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Moving On or Business as Usual? Contemplating a Post-Museveni Uganda

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Is the West’s renewed interest in promoting human rights in Uganda a genuine attempt at bringing about democracy and eliminating corruption, or is it based on the commercial interests of a superpower intent on reducing China’s influence in Africa?

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The Western media is taking notice of growing agitation for regime change in Uganda at a level comparable to the 1980s when Yoweri Museveni was referred to as a “a young handsome guerilla” on ITV News and featured in a British documentary filmed in the Luwero Triangle. Even as the then President Milton Obote was denying the existence of a rebel threat in Uganda, British journalist William Pike was interviewing Museveni in the bush. Pike later became a mobiliser for international support for the National Resistance Army (NRA) between 1984 and 1986.

In the past two years, the international mainstream media have regularly covered the phenomenon that is the People Power movement. With the help of social media, the movement’s leader, Robert Kyagulanyi, better known as Bobi Wine, has been noted as a leader of the future by two influential Western publications and has won multiple leadership awards on the African continent. As result, the failings of the 33-year-old National Resistance Movement (NRM) government have been under the global spotlight.

In his latest interview with Al Jazeera, Kyagulanyi appealed to the international community and investors to deal with Uganda and not with President Museveni. As the 2021 presidential and parliamentary elections draw near, foreign debt is coming to the fore in Uganda’s political discourse. Where human rights abuse once dominated, managerial failures in government and poor budget outcomes are gaining increasing attention. A series of events in 2018 and 2019 highlighted the impact of debt distress and managerial incompetence on service delivery.

Corruption and incompetence are no longer simply a drag on development but are bringing public institutions to a standstill. Special audits of thirteen out of fourteen regional referral hospitals show persistent drug stock-outs, understaffing and crumbling infrastructure. (The ICU at Jinja Hospital was shut down due to lack of batteries.).

In his latest interview with Al Jazeera, Kyagulanyi appealed to the international community and investors to deal with Uganda and not with President Museveni. As the 2021 presidential and parliamentary elections draw near, foreign debt is coming to the fore in Uganda’s political discourse.

Yet the health sector was unable to spend Shs.171 billion ($46,367,125.02) allocated to wages and construction and had to return the funds to the Treasury. Shs150 billion ($40,520,625.00) of that was external funding. Reasons given point to institutional failures, and inability to organise recruitment and procurement in time (Budget Monitoring and Accountability Unit, 2019).

In the education sector, the Makerere University strike was a reaction to the government’s inability to cover operational costs, and to the university increasingly relying on fees paid by private students. Ten years ago it was estimated that Shs.600 billion ($162,191,100.00) a year was lost through government procurement fraud alone. Professor Nuwagaba, a Makerere University lecturer and author of the study, estimated that the amount lost was enough to cover all of Makerere University’s student fees for two years.

The latest statistics from the primary education sector show the rate of literacy and numeracy fell from 39 per cent to 33 per cent. With a primary school drop-out rate of 60 per cent, this means that most of those who do not complete primary school education are insufficiently literate or numerate to go on to existing skills training institutions. Loans for skills training and higher education worth $100 million expired, with just a little over 50 per cent utilised and the rest returned to source. An application for a new $45 million has been tabled in Parliament.

Global climate right for change

The global climate is right for political change. By Executive Order 13818 (2017) the Trump administration declared global corruption and human rights violations “a national emergency” with respect to serious human rights abuses and corruption globally, which constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. The Magnitsky Act has since been invoked against senior army personnel while the former Inspector General of Police has been publicly designated under Section 7031(c) of the FY 2019 Department of State, Foreign Operations, and Related Programs Appropriations Act for human rights abuses.

Elsewhere in Africa, five Congolese officials of the DRC’s electoral commission and one from the Constitutional Court had visa restrictions placed on them and were publicly designated for electoral fraud. Together with military officials, they have also been identified as having undermined democracy by violating Congolese citizens’ rights to peaceful assembly, and freedom of expression.

Other publicly designated officials include Kenya’s former Attorney General Amos Wako, Cameroon’s Inspector General of the Cameroonian Gendarmerie, Colonel Jean Claude Ango, Malawi’s former Minister of Home Affairs, and current Special Advisor on Parliamentary Affairs, Uladi Basikolo Mussa due to involvement in significant corruption (a charge that Wako has denied). Exiled former president of the Gambia, Yahya Jammeh is also designated in an undated notice.

