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WAG THE DOG: War on Corruption or a Power Grab?

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WAG THE DOG: War on Corruption or a Power Grab?
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At Sh3 trillion, anyway you cut it, Kenya’s recently unveiled national budget is a monster. It is bigger than the combined budgets of the other four East Africa Community countries. It is nearly double the then record-breaking budget unveiled in the first year of President Uhuru Kenyatta’s first term. To finance it, the government plans to hoover up Sh1.7 trillion in taxes and to borrow another Sh560 billion. However, that will still leave a Sh770 billion hole – roughly the size of Uganda’s 2017 budget.

A budget that size is bound to raise eyebrows and to whet appetites. It has also been presented at a most inopportune time as the country is caught up in the throes of a hysteria over corruption. Each day, it seems, brings new exposés of theft of billions of shillings of public money. The scale of the stealing is fueling a fevered search for scapegoats and there is a literal cry for blood in the street as legislators compete to propose ever more draconian punishments (including public executions) for anyone convicted of the vice.

None of this is new to President Uhuru Kenyatta’s government, which has developed a template for dealing with public anger over graft that essentially boils down to making symbolic offerings to appease it. Three years ago, when facing a similar public tantrum, Kenyatta announced that all implicated senior government officials would “step aside” till they cleared their names. No one really knows what “stepping aside” actually means – it is neither a resignation nor a suspension but it would appear the officials continue to draw a public salary.

The “stepping aside” is then followed by prosecutions. However, there is a catch. Most graft prosecutions involve netting small fry dealing in relatively tiny amounts. Last week, for example, we learnt that a majority of the 57 cases prepared by the Ethics and Anti-Corruption Commission (EACC) involved the theft of under Sh10,000 (roughly US$100). And while it is true that senior officials involved in a Sh10 billion procurement scam at the National Youth Service have been charged in court, it is instructive to note that similar prosecutions in 2015 against 26 individuals involved in a remarkably similar Sh800 million heist at the same institution resulted in 23 acquittals.

Resignations that are not really resignations and prosecutions that are not really prosecutions. The truth is that Kenya’s war on corruption is really just a show, our very own version of Wag the Dog. What is going on here is the political class is using the cover of the corruption hysteria it has incited to settle scores. In the crosshairs is Kenyatta’s deputy, William Ruto, and his allies.

As the “handshake” between Kenyatta and his bitter rival, Raila Odinga, remakes Kenya’s political landscape, the Deputy President has found himself isolated and outmaneuvered and vulnerable in the scrap over who will succeed Kenyatta in 2022. However, even as they fight among themselves, the political elite are careful not to upset the cart. A fake corruption war can help get rid of rivals but all would lose if it was allowed to escalate into a real effort to stamp out the vice.

The truth is that Kenya’s war on corruption is really just a show, our very own version of Wag the Dog. What is going on here is the political class is using the cover of the corruption hysteria it has incited to settle scores. In the crosshairs is Kenyatta’s deputy, William Ruto, and his allies.

And this is what the rhetoric around prosecutions and “stepping aside” is designed to achieve. The privileging of resignations and convictions as the pre-eminent measures of success in the war against corruption allows the Executive to perversely claim to be more committed to fighting graft when more of its members are implicated in graft. Further, it allows the administration to scapegoat the Judiciary for failed prosecutions despite the fact that many of the cases presented in court are shoddily investigated and half-heartedly prosecuted.

More importantly, it means that Kenyatta can escape censure for not doing his job. Because the constitution secures the independence of the Director of Public Prosecutions, President Kenyatta can rightly disavow responsibility for the lack of convictions. But the singular focus on the fate of the so-called “big fish” has kept the public distracted from a much-needed conversation about reforming our governance systems to eliminate incentives and opportunities for graft. There is little in the way of a discussion on policy fixes to plug the leaks, which is Kenyatta’s actual job.

Lie detectors and other gimmicks

Take the Sh11 billion Integrated Financial Management Information System (IFMIS), an automated system for public financial management that has twice been gamed in almost identical fashion at the National Youth Service. It is even more stunning considering that, after the first scam, the Auditor-General had recommended specific reforms to IFMIS that were never implemented. Rather, by December 2016, at the very instance public attention was focused on the grilling of senior officials by Parliament and on prosecutions in the courts, the second scam was already under way.

Instead of offering policy solutions to systemic problems, Kenyatta has taken to introducing gimmicks like lie detector tests as well as to issuing Executive Orders that simply restate what the law already requires and which underscore the fact that it is not enforced. He has demanded that procurement officers submit wealth declarations, which they are already obligated to do every two years by the Public Officer Ethics Act. Most recently, he ordered all government entities to publish full details of tender awards, again as already required by the Access to Informationn Act.

But even as Kenyan media breathlessly report these “developments”, there is no questioning of why these laws weren’t enforced previously. If such questions were raised, Kenyans might begin to understand that the way the laws are designed defeats rather than achieves the goal of fighting corruption. For example, the requirement for wealth declarations, for example, is rendered nugatory by the fact that the declarations are by law kept secret, that the function of collecting the declarations is distributed across a number of bodies, and that there is no legal obligation placed on these bodies to verify or to audit the declarations.

However, instead of proposing the necessary changes to the legal regime to actually give it teeth, President Kenyatta has ordered a lifestyle audit of all public servants, again without detailing who exactly would carry it out and how they would do it. Rather than fix the systemic problems, the President is trying to make political hay.

The focus on prosecutions also misses the larger picture. Anti-corruption crusader and publisher of The Elephant, John Githongo, wrote in the e-Review that “corruption in Kenya isn’t about greedy procurement officers, fiddling civil servants, crooked businessmen, shady bankers, thieving politicians… these players are born of a system of politics and governance that is itself inherently corrupt; one in which the thieves and those who facilitate them thrive.” Understanding this is the key to solving the corruption riddle.

