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THE NEW LUNATIC EXPRESS: Lessons not learned from the East African Railway

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THE NEW LUNATIC EXPRESS: Lessons not learned from the East African Railway
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“The limits of tyrants are prescribed by the endurance of those whom they oppress.”
-Frederick Douglass

The building of standard gauge (SGR) railways in both Uganda and Kenya and the predictable sagas that have ensued are reminiscent of the controversies surrounding the building of the Uganda and Rhodesian Railways in the late 19th and early 20th centuries. Both present a framework within which it is possible finally to understand the limited achievements in development in all sectors (and frankly, underdevelopment in many) and regression in Uganda’s primary education, copper mining and agricultural sectors. Both SGR projects are tainted with suspicion of shady procurement which, if taken together with the track records of the implementers, points to corruption. It would be irresponsible to say otherwise.

The route, design, level of service and all other decisions of the Uganda Railway of 1990 were dictated by potential profits for foreign investors (both public and private) and their local agents, and not by notions of public service and the common good of those who would bear the ultimate cost. Return on investment is not a bad thing but the Imperial government also claimed to be acting in the interests of the indigenous populations.

The difference now is that there is no pretence about whether the railways are serving the interests of the general population. The different financial implications presented by the procurement process itself, the selection of routes and the relative cost of engineering in the different terrains, plus the cost of compensating displaced landowners, provide scope for long-running, energy-depleting corruption scandals. From the outset, there has been a lack of confidence that procurement processes for the necessary services would prioritise the interests of the public over the interests of the contractor and would actively exclude the personal interests of the public servants commissioning the works. This is what is triggering the anxiety surrounding the SGRs.

The different financial implications presented by the procurement process itself, the selection of routes and the relative cost of engineering in the different terrains, plus the cost of compensating displaced landowners, provide scope for long-running, energy-depleting corruption scandals.

Moreover, the choice over whether to upgrade the old railway or to start afresh was not adequately debated publicly. Ditto the options on financing. For the Kenyan SGR, the most costly of the potential routes were reportedly selectively chosen. Several cheaper routes on land allegedly already in possession of the government are said to have been rejected.

There are also questions surrounding passenger service. Do the railways only serve trade or are passengers entitled to this alternative to dangerous road transport? In areas where passengers and not commodities, who will be the primary user of the railway?

Uganda owns one half of the old East African Railway. Together with the Kenyan leg, it was put under a 25-year management contract. The new owners renamed their new toy Rift Valley Railways (RVR). In 2017, after only twelve years, the governments cancelled the contracts in a move the RVR called an illegal takeover. On the Ugandan end, there were allegations of asset-stripping by previous European concessionaires as well as unpaid concession fees and massive salary arrears caused by RVR. If RVR were to successfully sue the government for cancellation of the contract, their compensation would be the first budget overrun.

The government of Uganda then signed a Memorandum of Understanding in 2014 with the China Civil Engineering Construction Corporation (CCECC), which had submitted a study. It abandoned those negotiations in favour of a second Chinese entity, the China Harbour Engineering Company. In justifying its action, the government questioned the quality of the CCECC’s study, which it said was cut and pasted from pre-existing feasibility studies (something that could have been avoided by following proper procurement procedures). CCECC insists it was a pre-feasibility study requiring less detail than a full-blown feasibility study. Whatever the case, if CCECC had followed through with its suit for US$8 million in compensation, which would have been another massive blow to the budget at inception. Whatever compensation they have agreed to has not been made public but as matters stand, the budget for the eastern leg of the SGR has gone up from CCECC’s proposed US$4.2 billion to CHEC’s US$6.7 billion.

What stands out – apart from the incompetence, squabbling and eventual compensation claims that accompany nearly every major Ugandan development project – is that the President of the Republic is front and centre in the flouting of procurement procedures by issuing personal invitations to foreign firms and individuals to participate in projects. He has done the same with investors from the United Arab Emirates who have been promised land. The results are often disastrous: the country is in debt to the Kenya-based Bidco company after it fell short of 10,000 hectares of land it had promised the company for a vegetable oil project. As a result, Bidco received tax waivers worth US$3.1 million in 2016 alone, according to the Auditor General.

The last top-level contact with a foreign investor whose details are known resulted in the arrest in New York of Patrick Chi Ping Ho in late 2017 on charges of paying bribes to the Ugandan president and the foreign minister through an American bank. The Ho-Kutesa bribery case casts more shade on the procurement arrangements for the SGR. Without a satisfactory resolution of the matter and with the same people still in situ, citizens would be foolhardy to expect value for money from the SGR.

By the beginning of 2018, owing to cash flow difficulties, less than half of the land required for the 273-kilometre eastern section of the SGR had been acquired. Not surprisingly, as Uganda slithers into insolvency, the government has resorted to domestic and foreign borrowing to fund ordinary recurrent expenditure like payroll. Commodity prices are significantly lower and the shilling worth much less than when the SGR was first contemplated. So bad is the situation that the police force announced that police work in 2018 is to be carried out on a rotational basis among the regions as there are insufficient funds to enforce the law across the whole country at once.

The Uganda Railway, 1900

The Uganda Railway initially ran from Mombasa to the Kenyan side of Lake Victoria, where the journey was completed by steamer to Port Bell in Kampala. The main purpose of the railway was to make Uganda colonisable.

Under the hinterland principle introduced by the Treaty of Berlin of 1885, colonial powers had the first option on the ownership of the hinterland abutting on their coastal possessions. To claim possession of the hinterland, a power had to show that it had effectively occupied the coast.

Having secured the Kenyan coast, Britain was not required to effectively occupy the East African hinterland – Uganda – but was determined to do so, fronting the objective of stopping the slave trade under the Brussels Anti–Slavery Act of 1890, which also required it to “improve the moral and material conditions of existence of the native races”. The argument ran as follows: To stop the slave trade, the region had to be governed by Britain and to govern, soldiers, ammunition, civil servants and their supplies had to be transported to the region, for which a railway was essential.

Only after the annexation of Uganda did references to the slave trade fade out as the overriding objective and the need to grow cotton to feed Britain’s textile industry and reduce unemployment came in to sharper focus.

Having secured the Kenyan coast, Britain was not required to effectively occupy the East African hinterland – Uganda – but was determined to do so, fronting the objective of stopping the slave trade under the Brussels Anti–Slavery Act of 1890, which also required it to “improve the moral and material conditions of existence of the native races”.

There was competition for the hinterland from the western coast of Africa, whose Congolese hinterland Belgium owned. Belgium was interested in north-western Uganda. In the north, the French had had a military confrontation with the British in Fashoda over supremacy in the Sudan. Time was, therefore, of the essence and the proposal was tabled in Parliament without a thorough survey.

We have had a large sum of money voted, but I observe that in recent documents the survey has disappeared and it has become a ‘reconnaissance survey’. We want to know whether we are making an estimate of the cost of a railway upon a reconnaissance survey. Major Macdonald was at the head of that survey, and when he arrived at the mountains he did not survey any further but put upon his survey ‘mountains’, and so there was practically no survey” (Henry Labouchère, MP, Uganda Railway debate, April 1900)

 The expenditure necessary was minimised in presentations to Parliament,

The estimates of cost have been falsified from the very commencement. They began with an estimate of £1,700,000; then it jumped up to £3,000,000, and year after year when the vote for Uganda came on for discussion, we were told that that would not be exceeded. And now the right hon. Gentleman comes here and, pluming himself on having carried out his own estimates, asks us to vote almost two million additional; and he shows us in no sort of way that the last estimate of £5,000,000 is based on solid ground any more than the £3,000,000 estimate, or the £1,700,000 estimate […] We ought not to vote any more money until we have had a full practical businesslike survey. (Labouchère 1900)

Also distorted were facts about the purpose of the railway. The benefit to the British cotton industry, one of the country’s leading employers, was minimised while advantages to the inhabitants of British East Africa were magnified to overshadow any criticisms of the railway’s implementation. One argument was that Britain would eliminate the high cost of the squadron needed as a barrier to slave ships off the East African coast by transporting soldiers overland to quash the last remaining slave caravans.