Since October 2019, Tanzania’s opposition politician Tundu Lissu and the Justice for All South Sudanese movement have retained a Canadian firm in the area of human rights abuses. Amsterdam & Partners offered its services to the embattled Bobi Wine after the torture the state subjected him to in 2018.

During their press conference, Robert Amsterdam denounced Uganda’s history of political violence and the use of $500 million worth (his figure) of US weaponry in carrying out that violence, saying the West cannot ignore it any longer.

The question is how closely multinational commercial interests are aligned with the long-term interests of the political movements, parties and individuals they now support.

The language of the Executive Order implies that to be actionable, the violations must be a threat to American global interests. By implication, if those interests can be secured by means other than sanctioning human rights violators, then violators need not be sanctioned. Yet in order to end impunity African opposition politicians and activists are clamouring for sanctions on serving officials like foreign minister Sam Kutesa cited in the Patrick Ho bribery case.

In an interview with Aly Khan Satchu in October 2018, Amsterdam described his firm’s work as “litigation in global markets” around both political and commercial matters. He portrayed foreign investor and domestic governance issues as being intertwined.

The question is how closely multinational commercial interests are aligned with the long-term interests of the political movements, parties and individuals they now support.

Amsterdam described the Chinese Belt and Road Initiative (BRI) as predatory lending and neo-colonial, a choice of phrase that would appeal to post-colonial Africa and Asia. He said that the initiative had “prohibited the growth of representative democracy…and given some autocrats a new lease on life.” [Amsterdam video @9:48] Explaining that China uses its surpluses from exporting manufactured goods to “colonise” the rest of the world. Amsterdam warned that “the debt trap is very real”.

He mentioned Hambantota, the port that Sri Lanka lost to China as a result of a debt default in 2018. In the same year, the Auditor General revealed that Uganda too has contracted loan agreements with China that surrender sovereign immunity over territory in the event of default.

The phrase “predatory lending” had been used earlier by the sixteen U.S. congressmen who wrote to the Secretaries of State and the Treasury in August 2018, demanding action to disrupt what they described as China’s bid to dominate the global economy. What is of concern to the Congressmen is that 23 out of 68 BRI countries are said to be at risk of debt distress. Defaulting BRI countries are expected to seek IMF bail-outs, meaning a portion of America’s investment in the IMF (the largest shareholding) would be transferred to China.

The portrayal of Uganda’s governance deficits and Western foreign political and commercial interests as organically related issues is not convincing. The exit plan being signaled for President Museveni is less about human rights abuses about which the world has known for over 30 years and more in aid of preserving existing power and trade relations between Uganda and the United States.

In his latest interview (Al Jazeera, November 2019) Kyagulanyi appealed to the international community and international investors, in particular, to hold the Ugandan administration accountable for human rights abuses and corruption. He urged them not to focus only on business relations but to be united with Uganda by values such as “democracy, respect for human rights…zero tolerance of corruption”. Ugandan activists are aware of the debt-trap and welcome sanctions.

However, in his interview with Sachu, Amsterdam seemed to be suggesting that perpetrators be given a Get Out of Jail card. Apart from floating the idea of an easy exit for Museveni, he stated that sanctions would only “hand over” countries to China (because Chinese foreign policy does not enforce its anti-foreign bribery laws). He gave Myanmar as an example. Sanctioned for the Rohingya genocide, Myanmar allegedly fell profoundly under Chinese influence.

He is again at odds with African activists when he advises his clients to avoid the U.S. Foreign Corrupt Practices Act by denominating their foreign contracts in currencies other than dollars to avoid the New York-based SWIFT money transfer system. Corruption, some of the proceeds of which pass through the SWIFT system, costs the African continent billions of dollars a year. The US Department of Justice recovered $30 million from Vice President Teodorín Obiang in 2014. France recovered (and confiscated) $35 million from him in 2017.

Uganda’s corruption circles are at least as big as Equatorial Guinea’s. There are over 100 ministries and statutory agencies and many more presidential appointees. Museveni himself is rumoured to have stashed away $5 billion in illicit earnings. This figure is difficult to confirm but following the recent ‘#fishrot’ disclosures in which the Namibian Minister of Justice is filmed soliciting a bribe of $200,000 in return for allocating fishing rights to an Icelandic firm, Samherji, it is possible that during Museveni’s thirty years at the helm – when he oversaw the country’s privatisation programme – he amassed a lot of wealth.

An easy exit for Museveni in the interests of a “smooth transition” could jeopardise the hoped for recovery of stolen funds. Robert Mugabe estate includes $10 million in cash, not an insignificant amount in a country where child delivery in hospitals is done by candlelight and a unit of blood costs $120.00, the equivalent of a doctors’ monthly salary or just over two month’s pay for a teacher.