However, instead of proposing the necessary changes to the legal regime to actually give it teeth, President Kenyatta has ordered a lifestyle audit of all public servants, again without detailing who exactly would carry it out and how they would do it. Rather than fix the systemic problems, the President is trying to make political hay.

African gifts and other myths

Many times it has been suggested that graft is a cultural problem that grew out of a supposed “African” tradition of gift-giving. Now, it is a good practice to be sceptical every time someone uses the word “African” to imply a uniformity on the continent – and here a healthy dose of scepticism would be justified. As Joe Khamisi’s history of corruption, Looters and Grabbers: 54 Years of Corruption and Plunder by the Elite 1963-2017, demonstrates, corruption was the gift of colonialism. It was, and still is embedded into the very fabric of the state the British created. The logic of that state was to legitimise the stealing by the few from the many, a logic that was evinced through the state’s design.

In fact, Kenya was corrupted even before it became Kenya. By 1907, thirteen years before the territory officially became a colony, bribery was already a feature of the nascent state. Khamisi cites Hugh Cholmondeley, popularly known as Lord Delamere, a leader of the British settlers, describing the relations between the public and the new rulers: “Time and time, I have had a native say they were stopped by an Indian policeman. When I asked them how they got away, they always said, ‘Oh, I gave him something.’”

Khamisi also describes how corruption seeped from the white colonial establishment down to its African enforcers, the appointed chiefs and policemen. A state built to steal was itself peopled by thieves. As David Anderson says in Histories of the Hanged: The Dirty War in Kenya and the End of Empire, “Europeans were as guilty of corruption and malpractice in colonial Nairobi as anyone else, and Africans at the bottom of the colonial racial hierarchy were most often its victims.” The Rose Commission, which was established in 1955 to look into “alleged corruption or other malpractices in relation to the Affairs of the Nairobi City Council” found that “the practice of City Council servants demanding or accepting, and of contractors offering, bribes or, if you prefer, money presents for services rendered or to be rendered, [was] by no means uncommon”.

Corruption was baked into the state and its templates were established from early on. At the top, the white elite ripped off the state through public projects, such as the railway and the construction of public housing, while at the bottom, poorly paid chiefs, members of African courts and police supplemented their incomes by extorting from the people. As Khamisi puts it, citing David Leonard’s African Successes: Four Public Managers of Kenyan Rural Development, “Through corruption and bribery, chiefs were transformed into willing agents of colonialism and were implicitly encouraged to use their positions to amass wealth and demonstrate to all and sundry that it paid to cooperate with Europeans.” In this manner, corruption became institutionalised as a way of doing government business. And when those chiefs and their kids inherited the state from the British, they really did not know any other way to be.

Fixing systemic flaws

Following independence in 1963, the civil service was massively expanded. But the Jomo Kenyatta (Uhuru’s dad) administration was not keen on paying for it. Following the colonial model, in 1971 the Ndegwa Commission recommended allowing civil servants to supplement their wages with private business. This had the effect of legalising corruption and legitimising conflict of interest situations. The looting ramped up and it has been escalating ever since.

Understanding the systemic roots of corruption would allow Kenyans to see that successful prosecutions, while a necessary part of a credible anti-corruption strategy, will not fix he problem. Deterring and punishing the corrupt is no substitute for fixing a system that not only permits, but also rewards graft. Convictions, even in the unlikely event that meaningful ones are secured, would be ineffective so long as a third of the government’s budget, some Sh600 billion according to the EACC, continues to be available to be stolen every year.

Following the colonial model, in 1971 the Ndegwa Commission recommended allowing civil servants to supplement their wages with private business. This had the effect of legalising corruption and legitimising conflict of interest situations. The looting ramped up and it has been escalating ever since.

The fact is that the rewards of corruption far outstrip Kenya’s capacity to punish it. The country’s energies would be better spent in holding political leaders accountable, not just for delivering convictions and harsher sentences, but for shutting down the gravy train. And that will require reforming how the Kenyan state works.

Here we can take some lessons from the colonial times. A report from the Kenya National Commission on Human Rights says that while the pre-independence civil service was corrupt, it “had its avarice kept to a minimum by the vigilance of the white settler community that it served”. If Kenya were serious about addressing corruption, ensuring that the public can effectively keep watch on the state should be at the top of the list. Everything from public contracts to wealth declarations should be exposed to the discerning gaze of the people.

And rather than token public participation in budget making, it is important to ensure that the public is involved in all aspects of decision making. As Nic Cheeseman wrote in 2015 on the subject: “The budget process can be understood to have three main stages when it comes to public participation: participatory budgeting, budget approval and communication, and budget review and audit. Ideally, participation should occur at all three stages, because public oversight is an important way to tackle both policy formation and corruption.”

Empowering the public to more actively participate in and oversee the affairs of the government will require a radical retrofitting of the colonial state. To date, Kenya’s second attempt at doing this seems to be going the way of the first. The 2010 constitution was in essence a reset to 1963 and the independence Constitution, which had many of the same features. However, that constitution failed largely because, as former Attorney General, Githu Muigai, wrote in 1982, it was imposed on an authoritarian, administrative structure. “Unhappily instead of the latter being amended to fit the former, the former was altered to fit the latter with the result that the constitution was effectively downgraded.”

That same colonial understructure is alive and well today, doing its best to undermine the operation of the new Constitution and its values of transparency and accountability. The biggest blow was to Chapter 6 of the Constitution that deals with leadership and integrity. This Chapter was effectively demolished when in the run-up to the 2013 election, a High Court ruled that Uhuru Kenyatta and his running mate William Ruto, two of the six Kenyans indicted by the International Criminal Court for crimes against humanity, could run for the office of the President and Deputy President of the Republic, respectively. It is, therefore, a cruel irony that Kenyatta is now demanding public officials indicted for corruption to do what he was himself unwilling to do then – step aside till he cleared his name.

