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Tales of State Capture: Goldenberg, Anglo Leasing, and Eurobond

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WACHIRA MAINA examines three major corruption scandals during the Moi, Kibaki and Kenyatta eras that demonstrate how state capture facilitates the massive looting of public funds, and allows the culprits to get away scot-free.

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Tales of State Capture: Goldenberg, Anglo Leasing, and Eurobond
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Corruption and politics, never the twain shall part

Politics and corruption have always been intimates in Kenya since independence. Little wonder that the first commission of inquiry appointed after independence, the 1965 Chanan Singh Maize Commission of Inquiry, was triggered by a corruption scandal involving Paul Ngei, the then Minister for Marketing and Cooperatives.

Mr Ngei had permitted his wife Emma Ngei, through her company Uhuru Millers of Kangundo (commonly referred to at the time as Emma Stores) to directly buy maize from farmers, bypassing the Maize Marketing Board, which he chaired. This was despite the fact that the law did not allow Kenyans to buy maize straight from farmers (which was cheaper than buying from the government). Worse still, Ms Ngei was permitted to buy 2,000 bags of maize, but she refused to pay for them; she wrote “return to sender” on payment demands. In addition, she refused to remit the difference between the farmers’ price and the government price to the Board, which was also against the law.

Widespread speculation in maize by well-connected individuals, coupled with the government’s failure to import more maize in time, eventually led to a national shortage. The Chanan Singh commission of inquiry was appointed by President Jomo Kenyatta to investigate the cause of the maize shortage. Because of his relationship with Uhuru Millers, Mr Ngei was briefly suspended from the cabinet but was later reinstated.

Maize, then, before and since has had a long career in both politics and corruption. That first scandal set the tone for future graft: the politically connected rigging the system to benefit themselves, their relatives and their cronies and when unmasked, resorting to inconclusive methods of investigation, such as commissions of inquiry, task forces or inept prosecutions. The difference between that early corruption and the corruption described here as state capture is that most of it involved abuse of discretion and conformed closely to Robert Klitgaard’s definition: Corruption = Monopoly + Discretion – Accountability

The first corruption scandal encompassing major characteristics of state capture was the Turkwel Gorge hydroelectric power project between 1986 and 1991. Many aspects of the process of contracting for this project entailed rigging and repurposing legal processes for the benefit of President Daniel arap Moi and his cronies. According to an internal European Commission Memorandum of March 1986 written by Achim Kratz, the then Commission’s delegate to Kenya, the contract price for the project was more than double the amount Kenya’s government would have paid under a competitive international tender. The memo stated that the government knew that the price of the French contractor Spie Batignolles was extortionate, but hired them nevertheless, “because of high personal advantages”. Those “personal advantages” were millions of dollars paid to President Daniel Arap Moi and to the then Minister of Energy, Nicholas Biwott. Moreover, companies associated with people close to Moi and Moi’s family were sub-contracted to execute many elements of the Spie Batignolles contract.

The first corruption scandal encompassing major characteristics of state capture was the Turkwel Gorge hydroelectric power project between 1986 and 1991. Many aspects of the process of contracting for this project entailed rigging and repurposing legal processes for the benefit of President Daniel arap Moi and his cronies.

The effect of the combination of personal interest and inattention to geological and hydrological factors was that when the project was finally commissioned by President Moi in October 1993, the reservoir was under 25 per cent full and the project had already consumed three times the estimated cost. The knock-on effect was probably even greater: the Turkwel corruption provoked donors to cut funding to the energy sector, which would eventually generate the crippling power outages of the mid-1990s to the early 2000s.

Some of the lessons learnt from the Turkwel Gorge saga on repurposing state institutions and lawful processes to extract regime and personal gain would be applied with a vengeance to the first unambiguous case of state capture: the Goldenberg scandal.

Goldenberg: Designing the methods of state capture

In 1991 and 1992 Kenya underwent a foreign exchange crunch. The proximate cause for this was mounting pro-democracy pressure by the opposition and civil society groups, to which the government responded with violent crackdowns. Political repression and donor concern about corruption, combined with poor export performance of the leading foreign exchange earners of coffee, tea and tourism, led to a significant drop in hard currency reserves.

The government responded to this with an export promotion scheme in which exporters who deposited their hard currency earnings would not only receive the Kenya shilling equivalent of their deposits, but also an additional 20 percent “export incentive”. Goldenberg International, a company jointly owned by Kamlesh Pattni and the then director of the special branch (Kenya’s secret service), James Kanyotu, concocted a scheme to export gold and diamonds to three companies in Dubai and Switzerland on an understanding that they would be paid 35 per cent “export compensation”. The problem with this arrangement was that gold and diamonds were not covered in the Export Compensation Act and the “incentive” paid to the company was 15 per cent above the lawful limit.

The real scandal, though, was that Kenya had no diamonds and its gold mining was insignificant. In the beginning, Goldenberg International exports turned out to be entirely made up of gold smuggled from the Democratic Republic of the Congo (formerly Zaire). Later, the company stopped smuggling gold altogether and merely completed export declaration forms, produced fake hard currency deposit slips and got paid, not only the coupon amount on the fake deposit slips, but also the 35 per cent export compensation.

The total cost of the scandal is unknown, but some estimates indicate that up to 10 per cent of Kenya’s GDP was lost. The 2006 Bosire Commission of Inquiry into the scandal concluded that up to Sh158.3 billion of Goldenberg money was transacted with 487 companies and individuals. This is probably a gross underestimate, as in fact Goldenberg was a series of inter-connected financial scandals rather than the phantom exports of gold and diamonds that most investigations have focused on since 1992. (The scandal was first revealed in the Controller and Auditor General’s reports for 1991 and 1992.) According to various affidavits sworn by the main suspect in Goldenberg and associated scandals, the beneficiaries of these dealings included the President, the Vice President and his business associates.

Notwithstanding revelations in the Controller’s and Auditor General’s reports, together with whistleblower accounts covered in the media, the government initially stonewalled. This prompted the Law Society of Kenya (LSK) to seek the permission of the High Court to file a private prosecution to remedy the inaction of the Attorney General (AG).

The AG, Amos Wako, suddenly bestirred himself, asking to join the LSK case as a friend of the court. He promptly opposed the LSK’s application, arguing that he had been delayed by investigation reports, and requested the LSK to hand him such evidence as they had so that he may act. Backed by an affidavit by Japhet Masya, the Clerk to the National Assembly, the AG also argued that the High Court had no jurisdiction on Goldenberg given that the issue was before a committee of Parliament.

The total cost of the scandal is unknown, but some estimates indicate that up to 10 per cent of Kenya’s GDP was lost. The 2006 Bosire Commission of Inquiry into the scandal concluded that up to Sh158.3 billion of Goldenberg money was transacted with 487 companies and individuals.

Mr Wako’s pleas were both inexplicable and disingenuous: Parliament has no criminal jurisdiction and any policy issue on Goldenberg pending before one of its committees can have no effect on an indictment for corruption. The AG sounded more like a defence attorney than the head of public prosecutions and guardian of public interest that he was.

Dr Willy Mutunga, then the chair of the LSK, feared that Mr Wako’s ruse was proof that the government was “determined to complete the Goldenberg cover-up”. Mr Wako, he predicted, would continue to act like “counsel for all the accused persons” and would engineer “protracted delays”, “mention after mention, adjournment followed by adjournment”, ending in a “dramatic withdrawal of the cases”.

So it proved. The magistrate, Uniter Kidullah, appointed the Director of Public Prosecutions (DPP) after her decision in this case, rendered a rude and intemperate judgment, combining otiose proceduralism with personalised insults against the LSK: Mr Mutunga’s pleadings were inadmissible because he, rather than the secretary, had signed them; the LSK had no legal standing to file a private prosecution since it could not show how its interests had been harmed by the Goldenberg scandal and, so far as she could see, the LSK had acted outside its statutory mandate. Finally, she concluded that the only knowledge LSK seemed to have was that of “stealing from . . . clients”.

There the Goldenberg scandal would have died but for the government’s continuing hard currency crisis. The International Monetary Fund (IMF) and the World Bank warned Kenya that no new programme would be agreed with the country until the government took credible action on corruption in general and on Goldenberg in particular. It was this threat that spurred Attorney General Amos Wako to indict Pattni and his co-accused in 1997, five years after the scandal first broke.

But the charge was not meant to result in effective prosecution. Against the advice of his DPP, Bernard Chunga, the AG framed more than 90 counts in one charge in the face of clear precedent that so many counts would invalidate the charges. Knowing this, in July 1997, Kamlesh Pattni challenged the charges as illegal and was granted an order of prohibition by the High Court, stopping the trial. Donors, aghast at this turn of events, refused to lift the conditions they had imposed on aid to Kenya until Goldenberg was properly prosecuted.

