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Dam Scams: Lessons from Uganda, Tanzania and Ghana

11 min read. MARY SERUMAGA explains why it is important to maintain sovereignty in the management of natural resources and to carry out robust and representative feasibility and environmental impact studies on large dam projects, which tend to be shrouded in secrecy and which are often the vehicles for high-level corruption.

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Dam Scams: Lessons from Uganda, Tanzania and Ghana
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Murchison Falls will always be under threat from developers, if the trajectory of Stiegler’s Gorge Dam in Selous Game Reserve in Tanzania is anything to go by. Since it was explored in 1902 by Stiegler, the pressure to build a dam on River Rufiji has been massive and unrelenting. Both Stiegler’s Gorge and Murchison Falls on the Nile are World Heritage Sites, a designation proving insufficient to preserve them. Work on Stiegler’s Dam began in 2019, more than a century after it was first mooted.

Downstream from Stiegler’s Rock are the Rufiji plains, a farming area prone to seasonal flooding. The floods carry and distribute nutrients and are essential to the fertility of the soil and the survival of the algae in the wetlands. Another economic enterprise carried out there is fishing. The 150,000 dwellers of the area depend on the seasonal flooding for their livelihood, something a dam would change.

Twenty-seven environmental impact assessments (EIAs) of the potential effect of inundating the Rufiji Basin in the Selous Game Reserve had been carried out by 1980. Many warned of salination of the basin with adverse effects on downstream agriculture, prawn fishing and the Rufiji Basin’s ecology.

Like the proposed Stiegler’s Gorge project of the 1970s, Uganda’s dams produce power that exceeds consumption capacity. There is an argument for creating capacity – while only 28 per cent of Ugandans are connected to the grid, the Ministry for Energy says demand grows by 10 per cent every year. But this does not explain why alternative sources of power are not considered. The cost of installing capacity to generate power has to be paid out of revenues that would otherwise be used for other services. For example, expenditure on healthcare was $12 per head in 2016, short of the $17 as per the Health Sector Plan and the $28 needed to secure the National Minimum Healthcare Package.

Yet on 8 December 2019 the Secretary to the Treasury explained to the International Monetary Fund (IMF) that following the commissioning of Isimba Dam in April 2019, which adds 183MW, the total installed capacity is now 1200MW while peak consumption is only 600MW. An extra 600MW will be added when Karuma Dam is commissioned in early 2020.

Uganda’s dams produce power that exceeds consumption capacity. There is an argument for creating capacity – while only 28 per cent of Ugandans are connected to the grid, the Ministry for Energy says demand grows by 10 per cent every year.

The Rufiji Basin Project, as reviewed by Kjell J. Havnevik in his book Tanzania: The Limits to Development from Above, provides an interesting insight into the politics of the decision-making process in building dams. The review shows that there were many opposing views. To manage the process, Tanzania appointed an implementing authority, the Rufiji Basin Development Authority (RUBADA), which was tasked with coordinating the consultants studying various aspects of the project, the donors funding the study and the parent ministry.

Tanzanian institutions, including the University of Dar es Salaam, were unable for various reasons to have a major input. Once seen by some donors (including a faction of NORAD) as an important source of expertise in identifying and assessing environmental impact issues, they became marginalised after failing to reach agreement among themselves about whose interests the EIAs should serve and how to prioritise them.

The World Bank let it be known that they were not likely to fund a project based on a single development goal i.e. power generation. Other aspects of the Rufiji Basin development then came under review: transformation from flood-fed farming to irrigation; fishing; and ecological needs. Coming as an afterthought, some lacked depth. Even though the net benefits of building the dam to control River Rufiji floods were found to be marginal by Norplan, the Hafslund Report (commissioned to integrate previous reports and incorporate environmental studies) gave the primary justification of the dam as enabling Tanzania to cover the costs of irrigation and flood control projects in the Rufiji Basin.

NORAD eventually came to the conclusion that Dar es Salaam University and their nemeses in other institutions would not be able to deliver and so most of the funds available for the assessment were spent on external consultants with local scholars carrying out minor assignments. Havnevik states that those opposed to the development tended not to be invited to participate. Although Dar es Salaam University professors were allowed to attend discussions between the Ministry of Water, RUBADA, NORAD and Hafslund to discuss the latter’s preliminary report, they were asked to leave when critical matters were on the agenda.

RUBADA itself was not entirely independent; NORAD insisted the assistant to the Secretary General be replaced as he was deemed not to have sufficient political backing and to have developed a negative attitude to the planning of the project.

The multi-purpose development goals for the Rufiji Basin had been ignored, Havnevik tells us, in 1972 when Norconsult prepared a single-purpose preliminary project for the hydropower station. That being so, the technical specifications of the physical dam took precedence over environmental, community and other concerns. The higher above sea level the point of flow regulation, and the lower the unit cost of power generated led Norconsult to recommend that the dam be located at Stiegler’s Gorge. At the time there was no market for the 620MW to be generated at Rufiji and so the project recommended that power-consuming industries be built.

The Murchison Falls project

In the case of Murchison Falls, there is no multi-disciplinary coordinating committee or any known committee representing all stakeholders. The Ugandan government abdicated its responsibility towards the environment, the communities downstream and upstream, as well as the greater population when it announced that the issue would be decided by a feasibility study by potential foreign investors.

The terms of the Norconsult/Bonang Murchison Falls feasibility study have not been made public. If, like Norconsult’s Rufiji Basin study, as described by Havnevik, it is a single-purpose study commissioned to test the technical and financial feasibility of the structure without considering multi-purpose development goals, such as agriculture and fishing, environmental, tourism and heritage matters, it will not have addressed the issues most important to the tens of thousands who have signed petitions since the controversy began.

Another risk is that data required for a feasibility study that includes a comprehensive EIA may simply not be available within the time frame, which is also unknown. Uganda does not lack the expertise to carry out an EIA – Makerere University teaches conservation studies and tourism. Their voice has not been heard in the current controversy. The National Environmental Protection Agency is similarly silent.

The Ugandan government abdicated its responsibility towards the environment, the communities downstream and upstream, as well as the greater population when it announced that the issue would be decided by a feasibility study by potential foreign investors.

The Uganda Wildlife Authority and various travel operator associations are fighting their corner, mainly by awareness raising. Murchison Falls is Uganda’s most visited of the country’s twelve national parks – 32 per cent of visitors see the Falls. Earnings from tourism are 23 per cent of exports (more than doubling between 2008 and 2015, from $540 million in 2008 to $1,366 million (Ushs.3,549.3 billion) in 2014/2015. The direct contribution of tourism to GDP in 2017 was Ushs.2,699.1 billion (2.9 per cent of GDP) while the total contribution, including wider effects from investment, the supply chain and induced income impacts, was Ushs.6,888.5 billion in 2017 (7.3 per cent of GDP), up from Ushs.6, 171.5 billion in 2016 (Budget Framework Paper 2017).

Conservation and environmental issues

The complexity involved in carrying out industrial developments without disturbing the ecosystem requires extraordinary expertise. Dr Eve Abe, a noted ethnologist working in the UK as a wildlife management consultant, had not been consulted or asked to join a coordinating committee by the time of writing. Dr Abe spent years residing in Queen Elizabeth National Park studying elephants where the elephant population had fallen from 4,000 to 150 (see My Elephants and My People by Eve Lawino Abe, 2008). Across the continent the elephant population stood at 415,000 in 2016, having fallen by 111,000 in the previous period. In the 1930s Africa’s elephant population was ten million.

In her ground-breaking doctoral thesis (Cambridge, 1994) Dr Abe identified a parallel between the destruction of the human family unit and its habitat in her native Acoli. The destruction of elephants and their habitats has happened all over Africa, but is particularly acute in northern Uganda.

It was Dr Abe who first posited a causal relationship between this type of destruction and globally increasing instances of human-elephant conflict (HEC). HEC has been a problem in Uganda. Previously it was thought HEC was driven solely by encroachment on feeding and foraging territory. However, in Queen Elizabeth National Park, the population had fallen yet food for the elephants was abundant. (Incidentally, Stiegler was killed in an HEC incident in 1907 during a hydropower feasibility study.)