Déjà vu

Sadly, it is not constitutionalism or respect for the law and for institutions that is driving Kenyatta’s anti-corruption rhetoric. It is not even concern over the looting of public funds; rather, this is a power grab. The President is seeking to substitute his will for the law. Officials step aside, or are prosecuted, not because the law requires it, but because the President ordered it. They are vetted, make wealth declarations and undergo lie detector tests for the same reason.

Under the veil of the anti-corruption drive, the President is actually conducting a campaign to delegitimise the constitution and concentrate power in himself. And if there is one thing our history teaches us, it is that this will not turn out well for the majority of Kenyans.

Sadly, it is not constitutionalism or respect for the law and for institutions that is driving Kenyatta’s anti-corruption rhetoric. It is not even concern over the looting of public funds; rather, this is a power grab.

Beyond the President’s actions, Kenya has seen the demand for punishment used to undermine other constitutional protections. A significant one is the right to bail, which is today being presented as an extension of impunity. For a long time, Kenyans have been conditioned to equate arrest with both prosecution and punishment. In fact, during the Jomo Kenyatta and Daniel arap Moi dictatorships, detention was itself used as punishment, not as a means to facilitate justice.

And, as a 2015 report by a judiciary task force on bail and bond guidelines found, “historically, police officers rarely grant cash bail to suspects of any offences other than traffic offences in spite of the provisions in the Constitution, C[riminal] P[rocedure] C[ode] and the Police Standing Orders which give discretionary powers to exercise that function.” Today, when people clamour for corruption suspects (and that’s all they are till convicted) to be denied their constitutional right to bail, many do not understand that they are eroding that same right for themselves and inviting the abuses of yore.

In the end, to effectively fight corruption, we must focus on systems and incentives, as well as uphold and strengthen, rather than undermine our institutions and laws.

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Mr. Gathara is a social and political commentator and cartoonist based in Nairobi.

Politics

Has COVID-19 Sparked Another Revolution in Zanzibar?

The novel coronavirus pandemic has had one unexpected effect in Tanzania: it has emboldened Zanzibaris’ relentless struggle for self-determination.

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The union between Tanganyika and Zanzibar – the contentious two-tier government system that Tanzania adopted – has been riddled with a number of complaints (commonly referred to in Kiswahili as kero za muungano or grievances of the union) right from its formation on April 22, 1964. None of these complaints, however, have been nearly as controversial as Zanzibar’s de facto inability to enter into international agreements. (Zanzibar’s failed attempt in late 1992, for instance, to unilaterally join the Organisation of Islamic Cooperation (OIC) almost broke the union.) However, the desire among Zanzibaris to have this arrangement overturned across the political spectrum has never wavered and nothing could have demonstrated the arrangement’s detriments to Zanzibar’s development as much as the COVID-19 pandemic.

There is no shortage of literature on the history of the union between Tanganyika and Zanzibar, especially on its motivations. Various people, including journalists, historians, and social scientists, have tried to document the historical development regarded by some as one of the most enduring legacies of Mwalimu Julius Nyerere, the co-founding father of the modern Tanzanian state.

I’m too young to claim any expertise on the subject of the union (which, really, is older than my father), but as I write this I can vividly picture my high school history teacher, a blackboard behind his back, haranguing the class on how the union was conceived for the Zanzibaris’ own benefit, mainly security, and especially in preventing the return of the “Arab Sultanate” that had been overthrown in 1964. Only later would I come to learn other motivations behind the union: first, an attempt by Mwalimu to realise the Pan-Africanist dream, and second, a deliberate effort by the world’s only superpower, the United States, in the midst of Cold War politics, to prevent the emergence of “another Cuba” in the region.

How the union came about 

People who are not familiar with Tanzania’s political system should understand that Tanzania’s union is a two-tier government system where there’s the semi-autonomous government of Zanzibar, known as the Revolutionary Government of Zanzibar, currently under President Ali Mohamed Shein, which handles all non-union matters, and the union government, known as the Government of the United Republic of Tanzania, currently under President John Magufuli, which, contentiously, handles both union and non-union matters.

The uniting of two distinctly divergent people, both culturally (predominantly Muslim Zanzibar versus largely Christian Tanganyika) and ideologically (progressive Zanzibar versus conservative Tanganyika) took place at breakneck speed, hardly three months after the controversial Zanzibar Revolution of January 12, 1964.  This denied the people from both sides of the union any chance to express their views on the decisions made by their leaders, leaving some sceptical observers doubtful of the union’s true intentions and thus laying a fertile ground for the disagreements that were to follow.

In the rush to realise the union, the Articles of the Union – the treaty that effected the union of Tanganyika and Zanzibar – ended up being ratified only by Tanganyika’s Parliament on April 26, 1964, contrary to the initial agreement that the union also had to be ratified by the Zanzibar Revolutionary Council that was formed immediately after the revolution and which functioned both as a legislative and executive arm of the state.

What’s worse, nobody has ever seen the original copy of the Articles of the Union that carries the signatures of the founding fathers Mwalimu Julius Nyerere and Sheikh Abeid Aman Karume, the first president of Zanzibar. This is one of the thorniest issues in the whole discourse on the union between Tanganyika and Zanzibar.

In the rush to realise the union, the Articles of the Union – the treaty that effected the union of Tanganyika and Zanzibar – ended up being ratified only by Tanganyika’s Parliament on April 26, 1964, contrary to the initial agreement that the union also had to be ratified by the Zanzibar Revolutionary Council…

But that’s not the only thorny issue; the other is the arbitrary increase in the number of issues handled by the union, something that makes Zanzibar progressively less autonomous while increasing the powers of its partner, Tanganyika (which, to the Zanzibaris’ chagrin, now functions as Tanzania). This enables the government to meddle in Zanzibar’s local affairs, the most notorious form of meddling being deciding which political party will lead in the isles. This complicates the archipelago’s efforts in defining its developmental path as well as dealing with issues of immense significance to its people, as the COVID-19 experience has demonstrated.