A chastened AG filed new charges in August 1997, calculated to be good optics for an IMF mission that was expected in Nairobi in early 1998. In the meantime, Mr Pattni had concocted a new fraud to defeat any fresh charges that the AG might bring against him. Using forged papers, fake sale agreements backdated to 1992 with the connivance of the Registrar of Companies (in the Attorney General’s Chambers) Mr Pattni purported to be the owner of World Duty Free (WDF), the Isle of Man company to which he claimed to have sold the gold and diamonds. He then obtained court orders allowing him to take over management of WDF shops in Kenya.

The point of this devious scheme was that in a future prosecution Pattni could argue that as the owner of WDF he couldn’t be forced to testify against himself. Armed with this new civil suit, he challenged the fresh indictments, claiming these charges should be stopped as they were prejudicial to the WDF civil case. The court agreed with this risible claim, even though legal principle works the other way: where a criminal case raises the same issues as a civil case, the criminal case is heard first. There are two reasons for this: one, the public interest should be vindicated before the private interest and, two, given that the standard of proof in criminal cases – beyond reasonable doubt – is much higher than the standard in civil cases – on the balance of probabilities – it is more efficient to hear the criminal case first, since facts proved need not be proved again in the related civil case. This botched 1998 prosecution was the last action that the Moi government took to resolve the Goldenberg scandal.

In 2003, Mwai Kibaki succeeded Daniel arap Moi. He quickly set up a commission of inquiry into the Goldenberg scandal, ironically at just about the same time that his own cronies were busy siphoning monies out of Kenya under the Anglo Leasing scandal. The commission was chaired by Justice Samuel Bosire, who would later be declared as unfit to be a judge during the vetting of magistrates and judges mandated by the 2010 Constitution.

The point of this devious scheme was that in a future prosecution Pattni could argue that as the owner of WDF he couldn’t be forced to testify against himself. Armed with this new civil suit, he challenged the fresh indictments, claiming these charges should be stopped as they were prejudicial to the WDF civil case.

The Bosire Inquiry established what everyone always knew but could not prove, because the AG, Amos Wako, had developed feet of clay. Goldenberg, the commission concluded, involved the highest levels of President Moi’s government and Moi had personally authorised two Goldenberg-related payments. After the inquiry, the government imposed travel bans on people named by the commission as connected to Goldenberg. Bosire also recommended that retired President Moi’s role in Goldenberg be investigated. Nothing came of either the travel ban or the Moi investigation. In August 2006, the credibility of the report was seriously dented when Professor George Saitoti (formerly Vice President to Moi), who the commission had found culpable enough to warrant an indictment, got a court order expunging his name from that list of shame.

In the end, no one was ever convicted for any of the Goldenberg crimes. In 2006, six months after the release of the Goldenberg Report, David Munyakei – the man who first blew the whistle on the scandal only to be hounded into destitution for his efforts – died, a lonely and forgotten victim of the forces of state capture.

The Anglo Leasing Scandal

The Goldenberg script would be reprised in the second state capture case, the biggest scandal of the Kibaki era – the 2003 Anglo Leasing scandal. Anglo Leasing was a series of security-related scandals involving 18 state security contracts, collectively worth about $770 million (Sh55 billion), in which the government entered finance lease and suppliers’ credit agreements to pay for forensic facilities, security equipment and support services for Kenya Prisons, the Police Airwing, the police force, the Directorate of Criminal Investigations, the Administration Police, the National Security Intelligence Service (NSIS), and the National Counter-Terrorism Centre. Thirteen of the eighteen contracts were made under President Daniel arap Moi, the other five after 2002 under President Mwai Kibaki. The true identities and whereabouts of the companies remained unclear. Though the immediate investigation that blew open the scandal involved the Anglo Leasing and Finance Company, in truth the scandal involved many more companies owned by the same set of individuals: Deepak Kamani; Anura Perera; Amin Juma; Merlyn Kettering and Ludmilla Katuschenko.

Within these 18 generally irregular contracts, individual contracts were even more blatantly so: the contract for tamper-proof passports granted to Anglo Leasing and Finance Company was described by the Public Accounts Committee (PAC) – ironically chaired by Uhuru Kenyatta – as “an organised, systematic and fraudulent scheme designed to fleece the government through the so-called special purpose finance vehicles for purported security contracts”. How exactly Anglo Leasing became involved in these security contracts is unclear from the records, but the pattern itself is clear.

In 2000, the Department of Immigration did a “computer needs assessment” that concluded that to eliminate fraud, forgery, inefficiencies and revenue loss it would need to procure a passport -issuing system. This was to be done by restricted tender. The Ministerial Tender Committee invited five international firms to submit bids: two British firms, De La Rue Identity Systems and AIT International PLC; South Africa’s Face Technologies; Setec OY of Finland and Johannes Enschede of the Netherlands. Three firms responded. The decision was that AIT International PLC met both the commercial and technical specifications for the award.

However, the ministry’s budget for the 2000/2001 financial year did not cover the Sh622,039,944 contractual sum that AIT International PLC gave as the cost of the system. The procurement was deferred to 2002/2003. Six international firms were now invited to bid, the initial five and GET Group of the USA. Once again, three responded: De La Rue Identity Systems; South Africa’s Face Technologies and GET Group. The previously successful group, AIT International PLC, did not submit a bid.

A technical committee of the Government Information Technology Services concluded that none of the bids were responsive and subsequently recommended that they not only be disqualified but also that, “the system be redesigned and expanded to cover other aspects of the work of the Immigration Department, such as border controls and immigration monitoring”. It was now agreed that the expanded system would have five components: 1) high security new generation passports; 2) a secure passport issuing system; 3) high security new generation visas; 4) a high security visa-issuing system; and 5) computerisation of machine-readable immigration records. One consequence of expanding the system was a spiking of costs, which would require the Treasury to seek donor funds.

That is how matters stood when on 1 August 2003, a firm named Anglo Leasing and Finance Ltd of Alpha House, 100 Upper Parliament Street, Liverpool L19 AA, UK, sent an unsolicited technical proposal to the permanent secretary (PS) in the Vice President’s Office to supply and install an “Immigration Security and Document Control System, (ISDCS)”. The installation would be done by a sub-contractor of Anglo Leasing, François-Charles Oberthur Fiduciaire SA of Paris, France. To ease the funding problem, Anglo Leasing would offer a facility of €31,890,000 (Sh2.67 billion) to be repaid at an interest of 5% (later 4%) over a 62-month period.

On review, the PAC thought this highly irregular: a financing firm had prepared a detailed proposal for a project very similar to the one recommended by the Government Information Technology Services without a request from the government and, most curiously, in a manner that strongly suggested that the firm “had fore-knowledge of the recommendation to enhance and expand the system”.

Nonetheless, a month later, on 5 September 2003, the Vice President’s Office asked the Treasury to contract Anglo Leasing. That permission came through on 25 November 2003. Also on 5 September, the Vice President’s Office sought legal clearance from the AG’s Chambers, and in a letter dated 18 September 2003, the AG advised the ministry to do due diligence. For example, how many projects of this magnitude had Anglo Leasing successfully undertaken? What was the firm’s credit rating? The PAC did not see any evidence that tests had been undertaken or that the ministry had assessed the “authenticity, capacity, experience and track record of François-Charles Oberthur Fiduciaire”.

On review, the PAC thought this highly irregular: a financing firm had prepared a detailed proposal for a project very similar to the one recommended by the Government Information Technology Services without a request from the government and, most curiously, in a manner that strongly suggested that the firm “had fore-knowledge of the recommendation to enhance and expand the system”.

Even with all these things still outstanding, the government signed the Suppliers Services and Financing Credit Agreement for the ISDCS on 4 December 2003, and two months later, on 4 February 2004, a sum of Sh91,678,169.25 (described variously as “arrangement”, “commitment” and “administration” fees) was paid out to Anglo Leasing.

According to John Githongo’s dossier to the President, all the Anglo Leasing-type shell companies were probably established by one Pritpal Singh Thethy, an accountant and engineer who was associated with Anura Perera. These companies routinely won large contracts to supply goods and services at inflated prices to the security services and were notorious for paying generous kickbacks.

The unravelling of Anglo Leasing began when Maoka Maore, the MP for Ntonyiri, tabled documents in Parliament in April 2004, showing that Anglo Leasing and Finance Company Limited had been paid a Sh91 million commitment fee, amounting to 3 per cent of a Sh2.7 billion contract to produce the tamper-proof passports. The Department of Governance and Ethics, headed by John Githongo, tried to get to the bottom of the affair.

In that same month, whilst on a visit to the United Kingdom he asked Kroll Associates to do some due diligence on Anglo Leasing and discovered that no such company existed. Githongo had begun to suspect that very senior officials in the Kibaki administration were involved. Early suspects included Vice President Moody Awori, Minister for Justice and Constitutional Affairs Kiraitu Murungi, Minister for Finance David Mwiraria, Minister for Internal Security Chris Murungaru, Home Affairs Permanent Secretary Sylvester Mwaliko, Finance Permanent Secretary Joseph Magari, Internal Security Permanent Secretary David Mwangi, Alfred Getonga, Deepak Kamani and Jimmy Wanjigi.

