TEM Lab: Kenya – Lesiolo Grain Handlers

One of the final questions a small farmer from the Mwihoko group asked us was, “Would Lesiolo be willing to give me a guaranteed contract at harvest (September) to buy my grain in March at a pre-negotiated price?”  This savvy farmer was technically referring to a forward contract (with the approaching creation of a Kenyan futures exchange system , the contract he referred to would be classified as a futures contract).  By entering into a futures contract, the farmer makes an assumption:  that the price he negotiates today will be better than the price he would sell for in the spot market in March (the spot market price is the price of grain settled on by seller and buyer for immediate transfer of ownership).

This farmer was using a financial instrument called a hedge.  Hedging is a strategy that has been around for hundreds of years and is employed by producers and users of grain (millers, animal feed companies, edible oil producers) as a way to protect their harvest or inputs against future price volatility. It was quite interesting for a small farmer in rural Nakuru to be asking about a derivatives product that would allow him to hedge his interests while allowing speculators (people on the other side of a futures contract who assume the price will go the other way) to enter the Kenyan grain market.  It was also intriguing because a futures exchange in Kenya does not exist – yet.

As part of our deliverable, we took it upon ourselves to research the advent of a Kenyan futures market.  We discovered a very interesting fact about developing a futures exchange market in an emerging economy – a Warehouse Receipt System is the cornerstone of successful exchange markets in these environments.

For those of you following our previous blog posts, you know that another significant part of our project is the enhancement ofLesiolo’s WRS.  This revelation raised the stakes on our deliverable: not only did Lesiolo need a successful WRS to increase its’ bottom line and further support the small farmer, but Kenya needed a WRS to support the implementation of a futures exchange. It’s important to clarify the correlation between a WRS and a successful futures market.  Exchange markets fail in emerging economies for several reasons, and a functioning WRS can counteract these risk factors:

Commodities Exchange Risk Factor #1:  Small Markets

According to USAID, a commodities exchange fails when there is a small market.  A small market is one that lacks enough counterparties to take the opposite side of a contract.  In this scenario, a single bet could sink the clearinghouse responsible for covering losses or gains on unpaid contracts.  A small market can also refer to the number of commodities being traded.  Although white maize is a food staple of East Africa, and an important commodity in the market, a strong exchange requires a variety of commodities.  This variety stabilizes the exchange even if the government intervenes and participants renege on contracts.

WRS Opportunity 1):

A Warehouse Receipt System encourages larger market participation in several ways:

a) More Market Entrants:  A functioning WRS attracts new farmers into the system, and more market entrants stabilize price volatility in a commodities exchange.

b) Stability:  A WRS stabilizes markets by allowing traders to sell commodities at different points during the year, not just at harvest.  This added stability to the agricultural value chain encourages participation.

c) Insurers will only participate in an exchange if there is a sound WRS. Without insurance, there is no exchange: buyers and sellers need guarantees that if a party defaults on their obligation, someone will assume responsibility for debt.

Commodities Exchange Risk Factor #2:  Lack of Proper Infrastructure

Infrastructure refers to storage facilities, roads, railways, and communications platforms, but it also refers to buyers, sellers, and lenders.

WRS Opportunity 2):

A commodities exchange is based upon the ability to buy and sell goods.  In order for this to occur, institutional voids need to be addressed.  Private entities such as Lesiolo have gone to great expenses to install modern storage silos and grain laboratories, establish lending practices, procure trucks for transport of goods, build weigh stations to inventory grain storage, and build communication platforms to communicate with stakeholders.  Through the development of their WRS, Lesiolo has become a key provider of much of the infrastructure needed to ensure efficient and fair trading practices and encourage participation by the parties necessary to construct a commodities exchange.

Furthermore, private entity participation encourages public policy action, the final component needed to truly modernize grain trade and establish an exchange.  Governments need to step in and build roads, maintain reasonable interest rates, apply taxes in a sensible manner, and ensure a lawful society.

Commodities Exchange Risk Factor #3:  Lack of Legal Frameworks

If a country lacks proper legal frameworks, contracts cannot be enforced.  This dissuades lenders, insurers, clearinghouses and other vital participants from committing to a commodities exchange.