Dr Abe observed that elephants live in family groups and maintain stable relationships for most of their seventy years. Elephants mourn and bury their dead. Poaching in 1980s Uganda (often mass killings using grenades) and other encroachments destroyed those units and displaced the animals, leading to displacement and dysfunction among individuals.

Dr Abe’s work informed later research into the effects of trauma on elephant culture and elephants, which now includes M.R.I. scans of elephant brains, which was first done in 2008. Those scans have in fact revealed physical changes in the brains of traumatised animals and new conservation interventions take into account animal trauma caused by humans.

There is an additional risk that increased human activity and road-building in preparation for oil exploration in Murchison Falls National Park and the planned hydroelectric dam on the Falls will make the animals vulnerable to poaching. A cache of smuggled ivory seized by the Revenue Authority in January represented an estimated 325 elephants.

A third risk is human-to-animal transmission of parasites, an area that has been studied by the multiple award-winning wildlife veterinarian (Uganda’s first), Dr Gladys Kalema Zikusoka. She is best known for a pioneering translocation of gorillas to save them from poaching. She is also a winner of the prestigious Whitley Prize. Her approach to healthy co-existence is to invest in promoting and maintaining healthy human populations. By marketing the Arabica coffee grown by the surrounding community, she and her organisation, Conservation Through Public Health, help boost the income of the community, enabling them to gain access to healthcare and other services.

Dr Abe observed that elephants live in family groups and maintain stable relationships for most of their seventy years. Elephants mourn and bury their dead. Poaching in 1980s Uganda…and other encroachments destroyed those units and displaced the animals, leading to displacement and dysfunction among individuals.

There is a real danger that independent experts on conservation and fields outside power generation may have been excluded from the Murchison Falls feasibility study. Because the consortium led by Bonang Energy, Norconsult and JSC Institute Hydro project has offered its services for free, the extent to which the Government of Uganda can influence the scope of the terms of reference is debatable. Even if the government were to commission the study, the lead firm lacks the expertise, its experience being in road-building and maintenance and housing construction. The experience of Ernest Moloi, the proprietor of Bonang Energy who also owns Moseme Road Construction (PTY), appears to be limited to minor road construction and maintenance and property development. According to Forbes Africa, it was to seek openings in these two areas that he first came to Uganda.

Uganda is institutionally vulnerable to corruption

The broader governance issues were made clear in 2011 when Norconsult was sanctioned for corruptly obtaining the Dar es Salaam Water and Sanitation (Dawasa) project in Tanzania. The Integrity Vice President of the World Bank, Leonard McCarthy, stated then: “What we are trying to do here is examine the key intersections between corruption risk, organized crime and money laundering on the one hand and the institutional vulnerability in developing countries on the other. This work will be a critical input to the governance and anti-corruption work that the World Bank is focusing on in the post-crisis world.”

Does the current Ugandan administration have the will and the capacity to insulate the decision-making process from corruption and organised crime? Nobody will deny that in 2019 the risk of corruption and money laundering is high in Uganda. An indicator of the level of institutional failure is the fact that investors (both local and foreign) only seem to be assured of success after gaining access to the head of state. In the past few weeks the State House Anti-Corruption Unit has announced a crackdown on brokers who charge fees to arrange meetings with the president. Moloi has had face time with the President Museveni.

Given their past involvement in corruption in weak control environments in Tanzania and NW Province South Africa, there is no basis to expect an impartial report from Messrs Norconsult and Bonang Energy. To invite them to undertake work that threatens the ecosystem of Murchison Falls is indicative of the impunity with which the NRM government now operates.

In a statement calling for the protection of the Falls, the Africa Institute for Energy Governance says: “The company could be a front for corrupt officials who have caused loss of taxpayers’ money, have caused untold suffering to Ugandans and have degraded the environment.” Bonang has pulled down its website and currently has no online presence but earlier sightings revealed that it has no track record in hydropower construction or engineering.

Because the consortium led by Bonang Energy, Norconsult and JSC Institute Hydro project has offered its services for free, the extent to which the Government of Uganda can influence the scope of the terms of reference is debatable.

Moseme Road Construction was cited by North West Provincial Government of South Africa for being improperly awarded a contract and was ordered off the site in 2011. A 2016 gazette notice shows Moseme Properties and one Ernest Moloi were defendants to a suit filed by their creditors, Standard Chartered Bank for non-payment of a loan.

Three employees of Norconsult were prosecuted by Økokrim, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime on charges of bribery in connection with the $6.7 million Dar es Salaam Water Supply and Sanitation Project (Dawasa). Irregular payments of $146,000 were found to have been made in connection with Dawasa.

Norconsult Tanzania Limited was convicted and pulled out of Tanzania after an audit revealed $332 million in irregular payments – they reversed that decision almost immediately. According to Corpwatch (25 March 2008), the subsidiary was established in Tanzania in 1998 but never registered with the companies registrar, Brela. Still, the World Bank and Norway awarded them six road projects worth over $100 billion. They were all terminated by Tanroads in 2008.

A parallel investigation by Tanzanian authorities found that Norconsult had not filed tax returns nor paid taxes between 2002 and 2007. It was believed these irregularities could only have been made possible by bribery using the equivalent of $68,257 (Swedish Krona 650,000) expenditure not supported by the required documentation (Corpwatch).

While the local MD was asked to step down, the firm stood by three Norwegian employees. They were eventually charged in Sweden along with Norconsult. However, the firm was acquitted and one employee had his conviction overturned by the Supreme Court. Two were convicted and one was jailed. The decision was partly based on technical grounds concerning the length of time it took to prosecute the case and the fact that the World Bank had already imposed sanctions (Implementing the OECD Anti-Bribery Convention Phase 4 Report).

The politics of dam financing

The Murchison Falls Project is likely to be further complicated by options for financing. Most likely the financing will be sourced externally. Borrowing from China could jeopardise Uganda’s ownership of the national park and surrounding areas.

There are other possibilities. In 2017 Ghana exchanged 5 per cent of the country’s bauxite deposits for $10 billion worth of railway, roads and bridge development. The Ayensu, Densu and Birim Rivers have their source in the Atewa Forest Reserve and provide drinking water for five million people. A hundred wildlife species face extinction.

In the past, the viability of hydroelectric dams has been guaranteed by building industries that consume most of the power. Ghana’s Akasombo Dam on the Volta River also required a large, regular primary consumer of the power it was to generate. It was decided an aluminium plant would be built alongside the dam. The Volta River Basin was rich in bauxite, the raw material, as are many African rivers. Aluminium processing is the most power-consuming industrial process (International Rivers).

Ghana had 80 per cent of the funds (earned from the cocoa boom) and needed to borrow the balance as well as to finance the power-consuming industry. Negotiations opened in the White House when President Nkrumah requested President Eisenhower to introduce him to the well-known aluminium entrepreneur Henry Kaiser.

The most important lesson to be drawn from the Akasombo experience is the geopolitical one. The relationship was threatened by Nkrumah’s apparent leaning towards the U.S.S.R. in the UN General Assembly. At one point he was warned by Kaiser that if he sought financial assistance from the Soviet Union for any other projects, the Akasombo deal would be off.

Similar circumstances had bedevilled Egypt’s Aswan Dam. After the relationship between Egypt and the United States soured, President Nasser financed the Aswan Dam with money from the U.S.S.R. Although Nkrumah was an irritant to the American administration and their withdrawal from Akasombo was discussed many times, they eventually funded the project fearing further Russian encroachment on their sphere of influence.

The most important lesson to be drawn from the Akasombo experience is the geopolitical one. The relationship was threatened by Nkrumah’s apparent leaning towards the U.S.S.R. in the UN General Assembly. At one point he was warned by Kaiser that if he sought financial assistance from the Soviet Union for any other projects, the Akasombo deal would be off.

The contract was awarded to Volta Aluminium Company (Valco), a joint venture between the Ghanaian government and Kaiser Aluminium & Chemical Corporation; the latter had a 90 per cent shareholding. Valco was guaranteed 70 per cent of the power generated. According to International Rivers, most of Africa’s aluminium smelters consume most of the hydroelectricity generated and pay the lowest tariffs. It will be interesting to see if similar guarantees of supply at fixed low tariffs are offered to investors in the Murchison Falls Project feasibility report.