From an early stage in a series of private meetings, the Vice President, as well as the ministers for justice and finance, assiduously tried to stop the investigation, partly based on the theory that “the Vice President had already given a parliamentary statement”. The scale of Anglo Leasing and the depth of its penetration into the inner sanctum of power would become much clearer over the next few months. It turned out that even as investigations kicked off, additional payments and commitment fees were being processed.

When these stories hit the media, the then Secretary to the Cabinet, Francis Muthaura, said that Anglo Leasing had contacted him and promised to repay the monies they had already received. Shortly thereafter, on 14 May 2004, Anglo Leasing and Finance Ltd wired back €956,700 from Schroder & Co Bank AG in Zurich.

Investigations would reveal even more dirt. By early June, inquiries had established that Anglo Leasing had been paid $5 million for a forensic laboratories contract for which they had done no work. The brains behind the revival of this Moi-era contract were Deepak Kamani, Jimmy Wanjigi, Chris Murungaru, Dave Mwangi, Alfred Getonga, and C. Oyula, the Financial Secretary. It was clear that there were many more Anglo Leasing type contracts, and eventually 16 of them would become public.

From an early stage in a series of private meetings, the Vice President, as well as the ministers for justice and finance, assiduously tried to stop the investigation, partly based on the theory that “the Vice President had already given a parliamentary statement”. The scale of Anglo Leasing and the depth of its penetration into the inner sanctum of power would become much clearer over the next few months.

The case of two of these Anglo Leasing-type companies – Sound Day Corporation and Apex Finance Corporation – closely followed the conspiratorial modus operandi of the contracts for the tamper-proof passports. The two companies, which were managed by Brian Mills, a US national, had signed four contracts, cumulatively worth more than $145 million. According to newspaper accounts, the three Kamanis – Chamanlal Kamani, Deepak Kamani and Rashmi Kamani – became directors of Sound Day in April 1990. Sound Day, like other Anglo Leasing companies, was to provide credit, as well as supply the equipment to be financed through that credit. However, the contract terms were that the equipment would not be supplied until the government paid the first instalment. Sound Day provided no credit, but charged 3 per cent interest on this “financing” whilst, in fact, the financing was the money that had been advanced by the Kenyan government in the first place. This Byzantine arrangement was later described in court as a “classic case of reverse financing”.

As Anglo Leasing unravelled, the attempts to stop investigations became both frantic and menacing. The Minister for Finance, David Mwiraria, indicated that he would not lay before Parliament a damning special audit report compiled by the Controller and Auditor-General until the Treasury had made some “major changes”. The Minister for Justice, Kiraitu Murungi, weighed in with the caution that Mr Githongo should be careful not to “knock out key political people” like Alfie (Alfred Gitonga) and Murungaru given that both were “key players at the very heart of government”. He would later add that, “if Chris [Murungaru] is dropped and Alfie [Gitonga] is dropped we are in trouble, the enemy will have won”. According to him, people were concerned that John Githongo “did not appreciate the political costs of his work”.

A different politician was later to emphasise these warnings, saying that if Githongo’s investigations threatened the “stability of the regime” then the President would stop backing him. Both Mwiraria and Kiraitu said that they hoped that the investigations would stop as soon as Anglo Leasing repaid the money. Over time, the cover-up efforts would turn bizarre: Francis Muthaura even questioned the legal authority of the Kenya Anti-Corruption Commission (KACC) to conduct the investigation and implied that the Anti-Corruption and Economic Crimes Act was not reasonable legislation, ostensibly because of the broad powers it gave to the KACC.

What the pressure on Githongo and the repayment of the money on the publicly known contracts revealed was a clever ploy to head off investigators from the other numerous yet to be known contracts by issuing a mea culpa on what was then publicly known.

One issue surrounding the scandal is what President Kibaki knew and when he knew it. For instance, on the forensic labs contract, the Secretary to the Cabinet had indicated to Githongo that he had briefed the President on this contract, but when Githongo met the President on 29 May 2004 Kibaki said that no one had briefed him and asked to be furnished with a copy of the contract. Two days later, Muthaura would insist that the President had been fully briefed and that it had been agreed that all payments were to be stopped and that the authorities must establish who Anglo Leasing were.

Later still, Mwiraria would claim that the President had requested that they “go easy” on Anglo Leasing given that the money had now been returned. Mwiraria and Kiraitu would argue that if the public were to know that there were other corrupt deals of this magnitude, “our government would fall”. Had the President in fact said this or were Mwiraria and Kiraitu using the authority of the Presidency to smother inquiries? Had the President lied when he told Githongo that he had not been briefed?

From the determined opposition to his inquiries, the lukewarm support he received from the President and the threatening messages that he received throughout this early phase of the investigation, Githongo feared for his life and went into self-imposed exile in the United Kingdom in 2005. His conclusion was that the Anglo Leasing scandal went all the way to the top and that its baseline was a scheme to finance the 2007 election.

One issue surrounding the scandal is what President Kibaki knew and when he knew it. For instance, on the forensic labs contract, the Secretary to the Cabinet had indicated to Githongo that he had briefed the President on this contract, but when Githongo met the President on 29 May 2004 Kibaki said that no one had briefed him and asked to be furnished with a copy of the contract.

In November 2005, President Mwai Kibaki finally acted. He dropped Chris Murungaru from the Cabinet. On 1 February, he dropped David Mwiraria and a fortnight later he had “accepted” Kiraitu Murungi’s resignation. Although 80 MPs demanded that the President fire his Vice President, Moody Awori, the President demurred. As with Goldenberg, the government imposed the usual travel bans on the principals and announced that it would also freeze their assets. Whether this happened or not is unclear; there is no official indication that it did.

In 2007, the UK’s Serious Fraud Office tried to get to the bottom of a $30 million transfer made by Apex Finance, one of the Anglo Leasing companies, between April 2002 and February 2004 through the Channel Island tax havens of Jersey and Guernsey. But by 2009 this effort had petered out, partly due to obstruction by Kenya. That same year, authorities in Switzerland launched investigations into Swiss companies named in the scam and froze their bank accounts. It, too, came to naught. By the time President Kibaki had served out his two terms in 2013, no action had been taken on Anglo Leasing.

The next time Anglo Leasing would be in the news was in early 2014, ahead of the country’s debut launch of a $2 billion sovereign bond, half of which would disappear into thin air in the biggest scandal of the Uhuru Kenyatta presidency. The facts were as follows. Kenya had lost a lawsuit in Geneva filed by two Anglo Leasing companies linked to Anura Perera – First Mercantile Securities Corporation and Universal Satspace. (Perera was one of the suspects named in the 2006 special audit of Anglo Leasing.) It then turned out that the country had to pay Sh1.4 billion to improve its credibility with international markets by clearing its (ostensible) debts in preparation for the launch of its debut in the foreign sovereign bond market, the Eurobond.

This was odd for two reasons. First, there was also a contrary judgment from the High Court in Kenya. Justice Mathew Anyara Emukule had ruled in 2012 that the two companies were non-existent entities that could not sue. Second, the government had claimed that the contract was vitiated by bribery and there was a PricewaterhouseCoopers (PWC) audit showing that the goods were over-priced and some had never been delivered, even though payments had been made. The Geneva court rejected these PWC findings.

As a matter of Kenyan law, the government had paid this large sum to non-existent parties. According to Treasury Cabinet Secretary Henry Rotich, it was necessary to pay out this amount lest the country suffer huge interest penalties. The Deputy Solicitor General, Muthoni Kimani, buttressed the Treasury’s argument with the claim that the Anura Perera litigation in Switzerland had adversely affected the issuing of the sovereign bond. Hot on the heels of this payment, National Treasury Permanent Secretary Kamau Thugge told the Public Accounts Committee that Mr Perera was now demanding an additional Sh3.05 billion for services given to the National Security Intelligence Service, now known as the NIS. (According to Thugge, Perera’s new demand related to another project, Flagstaff National Counter Terrorism Centre,that the government had contracted in 2004 at a cost of $41,800,000.)

A payment of $16.4 million to Deepak Kamani in 2014, also purportedly to facilitate the launch of the Eurobond, seems to have triggered the government’s interest in prosecuting the Anglo Leasing principals. In March 2015, 11 years after the scandal broke, 13 people connected to Anglo Leasing, including businessman Deepak Kamani and former minister Chris Obure, now a senator, were indicted.