WRS Opportunity 3):

The key to a legal framework is a commodity that is uniform in grade (quality) and quantity.  The secure grain laboratory at Lesiolo records these control metrics:  the quantity of commodities entering and exiting the facility, moisture content, protein amounts, foreign matter, broken, rotten, discolored, immature or diseased grains, insect damage and live infestation.  Once these factors have been established, contracts can be written to include buyer and seller responsibility, deadline for delivery, and size of tradable lots – all with the assurance that a buyer or trader is getting the product they agreed to, without having to actually see it.

Financial backers (clearinghouses) and insurers are also integral players in a legal framework, and enforceable contracts assure their involvement in the system.  A WRS provides these players with affirmation that the grain products traded in the market actually exist, which means that contracts can be executed and enforced.

Commodities Exchange Risk Factor #4:  Consistent Contract Abandonment

When Governments intervene with excessive price controls, it’s easier for parties with commodity-backed contracts to renege on obligations.  Consistent reneging on the terms and conditions for standing agreements will collapse an exchange.

WRS Opportunity 4):

A WRS is used to confirm the physical presence of a commodity.  The accurate reporting and inventory management provided at secure grain handling facilities assures that the government cannot speculate on reserves of grain.   It also increases the likelihood that the government intervenes only when necessary, and not for political or personal gain.

Commodities Exchange Risk Factor #5:  Lack of Consistent Information

If the market lacks consistent information, it becomes non-transparent.  This can result in collusion.  To avoid collusion, an exchange must have accurate current and historical data.  This data must be free flowing.

WRS Opportunity 5):

New entrants and returned participants in a stable WRS provide consistent transparency into the: quantity, quality and spot price of grains.  When grain is stored it enforces immediate data capture.

During a trip to Nairobi, I met with the Head of Research and Development of the Security and Exchange Commission for Kenya.  My time with this gentleman revealed that the SEC is one of five consortiums invited to bid on a proposal to develop a Futures Exchange in Kenya.  The process was suspended, and the Kenyan Commodities Market Authority hired a consultant group to determine the rules and regulations of an exchange.  Once those rules are established, and a reasonable amount to finance the exchange has been determined (the original amount was quoted at US20M) the bidding process to build and operate an exchange will resume.  I asked this gentleman to name the advantages of an exchange for the SEC.  His response was; “boost liquidity, manage risk, and push return on equity”.  These are fairly obvious responses to interested parties.  Less obvious is the aforementioned correlation between a functioning WRS and a futures exchange.

As we began our project, Lesiolo immediately earned our respect by demonstrating its commitment to the promotion and well being of Kenya’s small farmer.  As our project concludes, we realize that Lesiolo is a key player in the development of an extremely valuable financial market.  Our team has worked to connect Lesiolo with the parties responsible for developing Kenya’s Futures Exchange.  We’re anticipating additional discussion within the industry regarding the correlation between a WRS and a successful exchange market.  Lesiolo’s commitment, and an ongoing dialogue among industry players, will ensure the company’s inclusion in important conversations with national and international stakeholders.  Our hope is that increased involvement leads to an immediate increase in the utilization of their WRS.

Although Nakuru is a modest city by western standards, it is large enough to conceal its’ rustic surroundings under the veil of sprawling shanty towns, business centers, universities, makeshift street side markets, traffic circles, and choked roadways. In such an environment, it’s easy to assume that industries are abundant.  However, once outside of any city in the Rift Valley you quickly find yourself in a sea of crops – an instant reminder that agriculture is what stimulates this country’s economy.  Our visit with the Mwihoko Farmer Group was a vivid look at how a properly functioning agricultural system – one that promotes fair lending and market pricing – can change lives and promote economic growth.

As we bounced down a dirt road in the back of the company van our eyes wander over rickety wooden market stalls, donkeys, men on bicycles, women with gaggles of children in their wake and sacks on their heads, cattle, and maize – lots of maize.  We were 20 minutes outside of Nakuru on our way to Kabatia.  The day’s mission was to give our WRS communication plan a simple test run in front of a local farmers group.  As I mentioned in my last post, crafting the proper message for Kenya’s farmers was, in my opinion,  the most important deliverable for our project.  Development of the plan, headed by Rula Andriessen, was an impressive multi-step process involving client interviews, market research, polling of expert opinions, surveys and the injection of structure by tying in marketing and communications tools learned at Thunderbird.  The plan is professional, relevant to Kenya’s current agricultural situation and is a tool that can be handed to our client to improve their bottom line and the economical standing of Kenyan farmers.  So there we were, on our way to put the plan in motion, looking for a reaction and seeking feedback to expand and refine our efforts.

