Rifts emerge among stakeholders as M-Akiba sale falters

 Treasury CS Rotich rings bell to launch Sh 1b mobile-traded M-Akiba bond. [File, Standard]

With just a month to go, the much-touted mobile-based M-Akiba bond has yet to live up to its hype, with subscriptions standing at 17 per cent of the Sh1 billion on offer.

Rifts have emerged among stakeholders, with the National Treasury, the Nairobi Securities Exchange (NSE), and Central Depository and Settlement Corporation (CDSC) trading blame over the dismal performance of the bond issue.

The target was to get 333,333 people to buy Sh3,000 worth of government debt, but that is becoming increasingly unlikely by the day.

Treasury late last month extended the bond issue by two months following lacklustre participation by investors.

As of Tuesday, 265,902 Kenyans had signed up for the bond, although what they had bought stood at a paltry Sh174 million since the launch of the bond on June 30.

Bureaucracy excuses

“M Akiba is a government instrument arranged as a public-private initiative. NSE was appointed to lead the private sector team who are instrumental to the overall success.

There is a clear and aggressive marketing campaign taking place where all players are involved and we are working tirelessly to achieve the set target. You know Kenyans are a last-minute lot. When the bond was about to close in July, we saw an uptick in volumes and expect the same towards the end of the issue,” said NSE Chief Executive Geoffrey Odundo.

“We have even put people in Huduma Centres to market the bond and we are meeting with investors to ensure the uptake picks up,” he added.

The Standard has, however, established that there are no marketers at Huduma Centres, with the information desk at the GPO Huduma Centre indicating that a contingent from Treasury only showed up once back in July and has not returned.

A source at Treasury shifted blame to NSE and CDSC, whom he claimed could be out to sabotage the bond.

“Upon advice from the Auditor General that the Government is not good at selling bonds and that this should be left to the private sector, Treasury gave NSE and CDSC a mandate letter to create awareness and sell the bond and in return get 1.5 per cent of the sum issued,” the source said.

This means that NSE would have received Sh15 million if the bond was to be fully subscribed. NSE in its financial results published on Tuesday said it had spent Sh4.8 million to launch the mobile-based bond.

Another source knowledgeable of the deliberations leading up to the launch said Treasury was partly to blame for launching the product on June 30 - the end of the financial year - and then giving excuses of bureaucracy of funding the marketing in a new financial year.

“Other parties felt like they were contributing more to the project than the Government, which is the issuer. Treasury should have taken a leading role in terms of action and resources,” the source said.

“I do not think Treasury has contributed anything save for round tables and tea at meetings or authorisaton of SMS blasts.”