The prosecution might be explained by President Kenyatta’s fury at the $16.4 million (Sh1.6 billion) Kamani payment and the extra Sh3.05 billion being demanded by Perera. In addition, some pressure seems to have come from Switzerland. Jacques Pitteloud, the Swiss ambassador to Kenya, told the Financial Times that Switzerland was tired of suffering reputational loss as a safe haven for stolen money. But the real political reason could well be that prosecuting Anglo Leasing deflected attention from scandals involving the friends and relatives of Mr Kenyatta. None of the targets of the Anglo Leasing indictments were connected to the Kenyattas.

As with Goldenberg, none of the arrests and indictments have so far led to convictions. This script of never holding to account those involved in state capture scandals would be replayed by Uhuru Kenyatta, as President, when he was himself caught up in the Eurobond scandal.

The Eurobond Scandal

Less than a year after the election of President Uhuru Kenyatta in March 2013, Kenya went to the international money markets to issue Kenya’s first sovereign bond worth $2.75 billion. This was done in two tranches. The first issue raised $2 billion (Sh176 billion at the time) and the second $815 million (Sh74 billion) for a total of $2.8 billion (Sh250 billion). The government said that the money would be used to reduce official borrowing from the domestic market, which would spur private investment by lowering interest rates.

According to an analysis by economist David Ndii, the government executed two transactions from the offshore account into which the $2 billion had been credited. It paid off a pending loan of $604 million (Sh53 billion) and then transferred $394 million (Sh35 billion) to the exchequer, leaving $1.002 billion (Sh88 billion) in that account. The government has never accounted for this money.

When inconsistencies were pointed out, the government responded with both lies and insults. The lies were that up to Sh120 billion had been used partly to pay pending bills to road contractors and for budget support. But as Ndii points out, the recurrent budget for the 2014/2015 financial year was funded by domestic revenues: the government raised Sh1.106 trillion in revenues, of which Sh229 billion was transferred to the counties. That left Sh877 billion for national government functions. The national government’s recurrent budget for that year was Sh897 billion, a mere Sh20 billion more than the revenue, reflecting no inflow of the Sh120 billion as claimed. According to this logic, the national government required only Sh20 billion more than what it had earned through revenue, so there was no way it could have used the Sh88 billion from the bond.

In its first public statement on the matter, the Treasury promised to give information on the projects that the Eurobond money had funded. It subsequently gave ministries three weeks to furnish the relevant information. Five weeks later, in an interview with Business Daily, the Cabinet Secretary for Finance lamented that “the ministries cannot differentiate whether the money they have received from the Exchequer came from VAT, income taxes, customs duties, excise taxes, domestic borrowing or the Eurobond”. This is true but irrelevant to the issue. Treasury should have been able to provide the answer. As Ndii points out, the government has a monitoring and evaluation responsibility. “For the Treasury to disburse a huge external loan, the biggest ever, without expenditure tracking seems downright irresponsible,” he commented.

In the following months, the government would “torture” the figures to show that the missing Eurobond money had indeed financed development projects. This was done by “wildly” (Ndii’s word) inflating the cost of nine projects in the energy sector that showed overruns of nearly Sh67 billion. Rural electrification of primary schools was said to have cost Sh34 billion rather than the Sh9.9 billion that had been budgeted. An unbudgeted item for the financial year, military modernisation, gobbled up another Sh62.8 billion. The point of cooking the figures, Ndii surmised, was to create a plausible storyline to explain the missing Eurobond money. “How high up does this fraud go?” he asked.

The government couldn’t – or rather wouldn’t – answer this question directly but its conduct in the coming years had the guilty air of an adulterer caught in flagrante delicto. As David Ndii explained, the government’s real problem was that it could not account for the Eurobond money that it had not spent and still manage to balance its accounts. In the 2014/15 financial year, it partially pulled off this miracle by reducing domestic borrowing for the year from Sh251 billion to Sh110 billion. The Sh140 billion reduction covered the exact amount of Eurobond money that it claimed to have carried forward from 2013/14. Unfortunately, this voodoo accounting was undone by the Central Bank accounts on domestic borrowing and was flatly contradicted by the interest that the government reported having paid on domestic borrowing for the year.

In the following months, the government would “torture” the figures to show that the missing Eurobond money had indeed financed development projects. This was done by “wildly” (Ndii’s word) inflating the cost of nine projects in the energy sector that showed overruns of nearly Sh67 billion.

In 2016 the Auditor General, Edward Ouko, tried to get to the bottom of the affair by conducting a forensic audit of Eurobond transfers from the Federal Reserve Bank of New York. As part of his preparations, he told Parliament that he had already made appointments with top US and UK financial institutions involved in the transactions. Mr Ouko promised to send forensic auditors to scrutinise transaction data at JP Morgan, the Federal Reserve Bank, City Transaction Services New York, JP Securities, Barclays Bank, ICB Standard Bank, Qatar National Bank and other banks that had handled the $2 billion Eurobond transactions.

Mr Kenyatta promptly blocked the investigation, arguing, implausibly, that by saying that “the Eurobond money was stolen and stashed in the Federal Reserve Bank of New York”, Mr Ouko was implying that the Kenyan government and the United States had colluded. “Who is stupid here?” the President scornfully asked.

In the next few years, the government became cockier and more belligerent. With the Auditor General not allowed to follow the international money trail, he was reduced to informing Parliament at the end of each audit year that “investigations into the receipts, accounting and use of funds related to the Sovereign/Eurobond are still ongoing and the accuracy of the net proceeds of Kshs 215,469,626,035.75 is yet to be ascertained”.

As Ndii’s analysis pointed out, unravelling this mystery should not have been as complicated as the Auditor General’s laconic conclusion might suggest and the Treasury’s effort to explain the mystery only compounded it, even with the IMF weighing in to support the official explanation. But as the Mozambique Eurobond story shows, the IMF has been criminally negligent in these matters.

In this case, the IMF’s attempt to aid the government was unavailing. The Fund showed that Eurobond money was received and spent in the 2013/14 financial year. But given that the Eurobond money was received in the last week of that financial year, it would not have been possible for it to be spent in that year. There was no drawdown until the first week of July, which was the start of the 2014/15 financial year. The difference between the Fund’s fiddling and the Treasury’s fiddling was that the IMF reported a domestic borrowing figure of Sh251 billion for 2014/15 domestic borrowing, whilst the Treasury showed one of Sh110 billion. As Ndii noted, “The IMF cooks the books one way, and the Treasury, the other”.

Mr Kenyatta promptly blocked the investigation, arguing, implausibly, that by saying that “the Eurobond money was stolen and stashed in the Federal Reserve Bank of New York”, Mr Ouko was implying that the Kenyan government and the United States had colluded. “Who is stupid here?” the President scornfully asked.

But the Treasury’s lies were also compounded by the mandarins’ poor memory. By 2015/2016, they seemed to have forgotten the 2014/2015 numbers. Now the Treasury reported Sh251 billion as the correct domestic borrowing figure. With Sh251 billion confirmed as the correct amount, the only way to account for the Eurobond Sh140 billion was to show the projects in which it was invested. That no such projects have been named implies that at least $1 billion of the Eurobond money has disappeared into thin air. The conclusion that it has most likely been stolen by some very senior untouchables is compelling.

With investigations never having been started, the Auditor General, beaten down by the President, and the marked lack of enthusiasm from the United States (particularly the New York Federal Reserve), it is unlikely that we will know who stole nearly $1billion of taxpayers’ money.

This is Part 3 of an abridged version of State Capture: Inside Kenya’s Inability to Fight Corruption, a report published by the Africa Centre for Open Governance (AfriCOG) in May 2019.

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Wachira Maina is a constitutional lawyer based in Nairobi, Kenya.

Politics

‘Teach and Go Home’: Kenya’s Teachers Service Commission and the Terrors of Bureaucracy

The TSC has no mandate, and no qualification, to be peeping into classrooms and making pedagogical decisions. The litany of bureaucracy that it imposes on teachers must be abolished.

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‘Teach and Go Home’: Kenya's Teachers Service Commission and the Terrors of Bureaucracy
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On the afternoon of Friday, 12 November, Martha Omollo, a teacher in Nairobi County, was called to her school and served with a letter from the Teachers Service Commission, the government employer of teachers in public schools. The letter, which was dated that day, informed her that she had been transferred to a school in Trans Nzoia County, 400 kilometres away, and that she was to report ready to teach the following Monday, 15th November.

Earlier in the week, Omollo had been the spokesperson of the Teachers’ Pressure Group, which had called into question the loyalty of the union leaders to its members, and the opaque health insurance scheme into which teachers pay through involuntary salary deductions. Shortly after the press conference, Omollo received a call from the TSC Nairobi County office warning her not to publicly discuss issues facing teachers.

The idea that a teacher can pack her bags in the middle of the term and move 400 km away, ready to teach in three days, is nothing short of cruel. The move clearly disregards human nature, and the fact that teaching is, by its very essence, a profession of relationship. Teachers cannot take care of students’ minds and wellbeing when they themselves are anxious about their own wellbeing, and worse, when they are denied the freedom of thought and speech. The transfer communicates that the TSC does not care, and worse, it callously turns one teacher into a warning to other teachers.