While Zanzibar is expected to handle the health of its people on its own, in the process of doing so it cannot ask for regional or international support.  This is because, according to the Constitution, health is a non-union matter but regional and international cooperation is a union one. This unfortunate arrangement has naturally meant that were Zanzibar in need of any support from, say, the World Health Organization (WHO), or from any other potential donor in its efforts to fight against the COVID-19 pandemic, or to carry out any development initiative, it has to request it through the union government, which reserves the sole right to decide whether the request can go forward. Nothing makes Zanzibaris as disillusioned about the union as this arrangement does, and it is against this background that several demands for the restructuring of the union have been made.

Two very different approaches 

Regarding COVID-19, right from the beginning, Zanzibar, a country of about 1.3 million people, and characterised by a strong communal spirit, took what seemed to be a completely different approach from that of the government of John Magufuli in its efforts to deal with the pandemic. It first reported cases on the isles on March 19, a time when the union government was still trying to figure out how to confront the public about the deadly virus, choosing instead to deny the people important information. As soon as it started to confirm its first coronavirus case, Zanzibar issued an update to its citizens and the world in general on the status of the pandemic there, earning it some admiration from some of Tanzania’s health experts.

On March 21, the Zanzibar government suspended all international flights entering the isles, a decision followed almost three weeks later, on April 13, by its union counterpart. Zanzibar even went one step further in an attempt to contain the spread of the pandemic by shutting down all 478 tourist hotels on the isles. This significantly affected its tourism sector, the lifeblood of the archipelago’s economy, which accounts for almost 80 per cent of its annual foreign income.

Almost a week after the union government announced, on April 28, that only 16 people had died of COVID-19, Zanzibar released an update showing that 32 people had died of the disease, something that made critics question the union government’s figures.

The difference in the approaches to dealing with the COVID-19 pandemic has more to do with the attitude of their respective leaders. While President Shein appreciated the magnitude of the pandemic right from the beginning, and thus took strong measures to contain it, his union counterpart, President Magufuli, on the other hand, did not view the pandemic as a threat. He even advised Tanzanians to go on with their business. While Shein’s government was postponing a major religious event to contain the spread of the fatal virus, the union government organised one. While Shein used every opportunity to urge people to protect themselves against COVID-19 by regularly washing their hands, using sanitisers and wearing masks (even making the latter directive mandatory, with he himself wearing it to set an example to his people), his union counterpart never wore one and was busy advising people to use steam inhalation therapy, saying it cures the disease in spite of health experts advising otherwise. In other words, while Zanzibar’s approach to COVID-19 was informed by the archipelago’s authorities’ willingness to trust science, Magufuli’s approach was informed by something quite the opposite: superstition and quackery.

These steps notwithstanding, there are limits to Zanzibar’s efforts to dealing with the priorities of its people, as highlighted above, thanks to both the current structure of the union as well as clientelism that characterises Zanzibar’s ruling elites, which tend to see their union counterparts (who happen to belong in the same party, the ruling Chama cha Mapinduzi [CCM]) as their patrons and thus are only free to pursue a particular path only to the extent that their patrons on the mainland can allow them. For example, Zanzibar stopped issuing updates on the COVID-19 trend shortly after the union government did so in the wake of the temporal closure of the national laboratory where COVID-19 tests used to be conducted to pave way for an investigation following allegations, among many others, that the lab’s technicians were conspiring with “imperialists” to portray Tanzania negatively by releasing more positive COVID-19 cases.

In other words, while Zanzibar’s approach to COVID-19 was informed by the archipelago’s authorities’ willingness to trust science, Magufuli’s approach was informed by something quite the opposite: superstition and quackery.

To understand this complexity, one must understand how political leadership has always been obtained in Zanzibar, or, to put it differently, how CCM has always ended “winning” elections in the archipelago: it’s through a sponsorship from the union government and its security apparatus.  Following pressure from the union government, for example, Zanzibar’s electoral body was forced to annul the 2015 election results for the president of Zanzibar and members of the House of Representatives, the archipelago’s legislative body, after initial results had shown that CCM, which has ruled both Zanzibar and the mainland since independence, had lost to the isles’ main opposition party, the Civic United Front (CUF). This has forced the Zanzibar government, which the opposition in Tanzania deems to be “illegitimate”, to feel like it has a debt to pay to the union government. (Jecha Salim Jecha, the then chair of the Zanzibar electoral body who was responsible for the 2015 annulment of the isles’ election, surprised many in Tanzania and beyond when he became one of more than a dozen CCM members who have declared their intention to run for the isles’ presidency on the party’s ticket.)

Zanzibar’s relatively better performance in fighting COVID-19 earned it some praise in the court of public opinion, with some even organising online fundraising to support the country in its war against the deadly virus. The seriousness shown by Zanzibar’s political leadership during the pandemic also made the archipelago a potential beneficiary of a number of international rescue aid packages available for needy countries, such as the International Monetary Fund (IMF)’s COVID-19 Emergency Financial Assistance. But that never happened, thanks to the current structure of the union. Apparently, the union government applied for the IMF’s rescue package but it was denied on several grounds, including the government’s decision to give inaccurate statistics on the budget it claimed to have spent in dealing with the COVID-19. The IMF’s Tanzania representative, Jens Reinke, told African Business that “the government doesn’t see the crisis as that big an issue” (Tanzania was ultimately able to secure about $14.3 million debt relief from the IMF’s Catastrophe Containment and Relief Trust to cover the country’s debt service from June 10 to October 13.)

The Black Lives Matter movement might have popularised the phrase “I can’t breathe”, but it did not coin it. Neither did George Floyd, the unarmed black man who said these words when his neck was under the knee of a white police officer. Zanzibaris used the phrase long before it became a global rallying cry for racial justice. The only difference is that they have been using it in the plural form, “We can’t breathe”, or “Hatupumui” in Kiswahili.