Akasombo offers other lessons in the importance of maintaining sovereignty in the management of natural resources and carrying out strong representative feasibility studies. Valco was meant to mine aluminium close to the dam, smelt it in Ghana and export the finished product. It turned out that Valco exported raw bauxite for the first five years. In the 21st century, they resisted attempts to increase the tariffs set in the 1950s and were paying less than Ghanaian domestic consumers.

Valco eventually sold its interest without clearing over $140 million it owed in taxes, claiming tax exemption. Meanwhile, Akasombo has recently suffered from falling water levels, which has forced up the domestic unit cost of the power (which has to be supplemented by fuel-driven generators), an outcome predicted by a minority voice in the 1950s.

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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

Why Colonial-Era Edicts Will Not Defeat the Coronavirus in Kenya

8 min read. In tackling COVID-19, the Kenyan government appears to be oblivious to the needs of the majority of citizens. What do “social distancing” and “self-quarantine” mean in urban areas where slum dwellers share a single room with half a dozen family members, and where the majority of people work in the informal economy?

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Why Colonial-Era Edicts Will Not Defeat the Coronavirus in Kenya
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Abraham Maslow once said that to those who only have a hammer, the whole world looks like a nail. The reactions of world governments to the coronavirus pandemic is proof of this. Around the globe, it appears that a one-size-fits-all basket of prescriptions – from closing borders to locking down societies – seems to be all the rage. Catchphrases like “social distancing” and “self-quarantine” abound in international media reports and political speeches and proliferate all over social media.

Not to be left out, African governments have followed suit. Last week, the Kenyan president, Uhuru Kenyatta, ordered all schools closed, forbade entry into the country to all but a few foreigners with residence permits and urged citizens to work from home, to wash and sanitise their hands, and to avoid crowding in public spaces, including transport. A few weeks ago, these measures would have seemed extreme. But not today, as the global advance of the virus sparks a stampede for the global system’s exits.

However, while the government’s rhetoric may make sense when viewed from a public health perspective, a closer look reveals the dangers inherent in blindly following the crowd. Take, for example, the situation in the Kenyan capital, Nairobi. Here, two-thirds of the city’s 4.4 million people are crammed into informal settlements, which cover just 6 percent of its land area. Within these crowded slums, entire families are forced to share single-room dwellings. With no running water, conditions are unsanitary and disease is rampant. Many slum residents work in the informal economy, running small businesses or providing casual labour to nearby rich and middle-class housing estates or to factories in the industrial areas. Few have job security or get sick leave.

The city’s public transport system is similarly crowded, unsanitary and chaotic. It is dominated by matatus – privately owned minibuses in which passengers are routinely packed shoulder to shoulder for journeys that, thanks to the city’s horrendous traffic, rarely last less than an hour. Another popular means of getting around are boda bodas or motorcycle taxis, where passengers share filthy helmets (when available) and can sometimes squeeze three to a bike.

In these circumstances, what do concepts such as “social distancing” mean? How practical is it to ask people to work from home? How exactly is someone who shares a single room with half a dozen other family members be expected to “self-quarantine” if they were to fall ill with symptoms associated with COVID-19? How are they to avoid infecting their neighbours or make it to the city hospitals – themselves hopelessly overcrowded and unsanitary at the best of times – without spreading the infection?

These practical considerations do not appear to have troubled President Kenyatta and his mandarins as they regurgitate the advice from the World Health Organization (WHO), which seems to take Western lifestyles as a template for life in the rest of the world. Perhaps this is because the government is fond of issuing “directives” when dealing with social issues, rather than consulting with its citizens. For example, researchers have noted that “approaches to reducing exposure to air pollution in informal settlements…have very little input from the people they target. As a result, they may have a low rate of acceptance”.

The people making decisions exhibit little awareness of or acquaintance with the realities of everyday life for the majority of urban Kenyans. Safely ensconced in their gated estates, accustomed to having the roads cleared for them and to being treated in well-equipped private hospitals (when they have opted not to fly abroad for medical treatment), these folks have no qualms about simply repeating the dictates from global elites. From where they sit, it can seem quite reasonable to propose that those in self-imposed quarantine have their own separate room and bathroom at a time when access to a flush toilet and piped water is a luxury for many of their fellow countrymen.

Public health in the colonial economy

The lack of appreciation for the circumstances of their fellow citizens stems from the fact that for over a century, Kenyan elites have been happy to exploit their poor neighbours for their cheap labour while doing little to invest in public services. The model was made during the colonial period. European authorities were not overly concerned with the health of the African population. In a 1987 paper titled “The 1920s Anti-Yaws Campaigns And Colonial Medical Policy In Kenya”, Marc Dawson notes that prior to 1920, “colonial medical officials were not responsible for the health of the bulk of the African population, only for caring for the health of government employees and European settlers and ensuring that epidemic disease did not disrupt the colonial economy”.

These practical considerations do not appear to have troubled President Kenyatta and his mandarins as they regurgitate the advice from the World Health Organization (WHO)…Perhaps this is because the government is fond of issuing “directives” when dealing with social issues, rather than consulting with its citizens.

Thus the focus of the colonial government was on ensuring that Africans did not carry diseases to work and did not threaten the health of Europeans, not that they were themselves healthy. For example, the outbreak of plague in Kisumu in the first decade of the 20th century elicited a quick response because of the potential for economic disruption, as well as the threat to the small European population. One can see a similar dynamic in the treatment of the poor in Nairobi’s slums today. Like the Africans in colonial Nairobi, their presence in the city is only tolerated because their labour is required. While typically their lives are blighted by disease and squalour, the government is not interested in them unless their illness poses a threat to the economy.

The response of the colonial authorities to the Third Plague Pandemic, which broke out of China’s Yunnan Province in the mid-19th century and spread globally via European steamships and merchant routes, is also illustrative. The pandemic reached Nairobi in 1902, where an outbreak led to the burning down of the Indian Bazaar, the city’s first business district. Nairobi would suffer frequent plague outbreaks over the next two decades. The persistence of the plague, according to Owaahh, “stimulated the first official town planning efforts for Nairobi, although most of the efforts were to segregate Indians whose sprawling townships were thought to be breeding grounds for carrier rats”.

In 1914, a report prepared by Prof. W. J. Simpson proposed not just the segregation of residential and commercial centres, but also, according to the book Indians in Kenya by Sana Aiyar, a “neutral belt of unoccupied land of at least 300 yards around European areas to ensure the healthfulness of the locality”. Following the outbreak of plague in Kisumu in December 1904, according to Health, State, and Society in Kenya by George Ndege, the Under Secretary of State for the Colonies declared that “great care should be exercised in the selection of sites for settlements, in keeping the native and European locations well apart”. Over the years, this segregation of the races has morphed into the class segregation that is a feature of Kenyan cities today.

To tackle the plague, the colonial authorities imposed harsh measures, including forced vaccinations, house burnings and quarantines. The Africans who bore the brunt of these measures were rarely consulted and quickly became loath to cooperate or to report plague cases in their homesteads, knowing it meant the destruction of their homes. This tendency to talk down to the people and to issue directives rather than consult with the citizens has been inherited by the current Kenya government.

Another colonial trait is the preference for quick, short-term fixes rather than long-term investments. When the first mass health survey of the African population was carried out in 1915 in the form of medical examinations of male conscripts for the Carrier Corps, the results sufficiently alarmed the authorities about the poor health situation in the African reserves from where they drew their labour. The main culprits were yaws and heart disease. The long term and more expensive solution would have been to improve the quality of life, especially as yaws has been described as a disease of poverty.

To tackle the plague, the colonial authorities imposed harsh measures, including forced vaccinations, house burnings and quarantines. The Africans who bore the brunt of these measures were rarely consulted and quickly became loath to cooperate or to report plague cases in their homesteads, knowing it meant the destruction of their homes.

However, while the 1920s anti-yaws campaign represented a first attempt by colonial medics to expand provision of healthcare beyond government employees to rural Africans, the government and physicians still chose to do it on the cheap. As Dawson notes, “rather than raising the living standards of the rural population (prevention), the colonial authorities tried to cure the population of yaws with injections of a drug of uncertain property”.