I have been to dozens of similar meetings in rural emerging markets.  They are always ceremonial in nature and each person is given the opportunity to speak.  The informalities can last for hours, and unlike western meetings, they lack tight agendas or time constraints.  This meeting was familiar, except the part in which the entire assembly opened with a song. Unexpectedly, all the men and women in front of us stood and followed with a harmonious, rhythmic, enchanting, soulful song.  We were moved and all smiles.  Once the song was over we casually proceeded, signifying the normalcy of such an opening event.

This group of farmers was formed 4 years ago.  It’s members were friends before forming a co-op, often lending each other money, tools, or manpower in times of need.  The East African Grain Council (EAGC), an advocate of Lesiolo and the authority on Kenyan small farmer development,  introduced the group to the idea of Warehouse Receipting.  It was the perfect vehicle to eliminate all the circumstances that made the farming business challenging .  The farmers were exposed to theft, rats, and aflotoxins that ate away their maize and profits.   With encouragement and education by EAGC and Lesiolo, the group aggregated their crops and took them to Lesiolo to be processed and stored.  The grain remained safe in a storage facility until market prices increased.  In the mean time, the group secured a loan, using their stored maize as collateral.  The farmers hoped for even higher yields the next year, and used the loan for seeds and fertilizer to plant a larger crop.  It worked.  The group has seen higher margins and increased yields.  They have become a model of success for the WRS, encouraging other farmers’ groups to join them or form sister organizations.  Together, these groups aggregate crops before transport to Lesiolo’s storage facilities, thereby saving money on transportation costs.  The event was encouraging and our conversations with the members confirmed that simple messages – those that highlight the potential for increased profits, safe storage of grains, and accessible loans to purchase fertilizer and seeds for future crops – are an effective foundation for our marketing and communications plan.

As the meeting progressed, the farmers quietly offered valuable advice on the dissemination of information, what kind of information would be valuable to the small farmer, and how often it should be sent.  We learned that frequent text messages from Lesiolo’s headquarters (highlighting movements in grain and transportation prices), weather updates,  and regional crop forecasts would be welcomed . Culturally, a personal connection to business is important to Kenyans, and we learned that these messages are an effective way to build a farmer’s personal connection to Lesiolo.   We also learned that all Kenyan farmers have small radios.  Radios are a way to help pass time during long days in the field and opened our eyes to a high impact marketing opportunity.  The farmers also talked about quarterly print ads and pamphlets that could be distributed among community members and posted in communal meeting centers.  They went on to say that historically print ads were illegible and cryptic.  This helped us understand the importance of visually appealing marketing communications to rural Kenyans, a point we surely would have overlooked without this type of interaction.

As the chatter increased among our audience, new members found the confidence and the desire to speak.  We successfully connected with the group and the floodgates for feedback opened.  The biggest surprise was a discussion about the  “next generation” of farmers, the sons and daughters of those with whom we were speaking.  The business of farming requires unwavering patience, and the older generation of farmers expressed concern for their impatient youth.  They noted that as soon as a crop was harvestable, the young farmers took it to market for sale, obtaining the lowest possible price.  This money was then quickly spent on low impact purchases.  Financial planning is not important to the younger generation, and it worries the older farmers.  This valuable information made it clear that we needed multiple messages tailored to different audiences.  Creating a sustainable WRS in Kenya will only be possible if its importance is communicated to the ranks of the generation that will assume responsibility for farming the vast fields of Kenya’s maize farms.

As the meeting came to a close, the group discussed farm inputs.  Farm inputs are the materials farmers need to grow and sustain a crop; seeds, fertilizer, pesticide and water.  Within the structure of a Warehouse Receipt System, inputs are purchased with the loans that famers receive once their crops are safely stored in the grain silos at Lesiolo.  We learned that a loan only partially pays for the next year’s crop.  Farmers still had to purchase the inputs – a nearly impossible task.  We listened to stories of farmers who traveled miles on foot to reach fertilizer depots, only to wait in line for up to two weeks to receive the necessary inputs to begin next season’s crop.  These facts prompted our teammate Alex Davis to begin investigating the limited supply of various inputs.  His results have been fascinating and have expanded our team’s exploration to include a new business opportunity for Lesiolo.  The impact of these recommendations could lead to more efficient supply flows, higher crop yields, lower costs, improved customer relations, and increased revenues.