Labouchère questioned the government in 1900 as to whether the partially complete railway had had any impact on the size of the British squadron. The answer was no, it hadn’t. In fact, as he noted “it has not prevented one single slave being carried away”. Apart from anything else, slavery was tolerated in Zanzibar and Zanzibari slaves were being used as porters by British officials even in 1900.

“Sir G. Portal’s expedition [sent to effectively occupy Buganda] was one which had numerous slaves in its ranks. The whole territory of the East Africa Company now was swarming with slaves. What hypocrisy would be charged against this country, if their real motive being financial greed and territorial aggrandisement, they put forward the sacred cause of slave emancipation, while at the same time their own territories were swarming with slaves, and were actually impressing these poor creatures in large numbers to carry Sir G. Portal himself on this expedition. (Robert Reid, Uganda debate, March 1893).

(This is the same G. Portal who was sent by the Crown to implement the treaty extracted from Kabaka Mwanga and who exceeded its boundaries by marching through Buganda, setting up a fort in the Kingdom of Toro from where the Kingdom of Bunyoro was annexed.)

In the interests of speed and economy, a non-standard gauge was used. This partially explains why in the 21st century Kenya and Uganda are embarking on their first SGRs rather than extending existing lines. Apologists for incompetence should take note: there will be railways but whether they are the most cost-effective, robust (extensible) option is another matter.

In their rush, the Foreign Office formed a Works Committee to build the railway, which wound up costing significantly more per mile than comparable railways in India. It was referred to as a light or small-gauge railway. The cost of two comparable light railways in India was £6,500 and £6,400 per mile, respectively. The Kenya-Uganda light railway was being built in 1900 at £8,500 per mile. (Ugandans may recall that the price tag for the new thirty-mile Kampala-Entebbe Highway was double that of a comparable highway in Ethiopia.)

Railway finance

Contrary to popular belief, railways were not a gift to the colonies; they were financed by loans paid from tax revenues collected by the local colonial administrations and, therefore, any waste and losses in the construction were borne by the taxpayers in the colonies. Even where the Imperial government made the initial expenditure, ultimately it was the citizens of the colonies who paid.

For example, Palestine was charged £1 million for a railway built to facilitate the movement of British troops during the First World War (Palestine and East Africa Loans Act 1926). The retroactive payment was engineered by guaranteeing a loan taken by Palestine the proceeds of which then went to the British treasury while Palestine (then under British administration) made the repayments. For an idea of the magnitude of a million pounds in those days, the exact same amount was provided three years later in total development grants for the entire empire, then numbering over 40 territories.

Contrary to popular belief, railways were not a gift to the colonies; they were financed by loans paid from tax revenues collected by the local colonial administrations and, therefore, any waste and losses in the construction were borne by the taxpayers in the colonies. Even where the Imperial government made the initial expenditure, ultimately it was the citizens of the colonies who paid.

The £1 million provided in 1929 would not have covered Uganda’s total budget for one year. Even without a full set of Protectorate accounts, it is still possible to see that Uganda’s budget balanced at approximately £2 million between 1931 and 1935. In those years there was an excess of assets over liabilities of between £700,000 and £1 million. The Uganda Protectorate was even able to maintain the reserve fund required by the Imperial government. It stood at over £400,000 in the 1930s.

“The Reserve Fund is really required for three purposes: (a) as a kind of insurance against a definite national emergency, such as a famine or locust invasion involving very exceptional expenditure; (b) to meet a possible deficit in case of an exceptional shortfall in revenue; and (c) to enable the normal programme of capital expenditure to be carried out from year to year unimpeded by fluctuations in revenue. It will thus be seen that a considerable sum should be kept available, and it is hoped that it will be possible to accumulate £l,000,000 in the course of time.” (A.E. Forrest, Acting Treasurer, Uganda Protectorate)

 The Imperial Loan, the earliest loan record available to this writer, was made in 1915. It was followed by development loans between 1921 and 1924 and then further loans in 1932 and 1933. Total unused balances on these loans ranged from between £3,300 and £95,727 in the years 1931 to 1935; £588 was paid towards the Kampala-Jinja Railway in 1933. Total loan servicing that year was £144,718 for the 1932 and 1933 loans. The only grant received during the same period was £841. (This is not a typo.)

Although the Imperial development grant budget was increased to £5 million in 1940 to cover an even larger number of colonies, the target could not be reached during the Second World War when funds were low. During the war, the colonies had to divert their resources to aid Britain’s war effort. Uganda and most other colonies each donated £100,000, the equivalent of Uganda’s entire development budget for 1939. Kenya raised approximately £17,000. Men from both countries volunteered to serve; there were 77,000 from Uganda and more from Kenya. (The British government finally sent pensions to Ugandan ex–servicemen in 2011 after a long, increasingly hoarse campaign. Over 2,000 British ex-servicemen and thousands of others were rewarded with land in Kenya and Rhodesia).

The people of Buganda gave an additional £10,000 and the Ankole gave £1,000 from taxes collected from their populations. Additionally, the Buganda Lukiiko and the Native Administrations of the Eastern and Western Provinces pledged to give £5,000, £7,000 and £5,000 a year, respectively, for the duration of the war and for one year after its end towards the expenditure of the Protectorate.

Gifts in kind included an airplane (from Mauritius), patrol boats (Singapore Harbour Authority), cocoa, coffee and foodstuffs of all kinds. Farmers’ savings in the cotton and coffee funds were diverted to feed and clothe Allied troops. Only the Oron tribe in Nigeria was spared – their gift of two hundred pounds was returned on the grounds of their financial standing.

Colonies also made interest-free loans to Britain: in 1940 the Kenya-Uganda Railway and Harbour Administration loaned His Majesty’s Government £100,000 for as long as the war lasted. In 1946, Uganda made an interest-free loan to His Majesty’s government of £650,000. Total loans from the colonies amounted to £1,156,983 (See: Accounts of the Uganda Protectorate, 1946 Statement of Balances, Statement XIV, at 31st December, 1946).

It is incredible that in spite of the evidence, Ugandans and other ex-colonials continue to believe that they are being “helped” first by Britain, then by the World Bank and the Chinese. It is this misreading of the facts that prevents any meaningful negotiations for better terms of development cooperation. It is the capacity to negotiate that today’s bribe-taking leaders sell for their thirty pieces of silver.

Secondly, railways transported cotton belonging to the British Cotton Growing Association (a voluntary body comprising Lancashire growers, mill owners, textile workers, shippers and workers in ancillary trades such as dyers) for free in Sierra Leone, Lagos, and Southern Nigeria in return for seeds and professional advice (Secretary of State for the Colonies, Cotton Supply debate, 1905.) Third, once built, railways were used to leverage further loans. The East African Railways and Harbours Authority, being a viable operation, was used to guarantee loans taken out by the East African High Commission (the colonial administration).