Similarly, to date the government has done little to raise living and sanitary standards in the slums. The big promises of slum upgrading have turned out to be little more than either looting schemes or empty talk. Many of the informal settlements that sprung up to house unwanted Africans when the colonials ran Nairobi persist to this very day. And while there will undoubtedly be a concerted effort to combat the coronavirus outbreak, it is unlikely that there will be any determined effort to improve livelihoods and eliminate slums.

The Spanish flu in Kenya

The next big foreign-born disease to hit Kenya in the colonial period was the Spanish flu, the deadliest pandemic in history. Originating in the United States and transported to the killing fields of World War I by American soldiers, the pandemic circled the globe, infecting between 3 and 5 per cent of the world’s population, including people in remote Pacific islands and the Arctic. It cut life expectancy around the world by about 12 years.

An interesting similarity with the current coronavirus epidemic is that the disease at the beginning was “mild, the mortality not unusually high”. Preoccupied with the events of the war, the first wave of the flu went largely unnoticed and it wasn’t until it started killing people in large numbers that the world paid attention. But by then it was too late. By the time it was brought under control, it had killed about 50 million people, more than had died in the war. And remember, this as all before the age of international commercial air travel.

The flu hit East Africa in two waves, the first beginning September 1918 and another in late 1919, killing at least 155,000 people, or an estimated 5.5 percent of the African population in Kenya. Again the reaction of the colonial authorities was largely driven by concerns over the loss of African labour. For example, as related by to Kirsten Moore in her 2013 paper, “Placing Pandemics: History of the 1918-19 Influenza Epidemics in Kenya and Uganda”, “the District Commissioner of Voi cited the influenza epidemic in arguments for a permanent native hospital, saying, ‘it is absolutely essential that adequate hospital provision be made to deal with sick labourers from […] Estates and Railways.’ A native hospital was up and running in Voi by 1921”. She points out that the pandemic was killing off African labour, “just as an influx of British settlers came to establish large, labour-intensive estates. Facing significant war debts and the prospect of bankruptcy, the administration depended on these new plantation enterprises to revitalise the economy”.

Again, it is clear that concern for the health of the natives was not the driving force behind the colonial provision of medical care to Africans. A century later, facing another epidemic, the Kenyan elite is showing itself to be similarly oblivious to the needs of the African majority and is really only concerned about its own economic and political interests.

Sink or swim together

Ironically, just as the colonials imported plague and influenza pandemics into Kenya, it is largely the wealthy, those with the means to travel abroad, who have brought the COVID-19 pandemic back to Kenya. Yet, as with the previous diseases, it is the poor, who did nothing to bring on the crisis, who will get to bear the brunt of both the disease and the government efforts to contain it.

However, there is a critical difference. As the pandemic exposes the systemic weaknesses in Kenya’s healthcare system, the shutdown of the global system means there is no escape for the wealthy who have profited from the plunder and neglect of public services. They will share the fate of the rest of the society. Thus, allowing the pandemic, whether through negligence or incompetence, to become established in the slums, will inevitably be fatal for the elite themselves.

A century later, facing another epidemic, the Kenyan elite is showing itself to be similarly oblivious to the needs of the African majority and is really only concerned about its own economic and political interests.

Since the virus threatens all, both rich and poor, it will require a whole society effort to confront it. Top-down directives will not suffice. In any case, after decades of hollowing out the state from within, the ability of the governing elites to enforce them is severely compromised. Thus it will be critical to work with communities to translate WHO advice into practical protocols that cater to the daily realities of the majority of the population rather than to the global imaginings of a privileged few.

In the short term, it is likely that the political elite will get its act together and do what is necessary to contain the pandemic. However, it is hoped that the lessons of history will not be quickly forgotten once the pandemic has passed. Maintaining a system predicated on inequality and the neglect of public services endangers everyone, not just those at the bottom of the pyramid. Kenyans, regardless of their station in life, will all sink or swim together. They can no longer afford to keep a colonial system where so few get so much at the expense of so many.

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Politics

Religion in the Age of Coronavirus

13 min read. If we have learned anything from COVID-19, it is that the miracle and faith-healing industry in Kenya is nothing but a sham and that prayers alone will not solve the country’s imminent health crisis.

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Religion in the Age of Coronavirus
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Our world, as we know it, has been turned upside down by the coronavirus (COVID-19). The virus has not just exposed our fragility as human beings, but has also raised our awareness of our interconnectedness as people sharing one planet with viruses and microbes.

First identified in China in November 2019, COVID-19 has since spread to more than 100 countries worldwide, including Italy, the USA, UK, Germany and 24 African countries so far.

The magnitude of this pandemic, as well as its fast geographical spread, has not only paralysed both rich and poor nations, but also caused global panic, creating gripping fear for our lives. On March 11, 2019, the World Health Organization (WHO) declared the COVID-19 a pandemic. At the time of writing this article, the pandemic had killed 8,000 people and infected 200,000.

The virus, which experts says is most certainly passed from animals, in this case the bat, has already infected seven people in Kenya, if the government reports are anything to go by. Other African countries that have reported its presence include South Africa, Nigeria, Ghana, Rwanda, Tanzania and Ethiopia. For many Kenyans, it was not a matter of if, but when the virus would strike. The country is a major travel hub in East and Central Africa, with nearly every major global airlines stopping at Jomo Kenyatta International Airport (JKIA) in Nairobi.

After seemingly dilly-dallying for some time, President Uhuru Kenyatta, finally, on March 15, ordered schools and institutions of higher learning to close. He also banned political rallies and religious gatherings.

However, despite the ban, on Sunday, March 15, Kenyan churches were packed to capacity with throngs of people, apparently oblivious of the coronavirus pandemic and the risk of spreading the disease. They (the churches) dulled the congregants’ fears and cried to God for protection. My neighbours even held a prayer fellowship in my neighbourhood to pray against the demonic virus as many have christened it, except that COVID-19 is not a demon.

In a country whose easy dalliance with the supernatural is legendary, this is not surprising. In moments of political, social and ecological crises, Kenyans turn to God, supposedly for guidance. Such challenges are seen through the prism of religion. In a country with a highly educated and exposed population, pandemics like COVID-19 and HIV/AIDs are still said to be caused by the devil and other dark forces. Even when science is very clear on the genesis of the viruses, the majority of Kenyans and other people elsewhere will still interpret them as the invention of the devil. Not surprising in a country where nearly 85 per cent of the population is Christian.

Kenya, in particular, is a highly religious country with diverse religious groups with high levels of religious participation across various religious traditions. Belonging and participating in various religious activities is essentially important to many people across the country. A 2015 study showed that for 95 per cent of Kenyans, faith informs how they conduct their daily lives.

Given the important role of religion in the lives of millions of people, it is important that we change how we practise our faiths in the face of this global pandemic that has already heavily impacted all of us. Already, the virus has killed 19 priests in Italy, which sadly means that no one is immune from the virus, not even our religious leaders.

Similarly, no amount of prayers and faith healing could cure this virus. African Christians have been praying for a cure for AIDS/HIV and Ebola for decades not but not a single person has certainly been cured of these dangerous viruses. The same logic should apply to COVID-19.

This is not to say that prayers and faith don’t work. Neither does it mean they have no significance in the lives of people. Faith is the glue that holds people together in moments of crisis like this. It is also a purveyor of hope in moments of immense anxieties and fears. Yet, in times of global pandemics like the coronavirus, science and medicine would seem the more reliable solution. After all, it is science that has continually sought cures for these epidemics. The antiretroviral drugs and the Ebola vaccine (not prayers and demon-bashing) have given a new lease of life to millions of people around the world. It is also science that will come up with a cure for COVID-19, not miracles and faith healing.

Given the important role of religion in the lives of millions of people, it is important that we change how we practise our faiths in the face of this global pandemic…

Yet, science and religion are not enemies, neither are they in competition with each other. There is nothing wrong with people praying and casting out the demons of disease if that is how they understand it, even as they wash hands, self-isolate, self-quarantine and maintain social distance, as advised by science and medical practitioners. Faith and science should not be in contradiction with each other. Each plays important and significant roles in our lives. Faith and prayers hold us together in hope and community while science tackles the virus in scientific and practical ways.

