DSE share prices decline minimal, not reflecting seismic economic

This signaled hard times as headlines talked of investors ‘enduring tough six months as 90 per cent of local firms lose’ in their DSE share prices, which was statistically accurate but slanted in the manner in which that datum was interpreted.

The typical reaction was hard times, but there was only marginal loss of value for most listed firms, for instance from Sh2,360 per share for National Microfinance Bank to Sh2,340 paltry decline.

It is thus more accurate to say that values at DSE remained more or less constant or in slight decline, instead of tough times where 90 per cent of listed firms were losing value at DSE, as for instance the loss registered for NMB was not significant as actual loss of value.

As shares are an alternative to term deposits or savings accumulation in commercial banks, the relative decline is one of expectations rather than value, as shares are usually expected to be rising in value, often at higher rates than bank deposits, but usually less than actual business.

Shares are a long term undertaking, strictly speaking meant for the next generation, to rise in value over a long period.

One picks up shares not because of the pursuit of profit as it is often wrongly projected but due to inability to assure himself or herself that such money would yield greater benefits if it is put into a business.

One’s hands might be tied already in one or other business whose yield is largely sufficient to assure a livelihood, and starting another business altogether may lead to a crop of problems and minimal psychological gain, in which case the cash is better used in purchasing shares in a listed company. It is an expression of confidence in that company, as well as a tactful use of cash, of ‘striking the iron when it is hot,’ if for instance it is the firm’s initial public offer.

Purchasing shares at a later date usually finds the shares more expensive than at first, with the first act of purchasing being amply rewarded as it is an act of confidence which isn’t as yet backed up by a visible track record, for instance when a company is being privatized.

At times firms have been listed but share buyers, looking at the firm’s business and legal ramifications, are slow in picking up its shares, but eventually it climbs the stage.

A more endowed investor purchases shares into the firm and then begins to rectify it, thus giving value to original shares and enabling his own purchase action to yield fruit, and ends up dominating other shareholders.

Rapidly put, a lack of momentum at the stock exchange is not the same as business loss but where a company makes little profit over a year or half year as in this case, but it still means the firm isn’t in the red.

Given the tumultuous situation in the country’s economy over the past year, the negative data in export trade results, the public debt and low levels of cereals stock at hand, DSE values are among rather bright spots in the country’s economy, experiencing some sort of flat terrain, not losing value and definitely not engulfed by any crisis.

As the menace of inflation, despite being felt in areas like the staple foods basket is contained, so share values remain stable.

Embezzling public funds in district level projects being brought under control

TWO or three districts are facing tremors where the government is moving to investigate, and at least in one instance, moved to impound properties of district officials and associates whether in a representative function or in business, tied up with losses of millions of shillings in project funds.

During a visit to Handeni and Muheza districts in Tanga Region midweek, President John Magufuli directed investigation into losses of up to Sh500million in project funds, especially in water projects.

Prime Minister Kassim Majaliwa was also recently cautioning councilors and district executives in key mining areas receiving billions of shillings not to cook up fake projects.

While a lot was being said in the legislature during previous governments, and even orders being issued against some district officials, not enough could be done as it went against ethos of party solidarity in particular.

At the same time, only in isolated cases were fingers being pointed at this or that individual in that connection, while embezzling was prevalent by different means, all of which are now being combated.

The president said at a big rally in the midweek tour that there was Sh500million, which a district director confirmed on the spot to have been delivered for specific projects, telling the responsible officials before the public, the cash isn’t for allowances.

Earlier on, there was an atmosphere of conviviality where public officials saw budgetary and project cash in similar manner as company officials see their revenues, that so long as it is high enough they can allocate for their own uses any such portions of the funds as they please.

The shift to multiparty democracy also played a part in this deficiency, as public officials became campaign agents for those wishing to be elected and top representatives of the president in regions and districts had to look aside as officials were feted with public cash. This was meant to retain the sort of conviviality it needs for ruling party support to remain steadfast, not eroded.

The change came with the dangers facing the ruling party in the 2015 polls, that its convivial methods was universally being detested as a few individuals in each cost centre could do anything they pleased, including mega-million shilling salaries in parastatal organizations, etc.

Checking these habits, faulty expenditure in projects due to the need to divert case for own use hasn’t been as popular with all ranks in the public service and in the ruling party, but criticism can hardly mobilize the people on the basis of what was being done in yesteryears, despite that many wish it came back. That is why the searchlight is focusing on district project funds, too.

There is an old maxim dating back to the Arusha Declaration 50 years ago that in order to make progress we need four things – people, land, good policies and good leadership.

For better or for worse we have nearly always believed that we had good policies and complain about leadership, while part of the problem is democracy and how it imposes solidarity to avoid giving ground to the opposition.

When malfeasance is combated in the public sector, solidarity diminishes and those in authority are compelled to reduce the scope of individual initiative so that it doesn’t derail the government from what it is doing, by constantly putting the legitimacy of various initiatives in question.

That is why democracy has had to be dented somewhat, as the public sector can’t be put under control and mud throwing at such moves remain free; it can’t work.