Service delivery default or debt default?

More divergences of interest can be expected post-Museveni. A key issue for Ugandans in the inevitable transition will be the status of Uganda’s foreign debt. By 2021 debt servicing will have risen to at least 65 per cent of revenue (Auditor General 2018).

In the event that the NRM regime is dislodged in the 2021 elections, expectations for more and better service delivery will be high as they were in post-apartheid South Africa. South Africa elected to pay the apartheid debt and as a result, twenty years later, 40 per cent of the population lives below the poverty line. Access to social housing, electricity, running water and other services in the quantities and to the standards promised during the anti-apartheid struggle is still limited for at least half the population.

An easy exit also implies the inheritance of unsustainable debt, whether or not contracted in return for bribes, and regardless of whether it was put to developmental use or stolen. Without a debt audit carried out by an independent body, the repudiation of illegal, illegitimate and odious debt, and the recovery of misappropriated funds, the new government will not be able to meet service delivery expectations without taking on yet more debt. Service delivery will be the casualty. Zimbabwe cleared its debt to the IMF circa 2016. However latest statistics show undernourishment in Zimbabwe is 51.3%, up from 50.9% in 2016 when the IMF debt was cleared.

Post-Mugabe Zimbabwe discovered that it was unable to get new IMF financing without clearing the $5 billion owed to the African Development Bank and World Bank, and without securing financing commitments from development partners to whom money is owed.

Uganda’s corruption circles are at least as big as Equatorial Guinea’s. There are over 100 cabinet ministers and many more presidential appointees, in addition to Museveni, who is rumoured to have stashed away $5 billion in illicit earnings.

The legal status of the Museveni debt, and therefore the obligation to repay it, has been challenged by Dr Kizza Besigye on the grounds that it is odious – contracted at a time when the government was waging war against the people of Uganda. There is ample legal precedent for repudiation of odious debt.

To the extent that payment of the Museveni debt would force the State to continue to default on its obligation to meet the basic needs of its citizens, it is illegitimate. As in Zimbabwe, undernourishment in Uganda has been rising for over a decade. Infant and maternal mortality remain high.

Legally, if the Museveni debt can be shown to be odious or that it was contracted with the lenders’ knowledge or expectation that the government lacked the capacity to manage or repay it and was in any case inclined to steal it (as with the Mozambique tuna bonds), a case can be made for repudiation.

There are several examples of debt being successfully repudiated. In 2007 Norway established the precedent for repudiating debt which is neither illegitimate nor odious on the grounds that “repayment may be subject to broader considerations of the equities of the debtor-creditor relationship” (UNCTAD).

The legal status of the Museveni debt, and therefore the obligation to repay it, has been challenged by Dr Kizza Besigye on the grounds that it is odious – contracted at a time when the government was waging war against the people of Uganda.

The Tsarist debt owed by Russia was significantly reduced after payment demands were repudiated. The German and Prussian debt used to colonise Poland was repudiated in 1919. Commercial loans made by the Royal Bank of Canada to fallen dictator Tinoco were repudiated by Costa Rica. Germany repudiated Austrian debt in 1938, and the Franco–Italian Conciliation Commission ruled that Italy was exempt from debt incurred during war waged by a previous regime (1947). (Source: The Concept of Odious Debt in International Law, UNCTAD.)

Debt mismanagement continues in Uganda. The long-awaited health insurance scheme – the National Minimum Healthcare Package (NMHCP) – was tabled in Parliament in August 2019. The maternal health component of it will be financed under the World Bank’s Health Systems Strengthening Project through a loan of $130 million even though $45 million was wasted when the first attempt to design the NMHCP scheme in 2003 came to nothing. The World Bank’s evaluation stated the reasons stemmed from failures within the World Bank itself, including unrealistic design timetables, lack of a monitoring and evaluation (M&E) framework, and little appreciation of the political economy of the reform programme.

There are tens of projects such as these dating back to the initial Economic Recovery Programme of 1987 for which loans were contracted, commissions were paid, disbursements often not completed, some money stolen and outputs only partially delivered, if at all.

The recovery of public funds lost in this way provides ample scope for alliances between opposition groupings across Africa. It remains to be seen whether Ugandans will be able to leverage the West’s new-found willingness to put the well-being of her citizens on the table and negotiate agreements that will prioritise service delivery over investor interests after Museveni’s departure. The pressure on them to do the opposite will be massive.

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

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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