Zanzibaris have for years been demanding for the restructuring of the union. They want a three-tier government system (that is, the government of Zanzibar, of Tanganyika and that of the United Republic) so that they can have more room than they have now to decide their own affairs and direct their own development path. The union government has deployed every available weapon in its arsenal to quash these demands, even arresting the movement’s leaders, and detaining them over trumped-up terrorism charges. Tanzania’s resolve to not let Zanzibaris “breathe” has turned it into a de facto occupying force in the archipelago that imposes its will on the people of Zanzibar and interferes in every aspect of the people’s lives. As shown above, it even decides which political party can govern the isles.

The COVID-19 pandemic has taught us numerous unforgettable lessons. However, the most important of these lessons for Zanzibaris is that they can be better off without the union as it is currently constituted. It is not an overstatement, therefore, to conclude that the disease has strengthened their resolve to achieve the right to self-determination.

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Politics

The Mushrooming of Car Boot Sales in These Corona Times

Many middle class Kenyans are converting their car boots into mini fruit and vegetable markets. In these times of coronavirus, car boot sales have become an adaptation mechanism: they give people an opportunity to earn some hard cash and maintain their sanity.

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Amos Waweru is your typical consultant: he always carries his laptop and speaks the language of consultancy – strategic objectives, writing proposals, project management, conducting feasibility studies, etc. An enterprise development consultant for the last 15 years, Waweru’s consultancy portfolio includes consulting for international NGOs, both in Kenya and abroad “but that is when the going was good”. Now, thanks to COVID-19, things are different. “It is really tough now and I have had to make adjustments,” said the consultant.

With three teenage children, all in high school, dwindling consultancy work in the last two years, and now the lockdown, which has halted his work to a near standstill for the last three months, Waweru had to make some tough decisions. One of them was converting his Japanese-made vehicle into a car boot sales market. “I stayed at home for one full month the whole of April, without work, with a lot of time on my hands, and simply immobile – three things that I was not used to having in plenty”.

Waweru, a resident of Ruiru, conducted preliminary research among the women who sell vegetables at Ruiru’s open-air market. “Where do they get their vegetables, what types of vegetables do people prefer, how are they priced, so that with this information, I could work out the logistics of starting my own little vegetable market from the boot of my car,” said the consultant. The coronavirus has taken everyone by surprise and upturned many people’s sources of income, throwing people completely off-balance, observed Waweru.

Waweru had cultivated the high-flier image of a successful consultant who occasionally travels abroad. So he was initially bothered by what his peers would think of him selling vegetables from his car off a busy thoroughfare. “I’m very well-known in my church community and in my residential area of Membley, to be truthful, I was a tad worried of my image and whether it wasn’t going to suffer. I was afraid my esteem among my community would diminish”, said the consultant.

When deciding which types of vegetables he should be selling, Waweru found that leafy green vegetables were most in demand. So the next thing he did was to look for a strategic location to park his vehicle and start his business. “I did a little feasibility study around my location and found a bustling stage where the Eastern bypass and Kamiti Road intersect. Already, there were other people selling foodstuff off their vehicles and I decided to join them.” (This intersection is popularly known as the “OJ Connection” – people drop off as others board boda bodas or matatus to their various destinations.)

Waweru had cultivated the high-flier image of a successful consultant who occasionally travels abroad. So he was initially bothered by what his peers would think of him selling vegetables from his car off a busy thoroughfare.

The leafy vegetables Waweru started with included indigenous vegetables like kahurura, kunde, managu, terere, thoroko and osuga. “The market women told me they buy the vegetables from some Ruiru farmers who farm along the Ruiru River. I didn’t know there’s a lot of vegetable farming specialising in indigenous vegetables going on around Ruiru town.” After his interest in vegetable farming was aroused, Waweru also discovered that on the fringes of Tatu City, the mega real estate project coming up on the outskirts of Ruiru town, “there are huge farms where some people have been growing tomatoes on a large scale”.

Waweru set up camp at OJ Connection, but not for long. “I was always looking for better strategic selling areas, because, somehow, I wasn’t persuaded OJ was the best location for me.” He found one at Kimbo, next to the General Service Unit (GSU) Recce Squad command post, on Kiganjo Road, off the Thika superhighway. (The Recce squad is a paramilitary force that is specially trained in dealing with terrorism and other security-related emergencies.) The consultant’s gut feelings on change of location paid off: “I’d been doing brisk business at OJ, but I began doing even brisker business at Kimbo.” Waweru’s image worries have dissipated; he is making some money “to basically pay my bills and fuel the car”.

The car boot sales allowed Waweru to deal with two things: “earn some little money, to be honest it’s really nothing – it is from car boot to mouth”, and even more critical, deal with the problem of staying idle at home. “It was driving me crazy and I found myself picking quarrels with everyone. I cannot remember the last time I was marooned in the house for this long. I needed to get out, meet my friends, have a drink and just be out there.” As he was accustomed to, he carries his laptop with him and keeps himself busy, working on business proposals to potential clients as he waits for his customers.

The Kimbo-Recce Squad junction has become a beehive of activity: We counted more than 20 car boot sales vehicles. “A new vehicle has been pitching camp every week since I came here,” explained Waweru. “Somehow, it has become a magnet for people with cars to experiment with selling a variety of foodstuff from the boots of their cars.” The consultant said that at first the paramilitary personnel were apprehensive about people bringing their cars so close to their camp, but they became more relaxed about it, but warned the car boot sellers not to encroach too near the camp’s gate.

“This coronavirus pandemic has driven people to try out different and several possibilities of finding coping mechanisms of staying economically afloat as they strive to deal with the bad times”, said Waweru. “Yet the crux of the matter is that the coronavirus has just been the catalyst: the economic downturn began with President Uhuru’s second term. I’ll be open with you – President Uhuru’s years have been the worst for my consultancy. I’ve suffered greatly because I cannot even begin to compare his tenure with President Kibaki’s. During Kibaki’s time, I made good money and built myself.”