Yet, the easy resort to religion and prayers as the only solution during times of crisis like this is not only problematic but is also risky and reckless. It takes away our focus from holding our negligent governments accountable. The Kenyan healthcare system has been struggling for decades, but the ruling elite does not care because it can afford to seek the best medical care abroad. Our blind religious faith does not allow us to question the massive inequality in our healthcare system, in particular, and in Kenyan society in general. We also do not ask why the poor lack sanitation and why they live in dehumanising conditions.

The national day of prayer and other diversionary tactics

This is not a far-fetched assertion: Every time we are faced with a crisis as a country, the government, in collusion with religious leaders, call for prayers. Saturday, March 21, 2019 was slated as a national day of prayer by President Uhuru Kenyatta, who asked Kenyans to pray for forgiveness. Kenyans who have suffered years of neglect and broken healthcare systems must ask what we are repenting for. Who between Kenyans and the government should be repenting for the sins of the nation, for the inaction, corruption and bad governance that have seriously put our health at risk for decades?

It seems to me that the government wants to divert attention from its inept and tardy response to the pandemic, while religious leaders are seeking for relevance and respectability at a time when the virus has rendered them impotent. The national prayer day called by the government is meant to dull our anxieties. It is a diversionary tactic to manage the public’s fears and soothe our anxieties as we are socialised not to squarely put the blame where it belongs: on the government.

Kenyans who have suffered years of neglect and broken healthcare systems must ask what we are repenting for. Who between Kenyans and the government should be repenting for the sins of the nation, for the inaction, corruption and bad governance that have seriously put our health at risk for decades?

Across the world, religious leaders are making hard and painful decisions to close their worship sanctuaries. Because religious services, by their very nature, bring together large groups of people, houses of worship in Africa are potential hubs for virus transmission. In developed democracies, religious leaders are scrambling to understand the COVID-19, even as they as find ways of protecting their congregations, while African clergy are either denying the virus or praying against the demons that cause the virus.

In Saudi Arabia, the annual Muslim pilgrimage to Mecca’s holy sites have been substantially reduced. The Vatican is streaming mass on television. Rabbis in many parts of the world are discouraging their followers from hugging and shaking hands. These are hard and painful decisions, but practical and important measures to keep followers alive.

Secondly, there is evidence in South Korea that the virus spread quickly because of the social interactions of the worshippers. South Korea was the first country to report significant coronavirus infections outside of China. In New Rochelle in New York, a synagogue, as reported by Slate.com, was the centre of an outbreak of coronavirus that eventually led to the summoning of the National Guard.

In Houston in the US, the world-renowned Pastor Joel Osteen of Lakewood Church, which attracts upwards of 50,000 people, has closed his church. Similarly, the famous megachurch pastor T.D Jakes of Potters House suspended church services for his thousands of followers.

Church business as usual in Kenya

While there were only seven confirmed cases of coronavirus in Kenya, by the time of writing this article, there was general panic in the country, which suggest that everyone should avoid crowds. Yet, religious leaders across the country have yet to cancel church services. Only the All Saints Cathedral, Christ is the Answer Ministries (CITAM), Presbyterian Church of East Africa (PCEA), Nairobi Chapel, Mavuno church and Jamia Mosque had suspended mass worship by the third week of March. Instead, many have provided water and soap for members to wash their hands at the entrances of the church compounds. While washing hands has been suggested as one of the ways to fight the virus, it does not cancel the benefits of social distancing. Are religious leaders feigning ignorance about the latter, or are they simply turning a blind eye to this important measure? I posit a number of theories to explain this lackadaisical behaviour.

First, church spaces in Kenya are not about people; they are about the church founders who use the tithes and offerings to enrich themselves and live a life of luxury. They are never about people-centred theologies or a gospel of social justice, but about personalities. This is the logic that underlies the majority of spiritual spaces, especially those that are prosperity gospel allied, where the church founder’s main concern is not to build a community, but to make money.

Second, Kenyan churches are generally small and crowded in mostly poorly ventilated buildings and semi-structures. Except for mosques, and the more established mainstream churches, the majority are in bad condition. Many Pentecostal/evangelical church services, for example, are held in tents or shelters made of iron sheets and with poor sanitation. These are hotbeds for the spread of the disease.

Why are the majority of Kenya’s popular churches in such dilapidated conditions? Why don’t tithers demand for safe and healthy spaces of worship? Don’t the poor tither have dignity? These are questions that the Kenyan religious population need to interrogate!

Church spaces in Kenya are not about people; they are about the church founders who use the tithes and offerings to enrich themselves and live a life of luxury. They are never about people-centred theologies or a gospel of social justice, but about personalities.

The majority of Pentecostal clergy rarely invested in building decent churches because they don’t think about the comfort and welfare of their members, but only about offering and tithes. Prophet Owuor of the Ministry of Repentance and Holiness, for example, hires school venues and tents, where his followers meet on Sundays. The reason he has given his followers for not building a permanent sanctuary is that Jesus Christ is coming back to rapture the church, hence there is no need for a physical church. However, he built himself a palatial home, complete with a bunker, where he can self-quarantine himself, while the millions of his followers who live a life of squalour can easily die from the coronavirus infection. Many other big and smaller churches have not invested in building decent spaces of worship yet their founders live in opulence and luxury. It is about them, not the people.

Yet the behaviour of the clergy in Kenya is hardly surprising. Rather, it mirrors class divisions in a country where religious elites, just like their political counterparts, have created heaven on earth for themselves, while ordinary Kenyans live in hell. The Kenyan clergy, just like our politicians, does not care for its members. It uses them to ascend to power (political and religious) and respectability. This is why the status of our churches mirrors the status of our public hospitals and schools and informal settlements. Many of our public facilities, just like many houses of worship, are in terrible condition, with no running water and poor sanitation. Yet pastors rarely raise the issue of the sorry state of our broken healthcare systems, even though some churches have built a semblance of health clinics to provide some form of medicare.

More importantly, religious leaders do not want to call off church services because they will be rendered irrelevant. Many a clergy use the pulpit, not just to mint money, but also to prop up their egos and advance their social status. The clergy are in the business of making money. Many churches in Kenya, particularly those of Pentecostal and charismatic church inclinations, are run like business enterprises, so closing a church has serious financial implications. In Africa, the church is an enterprise, just like the stock market: and their owners are afraid that their business empires will crash like stock markets.

Third, there is a fear that COVID-19 will expose the clergy’s dark underbelly and call to question Africa’s faith-healing and miracle industry. For so long, religious leaders have trafficked in miracles and faith-healing. COVID-19 has rendered them incapable of healing the sick and incapable of praying away the coronavirus. In fact, the virus has rendered them impotent and fragile; they have no power to pray away the disease or perform dubious miracles.

Fourth, the clergy has been averse to scientific discoveries because science makes their miraculous shenanigans questionable. Prayers for healing have not calmed a shocked and scared populace. Many a clergy has frowned on science, medicine and theological education, instead spiritualising even non-spiritual matters as serious as the coronavirus pandemic. Science shakes the foundation of their spiritual teachings. After all, and in the case of this pandemic, science has proved to be more practical and reliable than faith.

These fly-by-night pastors have also trafficked in guilt and false prophecies to shock people into a particular way of being religious. Self-proclaimed Prophet Owuor has trafficked in fear-mongering threats, and has even claimed that he had prophesied the pandemic. He also said it would kill people in Asia because the continent rejected his prophecy. In Kenya, a section of the public has cajoled him to unleash his “mighty prophetic powers” to fend off the virus. They have also called on him to pray it away.

Apostles James Maina Ng’ang’a’s video on coronavirus – where he is unable to pronounce the word coronavirus – showed not just his sheer ignorance, but also how ill-equipped he and his ilk are when it comes to offering solutions to such complex 21st-century problems.

A Meru-based Pentecostal clergyman with a huge following angered many Kenyans when he said that coronavirus is a global hoax and that God has instructed him not to cancel church service because there is no coronavirus.