By 1961 Uganda’s indebtedness had soared. The public debt was £16,933,000 and was being reliably serviced. Guarantees of interest alone stood at £58 million and a further £3.5 million for interest on a loan from the World Bank (presumably for Nalubaale Hydro-electric Dam). (See: Statement of Contingent Liabilities of the Protectorate Government as at 30 June 1961, Statement 12)

Construction and labour management

Due to the need to build the railway as quickly as possible, “gigantic errors” were made. An attempt was made to cover up escalating costs by saying that the materials had to be upgraded from wood to steel until an examination of the original plans showed provision had been made for steel from the very beginning. Accounts were submitted late for audit.

We have to pay £2,000,000 extra as the result of putting the work into the hands of men who have no practical experience of the work they have undertaken. I, for one, decidedly protest against the reckless and careless way in which the management of the railway has been conducted up to the present time.” (Thomas Bayley, M.P., 1900)

The management of the labour makes it even clearer that the railway was not for the primary benefit of the inhabitants of the region. Much in the same way as Chinese contractors do in Uganda today, the British shipped in foreign manual labourers to carry out the work; 14,000 of the 16,000 labourers employed were expatriates from India. There was a famine in Kenya shortly after.

We ought in my opinion, instead of importing so many thousands of Indian[s], to have employed a good deal more African labour, because natives have been dying by thousands of starvation in the neighbourhood of this railway. It has been most distressing to see the natives dying in the ditches by the side of the railway, and when trains have gone up the line little starving and dying children have come and begged for food, for a little rice, or anything from those on the train. That is not the sort of thing that ought to occur where the British Government are building a railway, and they ought to have engaged labour to a much larger extent from the neighbourhood. (Robert Perks, M.P., Uganda Railway debate 1900)

Much in the same way as Chinese contractors do in Uganda today, the British shipped in foreign manual labourers to carry out the work; 14,000 of the 16,000 labourers employed were expatriates from India.

Those Africans that were employed were paid four pence a day while the Indian skilled labourers were paid 14 pence a day. (Indians had experience in building the Indian railways.)

“That seems to be pretty nearly the same thing as slave labour. I should like to know what would be said in this country if any man were induced by the Government to work for four pence a day. [Several HON. MEMBERS: Oh, oh!] Hon. Members say oh, oh! I know their views. Working men in England have votes, and working men in Africa have not.” (Labouchère, 1900).

But Labouchère himself gave the standard racist reason for the low wages, a sentiment he expressed in defence of his own arguments that investment in Uganda was a waste of time: “What about the Ugandese themselves? They are without exception the very laziest of that laziest race in the whole world, the African negro.”

John Dillon, the Irish nationalist, demonstrated an understanding of the difference between the then African way of life and the grubbing and jostling necessary in over-populated, capitalist European countries,

“[…] where African labourers were employed the earthworks cost 10d. per cubic yard, while with the Indian labourers at the higher wage they cost but 6d., so that by employing the Indian labourer at higher wages you reduced the cost of the work. […] Very often, particularly in railway work, it is much cheaper to employ a better class of men at higher wages than men who do not understand the work at lower wages.

“One argument is that the labourers being free men, with no rent to pay, and with gardens round their huts, are not compelled to labour for the [low] wages offered by contractors and mine-owners; they can ask their own terms. What settles the price of labour in this country is the fact that a man cannot retire to his garden and his house and wait until the employer must have him at his own price; he would starve; therefore he must make the best terms he can. But in Africa the labourer is comparatively a free man, unless you have forced labour, as is so often advocated. (John Dillon, 1900)

However, it was later revealed that in addition to racialist considerations, there was a profit to be made on importing labour. Greek contractors had been awarded contracts to import the Indian labour and their commissions inflated labour costs. The point was not exhaustively argued in Parliament but there were suggestions that Sir Clement Hill, a public servant, received between £10,000 and 70,000 in commissions on materials ordered.

It was argued in Parliament that the amount of money required for the Uganda Railway was sufficient to build a full network of the light railways required in Britain. If anything speaks to the necessity of transparency it is this. Less extravagant profits assured by the government to private investors, contractors and commission agents would have ensured more was available for the common good of ordinary people in both countries, and a measure of dignity for the workers.

In contrast, before building permanent churches, schools and clinics in Uganda, Catholic missionaries in Uganda established technical schools and other training facilities in order to train the craftsmen that would be required for the work. They took the necessary time to maximise skills transference. They specialised in brick-making, architecture, glass-making and other building crafts, as well as tailoring, teaching and nursing. These facilities are still in service today, run by Africans.

For their part, indigenous communities using their own traditional model for infrastructural development known as bulungi bwa nsi (the good of the nation). They continued to contribute most of the locally available material inputs and, of course, all of the land and labour for community infrastructural development.

The character of development changed when the Imperial government commandeered the education sector in 1921 in order to “re-organise” it. After that, records show, the administration was able to manipulate communities by promising schools and other amenities to those communities that agreed to plant cash crops and do other things required of them. Voluntary communal labour was transformed into compulsory labour and extracted through corporal punishment and the dreaded poll tax.

Contracts for technical assistance these days require hired expatriate consultants to transfer skills to the indigenous staff. However, the fact that certain positions remain “expatriate” positions speaks volumes. These days African labourers on foreign-managed project sites are treated no better than the colonialists treated labourers. Ugandans at foreign-owned building sites have made numerous complaints about underpayment, lack of access to safety gear, harassment, sexual exploitation and even violence. In Uganda and elsewhere, some have been served lunch on their shovels. In the 1990s, Ugandans were made to squat in a line, one man between the legs of another. The reason given was that they kept losing/stealing the plates provided.

Chinese abuse of African workers’ rights, importation of labour, disregard for Ugandan environmental preservation and disdain for the communities among which they work is a repetition of the first invasion of capital and demonstrates the extremes to which it goes when left unfettered.

Route and service politics

The original plan had been for the railway to serve farming areas. Tax revenues from the crops would cover the cost of the construction. Introducing cotton and providing a fast means of exporting it was supposed to lead to development. Once the settlers came to know the route, the influential among them lobbied to have the railway diverted to serve their plantations.

The question of whose interests the SGR serves, as raised by Rasna Warah in a recent article published in the eReview, was as valid in the 1890s as it is today. In Kenya, the lack of “native”-directed development meant that there were insufficient railway stations between Mombasa and Lake Victoria for African requirements. It goes without saying that the interests of indigenous populations were not included in the plan. As a result, indigenous farmers had to carry their cotton long distances to the tracks – often in five shifts of one 60-pound bag at a time – and had to spend one or a few nights along the track, sleeping in the open air while waiting for the train.

Because in the beginning there were insufficient carriages and the few available were segregated, the Africans travelled in wagons. They were locked in for the safety and comfort of the first class travellers. Often, as some members of Westminster’s parliament were scandalised to learn, African passengers were unable to alight on arrival at their intended destinations despite banging on the wagon doors and were carried all the way to the next stop or to the Coast.

It goes without saying that the interests of indigenous populations were not included in the plan. As a result, indigenous farmers had to carry their cotton long distances to the tracks – often in five shifts of one 60-pound bag at a time – and had to spend one or a few nights along the track, sleeping in the open air while waiting for the train.

During the debate of the East Africa Commission Report in 1925, Henry Snell articulated the role of capital in distorting the higher development goals of bringing development to Africa,

“The land through which these railways pass [belonging to Settlers] should be taxed to help bear the cost that is involved. In the matter of transport it has been the case, unfortunately, that the Europeans have acquired the idea that railways should be built solely for their benefit, and that money granted as loans or in any other form should be entirely devoted to the white races. If by any chance a railway passes through native reserves, the cry is immediately raised that the land contiguous to the railway is too good for native use, and the native is therefore driven away, or it is urged that he should be removed to some less accessible position. It was on such a plea as that the Maasai were robbed of their country, and plots of land varying from 5,000 to 300,000 acres were given to Europeans for no other reason than that they were covetous of it and that it was in close touch with the railways.