Ultimately, our trip into the field was a success.  The Kenyan market, as we’ve heard many times during our trip, is one in which a champion – a success story – is crucial for the success of a new product or service. Our meeting with the Mwihoko Group provided us with the perfect example.  Furthermore, we obtained valuable information that offered additional depth to the WRS communication plan, allowing us to increase its sustainability and tailor it to small farmers’ needs.  Equally as important, our visit gave us a keen sense of stakeholder awareness, and provided us with a heightened sense of personal involvement in our project.

Our meeting took place outside, in a sort of community courtyard.  All around us was the evidence of a functioning WRS.  There was a water storage tank, new tarps for protecting recent harvests from the elements, healthy cattle, a school with smiling inquisitive children peaking around trees, a scale to weigh bags of maize, a machine to measure moisture content and a sieve to eliminate foreign material from de-grained cobs.  These materials are only available to communities with disposable income, monies above and beyond those necessary for food and shelter.  It was a visual testament to what an integrated and involved community of entrepreneurs, small businesses, large businesses, and public institutions can accomplish for the good of humanity.  We are proud to be working on behalf of an organization that plays an integral part in this chain of constituents – and one that will positively impact Kenyan farmers with an effective Warehouse Receipt System.

I hope I have conveyed the importance of a functioning WRS to the small Kenyan farmer.  In my next post, I will highlight the impact of a WRS on the future of complex financial trading instruments within Kenya’s budding financial system.

“Most persistent problems that call for consultation have no clear right answer.

Packaged consultation or training is faster, more digestible, more visible and predictable, and therefore more saleable…If learning and change are truly our intent, a slower, more demanding, and more deliberative approach is required.

We have to value struggle over prescription, questions over answers, tension over comfort, and capacities over needs and deficiencies.”

-Peter Block, “Flawless Consulting”

During our team’s visit to Nairobi, I was able to witness a stakeholder meeting at the East African Grain Council (EAGC) Headquarters.  Sitting at the round table in the midst of truly dynamic facilitators and participants, I couldn’t help but remember the first time I encountered some of the issues we discussed.

Not so long ago, as an undergraduate, I took an intensive seminar of courses in Global Development.  Somehow, I managed approval for the seminar – even though I hardly met the difficult prerequisites in economics and political science – and I soon realized I was in the company of extremely intelligent, passionate people.  The coursework required an almost inhuman effort on my part, and in most cases, I struggled to keep pace with even the quietest participant.  Throughout the semester, we questioned the effectiveness of foreign aid, struggled to find a balance between short-term solutions and long-term societal change, and tackled the theories of major voices in the global development space.  I finished the seminar as I would a marathon – pushing through wall after wall of discomfort, constant feelings of ineptitude and inadequacy – and wondered if I would ever be comfortable conversing about issues in an emerging economy.

My interest in global development has only grown with time, and now I find myself one of the lucky participants in Thunderbird’s Emerging Markets program.   Back at the round table in Nairobi, I was exhilarated, not exhausted, by the conversations taking place.  The facilitators were two U.S. government auditors, assessing the U.S. aid program “Feed the Future” and seeking answers to several important questions.  The one that struck me was a question of inclusion:  to what degree were key regional stakeholders (for profits, government agencies, donors, implementation partners, and NGOs) included in the discussions about creation and implementation of action plans for Feed the Future?

To clarify their questions, the auditors reminded stakeholders that the U.S. could be either an informative or collaborative change agent – one that tells organizations to simply follow a plan of action, or one that brings stakeholders in for dialogue and brainstorm prior to solidifying a plan for action.  Feed the Future was always meant to be a country-run program, so the facilitators had to ask careful questions to ascertain what was really happening.

I’ll keep the specific dialogue of the meeting confidential, but as the facilitators carefully and intelligently guided the stakeholders through a difficult conversation, I took each of their questions to heart in light of our own TEM Lab project:  Where we acting as informative or collaborative change agents?  Which stakeholders were we consulting before we made recommendations? Were we limiting ourselves to an available Rolodex of contacts, or were we truly acting inclusively, seeking out the unheard voices that needed to influence our counsel to LGHL?