Similar treatment of a teacher was witnessed in April this year. The media reported about a teacher, Magdalene Kimani, who trekked to a school 20km away for a number of days to administer national examinations. In reaction to this fairly innocent report, the county education office sent her a “show cause” letter, yet the report was initiated by the media rather than the other way round. The education officials were heartless to ignore the teacher’s 20km trek and then issue a threatening letter to her.

These two cases are just a microcosm of the harassment that Kenyan teachers endure under the TSC. For instance, the TSC has carried out massive transfers of teachers away from their home areas in a procedure called “delocalization”. In her appearance before the Senate, Nancy Macharia, the CEO of the TSC, justified the initiative affecting thousands of teachers as a move to encourage “national cohesion”. It is amazing that one can think that cohesion comes from displacing teachers, disrupting their families, and showing no care about what worried teachers mean for students. To make such moves that increase teachers’ anxiety during school unrest is insensitive and a symptom of bureaucratic hubris.

It should not surprise Kenyans, therefore, that this callousness is bound to show up in the schools and public spaces. Senior government officials display an amazing lack of emotional intelligence and sensitivity to ordinary professionals, and a seeming ignorance of the harm that their actions against juniors imply for the larger public. Teachers who are anxious and who feel disrespected cannot treat children with dignity and respond to the extra-ordinary circumstances of the children under their care. To expect otherwise, as the TSC seems to do, is the definition of either hubris or inhumanity.

Take, for instance, the forms that teachers have to fill in regularly. According to the TSC, teachers have to fill in 18 forms, but teachers say that the forms are more than that. The ludicrous CBC promise of paying attention to individual learners has meant that teachers fill in forms detailing the special learners in their class, the nature of the learners’ challenges, and the remedies that the teachers have taken to address those challenges. Teachers are also expected to file reports on how they have covered what KICD calls “strands” and “subs-strands”. Now that this is assessment season, teachers are also required by the Kenya National Examinations Council to assess students conducting group activities, but the assessments require the teacher to grade each individual student along six or seven measurements. This means that for one subject taught to one class of sixty students, a teacher is filling in 60 rows x 7 columns.

Senior government officials display an amazing lack of emotional intelligence and sensitivity to ordinary professionals.

The problem with this work is not simply the amount. It’s that the work is demeaning. Teachers are filling in paperwork about teaching rather than doing the actual teaching. In the language of the anthropologist David Graeber, this is the “bullshitization” of work caused by an increase in bureaucrats with nothing to do but supervise others. The point of these forms is not to improve teaching and learning, as the bureaucrats have deluded themselves. The point is control by people who spend their days in offices and do not understand the beauty and mystery of the human connection between teachers and children, nor the fact that that beauty and mystery cannot be translated into numerical measurements. By some perverse psychology, Graeber explains, work in the neoliberal era has meant an exponential increase in administrators who subsequently use bureaucratic tools to terrorize the people doing the actual work.

I do not use the word “terrorize” lightly. The word has been used by education scholars in their assessments of performance appraisal for teachers, including by the eminent British education sociologist Stephen J. Ball, in his well-cited journal article The Teacher’s Soul and the Terrors of Performativity. The nature of terror is to plant shame and fear in the individual, make the individual feel isolated and therefore incapable of changing anything about their condition. Terror is also characterized by a lack of predictability. And because the system is always incoherent and inconsistent, teachers can never tell where the attack will come from. No matter what the teacher does, the teacher is never good enough.

One teacher told me that with TPAD, teachers are told to rate themselves but not too much, and then punished for not achieving 100 per cent performance. The teacher put it this way: “During the introduction of TPAD, we were directed that we should not rate ourselves more than 80 per cent even when you know you have met the ‘targets’. During the recent interviews, those without evidence of it were disqualified.”

The point is control by people who spend their days in offices and do not understand the beauty and mystery of the human connection between teachers and children.

​Another tragically hilarious story was recounted in a letter to the editor of the Nation newspaper some years back. The letter, titled “TSC should listen to teachers’ voice on appraisal row”, read:

Back in 2010, quality assurance and standards personnel from the Ministry of Education visited the school I was teaching in then.

As a routine, they demanded to inspect teachers’ ‘tools of trade’, as they called them. These included schemes of work, records of work books, lesson notes and lesson plans and files containing learners’ progress reports, amongst many others. We complied. Only one member of staff had all these. The rest of us, in a staff of 27, including the principal, had one or more documents missing.

After perusal, we were given a lengthy lecture on how ‘lazy’ we had become, and that only one of us merited a recognition in a public forum, notably, the school’s Annual General Meeting, and that the institution would be posting better results were we to emulate our colleague.

After the exit of the QASO personnel, the entire staffroom burst into laughter. Months later, the teacher in question was transferred following complaints from parents and learners over his below par delivery and alcoholism.

This is an egregious story of how bureaucrats confuse measures and tools of work with the actual work itself. Humiliating teachers for not having submitted complete records is similar to judging a carpenter’s work not by the furniture but by the carpenter’s hammer. For the teacher, part of the torture of performance appraisal comes from the consciousness that the work that one is doing is barely a reflection of the real work of teaching. As the story shows, a teacher actually teaching in the classroom is unlikely to achieve perfect record keeping, and yet, it is the lack of record keeping that is used to judge the teacher as lax and incompetent.

As Ball explains, the goal of teacher appraisals is not the improvement of teaching, as education bureaucrats claim. The real goal is to capture the teacher’s soul. The demand for performativity seeks to change not what teachers do, but who the teachers are. It is a vicious power grab aimed at denying teachers the ability to make judgements based on their professional opinion, and at making the bureaucrats and managers, rather than the children in their classrooms, the main focus of teaching. This obsession is so acute in the TSC, that as the latest wave of school fires began a few weeks ago, teachers were simultaneously receiving text messages from their employer reminding them to meet the deadlines for their appraisals. In other words, our children are not a priority for the education bureaucrats. It is for this reason that many teachers have adopted the “teach and go home” philosophy. It even has an acronym: TAGH.

The common sense of cruelty

How is this cruelty so easily enforced without public resistance?

Part of what makes appraisals so difficult to resist is that they sound like common sense. The argument of the managerialists and politicians in support of appraisals goes something like this: Public education is useless and is failing our children (the Kenyan version is that it produces incompetent graduates). The problem is the teachers. To improve our education and make teachers work better, teachers need to be policed with appraisals or performance contracts, where their performance is measured by a score.

This logic is devilishly convincing when one has no personal experience of teaching. I have been studying performance management in education for a decade, and to this day, I still struggle with explaining why the system is abusive. The common sense character comes from Anglo-American billionaires and politicians whose power and access to the media allows them to spread the narrative of truant and incompetent teachers who are overpaid by the state and protected by permanent and pensionable terms (called “tenure” in the US). Teachers in the US, UK and Australia, among other English-speaking countries have gallantly resisted this attack, but their struggle has been rendered longer and harder by the fact that politicians and billionaires have used the media to poison the public’s opinion of teachers.

The demand for performativity seeks to change not what teachers do, but who the teachers are.

The demonization of teachers is, in reality, an effort to end job security for teachers and replace it with appraisals, or what American conservatives call “teacher accountability”. To avoid the political mess of firing teachers en masse, these haters of teachers call for more measurement of teachers’ work. They also advocate for drastic measures like shaming and firing teachers, and closing schools that do not meet “standards”, standards that are solely determined by students’ examination scores. Appraisal management is a large-scale and sanitized form of “constructive dismissal”, which is the technical term for workplace bullying, where a worker is deliberately mistreated so that they can quit. The tactics are working, because many teachers tell me that they want to quit.

Microsoft seems to be preparing for such a scenario where the number of trained teachers will be so insufficient that technology will have to do the teachers’ work. Microsoft came on my radar when one teacher wrote to me that part of the TSC’s regime of form-filling includes teachers uploading their notes on Microsoft. It appears that when the president attended the Global Partners for Education conference in London in August 2021, one of the events was to sign a deal with Microsoft whose goal was vaguely defined as “to enable the best use of technology to dramatically enhance learning.”

The article gives no details of what Microsoft intends to do with those notes, but one can legitimately worry that the point is to eventually use those notes to create lessons for which Microsoft will charge Kenyans, and probably without honouring the copyright of teachers. If such is the case, then the teaching profession is essentially a plantation in which the TSC is the foreman that terrorizes teachers to extract materials for foreign companies to exploit.

There is yet another common sense narrative to make us accommodate this potential exploitation, and this narrative came with CBC. It is the narrative of “individual talent” and “personalized learning”. When Kenyans hear it, they think the discussion is about a human teacher giving loving and individual attention to each child, when in fact, the corporates are talking about children learning from tablets and without teachers.