Some of the additional 20 or so cars that have since followed Waweru to Kimbo belong to teachers, a travel consultant and two matatu owners. At Kimbo they have created a car boot sales mini-market, selling everything from arrowroots, cabbages, eggs, onions, rice (of the pishori type) and tomatoes.

High school teacher Njenga teaches at a school in Kalimoni. After staying at home for a month and after realising there might be no prospect of returning to school sooner, he started thinking of what to do with the extra time that had been created for him. “We are still getting our pay, so compared to other professionals who may have lost their jobs or face a pay cut, we teachers have so far been spared both,” commented the teacher.

“But not used to being idle and immobile, the coronavirus lockdown was driving me nuts – I’ve never stayed at home from morning till evening, day-in day-out, weeks on end. I felt I was beginning to lose my marbles and I needed to be active and breathe out.” As a day school teacher, he and his wife, who is also is a secondary school teacher, had started a side hustle (a popular Kenyan cliché to mean an income-generating project for extra cash). They had invested in a 1000-chicken hatchery. “Instead of waiting for customers to come and collect their eggs at home, we used our car to market the eggs and even attract new customers,” explained the couple.

For some people, the coronavirus pandemic could as well be a blessing in disguise. “From our car boot sale at Kimbo, we’ve been doing good business. In a just a short time, we’ve been pushing between 10 to 20 trays of eggs in a day,” said the teachers. “I mean, before coronavirus, we only depended on our traditional customary clients. Now we’ve created a new market and hope to expand it. A tray of eggs consists of 30 eggs, so, even on a bad day, the Njengas can sell upwards of 300 eggs from their vehicle. At between Sh280 and Sh300 per tray, the teachers can make up to between Sh2,800 and Sh3,000 a day. “If you remove our expenses, we can’t complain too much.”

The other teacher, a lady who also teaches in a high school, has also been selling eggs. “There are enough customers to share, so it’s not a problem that I and my fellow teachers are selling the same thing in the same place. It’s a market of varieties. Let the customers have their say”. She also keeps a poultry farm where she rears chickens for eggs. The pandemic, opined the teacher, had opened her eyes to pursuing an infinite possibility: of selling her eggs from her car. “Even after the crisis is over, I’ll not stop my car boot sale. I’ve already seen the future and I like what I’ve seen: the car boot sale is a niche I had not contemplated. I’m not letting it go”.

For some people, the coronavirus pandemic could as well be a blessing in disguise. “From our car boot sale at Kimbo, we’ve been doing good business. In a just a short time, we’ve been pushing between 10 to 20 trays of eggs in a day,” said the teachers.

Two things have worked in favour of the teachers: The fact that they teach in day schools, which means they don’t have to stay in school all day, and they have not been paying cess to Kiambu County Government. Depending on the nature of business and what you are selling, the county government levies between Sh25 and Sh100 per trader per day.

A county official told me that for now, during the pandemic, they had decided not to charge the car boot sales traders. “We’ve understood the prevailing extraordinary situation to mean that the people are trying make ends meet.”

Just further afield, from where Waweru’s car was, Ben Kungu’s Toyota Hiace, complete with the tracking aerial aloft, was full of fruits and vegetables. Kungu had plucked off the seats of the vehicle to free space for his new venture. A travel and tours consultant, Kungu was hit hard. “Everything ground to a halt and I couldn’t get jobs for my ‘Shark’ [what the Toyota Hiace is popularly called].” His van then was essentially grounded and Kungu was out of a job. What to do in the prevailing circumstances? He decided to go to Ruiru’s open-air market, buy foodstuffs in bulk and in wholesale for resale. “It was both to make some money to fuel the vehicle and for my sanity. I felt like I was going crazy staying at home all day with nothing to do.”

Next to Kungu’s “Shark” were two other vans: the long-distance matatu shuttles known as “Box” because of their shape. When President Uhuru pronounced the cessation of movement in April, many long-distance shuttles that travelled outside of Nairobi County found themselves locked out of work. The owners of these two shuttles said that instead of parking them, like some of their compatriots had done, they decided to convert them into car boot sales markets and sell mostly cabbages from south Kinangop. “Once the cessation ceases, we shall resume our shuttle travel work. For now, let us make use of the vehicles in the most practical way we know how.”

“It was both to make some money to fuel the vehicle and for my sanity. I felt like I was going crazy staying at home all day with nothing to do.”

In Uthiru, an old trading centre off Nairobi-Nakuru highway, I met John Ndung’u. Ndung’u was donning a blue coat, and dusting off sweet potatoes that were spread in the boot of his car. “These sweet potatoes are the best in the market because they are from Kisii – sweet potatoes from this region are good because they remain dry and tough and are not watery,” said the former taxi driver. “They are fresher because I catch them from my supplier before he deposits the load at Marigiti Market in the city centre.” Trucks full of farm suppliers from north and central Rift Valley and western region pass outside Uthiru.

People nowadays prefer sweet potatoes to bread in the morning, said Ndung’u. “Bread has become expensive, but more fundamentally, the sweet potato is nutritious, very fulfilling and is good for school-going children. And there are more than one ways of preparing the sweet potato: you can roast it, you can boil it, you can even fry it, more like potato chips, all to create different tastes of this tasty African tuber crop.”

Ndung’u is the chairman of the Muthiga taxi drivers association. Muthiga, which is seven kilometres from Uthiru, is a popular meat-eating and beer-drinking joint. It has become so popular that it is referred to as Nairobi’s Kikopey. Kikopey is the famous mouth-watering, meat-eating stop on the same highway, but 120km away in Gilgil, Nakuru County. Ndung’u told me the coronavirus crisis had caught his members completely off-guard. Patronised by the moneyed wannabe who live around Muthiga and the adjoining areas of Kinoo, Kikuyu, Magina, Muthure, Sigona and Uthiru, Muthiga is busiest in the evenings and at night, making taxi-driving a profitable venture.