“These extra facilities for transport can only be justified if at the same time the native interests are completely safeguarded. At the present time the difficulties are immense. The native has to raise from 10s. to 16s. per annum for hut tax, and he has to pay this almost entirely out of the material he is able to sell. That involves him in carrying a load of 60 lbs. for 40 miles. To pay this tax he may have to go as many as five journeys of 40 miles, with the 60 lb. load on his head, making for the return journey a distance of 400 miles. That is economic slavery of a most indefensible kind, and of a kind worse than was ever known in the Southern States of America. The roads are very frequently impassable because of bad weather.” (Henry Snell, M.P. East Africa Commission Debate, 1925)

Land grabbing and the Rhodesian Railway

Planning, finance, procurement, labour – what more could go wrong? Answer: speculation. The major and most lucrative railway scam was the use of the railway as a vehicle for displacement of populations and acquisition of their land by speculators. The land was acquired by those who had already been given free or cheap land by the Imperial government and were in a position to leave it idle.

“One syndicate got 500 square miles from the Foreign Office, over the head of the then Governor of Kenya. That is a fairly extensive slice of territory to be handed away. Then there was a grazing land syndicate, called the East African Syndicate, which applied for 320,000 acres, and Lord Delamere, a notorious figure in these parts, applied for 100,000 acres. If one syndicate gets 500 square miles, another gets 320,000 acres, and another applies for 100,000 acres, there is some prima facie evidence of speculators in Kenya.” (Thomas Johnston, Kenya debate, December 1926.)

In Rhodesia, as in Kenya, this resulted in large tracts of land being bought on either side of the proposed track by investors. In both territories the value shot up exponentially as the railway approached. Once the route for the Rhodesian railway was set out, a strip measuring twelve miles wide was carved out alongside taking in parts of Native Reserves. Meanwhile, the Msoro tribe of over 2,000 was displaced in favour of three settlers.

By 1920, Rhodesians had already been corralled in Native Reserves. The 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the “right” to reside in (but not own any part of) reserves measuring 8 million acres. Most of the rest of the territory still belonged to the British South African Chartered Company (BSAC) that had deposed both the Mashona and Matabele kings and seized their territory.

After 1919, the British South African Company transferred what was left over from sales of this territory to the British Crown in return for a much disputed bail-out. The bail-out was controversial because under its agreement with the Crown, the BSAC was allowed to reimburse itself for work it did on behalf of the Crown by engaging in business. The Company had earned an income from the sale of millions of acres of land and mining concessions and had exported ivory and minerals, all under the protection of the British flag and therefore the British military. This was supposed to be their “compensation”. However, breaking the rules of the charter, the Company inter-mingled its own private accounts with those of the administration of the colony, making it difficult to separate the cost of government work and BSAC business. Just as with the British East African Company when it was leaving the area, the BSAC was further “compensated” with taxpayers’ money.

By 1920, Rhodesians had already been corralled in Native Reserves. The 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the “right” to reside in (but not own any part of) reserves measuring 8 million acres. Most of the rest of the territory still belonged to the British South African Chartered Company (BSAC) that had deposed both the Mashona and Matabele kings and seized their territory.

During the controversy, a secret agreement between the BSAC and the British government came to light under which the government had agreed to reimburse the BSAC if it deposed King Lobengula. BSAC recruited European settlers, promising each a lease of a 6,000-acre farm at 30 shillings a year. They were also offered the option of buying the farm outright at the cost of 3 pounds sterling per 20 acres or 900 pounds for 6,000 acres.

After the successful campaign, the British government paid the lease and purchase costs for the recruits. Those not wishing to purchase were reimbursed for improvements they had made on the properties. In total, £7 million was demanded, half for the recruits and half for the shareholders. All opposition in Parliament was silenced by the Colonial Secretary, public eugenicist Lord Amery, when he revealed that a Commission of Inquiry had exonerated the BSAC and its recruits of any wrong-doing in massacring the Matabele and deposing their King. They eventually settled for £4 million pounds in 1922, a sum roughly equivalent to the Colonial Office’s budget for four years.

The need for public oversight

In his essay “Mexico proved that debt can be repudiated”, published on 24 March 2017, Eric Toussaint devotes a section on showing the links between commodity extraction, railways for transporting the commodities, and loans required to finance the extraction and transport of the commodities. He demonstrates the impact these had on land ownership, the displacement of peoples, the national debt, and a clique of investors.

It is interesting to note that in South America, as on the African continent, railways did not serve to connect communities and countries but rather led straight from the point of extraction of commodities to the point of export. The entire operation was eventually paid for from the indigenous public purse.

Like chartered companies, 21st century local agents for foreign investors enjoy political and military protection by the foreign countries they serve. This phenomenon was most evident in Mexico where various debt repudiations resulted in military invasions and threats of invasion by the United States, Britain and France. Most interestingly, Mexican citizens who had lent to their government were granted European nationality after which their new countries included them among those whose rights were being defended by the invasions. They came to be known as vende patrias – sellers of their country. Then, as now, bail-outs came from taxpayers’ money.

In modern times, attempts to repudiate illegitimate debt or to choose other paths that do not profit financiers still lead to regime change. Today they take the form of grants and NGO funding, which attempt to fill the holes left by diversion of national resources. What a bail-out means is that when an investor makes a profit, it all belongs to the investor. Where s/he makes a loss, it is spread among taxpayers. As Noam Chomsky famously stated, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”

What a bail-out means is that when an investor makes a profit, it all belongs to the investor. Where s/he makes a loss, it is spread among taxpayers. As Noam Chomsky said, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”

There can be no real progress until a critical mass of the electorate makes the connection between foreign capital, its local agents and underdevelopment. As Frederick Douglass put it, “If there is no struggle there is no progress[.…] Power concedes nothing without a demand. It never did and it never will.”

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Mary Serumaga is a Ugandan essayist, graduated in Law from King's College, London, and attained an Msc in Intelligent Management Systems from the Southbank. Her work in civil service reform in East Africa lead to an interest in the nature of public service in Africa and the political influences under which it is delivered.

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Recent weeks have seen increased global media attention to Uganda following the incidents surrounding the arrest of popular musician and legislator, Bobi Wine; emblematic events that have marked the shrinking democratic space in Uganda and the growing popular struggles for political change in the country.

The spotlight is also informed by wider trends across the continent over the past few years—particularly the unanticipated fall of veteran autocrats Muammar Gaddafi in Libya, Hosni Mubarak in Egypt, Yaya Jammeh in Gambia, and most recently Robert Mugabe in Zimbabwe—which led to speculation about whether Yoweri Museveni, in power in Uganda since 1986, might be the next to exit this shrinking club of Africa’s strongmen.

Yet the Museveni state, and the immense presidential power that is its defining characteristic, has received far less attention, thus obscuring some of the issues at hand. Comprehending its dynamics requires paying attention to at-least three turning points in the National Resistance Movement’s history, which resulted in a gradual weeding-out of Museveni’s contemporaries and potential opponents from the NRM, then the mobilisation of military conflict to shore up regime legitimacy, and the policing of urban spaces to contain the increasingly frequent signals of potential revolution. Together, these dynamics crystallised presidential power in Uganda, run down key state institutions, and set the stage for the recent tensions and likely many more to come.

