s phenomenal growth has been Martin Oduor-Otieno, who is set to leave the Bank next year.

Although his predecessor Terry Davidson had laid out the groundwork when he took over eight years ago, Oduor-Otieno has been instrumental in consolidating the revival of KCB from an industry laggard to the country’s biggest bank in terms of assets and profitability. When he took over as chief executive in 2007 after serving for 18 months as deputy chief executive, KCB profitability stood at Sh2 billion. As he leaves, profitability has soared to a staggering Sh15 billion.

Under his watch, KCB has engaged in aggressive expansion in terms of branch network, ATMs and even regional presence. He has also caused disquiet through a highly divisive restructuring programme. Joshua Oigara was recently appointed his successor.

Julius Kipng’etich – KWS

Slightly over two months ago, Julius Kipng’etich surprised the country’s corporate world after he resigned as the Kenya Wildlife Services (KWS) director and joined Equity Bank as the chief operating officer. In a span of eight years, Kipng’etich had literally become synonymous with KWS.

When he was appointed director in 2004, Kipng’etich walked into a parastatal that was largely a breeding ground for corruption, political interference and lacked any form of structures. By his own admission, KWS was a house in chaos and despite its vast potential; it had been reduced to an organisation that merely took care of the country’s wildlife.

But Kipng’etich meticulously streamlined KWS and by the time he bolted out, it had become one of the most celebrated public entities with a value of Sh5 billion from less than Sh1 billion in 2004. Due to his meticulous transformation of KWS, in 2009 he was named the CEO of the Year by the Company of the Year Awards. Kipng’etich was replaced by William Kiprono.