Our team constantly seeks new opinions from new people, even if the perspectives we encounter are wildly different than our own.  My teammates visited the Ministry of Agriculture at the U.S. Embassy in Nairobi, spoke with representatives from USAID Compete, engaged with consultants and leaders in the grain industry, and conversed with an extremely dedicated group of small farmers outside Nakuru.  We’ve utilized the power of LGHL’s internal stakeholder opinions as we create a brand for the company’s marketing and communications plan.   We’ve built a great relationship with our client that’s allowed us to have real, honest conversations that get to the heart of food and economic security in Kenya.  The recommendations we’re making to Lesiolo will be actionable because we’ve done our best to acknowledge the challenges and capacities of the Kenyan grain industry and Lesiolo’s business.

The insights we’ve gained so far are varied, challenging, and inspiring:

“Do women and youth groups exist?

Well, they may exist but they don’t know about important stakeholder meetings.

Why aren’t they invited?  Why do we hear from the same players over and over again?”

-EAGC Stakeholder Meeting Conversation

“Farming co-op groups will not work in Kenya: mismanagement, stealing,

and a break-up over time prevent their success.”

-Foreign Agriculture Services

“Mwihoko means “hope”.  Our motto is “We work together and we sell together.””

-Paul, Mwihoko Farmer Co-op Group

As I remember the hours I pored over books, websites, and development metrics, I realize what was missing from the never-ending search for answers: the chance to engage with people who are directly impacted by projects in emerging economies.   This, and the freedom to embrace questions by leaning into the intrinsic tensions of emerging markets, is the true opportunity of a TEM Lab.

Click here to see us in action at work and footage from our visit to Masai Mara National Park:

Our TEM lab experience in Kenya is based on agriculture – over the course of two weeks, our team has had a crash course on everything related to this industry.  As you dive into the field, you quickly understand how expansive the agricultural value chain is.  It spans a variety of industrial mediums (inland storage facilities, port terminals, railcars, trucking companies, tankers, millhouses and grain processors) involved in a process that eventually places a food product on a consumer’s plate in one form or another.  These large complex institutions exist to fill the country’s agricultural infrastructure voids, but we’re discovering that the entire grain industry depends on a much smaller stakeholder: the Kenyan farmer.

In Kenya – unlike the United States, where the agricultural industry is controlled by a few powerhouse corporations – the agriculture industry is grounded by thousands of independent men and women who plant a seed, tend to it, and eventually harvest it.  Most Kenyan farmers plant white corn (called maize in Kenya), and their harvest is sold to millers.  It eventually finds its way to grocers, restaurants, and the military for use in making staple food products like ugali (akin to the Westerner biscuit, roll or tortilla).  Ugali is found on almost every Kenyan’s plate on a daily basis.  Without the common Kenyan farmer, large millers would have no grain to process into flour.  They would lose billions of shillings in revenue and the food security of the nation would be jeopardized.  In Kenya, the large agricultural companies need the small farmers’ inputs, but, as we’re learning, small farmers need the support of larger entities in the agricultural industry to advance their livelihoods.

The farmers’ need for organized corporate entities is in large part due to the powerful economic force of supply anddemand, which is nowhere more evident than in the grains industry.  As farmers harvest their maize or wheat the market is flooded with excess supplies of both.  As we know, when this happens, the prices of those commodities drop.  If a farmer is forced to sell at the moment of harvest they are almost assured to receive the lowest price for their toils that the market has to offer.  If however, if the farmer can wait until the initial shock of over supply to the system diminishes as inputs are used up, they will receive prices 50% higher or more for their goods.

This is where a socially responsible company like our client, Lesiolo Grain Handlers, Ltd., provides an extremely valuable service to farmers.  Lesiolo has instituted what is called a Warehouse Receipt System (WRS), and helping Lesiolo grow their WRS is a key component of our TEM lab project. A Warehouse Receipt System works like this: Kenyan farmers take their harvested grain to Lesiolo’s facility.  LGHL dries, fumigates, and stores the grain until market prices for the wheat and maize goes up.  It can be several weeks or several months depending on market forces.  At the proper point in time the farmers can sell.  The extra income earned by waiting to sell is enough to elevate them into an entirely new income bracket.  It is a system that Carl Tundo, owner of Lesiolo Grain Handlers, has instituted in large part to better the lives of Kenyan farmers.  The service is mutually beneficial both the small farmer and Lesiolo Grain Handlers – the company sees a small increase in revenue through the processing fees that make grain suitable for storage.    For the country of Kenya, the WRS is an essential way to keep grain values high, ensure financial rewards for farmers, and instigate the growth of more crops. Further planting and harvesting of maize and wheat encourages greater Kenyan food security, which is a constant concern for emerging market governments.