With the president’s announcement of the quasi-lockdown and curfew, taxi drivers in Muthiga became redundant. They had to quickly think of what to do next, what with families to cater for. “We decided, for those who were interested, to temporarily convert our cabs into car boot markets, as we study the effects of this coronavirus and what those effects portended for our business in the coming days,” explained Ndung’u.

If you take a quick tour of the highway from Uthiru, all the way to Regen and Rungiri, you will see saloon vehicles parked besides the highway, with open boots selling all manner of foodstuffs. “Beginning from Corporation, 87, Kinoo, Muthiga, Regen, Rungiri, all the way to Kikuyu town, most of the vehicles you will see are taxi drivers of our association,” said Ndung’u. The cab driver said if the lockdown and the curfew are lifted tomorrow, he would immediately go back to what he knows best: taxi driving.

But Monica Wangari – who I found selling bananas, avocadoes, pineapples and pumpkins in Thindigwa, a splashy middle-class residential area off the busy Kiambu Road – was not sure whether she would go back to her old job. “I was an insurance agent, working for one of the biggest insurance companies in Nairobi. Then coronavirus happened. Heads of department were asked by the MD to select which people should be laid off. I happened to be one of the people who were picked,” said Wangari.

Her family type car is a Vox Noah. Now, she wakes up in the morning, goes to Marigiti Market in downtown Nairobi, buys her foodstuff and parks her Noah on the dusty road that cuts across Thindigwa. “I couldn’t stay in the house. I tried in the first few weeks. I thought I was going to run mad.” At first, she had sought to sell off her wares on the Eastern bypass on the way to Windsor Hotel, “but I found there were too many vehicles and the competition was very stiff, so I opted to park in my hood,” said Wangari.

If you take a quick tour of the highway from Uthiru, all the way to Regen and Rungiri, you will see saloon vehicles parked besides the highway, with open boots selling all manner of foodstuffs.

Not far from where Wangari was parked, I met Catherine Nyawira. A professional cateress, her outside catering business was doing fine until coronavirus come knocking. “My vehicle was for delivering supplies. Little did I know I would convert it to car boot market.” Like Wangari, she opted to sell fruits, but with a bias towards pumpkins. “My pumpkins are from Meru, they are best: they are sweet and dry. Good for mothers weaning their babies off breast milk and for babies generally.” The coronavirus had hit her business hard, said Nyawira. “This is the new reality and it’s survival of the fittest.”

For Kennedy Kiarie from Kiambu town, this new reality is very real. He had been working in the hospitality industry as a sales and marketing executive for a leading hotel in Nairobi. Then coronavirus came. Hotels and restaurants were forced to close down. It was only a matter of time before the workers were asked to go home. He was one of the many employees who was asked to leace. His teacher wife’s salary couldn’t take care of the family and so he decided to convert their family car into a car boot sale market. Unlike Wangari, he does not fear the competition on the Eastern bypass: he has been selling fruits and vegetables just after the roundabout on the road heading to Windsor Hotel since April.

As a full-time Uber cab driver, Kimondo had to contend with the ever-increasing competition from traditional taxi cabs as well from other taxi apps. Yet he was not prepared for coronavirus. When it landed in Kenya, it hit him real hard. He found that he could not cope anymore: his clients had dwindled to zero. “With people not travelling, many cab drivers were rendered jobless, I being one of them,” said Kimondo. Kimondo is now growing vegetables like sukuma wiki and spinach in his small plot in the Mushrooms area, just behind Thindigwa. “I didn’t need to think twice. Once my cab business tumbled, I turned to my car and went off to sell my wares on the Eastern bypass on your way to Windsor Hotel”.

In these times of coronavirus, car boot sales have become an adaptation mechanism: they give people an opportunity to earn some hard cash and maintain their sanity. One could also surmise that the car boot market has in the short-term become an integral part of the food distribution network, ensuring that people living under COVID-19 and curfew still get their food supplies.

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It’s Our Turn to Eat: Cousin of Kenya’s President Has Stake in Sportpesa Betting Firm

The Kenyatta family business, managed by one the president’s brothers, has sprawling interests across the Kenyan economy, and as Faull and Wafula reveal, the presidency has increased their stake in the economy.

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It’s Our Turn to Eat: Cousin of Kenya’s President Has Stake in Sportpesa Betting Firm
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A cousin of President Uhuru Kenyatta has quietly accumulated a financial stake in SportPesa’s controversial gambling empire, Finance Uncovered can reveal.

The finding — discovered in details buried in corporate filings in Kenya, the UK and the Isle of Man — came as the president signed a law to axe a 20% excise duty on bets staked, a levy that contributed to SportPesa’s withdrawal from its lucrative Kenyan market last year.

The proposal to drop the duty was included as an amendment to the Finance Bill, which had been passed by the National Assembly last week. The final hurdle to it becoming law was the president’s assent on Tuesday night.

A cousin of President Uhuru Kenyatta has quietly accumulated a financial stake in SportPesa’s controversial gambling empire, Finance Uncovered can reveal.

The president’s crucial decision is being analysed closely now it has been established that Peter Kihanya Muiruri, his second cousin, has over the past 14 months acquired stakes in three companies which are part of  SportPesa’s international gambling empire.

SportPesa is the shirt sponsor of English Premier League side, Everton FC. After the government introduced taxes on bets placed by punters, and aggressively pursued gambling firms for its payment, it prompted a number of leading gambling firms to close their businesses in Kenya.

The president’s crucial decision is being analysed closely now it has been established that Peter Kihanya Muiruri, his second cousin, has over the past 14 months acquired stakes in three companies which are part of SportPesa’s international gambling empire.

The taxes were brought in to both stem rampant gambling addiction in Kenya and also raise revenue from what has rapidly become a highly lucrative business.

Now it has been axed, it could see SportPesa, whose biggest shareholder and founder is Bulgarian national Guerassim Nikolov, re-enter the Kenya sport betting market and revive the wider gambling industry.

A SportPesa revival in Kenya would also benefit a member of Kenyatta’s own family.