Fifth, many of the clergy have not built an infrastructure that would enable them to continue their ministry in times of crisis like this. While many pastors have invested in TV stations, radio frequencies, social media pages, YouTube and websites, the intention has always been to win souls and tithes that will make them more powerful. Investing in sound infrastructure that would have allowed them to go online or on radio or televised church services at times of crisis like this was never part of their plan because their short-sightedness does not allow them to rethink about ministry for 21st-century challenges, including climate change and its links to our health. The available infrastructure has been mainly directed at international audiences, not local congregations. It has also never been about their congregations but about how they can use such platforms to minister to gain respectability, online audiences and donations.

The question is, where is that spiritual power to perform miracles and heal people of coronavirus when we really need it? Prophet Owuor, who claims to have caused the virus because the world has rejected his gospel of fear and threats, is impotent. A couple of Sundays ago, he preached without an interpreter, as many of his followers wore masks and kept a safe distance from each other for fear of catching a disease he supposedly brought to the nation for rejecting his message. His sermons have always been fear-inducing. He preachers about a dreadful God who kills people on a whim. It is interesting that a man who claims that the clouds clap for him and the glory of God descends on him while preaching cannot pray away a global pandemic that can infect him and his retinue of thousands of followers in Kenya and beyond.

More importantly is that religious leaders are no longer the voice of the voiceless, the conscience of the nation and defenders of social justice. It is about them and not the vulnerable. I have not seen any statement or press conference by the interreligious forum or the National Council of Churches of Kenya (NCCK) or the Evangelical Alliance of Kenya or the Conference of Catholic Bishops to assure a nation in a moment of deep fear and frustrations.

Yet, many leaders have the audacity to force members to go to church. Where is the voice of religious leaders in Kenya? Who will call out the government’s bluff for putting the lives of Kenyans in extreme danger? Where is Prophet Owuor, Kenya’s “spiritual president” who “resurrects the dead” and claims to have prophesied about COVID-19? Where are the miracle workers who claim to have the powers to delete HIV/AID, cancer, and diabetes? The refusal of many churches to cancel church services must be questioned by all. But even more importantly, the Kenyan religious community must defy their clergy and stay at home for their own health and that of their families and communities. I suggest that in light of this moment of great social anxieties, all religious activities must be cancelled to help contain the spread of the disease.

Exposing the sham

If there is anything we have learned from this experience, it is that the miracle and faith-healing industry is nothing but a sham. No religious leader has the power to heal you. Science is our only hope. Going to church right now is not just the height of spiritual carelessness, but also an act of foolishness. When the virus is under control, we can all troop back to our houses of worship.

In developed countries, pastors have been at the forefront of ministering to their congregations at home. Many have come up with innovative ways of being Christian in the age of the coronavirus. They have asked communities of faith to change not just their usual religious practices, but their worship as well. Parishioners are not only conducting mass online but offering online prayer support and educating congregations about the scientific ways of mitigating the virus.

More importantly, they have come up with spiritual resources to help their followers remain spiritually connected during such times. These clergy and churches are institutions that are congregation-centred, not individual-centred. They have invested in infrastructure for a coronavirus pandemic and 21st-century challenges. For such churches and congregations, God is not found in a physical church, but everywhere and God does not speak to the clergy alone.

There is need to deinstitutionalise the church and question our high dependence on the so-called men and women of God. We must re-evaluate their moral and intellectual standards, and we must critically debate the theological foundations of the church in Kenya.

In developed countries, pastors have been at the forefront of ministering to their congregations at home. Many have come up with innovative ways of being Christian in the age of the coronavirus.

The Kenyan Christian needs to be socialised not to depend so much on the clergy. God does not live in church but is everywhere. No clergyman has the monopoly and direct line to God. God lives in our minds and hearts. We can have church with ourselves and our families. The pastor has no magic to ward off coronavirus. He is as afraid as you are. But he can be a voice of hope and reason.

Many churches and clergy have denied science and climate change. The evangelical and Pentecostal churches, which are the fastest growing churches in Africa, Latin America and Oceania, have always been at odds with science and climate change. One of the effects of climate change is the spread of pandemics like this. As human beings, we share the world with viruses and they attack us. Yet we have refused to be good stewards of the environment and we have denied climate change despite tremendous scientific evidence about its links to our human body.

The sheer magnitude and fast spread of the virus has paralysed the world and caused huge fear and confusion. For many religious people, it has caused an ecclesiological conundrum. Fear and confusion have taken over reason. Yet scientific data available calls us to do things differently; wash hands, minimise unnecessary travel, stay home while sick to reduce infecting others, keeping social distance, avoiding large crowds, such as church services, and maintaining social distance.

Different ways of being religious

What does it mean to be church in the age of coronavirus? How much should it matter that we continue to physically gather in spaces of worship in the midst of a pandemic that by its very nature is anti-crowding? Isn’t it the wise thing to do that the clergy should call off all religious activities to save lives and avoid mass spread of the pandemic? Is it not a death sentence to encourage people to go to church at such a time as this? Does it make any sense at all for people to continue to troop to churches, and other spaces of worship for prayer, fellowship and community making, when such actions put people in serious danger? Why do pastors have such a hold on peoples’ abilities to think? Is God only found in churches and mosques? Why are Kenyan churches clergy-centric and not people-centric? Can the African and Kenyan clergy spring to action and guide their congregations and provide the much- needed leadership in an era of crippling fear and uncertainties?

For many religious people, this time calls for many ways of being. It calls on us to deinstitutionalise faith and rethink innovative ways of being spiritual communities. It calls on us to decentralise the role of a clergy that does not think about us but about themselves. It calls on us to give science a chance, even as we continue to pray and hope and take care of each other. Taking care of each other is a spiritual exercise. This is the time to be good neighbours. This is the time for us to think about compassion and empathy, After all, science and faith are not in contradiction with each other.

Now is the time to ground ourselves in a gospel of social justice, not fake miracles and questionable cures.

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Unfair Trade: How Dutch Rose Growers Avoid Paying Taxes in Kenya

14 min read. Dutch growers who dominate the flower sector in Kenya were already in the news because of environmental violations and poor employment conditions. Now, as investigative journalists Romy van der Burgh and Linda van der Pol found out, they are also being accused of avoiding taxation in Kenya while proudly wearing the “fair trade” badge.

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Unfair Trade: How Dutch Rose Growers Avoid Paying Taxes in Kenya
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A wide tarmac road winds around the freshwater Lake Naivasha, about a hundred kilometers away from the capital city of Nairobi. A stream of heavy traffic manoeuvres from one side of the road to the other in order to avoid the large potholes – sometimes half a meter deep. Drivers of matatus (minibuses) often prefer the dirt tracks on either side of the road, where the chance of a tyre blowout is less likely. Occasionally, individuals are spotted putting their lives at risk pushing a wheelbarrow with stones onto the road to seal a pothole.

The condition of Moi South Lake Road stands in contrast with the well-paved roads that branch from it and lead into fenced compounds manned by armed guards. The flag of Dutch professional football club, Feyenoord, flutters behind one of those gates. The flower farms that are nestled in between Moi South Lake Road and Lake Naivasha are mostly owned by Dutch farmers and appear to be in perfect condition.

In the Netherlands, rose cultivation has decreased spectacularly in recent decades. Between 2000 and 2019, the area under rose cultivation in the Netherlands dropped from 932 hectares to 200 hectares. Many Dutch growers moved their companies to African countries such as Kenya and Ethiopia. Labour, energy, water and land prices are lower in Eastern Africa than the Netherlands and the Eastern Africa climate is favourable for rose cultivation. Roses thrive in sunlight and warmth. The cut flower has since become the largest export product in Kenya and the sector offers work to 500,000 Kenyans. However, the flower industry in Kenya has faced criticism in recent years due to poor working conditions, the large-scale use of toxic pesticides, and the negative impact on the environment, including the pollution of Lake Naivasha.

In light of these past controversies, a new one arises: Flower companies are avoiding their tax liability in Kenya, the Dutch investigative journalism platform Investico revealed. A search through registrations and annual reports show us how flower companies are evading local taxes through export companies in the Netherlands and trusts located in tax havens such as the Cayman and British Virgin Islands, Liechtenstein and Jersey. Others sell their revenue to sister companies in Dubai for an artificially low price, which means that profits do not fall at the Kenyan farm, but at a foreign entity where the profit tax is also much lower than in Kenya.