So, small farmers need larger corporations to survive, and larger corporations need farmers’ inputs to sustain their businesses.  Large corporations and small farmers also share a common need:  banks.  Even in relatively small scale farming, banks can make or break a farmer’s ability to survive.

The diagram below (constructed by TEM lab member Ryan Wegner) visually represents a WRS cycle.  Within the cycle, there is a point where a Kenyan farmer needs a loan. After the farmer has taken his grain to Lesiolo for storage there is a waiting period.  It is during this time that farmers need an infusion of cash, as market prices rise and farmers wait for the right time to sell.  This cash is used to start next year’s crop and pay for current household expenses.  Once the farmer’s grain is safely stored in Lesiolo’s silos, they are given an actual receipt for the grain.  With this paper certificate (receipt) the farmer can approach a bank and get a loan, using their stored grain as collateral.

Banks could logically work within this system when a farmer presents their grain as collateral and the bank loans them money.  However, at prevailing interest rates as high as 23%, the farmer can no longer make a margin that makes it worthwhile to hold their grain in storage.  Instead, they sell at market lows.

So here we are, thousands of miles from the United States, nowhere near New York’s institutional lenders, or Chicago’s bond market, in the middle of The Rift Valley.   Here there are no skyscrapers or massive industrial projects that would logically require the intervention of banks.  As far as the eye can see, there are green valleys and national parks.  Yet, the fragile construct of the most important industry in Kenya is beholden to banks.  Subsequently, a key success factor of our project is the ability to find affordable financing for the inner-workings of Lesilo’s Warehouse Receipt System. Another challenge is to find an institution that is willing to work at lower interest rates, or to find a large infusion of cash that Lesiolo can use to lend to farmers.

By our figures, supporting just a quarter local farmers in the 12 provinces of the Rift Valley could cost $3 million USD.  There are, however, worldwide credit unions with large coffers and a vision to help emerging market agricultural communities.  We are tapping our large Thunderbird Alumni network to engage this type of organization as well as the likes of USAID, IFC and various NGOs.

Once a proper lender is secured, the next step will be to communicate the benefits of the Warehouse Receipt System to thousands of farmers across the Rift Valley.  Our team member Rula Andriessen is crafting this communication strategy and platform.  In my opinion, the communication strategy is the most important component to our project.  The success of our clients’ lofty ambitions to make their Warehouse Receipt System an indispensible component to Kenya’s agricultural infrastructure depends on sound communication.  We’ll be consulting local experts for the best ways to communicate with our target audience, and we’ll update next week’s blog with our progress.

“Kevin, do you think those cats might have rabies?”

Calm and soft-spoken as usual, Kevin, a manager at LGHL, replied, “Yes…I think it’s very likely.”

Since the encounter, I immediately washed the wound and made a makeshift bandage out of a napkin. Sending a shudder down my spine was my next thought: I would have to get a shot.

Generally disliking shots, my main worry centered on my fear of dirty needles. Unfamiliar with local healthcare standards, what flashed through my mind was a series medical horror stories. New to this region, my fears stemmed from what little I’ve heard, with gaps filled in by my potentially rabies fueled imagination.

My head was flooded with images of an overcrowded waiting room filled with people with missing patches of skin, or tree limbs and pipes sticking out of heads—all managed by a tired triage nurse who would take a glimpse at my minute but festering scratch, slap a green tag onto my forehead, and sentence me to a 10 hour wait. By the time I saw a doctor, I would likely be the harbinger of a reenactment of 28 Days Later. Oh, and I almost forgot my innate fear of other people’s body fluids. My mind raced: body fluids…blood…disease…HIV/AIDS…death.

From media reports and publicity generated by NGO fundraising efforts, the continent of Africa is infamous for its very high rate of HIV/AIDs infection. While HIV rates are as high as 20% in some nations, Kenya has a comparably low rate of about 6% (whereas the US rate is less than a percent).