The purge

From the late 1990s, there has been a gradual weeding out the old guard in the NRM, which through an informal “succession queue,” had posed an internal challenge to the continuity of Museveni’s rule. It all started amidst the heated debates in the late 1990s over the reform of the then decaying Movement system; debates that pitted a younger club of reformists against an older group. The resultant split led to the exit of many critical voices from the NRM’s ranks, and began to bolster Museveni’s grip on power in a manner that was unprecedented. It also opened the lid on official corruption and the abuse of public offices.

Over the years, the purge also got rid of many political and military elites—the so-called “historicals”—many of whom shared Museveni’s sense of entitlement to political office rooted in their contribution to the 1980-1985 liberation war, and some of whom probably had an eye on his seat.

By 2005 the purge was at its peak; that year the constitutional amendment that removed presidential term limits—passed after a bribe to every legislator—saw almost all insiders that were opposed to it, summarily dismissed. As many of them joined the ranks of the opposition, Museveni’s inner circle was left with mainly sycophants whose loyalty was more hinged on patronage than anything else. Questioning the president or harboring presidential ambitions within the NRM had become tantamount to a crime.

By 2011 the process was almost complete, with the dismissal of Vice President Gilbert Bukenya, whose growing popularity among rural farmers was interpreted as a nascent presidential bid, resulting in his firing.

One man remained standing, Museveni’s long-time friend Amama Mbabazi. His friendship with Museveni had long fueled rumors that he would succeed “the big man” at some point. In 2015, however, his attempt to run against Museveni in the ruling party primaries also earned him an expulsion from both the secretary general position of the ruling party as well as the prime ministerial office.

The departure of Mbabazi marked the end of any pretensions to a succession plan within the NRM. He was unpopular, with a record tainted by corruption scandals and complicity in Museveni’s authoritarianism, but his status as a “president-in-waiting” had given the NRM at least the semblance of an institution that could survive beyond Museveni’s tenure, which his firing effectively ended.

What is left now is perhaps only the “Muhoozi project,” a supposed plan by Museveni to have his son Muhoozi Kainerugaba succeed him. Lately it has been given credence by the son’s rapid rise to commanding positions in elite sections of the Ugandan military. But with an increasingly insecure Museveni heavily reliant on familial relationships and patronage networks, even the Muhoozi project appears very unlikely. What is clear, though, is that the over time, the presidency has essentially become Museveni’s property.

Exporting peace?

Fundamental to Museveni’s personalisation of power also has been the role of military conflict, both local and regional. First was the rebellion by Joseph Kony’s Lord’s Resistance Army in northern Uganda, which over its two-decade span enabled a continuation of the military ethos of the NRM. The war’s dynamics were indeed complex, and rooted in a longer history that predated even the NRM government, but undoubtedly it provided a ready excuse for the various shades of authoritarianism that came to define Museveni’s rule.

With war ongoing in the north, any challenge to Museveni’s rule was easily constructed as a threat to the peace already secured in the rest of the country, providing an absurd logic for clamping down on political opposition. More importantly, the emergency state born of it, frequently provided a justification for the president to side-step democratic institutions and processes, while at the same time rationalising the government’s disproportionate expenditure on the military. It also fed into Museveni’s self-perception as a “freedom fighter,” buttressed the personality cult around him, and empowered him to further undermine any checks on his power.

By the late 2000s the LRA war was coming to an end—but another war had taken over its function just in time. From the early 2000s, Uganda’s participation in a regional security project in the context of the War on Terror, particularly in the Somalian conflict, rehabilitated the regime’s international image and provided cover for the narrowing political space at home, as well as facilitating a further entrenchment of Museveni’s rule.

As post-9/11 Western foreign policy began to prioritise stability over political reform, Museveni increasingly postured as the regional peacemaker, endearing himself to donors while further sweeping the calls for democratic change at home under the carpet—and earning big from it.

It is easy to overlook the impact of these military engagements, but the point is that together they accentuated the role of the military in Ugandan politics and further entrenched Museveni’s power to degrees that perhaps even the NRM’s own roots in a guerrilla movement could never have reached.

Policing protest

The expulsion of powerful elites from the ruling circles and the politicisation of military conflict had just started to cement Musevenism, when a new threat emerged on the horizon. It involved not the usual antagonists—gun-toting rebels or ruling party elites—but ordinary protesters. And they were challenging the NRM on an unfamiliar battleground—not in the jungles, but on the streets: the 2011 “Walk-to-Work” protests, rejecting the rising fuel and food prices, were unprecedented.

But there is another reason the protests constituted a new threat. For long the NRM had mastered the art of winning elections. The majority constituencies were rural, and allegedly strongholds of the regime. The electoral commission itself was largely answerable to Museveni. With rural constituencies in one hand and the electoral body in the other, the NRM could safely ignore the minority opposition-dominated urban constituencies. Electoral defeat thus never constituted a threat to the NRM, at least at parliamentary and presidential levels.

But now the protesters had turned the tables, and were challenging the regime immediately after one of its landslide victories. The streets could not be rigged. In a moment, they had shifted the locus of Ugandan politics from the rural to the urban, and from institutional to informal spaces. And they were picking lessons from a strange source: North Africa. There, where Museveni’s old friend Gaddafi, among others, was facing a sudden exit under pressure from similar struggles. Things could quickly get out of hand. A strategic response was urgent.

The regime went into overdrive. The 2011 protests were snuffed out, and from then, the policing of urban spaces became central to the logic and working of the Museveni state. Draconian laws on public assembly and free speech came into effect, enacted by a rubber-stamp parliament that was already firmly in Museveni’s hands. Police partnered with criminal gangs, notably the Boda Boda 2010, to curb what was called “public disorder”—really the official name for peaceful protest. As police’s mandate expanded to include the pursuit of regime critics, its budget ballooned, and its chief, General Kale Kayihura, became the most powerful person after Museveni—before his recent dismissal.

For a while, the regime seemed triumphant. Organising and protest became virtually impossible, as urban areas came under 24/7 surveillance. Moreover, key state institutions—the parliament, electoral commission, judiciary, military and now the police—were all in the service of the NRM, and all voices of dissent had been effectively silenced. In time, the constitution would be amended again, by the NRM-dominated house, this time to remove the presidential age limit—the last obstacle to Museveni’s life presidency—followed by a new tax on social media, to curb “gossip.” Museveni was now truly invincible. Or so it seemed.

But the dreams of “walk-to-work”—the nightmare for the Museveni state—had never really disappeared, and behind the tightly-patrolled streets always lay the simmering quest for change. That is how we arrived at the present moment, with a popstar representing the widespread aspiration for better government, and a seemingly all-powerful president suddenly struggling for legitimacy. Whatever direction the current popular struggles ultimately take, what is certain is that they are learning well from history, and are a harbinger of many more to come.

This post is from a new partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

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The Enduring Blind Spots of America’s Africa Policy

America should move way from making the military the face of its engagement with Africa and instead invest in deepening democracy as a principled approach rather than a convenient choice.

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The Enduring Blind Spots of America's Africa Policy
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While Donald Trump’s administration completely neglected America-Africa relations, the blind spots bedeviling America’s Africa policy preceded his 2016 election. Correcting the systemic flaws of the past 30 years will require a complete rethink after the controversial President’s departure.

To remedy America’s Africa policy, President Joseph Biden’s administration should pivot away from counterterrorism to supporting democratic governance as a principal rather than as mere convenience, and cooperate with China on climate change, peace, and security on the continent.