A presidential spokesperson did not return calls or respond to a detailed text message asking whether Kenyatta knew about his cousin’s shareholding before he signed the bill into law.

A SportPesa revival in Kenya would also benefit a member of Kenyatta’s own family

The Kenyatta family business, managed by one the president’s brothers, has sprawling interests across the Kenyan economy, and individual family members also invest widely.

Shareholdings

Finance Uncovered, working with the Daily Nation in Kenya, accessed documents filed by SportPesa companies in Kenya, the UK and the Isle of Man.

The documents show Peter Kihanya Muiruri is a shareholder in three companies linked to SportPesa:

  • The first is a 1% stake in Pevans East Africa, the company which owns SportPesa in Kenya. Muiruri appeared on the shareholder register for the first time in May 2019, shortly before a government clampdown on the betting industry began. Muiruri is now also a director of Pevans. Pevans has previously disclosed that it amassed Sh20 billion in revenues and generated gross profits of Sh9 billion (£70m) in Kenya in 2018.
  • The second stake is a 0.5% shareholding in SportPesa Global Holdings Limited (UK) – a  company that owns SportPesa’s non-Kenyan betting companies in Tanzania, South Africa, Italy and Russia. It also owns a highly profitable UK business SPS Sportsoft Ltd, which provides IT services to SportPesa sister companies, including Pevans in Kenya. Muiruri acquired the stake last November. SportPesa Global Holdings made a profit after tax of almost £12m in 2018, according to its financial statements.
  • The third is a 3% stake in SportPesa Holdings Limited (Isle of Man). This is an offshore company which receives SportPesa’s revenues from bets staked in the UK. Companies based in the Isle of Man, a small British Crown dependency and tax haven in the Irish Sea, do not have to publicly disclose their accounts so no financial information is available. Muiruri acquired the stake last December.

The value of Muiruri’s shares in the three companies is unclear, because up-to-date financial information for these companies is not available. It is also unknown at this stage how much, if anything, Muiruri paid for the shares.

SportPesa did not respond to the Daily Nation’s emailed questions.

The company was asked whether it had  lobbied the President either directly or indirectly for the reinstatement of its betting licence or any tax reductions.

The firm was also asked to disclose how much the president’s cousin paid for his shares in each of the three companies, and when he became a director in Pevans.

There is no suggestion of wrongdoing either by Muiruri or SportPesa.

Family connection

Muiruri himself is a low-key businessman. Little is publicly known about him. Muiruri’s mother is Uhuru Kenyatta’s first cousin, while his grandfather was the younger half brother of Jomo Kenyatta, Kenya’s first president.

In November 2016, President Kenyatta attended the funeral service of Muiruri’s father, the late Mzee Josphat Muiruri Kihanya, at the Holy Family Basilica in Nairobi and gave a short address. The presidency also issued a formal press statement paying tribute to the former civil servant, although it made no mention of the family connection.

SportPesa lost its betting license last July. The company announced it was withdrawing from  Kenya last September in response to what it called “the hostile taxation and operating environment in the country”. Their withdrawal led to 400 job losses and the sudden cancellation of its local sports sponsorships.

In February this year SportPesa also withdrew from its international sponsorship commitments, including a reported £9.6 million a year shirt sponsorship with Everton.

The 20% duty was only introduced last November, according to the Kenya Revenue Authority.

Tax about-turn

Reversing any betting tax was not on the cards two months ago, when the Departmental Committee on Finance and National Planning chaired by Joseph Limo published the Finance Bill for public comment on 8 May. At that stage, the bill contained no plans to tinker with any betting taxes.

Committee meeting minutes show that an obscure stakeholder group — identified only by a non-existent URL as shade.co.ke — wrote to the committee on 15 May proposing the scrapping of the 20% excise duty on bets placed. “It has made many betting firms cash strapped hence cutting down on their sponsorships to local sports clubs,” they said.

The committee agreed, noting that “the high level of taxation had led to punters placing bets on foreign platforms that are not subject to tax and thereby denying the Government revenue”.

In its justification for approving the amendment, the committee explained to the National Assembly that it would “reverse the negative effects of this tax on the industry which has led to closure of betting companies in Kenya, yet international players continue to operate”.

The committee turned down other proposals by the unidentified stakeholder group to amend other tax laws affecting betting, which included a reduction in withholding tax on players’ winnings from 20% to 10% and exempting the betting industry from digital services tax.

A gambling nation

As the committee was still considering the excise tax proposals in May, Finance Uncovered working with the Daily Nation published leaked betting revenue declaration figures from the industry for May 2019.

The data showed that punters had wagered more than Shs30bn (£234m) in just one month. SportPesa alone accounted for two-thirds of these betting revenues, according to the data which all betting firms submitted to the Betting Control and Licencing Board (BCLB).

Such huge revenues for a single month showed what is at stake for the gambling companies in Kenya.

The controversial 20% excise duty would have been levied directly on these revenues, and could — on the basis of the leaked revenue data — have been worth up to Shs72bn (£562m) in annual taxes for the Kenya Revenue Authority (KRA).

SportPesa alone accounted for two-thirds of these betting revenues, according to the data which all betting firms submitted to the Betting Control and Licencing Board

However, this was when the industry was at its peak, and before the government began its tax and regulatory clampdown last July, including suspending  the betting licences of gambling firms including SportPesa and its next biggest rival Betin.

Two other associates of the president already hold a significant chunk of equity in SportPesa both locally and internationally.

They are Paul Wanderi Ndung’u, a key fundraiser for Kenyatta’s Jubilee political party during the 2017 election (17%); and Asenath Wachera Maina (21%), whose late husband Dick Wathika is a former Nairobi mayor whom Kenyatta has described as a long-time friend.

In addition to these links, SportPesa’s Nairobi headquarters share the same office complex that also houses the Kenyatta family-owned investment holding company.

This article was first published by Finance uncovered. An investigative journalism training and reporting project.

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