This hatred for teachers is not about education. It’s a cruel contempt for society and especially for the poor whom, the rich think, do not deserve a good education, least of all at public expense. Others suggest that it comes from contempt for teachers as people with expertise, and as members of unions that are still standing up against the casualization of labour. Rev. William J. Barber also mentioned another logic of this attack: “The reason they want to privatize education is because a lot of people who are greedy know that they can’t make as much money out in other markets now. So they want to come in and siphon off money from the government for their own personal pockets. Some of them don’t hate government; they just hate government money going to anybody but them.”

Whatever the case, the war against teachers and public education, which has a peculiarly Anglo-American character, is a war that has been waged against Kenyan public school teachers since 2010, led by the current president who was Finance Minister and Acting Education Minister then, and with the help of the British Government. As Nimi Hoffman details in her article, the DfID engaged British academics who used unethical means to push for a project that undermined teachers’ unions through hiring contract teachers on low pay. The project was piloted in Kakamega County and was rigorously resisted by the teachers’ unions.

It is for this reason that many teachers have adopted the philosophy of “teach and go home”.

The relentless effort to casualize teaching continued in April 2015, when the TSC announced the replacement of the punitive performance management system with a more “encouraging” appraisal system. The pilot project was funded by the World Bank, and the British Council funded the implementation of appraisals. To anticipate the resistance of the union officials, the then TSC chief executive officer Gabriel Lengoiboni reminded them that they had implicitly accepted the project when they participated in the benchmarking trip to Britain in 2014.

Education policy in Africa has largely been influenced in this way. Foreign governments offer trips abroad for teachers, and the familiarity disempowers teachers from questioning or opposing the policy being subtly pushed through this informal networking. Even the Bologna Process, largely responsible for the bureaucratization of Kenyan higher education, was entrenched through sponsored trips to Europe for African vice-chancellors and senior academics.

Truth is exposure

The way to end this intricate system of decadence in the school system is through public exposure. But education leaders in Kenya are notoriously secretive, fanatically hostile to self-examination and ironically, steadfastly resistant to public interrogation. Learning institutions muzzle teaching professionals despite academic freedom being guaranteed by the constitution. The Kenya Institute of Curriculum Development replaced the education system with competency but avoided any debate in the media about their choice. The TSC terrorizes teachers in the shadows and punishes teachers for any publicity in the media. In the universities, public debate is discouraged through an insidious rebuke of disagreement as “attacking people personally” and with calls for intervention from a third party to lead in reconciliation. Being a teacher in Kenya’s colonial school system is like living in a bad version of the movie “Stepford Wives”, where people are supposed to ignore reality and humanity and live in a fictional utopia.

There is little difference between this scenario and witchcraft. The defining characteristic of witchcraft is that actions happen in the shadows, supposedly with no human actors, as if brought about by the wind, with nobody to hold accountable. There is no one to name, no one to be held responsible. Education institutions maintain a stoic silence in the delusion that because education bureaucrats have blocked their ears and cannot hear alternative voices and visions of education, those alternatives do not exist.

The demonization of teachers is, in reality, an effort to end job security for teachers and replace it with appraisals, or what American conservatives call “teacher accountability”.

This is why we need a Truth and Justice Commission for education. We need a public forum where Kenyans are forced to hear all the participants in education, especially those who are the most vulnerable. It is time for Kenyans to stop listening to the disjointed stories of the media, the propaganda of the private sector, and the silence of educational institutions, and to construct for themselves a complete story that connects the dots between the brutality suffered by our children, the terror experienced by teachers, the deaf ears of education bureaucrats and the sadism of the Kenyan public. Our faith in the colonial education system is a national delusion that can only be cured by the truth.

In the immediate, TPAD and the litany of bureaucracy which the TSC imposes on teachers needs to be abolished. The TSC has no mandate, and no qualification, to be peeping into the classrooms and making pedagogical decisions. Despite its “Commission”, tag the TSC’s role is mainly human resource clerical work. If the TSC officers want to enjoy the dignity of teaching, they are welcome to join us in the classroom. As they know, there are not enough teachers, and moving with their salaries to the classroom would save the country some money for hiring teachers. Likewise, the yearly assessments of the Kenya National Examination Council need to be done away with. With the introduction of CBC, the KICD promised Kenyans the end of exam obsession. It is ridiculous that CBC is now increasing yearly assessments all the way down to primary school. And Martha Omollo’s transfer should be reversed. The remedial measures should be guided by this simple principle: our children deserve to be taught by adults who are free in thinking, creative in teaching, and caring in interaction.

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Politics

Prebendal Politics and Transition to Democracy in Somalia

The Somali political space is a marketplace that does not allow for free and fair elections and diminishes the credibility and legitimacy of the electoral process, hindering the emergence of democracy in Somalia.

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Government should belong to the people, be for the people and by the people. This is the democratic ideal borne out of man’s innate desire for good governance, societal stability, and development. Credible elections are the hub around which the practice of ideal and sustainable democracy revolves.

As such, it is closely tied to the growth and development of democratic political order. To realise this democratic ideal, however, electing people to participate in government should be freely and fairly done to allow for the right choice of the electorates to emerge. The elections process is the only means of guaranteeing the credibility and sanctity of democratic practice. The election becomes a crucial point in the continuum of democratisation and an imperative means of giving voice to the people’s will, which is the basis of government authority.

Fundamentally, democratic development involves the practice and sustainability of regular, credible electoral conducts and processes. In fact, one of the cardinal features of democratic practice is the conduct of credible, free and fair elections. Therefore, the cardinal issue in a democratic polity could viewed as the method of selecting people who govern at any point in time.

Indirect election

Conducting elections in fragile countries like Somalia cannot be an easy task by any yardstick. Conducting free and fair elections in such a polity, that gives the victor free reign to grab resources, is a much more difficult assignment the success of which even angels cannot guarantee. This is in large part because of the insecurity, political infighting amongst the elites, endemic corruption and the threat from Al-Shabaab. The militant group has historically made it difficult to hold elections in Somalia by threatening to attack polling places.

To minimize concerns about Al-Shabaab disrupting elections, Somali political leaders and their international allies have supported a narrow voting process based on a power-sharing formula between clans, rather than a popular vote (universal suffrage is still a distant dream for the country) and adopted the electoral college model. In the model, elders are selected from across the diverse clans and they, in turn, nominate or elect parliamentarians, who in turn elect the president. Initially, one elder from each clan picked one member of parliament (MP), but this has now changed to an electoral college system. In this system, each clan still appoints one member of parliament, but instead of one person deciding, each clan picks 51 of its members to vote for that clan’s one representative in the lower house of parliament as happened in 2016/17 indirect election.

Since early 2000, Somalia has had four indirect national elections and witnessed a peaceful transfer of power from one civilian to another. In 2012, 135 traditional clan elders elected members of parliament, who in turn elected their speakers and the federal president. In 2016, elections were conducted in one location in each federal member state. The 135 traditional clan elders also selected the members of the 275 electoral colleges made up of 51 delegates per seat, constituting the total college of 14,025. On the other hand, the senate (upper house) members were nominated by the federal member state presidents, while the federal member state parliament selected the final members of the upper house.

The ongoing (2020/21) election mirrors the 2016 exercise but has expanded the number of delegates involved in the lower house (electoral collegeElectoral College) from 51 to 101 delegates. This expansion raised the number of participants in the lower house election from 14,025 to 27,775—a notable growth in suffrage. Furthermore, the September 2020 agreement increased the number of voting centres per member state from one to two. It also established federal and state election commissions to oversee the polls. However, elections in Somalia have lacked the basic ingredients of democratic elections as most Somalis are not included in the voting. The elections have also been characterised by pervasive corruption and widespread electoral fraud.

It is common knowledge in Somalia that running in an election and winning requires not only political clout but also a lot of money. An aspiring politician needs the help of a well-heeled or well-grounded politician or a money bag to bankroll their political campaign to see success in such an endeavour. This is mainly because taking political office in Somalia has come to be seen primarily as a means of enrichment and of gaining influence, and not as an opportunity to serve the people.

Somali elites and prospective parliamentarians receive campaign funding from both internal and external actors. External actors include neighbouring countries such as Kenya and Ethiopia, Gulf countries and Western allies. On the other hand, internally, the key powerbrokers are the elites who have captured states and regions, and particularly those who had mastered the art of obtaining contracts during the war; they have built business empires in the import/export sectors, construction and rebuilding, clearance and customs and are now playing a critical role in politics.

The cost of democracy 

In the electoral collegeElectoral College system, the price of votes ranges from US$5,000 to US$30,000, with politics at the local and national levels recognised to have become increasingly monetised over time. Some candidates are said to have offered bribes of up to US$1.3 million to secure votes. Jeffrey Gentlemen reports that in 2012 former President Hassan Sheikh Mohamud gave several clan elders a US$5,000 bribe each to influence the choice of their clan’s representatives in Parliament.