Of the 32 companies we investigated, of which at least 13 have Dutch origins, 45 per cent can be linked to tax havens. Almost all Dutch growers who went to Kenya transferred part of their business to a Dutch company. Companies that set up an international group of several companies can transfer and settle profits and losses within that group. This way they can ensure that the profit is as low as possible in the country with the highest tax rate. Because Kenya has a high profit tax, this model is attractive for companies that operate there. The Netherlands has tax treaties with many other countries. This makes it easier to channel money through the Netherlands to a tax haven than from Kenya.

While the growers are avoiding paying tax in a country like Kenya, where 36 per cent of the population lives in poverty, they still call their business “fair trade”. In fact, more than half of all the companies that we investigated have a Fairtrade certificate. Fairtrade, a premium label that stands for fair trade between the West and African countries, presents a blind spot for tax avoidance. “Fair trade – that is an oxymoron,” says Alvin Mosioma, director of Tax Justice Network Africa. “There is nothing fair about this trade. Not to the workers who cut the flowers, nor to the government.”

***

In a small hall at Oserian Primary School in Naivasha, parents scramble to get hold of plastic chairs with “Oserian Church” written on the back of the chairs. They have been borrowed from a nearby church and placed in neat rows. During this ceremony, the ten best performing students of the national exam from last year are being honoured: one of them may even join the top five hundred students in the country and soon journalists will swarm around him for soundbites. But first the school principal opens the proceedings with a prayer and in one breath he thanks God and the Oserian flower company for the brilliance of the students.

Oserian is a huge company with Dutch roots: it was founded in 1969 by ex-marine Hans Zwager and is now one of the largest exporters of roses and cut flowers in Africa. A million roses are processed every day. A portion is transported by air to Schiphol to be traded at the auction in Aalsmeer (Netherlands); the rest is delivered directly to European supermarkets such as Sainsbury’s. More than four thousand employees work at the nursery, and hundreds at the rest of Oserian’s estate.

“Fair trade – that is an oxymoron,” says Alvin Mosioma, director of Tax Justice Network Africa. “There is nothing fair about this trade. Not to the workers who cut the flowers, nor to the government.”

Oserian is the banner of the Kenyan flower industry. It puts a lot of effort into conserving wildlife and on its grounds are schools, a hospital and houses for the staff. Founder Hans Zwager was decorated by recently deceased former president Daniel Arap Moi for his pioneering work in the Kenyan horticulture industry and for socially responsible entrepreneurship.

From the Moi South Lake Road there is a view of a palace with white spiers that protrude above the tree line. It once belonged to the colonial British family Delamère and is now occupied by the Zwager family.

“Oh, you disappear in life there,” says Fredrick, 46, a former employee of Oserian, as he digs into a plate of fish. Cafe Hollywood, located a few kilometres from the flower nursery, is full in the evening. The space is heated by charcoal mounds on which freshly caught tilapias are baked. “Oserian provides all facilities. When I was on vacation, I didn’t know where to look, as if there were no more worlds outside the company.”

For nearly twenty years, Fredrick ensured that the rose buds were fertilized. He now works for himself: he repairs and rents out bicycles. Fredrick initially worked for the flower company for 12,000 Kenya shillings (around 110 euros) a month, but people with that salary were slowly being phased out, he says. New employees earn half that amount. This figure is confirmed the next morning when we chance upon a new rose cutter at Oserian and give her a lift. She confesses that she only gets 59 euros for a month’s work. A third employee, whom we speak to when we deviate from the route during a tightly guided tour of the sorting center, speaks of the same amount – which is roughly equal to the minimum wage for unskilled personnel in Kenya. However, Mary Kinyua, the administrative director of Oserian, claims that the average salary of an Oserian worker is 167 euros.

In 2017, Oserian split the company on paper in two. Some activities, such as the packing of roses, were transferred to a new company. That company is evading the sector CAO (Collective Labour Agreement) that requires a salary of 10,000 shillings (91 euros). In practice, there appears to be little difference in employees from one or the other company. In the pale-green greenhouses, which extend as far as you can see, employees of both companies interact. Both groups do not come close to the living wage calculated by Hivos in Naivasha, which is 2.852 euros per year. Nevertheless, Fairtrade currently agrees with both the minimum wage and the sector CAO.

Dutch flower farmers moved to Africa because of the prosperity that was promised. But in Kenya that landscape has since changed considerably; flower cultivation is also in decline there. “My sixteen hectares in the Netherlands yields more than the seventy in Kenya,” says flower farmer Arie van den Berg, who is farming both in the Netherlands and in Kenya. Dutch roses in Europe are still available for a few euros every Valentine’s Day at the florist, but African roses are sold at Lidl (a European supermarket chain) for a dumping price of 1.99 euros per bunch. Sometimes auction prices are so low that it is more beneficial to destroy a load of roses than having to pay for the flight costs to send it to the auction in the Dutch Westland that revolves around horticulture.

Competition is increasing worldwide and African countries are trying to outdo each other: Ethiopia has begun to compete by offering so-called tax holidays – and there is no question of a minimum wage at all. Another problem is the tax, which is high in Kenya for foreign entrepreneurs: the corporation tax is 37.5 per cent. In a market where every cent counts, some companies do everything they can to get out of that tax burden.

A few years ago, in 2012, Oserian FC and Karuturi Sports football teams, sponsored and named after two competing rose nurseries, competed against each other in the Premier League, the highest football division in Kenya. The “derby of Naivasha” was a crowd puller. Barely two years after this high point, fortunes took a dramatic turn and the players of Karuturi Sports had to hang up their boots in 2014. The Karuturi site has since been abandoned. The vacant greenhouses stretch hundreds of meters. The iron structures occupy one’s view for as far as the eye can see, interrupted only by the occasional individual plucking a stray rose from the wild growing plants in the abandoned greenhouses.

Dutch flower farmers moved to Africa because of the prosperity that was promised. But in Kenya that landscape has since changed considerably; flower cultivation is also in decline there.

Five years after the bankruptcy, a former employee still lives in a hut at the entrance of the company premises – hoping that he will be paid the three-month wages that he is owed, plus his accrued pension. “In the last months before the nursery closed, the working conditions were terrible. There was no longer any protection against the pesticides and the face masks we had on were not even really suitable for dust, let alone poison,” he says.

But the closure of Karuturi was not due to its pesticide use. The company was found guilty of evading more than 18 million euros in taxes. Although Karuturi and the tax authorities came to a settlement of 4 million euros, it turned out to be enough to bankrupt the company. Roses were systematically exported at an extremely low price to their own company in Dubai, from where they were further distributed throughout the market. The Kenyan branch turned into a loss, while the branch turned green figures in the Emirates. But Karuturi paid no tax on this profit: the United Arab Emirates have no income, profit, or dividend taxes and no import duties on transit goods. While 37.5 per cent tax is charged in Kenya, tax in Dubai is 0 per cent.

Dubai is a new tax haven. Free zones, where the official language is English and foreign entrepreneurs may be the full owners of a company, are advancing. Three Dutch nurseries in Kenya have already found a home in the Emirates, according to various annual reports from the Dutch Chamber of Commerce, including the large Oserian, which opened a logistics center, Airflo FZE (Free Zone Enterprise), at Dubai airport.

In addition to low taxes, Dubai offers far-reaching confidentiality to business owners: annual reports are not mandatory and requesting them is impossible. That is why we cannot verify whether Oserian applies the same rulebook as Karuturi. Karuturi was ultimately unsuccessful because it had to disclose more information as a listed company in India. The Dutch companies do not have to disclose financial records to the public because they are not registered on the stock exchange.

***

We track the offshore trade and walk of Dutch companies for the first time via the FlowerCompanies.com database, founded by a Dutch entrepreneur. Out of 21 African companies, the country of establishment does not state Kenya or Ethiopia, but the Cayman Islands, a sunny place, but without a single mega farm.

“No idea why this is, how crazy. This is a bug in the website,” the founder says when we have him on the line. After a few hours, the addresses were removed from the website, but we discovered through other means that the majority of those companies do indeed have branches in tax havens such as the Cayman Islands. It is more difficult to prove that they pay little or no tax in Kenya.