America’s Africa policy 

America’s post-Cold War Africa policy has had three distinct and discernible phases. The first phase was an expansionist outlook undergirded by humanitarian intervention. The second was nonintervention, a stance triggered by the experience of the first phase. The third is the use of “smart” military interventions using military allies.  

The turning point for the first phase was in 1989 when a victorious America pursued an expansive foreign policy approach predicated on humanitarian intervention. Somalia became the first African test case of this policy when, in 1992, America sent almost 30,000 troops to support Operation Restore Hope’s humanitarian mission which took place against the background of the collapse of the Somalia government in 1991.

On 3-4 October 1993, during the Battle of Mogadishu, 18 US servicemen were killed in a fight with warlords who controlled Mogadishu then, and the bodies of the marines dragged through the streets of Mogadishu. The media coverage increased pressure on the politicians and six months later America withdrew from Somalia — a case of the New World Order meeting the harsh reality of civil conflict.

The chastening experience resulted in America scaling back its involvement in internal conflicts in far-flung places. The result was the emergence of the second phase — non-engagement when Rwanda’s Genocide erupted in 1994 and almost a million people died in 100 days revealed the limitations of over-correcting the Somalia experience. This “non-interference” phase lasted until the twin Nairobi and Dar es Salaam US embassy bombings by Al Qaeda in 1998.

This gave way to the third phase with the realisation that the new threat to America was no longer primarily from state actors, but from transnational non-state actors using failing states as safe havens. The 2002 National Security Strategy states: “the events of September 11, 2001, taught us that weak states . . . can pose as a great danger to our national interests as strong states.”

Counterterrorism training and equipping of African militaries is the central plank of this new security policy. As a result, counterterrorism funding has skyrocketed as has America’s military footprint in Africa. As a result, Africa has become the theatre in which the Global forever War on Terror is fought.

The counterterrorism traps 

The reflexive reaction to the events of September 11 2001 spawned an interlocking web of covert and overt military and non-military operations. These efforts, initially deemed necessary and temporary, have since morphed into a self-sustaining system complete with agencies, institutions and a specialised lingo that pervades every realm of America’s engagement with Africa.

The United States Africa Command (Africom) is the vehicle of America’s engagement with the continent. Counterterrorism blurred the line between security, development, and humanitarian assistance with a host of implications including unrelenting militarisation which America’s policy establishment embraced uncritically as the sine qua non of America’s diplomacy, their obvious flaws notwithstanding. The securitisation of problems became self-fulfilling and self-sustaining.

The embrace of counterterrorism could not have come at a worse time for Africa’s efforts at democratization. In many African countries, political and military elites have now developed a predictable rule-based compact governing accession to power via elections rather than the coups of the past.

“Smart” African leaders exploited the securitised approach in two main ways: closing the political space and criminalising dissent as “terrorism” and as a source of free money. In Ethiopia, Yonatan Tesfaye, a former spokesman of the Semayawi (Blue) Party, was detained in December 2015 on charges under Article 4 of Ethiopia’s Anti-Terrorism Proclamation ((EATP), arguably one of the the country’s most severe pieces of legislation. But Ethiopia has received millions of dollars from the United States.

The Department of Defense hardly says anything in public but gives out plenty of money without asking questions about human rights and good governance. Being a counterterrorism hub has become insurance policy against any form of criticism regardless of state malfeasance.

Egypt is one such hub. According to the Congressional Research Service, for the 2021 financial year, the Trump Administration has requested a total of US$1.4 billion in bilateral assistance for Egypt, which Congress approved in 2018 and 2019. Nearly all US funding for Egypt comes from the Foreign Military Finance (FMF) account and is in turn used to purchase military equipment of US origin, spare parts, training, and maintenance from US firms.

Another country that is a counterterrorism hub in the Horn of Africa is Ethiopia. For the few months they were in charge, the Union of Islamic Courts (ICU) brought order and stability to the country.  Although they were linked to only a few of Mogadishu’s local courts, on 24 December 2006, Ethiopia’s military intervened in Somalia to contain the rise of Al Shabaab’s political and military influence.

The ouster of the ICU by Ethiopia aggravated the deep historical enmity between Somalia and Ethiopia, something Al Shabaab — initially the youth wing of the ICU — subsequently exploited through a mix of Somali nationalism, Islamist ideology, and Western anti-imperialism. Al Shabaab presented themselves as the vanguard against Ethiopia and other external aggressors, providing the group with an opportunity to translate their rhetoric into action.

Ethiopia’s intervention in Somalia could not have taken place without America’s blessing. The intervention took place three weeks after General John Abizaid, the commander of US forces from the Middle East to Afghanistan, met with the then Ethiopian Prime Minister Meles Zenawi.  The intervention generated a vicious self-sustaining loop. Ethiopians are in Somalia because of Al Shabaab, and Al Shabaab says they will continue fighting as long as foreign troops are inside Somalia.

America has rewarded Ethiopia handsomely for its role as the Horn of Africa’s policeman. In both Ethiopia’s and Egypt’s case, on the score of human rights and good governance, the net losers are the citizens.

Drone attacks 

In keeping with the War on Terror being for forever, and despite departing Somalia in 1993, America outsourced a massive chunk of the fight against Al Shabaab to Ethiopia primarily, and later, to AMISOM. America is still engaged in Somalia where it has approximately 800 troops, including special forces that help train Somalia’s army to fight against Al Shabaab.

America carried out its first drone strike in Somalia in 2011 during President Barack Obama’s tenure. Under the Trump administration, however, the US has dramatically increased the frequency of drone attacks and loosened the oversight required to approve strike targets in Somalia. In March 2017, President Trump secretly designated parts of Somalia “areas of active hostilities”, meaning that the high-level inter-agency vetting of proposed strikes and the need to demonstrate with near certainty that civilians would not be injured or killed no longer applied. Last year, the US acknowledged conducting 63 airstrikes in the country, and in late August last year, the US admitted that it had carried out 46 strikes in 2020.

A lack of transparency regarding civilian casualties and the absence of empirical evidence that the strikes lead to a reduction in terrorism in Somalia suggest that expanding to Kenya would be ill-advised. The US has only acknowledged having caused civilian casualties in Somalia three times. Between 2016 and 2019, AFRICOM failed to conduct a single interview with civilian witnesses of its airstrikes in Somalia.

Despite this level of engagement, defeating Al Shabaab remains a remote possibility.

Containing the Chinese takeover 

The Trump Administration did not have an Africa policy. The closest approximation of a policy during Trump’s tenure was stated in a speech delivered by John Bolton at a Conservative think tank decrying  China’s nefarious activities in Africa.  Even with a policy, where the counterterrorism framework views Africa as a problem to be solved by military means, the containing China policy views African countries as lacking the agency to act in their own interests. The problem with this argument is that it is patronising; Africans cannot decide what is right for them.

Over the last decades, while America was busy creating the interlocking counterterrorism infrastructure in Africa, China was building large-scale infrastructure across the continent. Where America sees Africa as a problem to be solved, China sees Africa as an opportunity to be seized.

Almost two years into the Trump administration, there were no US ambassadors deployed in 20 of Africa’s 54 countries even while America was maintaining a network of 29 military bases.  By comparison China, has 50 embassies spread across Africa.

For three consecutive years America’s administration has proposed deep and disproportionate cuts to diplomacy and development while China has doubled its foreign affairs budget since 2011. In 2018, China increased its funding for diplomacy by nearly 16 per cent and its funding for foreign aid by almost 7 per cent.

As a show of how engagement with Africa is low on the list of US priorities, Trump appointed a luxury handbag designer as America’s ambassador to South Africa on 14 November 2018. Kenya’s ambassador is a political appointee who, when he is not sparring with Kenyans on Twitter, is supporting a discredited coal mining project.

