MAGNIFICENT: The view of Raila?s Sh1 billion home.
Miguna Miguna, in one of his most recent articles on what may now be characterised as patently absurd obsession with former PM Raila Odinga, draws a logically inconsistent, and fundamentally flawed parallel between Raila's alleged palatial residence under construction in Kisumu, and the South Africa’s President Jacob Zuma’s abuse of public office, with reckless abandon, and, for lack of a better phrase, parochial simple mindedness, begging the question: Could Miguna have “long veered past the junction of relevance?”
For starters, no one has accused Raila of abuse of office or embezzlement of public funds. At least, none of that is in the public domain, unless our learned friend is privy to something we don’t know. Miguna argues that the alleged Sh1 billion invested in Kisumu would be better utilised, providing basic necessities for those living in abject poverty in places like Kibera slums.
While this may be a noble cause, Raila may be many things to many people. He may have been called names ranging from 'Ule Jamaa Wa Vitendawili', 'Kigeuge', to 'Agwambo', among many others, but he has never, represented himself as a Mother Teresaof sorts. He may have given his prime years to the fight for social justice, but he has never, sworn to charity or poverty. Therefore, the insinuation by 'JaNyando', that the former Prime Minister should for some reason be held to a different standard, crumbles under scrutiny.
Now, given his long sacrifice to this great nation, his decision to defer his own gratification, even to the detriment of family life, why should the society so harshly judge the former PM, should he decide, in his sunset years to reward himself with something like a palace in Kisumu? Not that that was his intention, but can we be justified in putting a price on his sacrifice? Ironically, we’re yet to hear, to what charity Miguna donated the revenue from his two books. Last time I checked, he had flown his family for a vacation in the West after finding no spot befitting his stature within the confines of our beloved republic. He didn’t think twice about patronising Canadian businesses at the expense of the local Investors and hardworking citizens who bought his book. He doesn’t seem to me like someone with the moral authority to advise on matters of stimulating the local economy or charity.
What about the fundamental flaws I had earlier alluded to? It’s unfortunate that someone of Miguna’s intellectual prowess, would pen an article touching on capital investment, without doing his homework, granted he is not an authority in the field. He gloats over Raila's capital investment without necessarily understanding the drivers of capital budgeting decisions. Well, 'JaNyando', I hate to break it to you, but such decisions are not based on the sources of funds, but its uses.
In other words, it’s not how much it costs, but the projected future cash flows discounted to their Net Present Value, that determine what projects are viable. It is the Weighted Average Cost of Capital and the Opportunity Cost of Capital that drive such decisions. Now, until such a time that you can show that Raila's decision to invest a billion shillings in Kisumu would not at the minimum, break even, your argument is Dead On Arrival.
His argument postulates that the former PM may have funded this project using equity, but falls short of providing evidence to that effect. Even if it was pure equity, for all we know, Raila could be a façade for other investors, or better yet, a partner in this venture. For now, the Capital Structure might as well be a combination of Equity and Debt, but the big picture is that whoever is ploughing such resources on this project must have done his due diligence. Approaching this debate devoid of facts only leaves our learned friend with conspiracy theories that expose his soft underbelly. Without such pertinent facts, his argument falls flat on the face.
The claims that the former PM is hiding behind a foundation while also planning to rent a portion of the premises, is framed by 'JaNyando'as a manifestation of inconsistency. Truth is, this might as well be one of the many parts of a whole. The fact that Raila owns the premises doesn’t preclude him from renting a portion of it to his own foundation and by extension, interested parties. Now, even if the facility belonged to the foundation, there is nothing wrong with an NGO renting parts of its premises as a source of revenue to supplement its fundraising initiatives. What the PM articulates as his vision for the facility is a brilliant and prudent investment decision by any standard.
The big question is: Did Miguna really think his argument through, or did he emerge from an emotional state? The mere presence of the facility in Kisumu, fundamentally alters the market value of its locale, to the benefit of the local community. Would Miguna have preferred such a project near his house in Runda as opposed to Kisumu? Did he by any chance bother to factor the positive externalities associated with such an undertaking; the potential for mass capital influx from potential investors? What if what the PM did is interpreted by smart money as Market Signaling? What of the jobs that would be created for the locals as a result of such a bold move?
Martin Ouko is a US-based Consulting Business Analyst and a Master’s Fellow at the New Jersey Institute of Technology School of Computing Sciences.
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