The 2012 parliamentary and presidential elections that brought Hassan Sheikh to power had little legitimacy, and they were criticised as the most fraudulent in Somalia’s history. Hassan Sheikh was elected as President, backed by the Qatari Government with money brought to Mogadishu by Farah Abdulkadir (a former Minister of Justice and Constitutional Affairs), and business and political allies in Mogadishu. The various processes and elections to put together the leadership of the federal member states were also marred by high levels of corruption and intimidation.

Taking political office in Somalia has come to be seen primarily as a means of enrichment and of gaining influence, and not as an opportunity to serve the people.

The 2016/17 federal election involved a significant amount of money. Farmaajo’s win surprised most observers, and Somali analysts estimate that at least US$20 million changed hands during the parliamentary elections that culminated in the presidential election. Farmaajo’s supporters had hoped that he could be the answer to corruption and extremism in Somalia, but he too succumbed to corruption. He is believed to have influenced elections in the federal member states using money and coercion. During Farmaajo’s time in office corruption worsened and security deteriorated.

Between 2017 and 2021, elections were held across the federal member states that optimised the defining features of prebend, the salience of clan identity, and the pervasive use of violence and money. In Puntland, incumbent President Said Abdullahi Dani narrowly won the election after carefully crafting an alliance of two clan-based interests, The Saleban Clans.  An estimated US$15 million changed hands in the week before the election, with all candidates using money to buy support.

In Galmudug, FGS employed the Somalia National Army (SNA) and Ethiopian military support to restrict opposition figures and elders access to voting centres. The FGS was able to disarm Ahla Sunna Wal Jamma using financial incentives. Eventually, Ahmed Abdi Kaariye, also known as Qoor, won the election with the support of the federal government.

In the Hirshabelle election, the FGS spent more than US$1.2 million to secure the election of the Hirshabelle president. Former Al-Shabaab leader Mukhtar Robow was the running favourite in the South-West State elections. Robow is from an influential Leysan sub-clan (one of the largest in South-west State) with a loyal clan militia, and he was considered widely popular among the broader population. He reportedly refused a significant financial pay-off not to take part in the election and was duly arrested by Ethiopian forces acting on behalf of the federal government before the election itself.

The arrest of Mukhtar Robow and the blatant intervention of Ethiopian forces on behalf of the federal government led to a demonstration and a reported 15 deaths. A critical statement by Nicholas Haysom, Special Representative of the U.N. Secretary-General, in which he raised questions over allegations of abuses by forces loyal to the federal government saw him declared persona non grata.

The long-delayed parliamentary and presidential election was supposed to offer Somalis universal suffrage. However, given the security and logistical challenges of conducting an election in Somalia, as mentioned previously, Somalis opted for indirect election, and so far, the election of members of the senate has been concluded. It is commendable that the majority of senators have been elected by the FMS state legislature in accordance with the electoral model adopted on 17 September. However, the senate election was marred by foul play where FMS presidents and elites pre-determined the winners of every seat, contrary to the agreements and the national interest. The cases of corruption were widely reported; bribes were given to the state legislatures by aspiring senators and their sponsors, including federal and regional executives.

The election for the lower house has just started. Each of the 275 members of the lower house will be elected by an electoral college of 101 clan elders and civil society, determined through the collaboration of the FMS authorities, clan elders and civil society. Nonetheless, the lack of criteria by which the members of civil society and clan elders will be selected has created great concern among the public. It is widely believed that the federal member state presidents have the upper hand in the process, as they also play a role in determining clan elders and civil society. Corruption and vote buying are widespread in all regions; prospective parliamentarians are buying votes.

Abdi Malik Abdullahi tweeted, “2021 electoral process in Somalia is commercialised and sham.” On her part, Hodan Ali tweeted, “Somali politicians poised to spend 10s of millions of dollars on election rigging/buying while millions face killer drought conditions across the country.” Nadeef shared similar view. He noted, “I have realised that Somali leaders are not trying to fix any of our problems. They are trying to make enough money and get enough power so that problems that affect us don’t reach them.”

Given the foregoing, it is clear that taking political office is perceived more as a means to personal economic advancement. This, no doubt, intensifies the unhealthy rivalry and competition for political office that triggers corruption, election rigging, violent conflicts and even coups. In recent years, those seeking power have included prominent scholars coming from all corners of the world to seek elective office on the strength of the size of their pocket. Indeed, the Somali political space is a marketplace that does not allow for free and fair elections and diminishes the credibility and legitimacy of the electoral process, hindering the emergence of democracy in Somalia.

External Influence 

In both Somalia and the West, these influences are believed to be coming from five or six Middle Eastern and African countries with various interests in Somalia. These countries include Turkey, Qatar, the United Arab Emirates (UAE), Ethiopia, Kenya, Egypt, and Sudan. They have been increasingly involved in providing the political elites with campaign money to secure their specific objectives such as access to oil, port and airport development projects, and other business opportunities. Turkey has financial and infrastructure interests in Somalia, including significant investment in the Mogadishu airport. Qatar is a supporter of the Muslim Brotherhood and wishes to see its regional influence expand in East Africa. The United Arab Emirates opposes the Muslim Brotherhood, and may therefore be acting to counteract Qatari influence in East Africa.

Corruption and vote buying are widespread in all regions; prospective parliamentarians are buying votes.

The Gulf crisis has made Somalia a proxy ground for strategic rivalries across the wider region. Qatar and Turkey have supported the last two presidents. Under Farmaajo’s presidency, the UAE supported federal member states and their oppositions, enhancing the bargaining power of federal member state elites in the political marketplace. The UAE is reported to have made payments to parliamentarians and has directed considerable investment towards Puntland, Somaliland and Galmudug. The UAE has also maintained its corporate interests in port development and strategic infrastructure in Berbera, Bossaso and Hobyo.

On the other hand, maritime disputes between Kenya and Somalia have raised Kenya’s involvement profile. FGS has accused Kenya of supporting Jubaland president Ahmed Madobe against the federal government. Ethiopia remains one of the most influential actors in Somalia and since the election of Abiy Ahmed in 2018, the country has taken a much stronger position in supporting the federal government.

Domestic dynamics

Internal actors including clan elders, political entrepreneurs, conglomerates and technocrats are entangled in a web of political clientelism, kickbacks and redistribution, and debt relations. The federal formula has shaped elite political competition around access to external rents in Somalia.

In recent years, those seeking power have included prominent scholars coming from all corners of the world to seek elective office on the strength of the size of their pocket.

These actors use territorial control, access to strategic infrastructure and foreign exchange to protect their ill-gotten assets and to secure new opportunities. These businesses cope with containing cost and risk by stashing wealth abroad and by avoiding growth to circumvent the attention of governance providers and armed actors who may wish to extract or take a stake in an expanding business.

Consequences of state capture by elites and external actors

The consequences of corruption will be far-reaching. Donors will expect to call the shots after an election. This will constitute a cog in the wheel of progress of such a political entity, with outside forces dictating the direction politics and development will take. It may become difficult for the Somali government to act in the interests of the Somali people rather than those of foreign capital since the occupants of political office will owe allegiance to the money bag (the godfather) rather than the state.

It has become increasingly clear that the main incentive for joining politics in Somalia has become prebendal as the issues of democratic ideals and political ideology are relegated to the background. Ideally, ideology serves as a guide to an individual politician and to a political party’s development initiatives, policies, programmes and actions. This is because a political leadership that emerges without ideology will lack development focus and discipline and not be subject to the rule of law.

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Politics

Agricultural Productivity as Performance: A Tale of Two Mozambican Corridors

Agricultural corridors in Mozambique emerge when international funders and investors, national elites, local bureaucrats and smallholder farmers overstate the success of agricultural projects.

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Agricultural Productivity as Performance: A Tale of Two Mozambican Corridors
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In what is now remembered as the Great Leap Forward, 15 to 55 million people died of starvation in Mao Zedong’s China. Decreeing increased efforts to multiply grain yields, Chairman Mao unleashed panic in rural China, and local officials, fearful of the national government, competed to fulfil (or over-fulfil) quotas based on Mao’s exaggerated claims, collecting “surpluses” that in fact did not exist and leaving farmers to starve as a result.

The Great Leap Forward took place between 1958 and 1962. Such schemes ostensibly aimed at improving the human condition and which end up in epic failure, as observed by James C. Scott, have reoccurred throughout history.

Other examples may not have led to a widespread loss of life as happened in mid-twentieth century China, but they have certainly produced hybrid and rather unpredictable outcomes.  An agricultural campaign with similar objectives as the Great Leap Forward was adopted by the Mozambican government for the year 2018/19.

It rallied smallholder farmers to increase production and productivity under the motto, “Mozambique Increasing Production and Productivity Towards Zero Hunger”. In the end, Mozambican farmers were unable to significantly increase production.

They had faced a number of challenges: limited access to credit, fertilizer, farm inputs, and feeder roads, and thus to markets. Which is to say, without easy access to markets, any surplus the farmers had produced was wasted before it even got to market.