However, when I met with the doctor, my fears diminished as a poster described the use of post-exposure prophylaxis (PEP), a 28 day injection treatment aiming to prevent the HIV from infecting the body, was prominently displayed in the examination room. I felt assured that this clinic would be well aware of the dangers and methods of HIV transmission. After all, I was unaware that such a treatment even existed.

In fact, Kenya offers antiretroviral therapy for free. However, with a 40% unemployment rate, approximately half of Kenya’s 40 million people lives below the poverty line subsisting on less than $1.25 (PPP) a day. With so few resources, expenses surrounding laboratory fees or transportation to the medical facility can be prove to be harsh barriers for effective PEP implementation.

Once face to face with a doctor, I was particularly surprised that he made no attempt to rush me out of his small but clean office, as I was accustomed to the limited 15 minute face time typical with doctors back home. He took the time to explain the risk of rabies infection, treatment options, and even took the time to answer all my questions.

I learned:

• Dog bites are the source of 99% of human rabies death.
• Incubation period for rabies is usually up to 90 days.
• Wound cleansing and vaccination within a few hours of contact can prevent the onset of rabies and death.
• Even if vaccinated, an after exposure shot should be given.
• While it is possible I could die from rabies, my death will certainly not be from cat born AIDS.

Going to a private clinic in Nakuru, Africa’s fastest growing town and the fourth largest city in Kenya, it should have been no surprise that the facilities would be rather modern.  In some ways the experience was even superior to my previous doctor’s visits in the well-known, modern cities of Guangzhou and Hong Kong. The doctor’s office looked like it could have been a clinic that I could find back home; complete with cushioned examination tables, computers, and curtains. Incredibly, I felt quite at home.

Nonetheless, I carefully watched the nurse as she unwrap a fresh needle. After she was done, she walked toward the medical waste receptacle, but hung a right instead, stepped to open lid of the waste bin, and dropped my used needle in the trash can.

Okay, well, maybe not quite home.

Our team received strict warnings from our clients (local Kenyans) and our new expat friend about the danger of walking around at night.  “Kenya in the day and Kenya at night are two different places,” our friend warned.  “Follow the locals and do what they do – you will not see them out after 7:30pm.  You’ll see them get in a taxi or on a motorbike to drive 30 feet and enter a new restaurant.  They do not walk.”

Thanks to our new network, we were able to heed their warnings – the man in the unmarked vehicle was actually a taxi driver that came highly recommended by our expat friend.  Most taxis in Nakuru are unmarked, so we were extremely grateful to have numbers for reputable drivers.  The five of us crammed into the vehicle and safely navigated the dark streets of Nakuru.

The power of connection, as evidenced by our taxi experience, has had a huge impact on our experiences in Kenya so far.  At home in the US, we have connections in the form of ubiquitous internet access and cultural orientation, and these connections grant us a powerful capacity to be independent.  In Kenya, we’ve found we’re quite dependent on our client for almost everything – finding reputable taxi drivers, making trips to town and work, buying our first groceries, managing our home, regaining electricity, securing internet access, and accessing emergency water reserves.

David, Alex, and Angela working by back-up light during a power-outage in Nakuru, Kenya

This weekend, our team, accompanied by an employee from LGHL, Kevin, ventured out to Naivasha, Kenya, for a camping excursion.  We were able to secure cabins atop a beautiful hill in Naivasha thanks to our connections in Nakuru.  We were also given suggestions for things to do, including a trip to the breathtaking Hell’s Gate National Park, and hippo safari (see below).  When we got to the park, Kevin negotiated an unforgettable tour of the Gorge in Hell’s Gate for 1/3 of the originally quoted price!  Our excursion would not have been the same without the companionship and advice from our newfound connections.

Rula, Kevin, Alex, Angela, and Ryan enjoying a Hippo Safari!

As we become more aware of the delicate web of relationships that allows us to function productively in Kenya, it will be our challenge as consultants to harness its potential for actionable recommendations to our business partner, LGHL.   So far, we’re enjoying the journey!

A hippo makes an appearance and Dave captures a great shot!

I was solicited for bribe money thrice this week; once by a police officer. I also fed crackers to a family of baboons in the middle of the national highway and was denied access to a simple cash withdrawal due to my bank’s skepticism surrounding the local bank’s legitimacy. This morning; however, my TEM lab team and I confirmed how we would assist our client in its upcoming large corporate expansion. Welcome to Kenya, where myriad business opportunities lie in the midst of  apparent disorder.
Read more »