Safaricom chief executive Bob Collymore’s decision to declare his wealth has significantly raised the bar for wealthy business executives and top public officials, whose responses Kenyans will be eagerly awaiting in the coming weeks.
Mr Collymore yesterday revealed that he is paid an average of Sh9 million per month and that he has net assets of $2.7 million (Sh277.3 million), largely in the form of bank deposits and a house in London, UK.
The Safaricom chief said he decided to make his wealth public as part of the freshly launched effort to boost transparency and fight corruption that has permeated both Kenya’s public and private sectors.
While public officers have since 2003 been required to declare their income, assets and liabilities, the information has been kept secret, making it difficult to hold anyone accountable.
Mr Collymore is the first private sector executive to publicly declare his wealth, raising the transparency bar so high in a market where even the pay of public listed company executives remains a closely guarded secret.
“Corruption distorts markets and has a negative impact on society as a whole, in both the developing and the developed world,” Mr Collymore said. “It is the reason why the responsibility to turn the tide against corruption ultimately lies with us as individuals.”
The income and wealth disclosure requirement in the public service and the private sector has enabled corrupt individuals to sidestep the pressure of accounting for their ill-gotten fortune.
The Public Officers Ethics Act expressly states that wealth declaration forms filed by civil servants shall not be “published or in any way made public except with written authority of the (relevant) commission.”
Anyone who otherwise makes such information public is guilty of an offence and liable to imprisonment for five years or a fine of Sh500,000.
Former Rongo MP Ochillo Ayacko had warned – as the law was being crafted — that keeping information on civil servants’ wealth away from the public would have the effect of undermining the fight against graft.
“In fact, this Bill also suggests that such declarations remain a secret. If that were to be the case, the purpose of this Bill would not be realised,” Mr Ayacko told Parliament in November 2000.
“The purpose of this Bill is for all Kenyans to know their leaders well and the extent to which they own property and to which they have been involved in grabbing.”
Cover their tracks
The law was eventually passed with the provisions to keep the wealth forms secret helping the political elite – who rank among the most corrupt — to cover their tracks.
In the private sector, no meaningful information is published about executive wealth or income even from publicly traded firms.
At best, companies say how many shares executives hold in their own company directly and deliberately fail to show the entirety of those holdings, including shares in nominee accounts.
Citing statistics from the World Bank, Mr Collymore asserts that the private sector has a major role in fighting corruption in Kenya and other African countries.
“According to the World Bank, $1 trillion is paid every year in bribes in Africa. An additional $2.6 trillion is stolen annually through corruption – a sum equivalent to more than five per cent of the global GDP,” Mr Collymore said.
“Shockingly, in the new era driving Africa’s narrative, the protagonists in this new story of corruption are the private sector, who account for as much as 70 per cent of the fraud taking place in the continent.”
Mr Collymore’s wealth is simplicity itself and indicates that the 57-year-old is highly conservative, showing no inclination to maximise returns on assets.
Among the assets listed by the Safaricom chief are cash balances amounting to $1.1 million (Sh116 million) – representing 41.8 per cent of his net worth — in local and UK banks.
He owns a house in London valued at $530,000 (Sh54 million) and shares in Safaricom worth $180,000 (Sh18.3 million). Mr Collymore’s ownership of shares in Safaricom’s parent firm Vodafone Plc valued at $871,000 (Sh88.8 million) rounds up the list of his assets.
The Safaricom boss in the last 12 months earned $5,800 (Sh592,000) in interest and dividends on his bank deposits and stock holdings, translating into an annual rate of return of 0.26 per cent.
That level of return will not hurt him in the UK where inflation is about zero per cent. It will, however, eat up his assets in Kenya where the cost of living is galloping at a rate of 7.32 per cent.
While revealing his wealth, Mr Collymore also confirmed that he is among the highest paid CEOs in Kenya with an annual compensation of $1.06 million (Sh109 million) or Sh9 million per month.
That is equivalent to 196.2 times the average monthly salary of Sh46,264 paid to a formal sector worker in Kenya.