What is more important to consider is the fact that this failure to increase the productivity of rural farmers in Mozambique had occurred at the same time as the government had put in place measures to commercialise agriculture along two important transport corridors located in its central and northern regions, that is, the Beira and Nacala agricultural corridors. The Mozambican government had been mobilizing international capital over a decade or so, in order to build and renovate transport infrastructure with the aim of commercialising agriculture along the corridors.

Despite attracting some capital and infusion of technology, capital flows and technological transfers were generally unpredictable as they largely depended on the intervention of multiple actors and the dynamics of the global economy and global commodity prices. Adding to the lack of the much-needed infrastructure was the absence of Mozambican capital, as the banking system in Mozambique was unwilling to take the risks that come with financing agriculture. Investments in agriculture normally take 5-10 years to show visible returns, and Mozambican investors cannot afford to wait that long.

Additional challenges to the implementation of the Beira and Nacala agricultural corridors were related to national and local politics. On the one hand, the armed confrontation between government forces and the armed branch of the major political party in the opposition, Renamo, which affected parts of Sofala and Nampula provinces between 2013 and 2016, had led to a reduction of investments, disrupting the flows of existing businesses. Also, agricultural corridors, in particular the Nacala corridor, tend to generate anxiety over land, leading to continuous debates and campaigns over “land grabbing” and land titling. As a result, both the Beira and Nacala agricultural corridors faced significant challenges in their implementation.

Investments in agriculture normally take 5-10 years to show visible returns, and Mozambican investors cannot afford to wait that long.

The vision of their blueprints, that is, of interlinked agricultural activities – that would have stretched from the cities of Beira and Nacala on the Indian Ocean up to Mozambique’s land-locked neighbours, Zimbabwe, Zambia and Malawi – is yet to materialize. Despite the fact that such a grand vision is yet to materialize – if at all it will – this piece highlights its material consequences on the ground.

As a recently published special issue of the Journal of Eastern African Studies on growth corridors has shown, a careful examination of the planning, implementation and effects of agricultural corridors suggests that they often generate anxiety over land, and potential environmental impacts, and reconfigure power dynamics between international capital, local elites, bureaucrats and smallholder farmers – whether or not their official objectives are achieved.

By focusing on the practices of international investors, national elites, local bureaucrats and project beneficiaries, this research has suggested that, in order to attract capital, selected regions for development projects must dramatize their potential as places for investment, carefully selecting project locations and participants who will make compromises so as to conceal failure, virtually guaranteeing that the programme will be declared a success when the time comes for evaluation. These performances of success require the participation of a constellation of actors in order to be effective.

Along the Beira and Nacala agricultural corridors of Mozambique, there has been a widespread trend where international funders and investors, national elites, local bureaucrats and smallholder farmers collude in performing agricultural success, not only to attract the much-needed international capital, but in ways that bring the largely non-existent corridors to life. Agricultural corridors in Mozambique, in this sense, emerge on those occasions when international funders and investors, national elites, local bureaucrats and smallholder farmers overstate the success of agricultural projects – much like Chinese local officials did in the early 1960s. Below are two examples worth considering.

The tomato processing plant that never was

The administrative post of Tica in Nhamatanda District – along the Beira agricultural corridor – is famous for its abundant production of tomatoes. They are often left to rot when farmers are not able to sell all their produce.

In the local media, talk of building a tomato processing plant in Tica can be traced back to 2009, when a local entrepreneur reportedly received about US$33,000 from the Nhamatanda District Development Fund to build a tomato processing plant in order to capitalize on the district’s agricultural potential. In some of the media accounts, the processing plant was presented as if it already existed, running and fulfilling its promise to absorb the horticultural produce of farmers along the Beira agricultural corridor.

In 2013, a daily newspaper Notícias, published a news piece with the title, Processing plant created in Nhamatanda. The content of the news was based on an interview with the then district administrator of Nhamatanda, who said that a building plot had been located for the construction of the processing plant, and that a public tender for constructors had been announced and bids were awaited. He stated that the building would be completed by December 2013, and that equipment would be installed by February 2014.

There has been a widespread trend where international funders and investors, national elites, local bureaucrats and smallholder farmers collude in performing agricultural success.

In April 2015, another headline by the Voice of America read, Tomato processing plant changes the lives of producers in Tica. This story was based on two women who had been making a living for over 12 years selling tomatoes at a small agricultural market. This time the district administrator was announcing that the building was going to be completed by May 2015. In February 2018, another headline announced, This year Nhamatanda is going to process tomato, in an article where a district administrator was boasting of the 200,000-tonnes capacity of the future processing plant, advising local farmers to get ready to “produce a lot” since there was going to be a company to buy their produce.

When I visited the factory in March 2018, the building was not equipped. In a follow-up visit three months later, the main building of the processing plant was closed; a small agricultural inputs shop was operating from the security booth. The main building had caught fire at some point, and was closed pending repairs. The situation on the ground was in stark contrast to what district officials had been telling visiting researchers and journalists.

Ideas such as the introduction of financial services or the provision of technical assistance and tillage services are attractive, not only to farmers, but also to international donors and investors, but at the time the success of the tomato processing plant in Tica was being widely touted in the media, most of these plans were yet to materialize. The fire did indeed put an abrupt end to the brief lifespan of the plant, but the expectation of agricultural commercialisation that the plant had generated in the region long before it began operating exemplified the extent to which local officials were willing to create a narrative of success around a project in anticipation of, or as a means of attracting the much needed but seriously lacking investment capital.

A very important agribusiness fair 

On 7 and 8 July 2018, an agribusiness fair took place at the municipal soccer field of Ribáuè in Nampula province along the Nacala agricultural corridor. The fair was entitled Nakosso Agribusiness Fair: Facilitating Access to Markets, and was the first of a series of five fairs to be organized in northern Mozambique by a private company working in partnership with the Swiss Agency for Development and Cooperation. The fair was an important event in the calendar. The provincial governor opened it in a ceremony that was also attended by the Ministers of Agriculture and Rural Development, and by the Minister of Industry and Commerce.

The fair had stands showing various products by local farmers’ associations, whose work is often done with the support of district extension officers, and through a number of NGO-supported projects. As the visiting dignitaries went from one exhibition stand to another, the interaction with exhibitors was punctuated by questions, compliments and suggestions for improvement. The opening ceremony ended with the provincial governor’s speech, where he congratulated the exhibitors and encouraged them to continue the good work.

The events that took place during the fair, including the governor’s speech, were disseminated across the district through local radio station news programmes by the end of the day and the following morning they featured in the provincial news broadcast – a local feat.

The processing plant was presented as if it already existed, running and fulfilling its promise to absorb the horticultural produce of farmers along the Beira agricultural corridor.

In many ways, the fair represented the desired agricultural life in the district, showcasing products and opportunities for smallholder, medium and large-scale farmers in the production and commercialization processes – financial institutions, input providers and dealers, extension officers, successful smallholder farmers and large commercial farms were all brought together at the fair in a performance of agricultural success.

While district statistics point to the growth in local production and productivity in the past three years, the fair is especially effective as a field to demonstrate agricultural productivity all throughout the corridor, giving materiality to the corridor as a result, and enlisting a network of actors in the project of corridor making. In other words, the example of the fair illustrates how such events can provide occasions for the demonstration of success, and the creation of an ideal vision for the agricultural corridor. In Mozambique, the significance of agricultural fairs is perhaps best exemplified by the fact that they form a distinctive feature in the agenda of visiting high-level dignitaries, from the president of the republic, to provincial governors and ministers.

Despite the fact that on some occasions visiting dignitaries have questioned the blatant exhibition of produce brought in from other areas – in ways similar to the deception adopted by local officials in 1960s China – the fair is presented as a sample of agricultural developments already taking place in other areas covered by the corridor, especially given the efforts local officials put into achieving some kind of geographical representation of exhibitors. Finally, the fair also provides an opportunity for a pedagogy, through the celebration of cases of success that should be seen as models to be followed by other actors, in particular smallholder farmers.

In Mozambique, the significance of agricultural fairs is perhaps best exemplified by the fact that they form a distinctive feature in the agenda of visiting high-level dignitaries.

The idea of the corridor, whether the corridor existed or not, was in Mozambique, producing material effects on the ground.

The lesson

Without actual investments and infrastructure, blueprints, visions and policies for agricultural commercialisation in Mozambique come to be, or are given visibility, only when specific agricultural projects within the geographical location of the corridor are presented as successful.

At these events, complex entanglements emerge, exemplifying the everyday work of international funders and investors, national elites, local bureaucrats, and smallholder farmers, as they all perform project success on different occasions. Meanwhile, agricultural commercialisation, within the identified corridor region, remains low.

The lesson from these examples is that whether or not they achieve their official objectives – often to increase productivity and lift people out of poverty – development plans, visions and blueprints have material consequences.

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