The US anti-China arguments emphasize that China does not believe in human rights and good governance, and that China’s funding of large infrastructure projects is essentially debt-trap diplomacy. The anti-China rhetoric coming from American officials is not driven by altruism but by the realisation that they have fallen behind China in Africa.

By the middle of this century Africa’s population is expected to double to roughly two billion. Nigeria will become the second most populous country globally by 2100, behind only India. The 24-country African Continental Free Trade Agreement (AfCFTA) entered into force on 30 May 2019. AfCFTA will ultimately bring together all 55 member states of the African Union covering a market of more than 1.2 billion people — including a growing middle class — and a combined gross domestic product (GDP) of more than US$3.4 trillion.

While Chinese infrastructure projects grab the headlines, China has moved into diversifying its engagement with Africa. The country has increased its investments in Africa by more than 520 per cent over the last 15 years, surpassing the US as the largest trading partner for Africa in 2009 and becoming the top exporter to 19 out of 48 countries in sub-Saharan Africa.

Some of the legacy Chinese investments have come at a steep environmental price and with an unsustainable debt. Kenya’s Standard Gauge Railway is bleeding money and is economically unviable.

A fresh start

Supporting democratic governance and learning to cooperate with China are two areas that will make America part of Africa’s future rather than its past.

America should pivot way from making the military the most visible face of its engagement with Africa and instead invest in deepening democracy as a principled approach rather than a convenient choice.

Despite the elegy about its retreat in Africa, democracy enjoys tremendous support. According to an Afro barometer poll, almost 70 per cent of Africans say democracy is their preferred form of government. Large majorities also reject alternative authoritarian regimes such as presidential dictatorships, military rule, and one-party governments. Democracy, while still fledgling, remains a positive trend; since 2015, there have been 34 peaceful transfers of power.

However, such positive metrics go hand in hand with a worrying inclination by presidents to change constitutions to extend their terms in office. Since 2015, leaders of 13 countries have evaded or overseen the weakening of term limit restrictions that had been in place. Democracy might be less sexy, but ignoring it is perilous. There are no apps or switches to flip to arrest this slide. It requires hard work that America is well equipped to support but has chosen not to in a range of countries in recent years There is a difference between interfering in the internal affairs of a country and complete abdication or (in some cases) supporting leaders who engage in activities that are inimical to deepening democracy.

The damage wrought by the Trump presidency and neo-liberal counterterrorism policies will take time to undo, but symbolic efforts can go a long way to bridging the gap.

America must also contend with China being an indispensable player in Africa and learn to cooperate rather than compete in order to achieve optimal outcomes.

China has 2,458 military and police personnel serving in eight missions around the globe, far more than the combined contribution of personnel by the other four permanent members of the UN Security Council, Russia, the US, France and Britain. China had more than 2,400 Chinese troops take part in seven UN peacekeeping missions across the continent — most notably in Mali and South Sudan. Of the 14 current UN peacekeeping missions, seven are in Africa, consuming two-thirds of the budget.

Climate change and conflict resolution provide opportunities for cooperation. Disproportionate reliance on rain-fed agriculture and low adaptation to the adverse impact of climate change make Africa vulnerable to the damaging effects of climate change, the consequences of which will transcend Africa. Through a combination of research, development, technological transfer and multilateral investment, America and China could stave off the impact of climate change in Africa.

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Hijacking Kenya’s Health Spending: Companies Linked to Powerful MP Received Suspicious Procurement Contracts

Two obscure companies linked to Kitui South MP Rachael Kaki Nyamai were paid at least KSh24.2 million to deliver medical supplies under single-source agreements at the time the MP was chair of the National Assembly’s Health Committee.

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Hijacking Kenya’s Health Spending: Companies Linked to Powerful MP Received Suspicious Procurement Contracts
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Two obscure companies linked to Kitui South MP Rachael Kaki Nyamai were paid at least KSh24.2 million to deliver medical supplies under single-source agreements at the time the MP was chair of the National Assembly’s Health Committee, an investigation by Africa Uncensored and The Elephant has uncovered.

One of the companies was also awarded a mysterious Ksh 4.3 billion agreement to supply 8 million bottles of hand sanitizer, according to the government’s procurement system.

The contracts were awarded in 2015 as authorities moved to contain the threat from the Ebola outbreak that was ravaging West Africa and threatening to spread across the continent as well as from flooding related to the El-Nino weather phenomenon.

The investigation found that between 2014 and 2016, the Ministry of Health handed out hundreds of questionable non-compete tenders related to impending disasters, with a total value of KSh176 billion including three no-bid contracts to two firms, Tira Southshore Holdings Limited and Ameken Minewest Company Limited, linked to Mrs Nyamai, whose committee oversaw the ministry’s funding – a clear conflict of interest.

Number of Suppliers Allocated BPAAlthough authorities have since scrutinized some of the suspicious contracts and misappropriated health funds, the investigation revealed a handful of contracts that were not made public, nor questioned by the health committee.

Mrs Nyamai declined to comment for the story.

Nyamai has been accused by fellow members of parliament of thwarting an investigation of a separate alleged fraud. In 2016, a leaked internal audit report accused the Ministry of Health — colloquially referred to for its location at Afya House — of misappropriating funds in excess of nearly $60 million during the 2015/2016 financial year. Media stories described unauthorized suppliers, fraudulent transactions, and duplicate payments, citing the leaked document.

Members of the National Assembly’s Health Committee threatened to investigate by bringing the suppliers in for questioning, and then accused Nyamai, the committee chairperson, of blocking their probe. Members of the committee signed a petition calling for the removal of Nyamai and her deputy, but the petition reportedly went missing. Nyamai now heads the National Assembly’s Committee on Lands.

Transactions for companies owned by Mrs Nyamai’s relatives were among 25,727 leaked procurement records reviewed by reporters from Africa Uncensored, Finance Uncovered, The Elephant, and OCCRP. The data includes transactions by eight government agencies between August 2014 and January 2018, and reveals both questionable contracts as well as problems that continue to plague the government’s accounting tool, IFMIS.

The Integrated Financial Management Information System was adopted to improve efficiency and accountability. Instead, it has been used to fast-track corruption.

Hand sanitizer was an important tool in fighting transmission of Ebola, according to a WHO health expert. In one transaction, the Ministry of Health paid Sh5.4 million for “the supply of Ebola reagents for hand sanitizer” to a company owned by a niece of the MP who chaired the parliamentary health committee. However, it’s unclear what Ebola reagents, which are meant for Ebola testing, have to do with hand sanitizer. Kenya’s Ministry of Health made 84 other transactions to various vendors during this period, earmarked specifically for Ebola-related spending. These included:

  • Public awareness campaigns and adverts paid to print, radio and tv media platforms, totalling at least KSh122 million.
  • Printed materials totalling at least KSh214 million for Ebola prevention and information posters, contact tracing forms, technical guideline and point-of-entry forms, brochures and decision charts, etc. Most of the payments were made to six obscure companies.
  • Ebola-related pharmaceutical and non-pharmaceutical supplies, including hand sanitizer
  • Ebola-related conferences, catering, and travel expenses
  • At least KSh15 millions paid to a single vendor for isolation beds

Hacking the System

Tira Southshore Holdings Limited and Ameken Minewest Company Limited, appear to have no history of dealing in hygiene or medical supplies. Yet they were awarded three blanket purchase agreements, which are usually reserved for trusted vendors who provide recurring supplies such as newspapers and tea, or services such as office cleaning.

“A blanket agreement is something which should be exceptional, in my view,” says former Auditor-General, Edward Ouko.

But the leaked data show more than 2,000 such agreements, marked as approved by the heads of procurement in various ministries. About KSh176 billion (about $1.7 billion) was committed under such contracts over 42 months.

“Any other method of procurement, there must be competition. And in this one there is no competition,” explained a procurement officer, who spoke generally about blanket purchase agreements on background. “You have avoided sourcing.”

The Ministry of Health did not respond to detailed questions, while Mrs Nyamai declined to comment on the contracts in question.

Procurement experts say blanket purchase agreements are used in Kenya to short-circuit the competitive process. A ministry’s head of procurement can request authority from the National Treasury to create blanket agreements for certain vendors. Those companies can then be asked by procurement employees to deliver supplies and services without competing for a tender.

Once in the system, these single-source contracts are prone to corruption, as orders and payments can simply be made without the detailed documentation required under standard procurements. With limited time and resources, government auditors say they struggle especially with reconciling purchases made under blanket agreements.

The agreements were almost always followed by standard purchase orders that indicated the same vendor and the same amount which is unusual and raises fears of duplication. Some of these transactions were generated days or weeks after the blanket agreements, many with missing or mismatched explanations. It’s unclear whether any of these actually constituted duplicate payments.

For example, the leaked data show two transactions for Ameken Minewest for Sh6.9 million each — a blanket purchase order for El Nino mitigation supplies and a standard order for the supply of chlorine tablets eight days later. Tira Southshore also had two transactions of Sh12 million each — a blanket purchase for the “supply of lab reagents for cholera,” and six days later a standard order for the supply of chlorine powder.

Auditors say both the amounts and the timing of such payments are suspicious because blanket agreements should be paid in installments.

“It could well be a duplicate, using the same information, to get through the process. Because you make a blanket [agreement], then the intention is to do duplicates, so that it can pass through the cash payee phase several times without delivering more,” said Ouko upon reviewing some of the transactions for Tira Southshore. This weakness makes the IFMIS system prone to abuse, he added.

In addition, a KSh4 billion contract for hand sanitizer between the Health Ministry’s Preventive and Promotive Health Department and Tira Southshore was approved as a blanket purchase agreement in April 2015. The following month, a standard purchase order was generated for the same amount but without a description of services — this transaction is marked in the system as incomplete. A third transaction — this one for 0 shillings — was generated 10 days later by the same procurement employee, using the original order description: “please supply hand sanitizers 5oomls as per contract Moh/dpphs/dsru/008/14-15-MTC/17/14-15(min.no.6).

Reporters were unable to confirm whether KSh4 billion was paid by the ministry. The leaked data doesn’t include payment disbursement details, and the MOH has not responded to requests for information.

“I can assure you there’s no 4 billion, not even 1 billion. Not even 10 million that I have ever done, that has ever gone through Tira’s account, through that bank account,” said the co-owner of the company, Abigael Mukeli. She insisted that Tira Southshore never had a contract to deliver hand sanitizer, but declined to answer specific questions. It is unclear how a company without a contract would appear as a vendor in IFMIS, alongside contract details.

It is possible that payments could end up in bank accounts other than the ones associated with the supplier. That is because IFMIS also allowed for the creation of duplicate suppliers, according to a 2016 audit of the procurement system. That audit found almost 50 cases of duplication of the same vendor.

“Presence of active duplicate supplier master records increases the possibility of potential duplicate payments, misuse of bank account information, [and] reconciliation issues,” the auditors warned.

They also found such blatant security vulnerabilities as ghost and duplicate login IDs, deactivated requirements for password resets, and remote access for some procurement employees.

Credit: Edin Pasovic/OCCRP

Credit: Edin Pasovic/OCCRP

IFMIS was promoted as a solution for a faster procurement process and more transparent management of public funds. But the way the system was installed and used in Kenya compromised its extolled safeguards, according to auditors.

“There is a human element in the system,” said Ouko. “So if the human element is also not working as expected then the system cannot be perfect.”

The former head of the internal audit unit at the health ministry, Bernard Muchere, confirmed in an interview that IFMIS can be manipulated.

Masking the Setup

Ms Mukeli, the co-owner of Tira Southshore and Ameken Minewest, is the niece of Mrs Nyamai, according to local sources and social media investigation, although she denied the relationship to reporters. According to her LinkedIn profile, Ms Mukeli works at Kenya Medical Supplies Agency, a medical logistics agency under the Ministry of Health, now embroiled in a COVID procurement scandal.

Ms Mukeli’s mother, who is the MP’s elder sister, co-owns Icpher Consultants Company Ltd., which shares a post office box with Tira Southshore and Mematira Holdings Limited, which was opened in 2018, is co-owned by Mrs Nyamai’s husband and daughter, and is currently the majority shareholder of Ameken Minewest. Documents also show that a company called Icpher Consultants was originally registered to the MP, who was listed as the beneficial owner.

Co-owner of Tira Southshore Holdings Limited, Abigael Mukeli, described the company to reporters as a health consulting firm. However Tira Southshore also holds an active exploration license for the industrial mining in a 27-square-kilometer area in Kitui County, including in the restricted South Kitui National Reserve. According to government records, the application for mining limestone in Mutomo sub-county — Nyamai’s hometown — was initiated in 2015 and granted in 2018.

Mukeli is also a minority owner of Ameken Minewest Company Limited, which also holds an active mining license in Mutomo sub-county of Kitui, in an area covering 135.5 square kilometers. Government records show that the application for the mining of limestone, magnesite, and manganese was initiated in 2015 and granted in 2018. Two weeks after the license was granted, Mematira Holdings Limited was incorporated, with Nyamai’s husband and daughter as directors. Today, Mematira Holdings is the majority shareholder of Ameken Minewest, which is now in the process of obtaining another mining license in Kitui County.

According to public documents, Ameken also dabbles in road works and the transport of liquefied petroleum gas. And it’s been named by the Directorate of Criminal Investigations in a fuel fraud scheme.

Yet another company, Wet Blue Proprietors Logistics Ltd., shares a phone number with Tira Southshore and another post office box with Icpher Consultants Company Ltd., according to a Kenya National Highway Authority list of pre-qualified vendors.

Family LinksMrs Nyamai and her husband co-own Wet Blue. The consulting company was opened in 2010, the same year that the lawmaker completed her PhD work in HIV/AIDS education in Denmark.

Wet Blue was licenced in 2014 as a dam contractor and supplier of water, sewerage, irrigation and electromechanical works. It’s also listed by KENHA as a vetted consultant for HIV/AIDS mitigation services, together with Icpher Consultants.

It is unclear why these companies are qualified to deliver all these services simultaneously.

“Shell companies receiving contracts in the public sector in Kenya have enabled corruption, fraud and tax evasion in the country. They are literally special purpose vehicles to conduct ‘heists’ and with no track record to deliver the public goods, works or services procured,” said Sheila Masinde, executive director of Transparency International-Kenya.

Both MOH and Ms Mukeli refused to confirm whether the ordered supplies were delivered.

Mrs Nyamai also co-owns Ameken Petroleum Limited together with Alfred Agoi Masadia and Allan Sila Kithome.

Mr Agoi is an ANC Party MP for Sabatia Constituency in Vihiga County, and was on the same Health Committee as Mrs Nyamai, a Jubilee Party legislator. Mr Sila is a philanthropist who is campaigning for the Kitui County senate seat in the 2022 election.

Juliet Atellah at The Elephant and Finance Uncovered in the UK contributed reporting.

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