By law, all Kenyan residents have the right to request data from government agencies and private companies. Because we are not Kenyan residents, a tax law student in Nairobi helped us to view annual reports of Dutch growers in Kenya. During his first visit to the Kenya Chamber of Commerce, he was summoned to communicate his choices via the internet. During his second visit, he was only given an empty file. During his third visit, he finally got the Oserian file. He paid more than six euros for inspecting it.

Taking photos is not allowed at the Chamber of Commerce and security cameras dissuade visitors from doing so. Our “informant” is reluctant to use a hidden camera. Calling the Netherlands, he browses through the book, which contains an independent Deloitte audit, in which Oserian’s revenue for 2013 is estimated at 2.7 million euros. Below the line, only 3,910 euros of profit remains on their own financial statements, of which Oserian paid just under 1,041 euros to the tax authorities.

We wrote, in accordance with the law, a letter to the Kenya Chamber of Commerce, asking for copies of the file – but the papers that the Kenyan student saw a few days before suddenly got “lost”. The company also refuses to transfer any information about its finances.

The Zwager family, owner of Oserian, built a whole web of companies around the nursery that together cover the entire chain, from breeding to sales and distribution. A company in the Netherlands is concerned with “sales and marketing of cut flowers”. The Dutch company of Peter Zwager generated a gross turnover of 47 million euros in 2010. Most employees, according to the LinkedIn reference, simply work from Kenya. That cannot be otherwise, because there are no workplaces in Amsterdam: the company was transferred to Align trust office.

The ultimate stakeholder in all these “Dutch” companies is Mavuno Group Holding Company Establishment, a trust in tax haven Liechtenstein, which is again managed by a trust office. No country in Europe charges as little tax as Liechtenstein, and above all, it is not open to public scrutiny. The only two shareholders that we identify are a company at the same address in the principality, and one near the picturesque harbour of Road Town, the capital of the British Virgin Islands, which in turn owns a whole range of companies, including a Florida real estate company.

Other branches of Oserian also end up vanishing in the smoke of vague shareholders and directors on tropical islands where neither annual reports nor ultimate owners are made public. We identify New Zealand, the Bahamas and Jersey.

“We do not sell anything in Liechtenstein, we do not trade there, we certainly do not get a tax advantage there – it is just a trust,” explains administrative director Mary Kinyua. “The owner of Oserian, Peter Zwager, puts his assets in.” When asked why Oserian in Kenya only makes about 2,000 euros in profit, she has no answer.

“This is super signing. It is very clear that we are trying to evade taxes here,” says Vincent Kiezebrink of the Research Foundation for Multinational Enterprises (SOMO) when we present the drawn-up corporate structure of Oserian. “It looks like she can try to get the most out of it,” he chuckles. “All tax ports come by. You don’t need so many havens to evade tax. Many large companies nowadays invest in their public image: they no longer settle in the Bahamas but in lesser known tax havens such as Ireland or Cyprus, because they still claim to levy about 15 per cent tax. I do not see that consciousness here. It would not surprise me if this company thinks: ‘The closer to zero, the better.’”

We wrote, in accordance with the law, a letter to the Kenya Chamber of Commerce, asking for copies of the file – but the papers that the Kenyan student saw a few days before suddenly got “lost”.

A world full of crafty lawyers and accountants unfolds around emigrating farmers who show them around in Kenya and, where necessary, help them with agricultural land and tax constructions. The fulcrum in this is the law firm Raffman Dhanji Elms & Virdee based in Nairobi. On its website, the law firm states: “The Firm has been heavily involved in advising the flower and horticultural industries over the last decade in particular with foreign investment into this country and the methods to acquire land and the corporate structures required. This has led to joint ventures between Kenyan and overseas investors and the protecting and balancing of the respective interests.”

Controversial city lawyer Guy Spencer Elms was one of the three names given to us. He was once infamously associated with a multitude of corruption scandals in Kenya. Nonetheless, he has never been convicted and maintains in his defence of a plot by a criminal cartel to always paint his image in a bad light. Guy Spencer Elms says he arranges the tax planning of various Dutch nurseries himself, and he also helps farmers with agricultural land transactions. When we present him with the offshore constructions, he says: “People immediately think of something bad like hearing about a trust in Liechtenstein or the British Virgin Islands, but often it is just a way of’ estate planning. Trusts are not necessarily a bad thing “.

***

“Tax is Life!” reads the slogan celebrating 100 years of income tax in Kenya. The luxurious Safari Park Hotel in Nairobi is the location of the tax conference organised by the University of Nairobi. Joan, a student, takes a credit note from her bag, and points to the 16 per cent VAT. “This is why I think tax is so important. Taxes can pull Kenya out of the mud,” she says.

Students speak of tax obligations in glowing terms; they see it as the future. Where that change must take place is something that everyone agrees with: the government. Tax guru Attiya Waris, a professor of tax law, points out the loopholes in tax collection throughout Africa. According to the OECD, Africa misses 46 billion euros in tax revenues every year from evasive multinationals. The United Nations estimates that amount to be 92 billion euros. Waris did research for a long time on flower companies in the country. “Kenya transfers its land to foreign companies, but the profit they make falls elsewhere. It is not a win-win situation,” she says.

Other branches of Oserian also end up vanishing in the smoke of vague shareholders and directors on tropical islands where neither annual reports nor ultimate owners are made public. We identify New Zealand, the Bahamas and Jersey.

The Dutch company Berg Roses received 1.8 million in income tax with retroactive effect. The company was accused by the Kenyan tax authorities of conspiring with its parent company in the Netherlands. The Kenyan branch would sell most of its flowers for extremely low prices to the parent company in the Netherlands so that the profit is not realised in Kenya, but in the Netherlands.

The lawsuit is still ongoing because Van den Berg challenged the matter. “We ensure that we make fifty percent profit in Kenya and fifty percent in the Netherlands. We think that is fair. If we lose this case, it will be the death blow for our company.” Van den Berg knows of companies that channel the profit away to offshore trusts and, according to him, we never hear about it.

“Not only in the sector, but also in government is it only in terms of profit, not what is good for the country,” says tax expert Waris at the end of the celebration. She pulls her colourful scarf a little tighter around her shoulders and continues in a whisper when a duo of armed guards walk past. It should be a moral obligation to pay taxes in a country whose land, water and people you use, she says.

But monitoring the flower industry often leaves much to be desired because business and the political elite are intertwined – a euphemism for corruption. That became clear, for example, in the Paradise Papers – leaked files from the law firm Appleby – which show that Sally Jemngetich Kosgei, the former Head of Civil Service, and owner of a flower nursery in Kenya, bought a luxurious apartment in London through an offshore company based in Mauritius. Kosgei told the International Consortium of Investigative Journalists (ICIJ) that she bought the apartment with her personal funds.

Fair trade organisations do not see tax ethics as their responsibility. The cover page of a recent issue of Fairtrade International is adorned with a photo of the Waridi Limited nursery, which is almost entirely in the hands of a company in the Virgin Islands. Almost all Dutch nurseries in Kenya are in possession of the Fair Trade quality mark, which stands for good conditions.

According to the OECD, Africa misses 46 billion euros in tax revenues every year from evasive multinationals. The United Nations estimates that amount to be 92 billion euros.

“Oserian sells 14 per cent of its production as a Fair Trade rose,” says Tara Scally, the spokesperson for Fair Trade Netherlands. Part of the proceeds from Fair Trade roses, which are often more expensive, are returned to a pot that employees of the farm can dispose of themselves: for example, they invest it in education or in the salary of a doctor.

Fairtrade’s focus is on the position of farmers and workers, says Scally. Tax constructions are not part of this. Moreover, tax research requires a lot of specialist knowledge and financial resources, she adds. She fears that companies will no longer participate in the programme if they are required to disclose what is in their books. “The consequence may be that workers lose part of their income. We would rather not see that.”

A ridiculous line of reasoning, counters Alvin Mosioma, founder and director of Tax Justice Network Africa. “Wear a Fair Trade label while not paying your taxes? That is an oxymoron.” Mosioma regards Fair Trade as a marketing gimmick:

“People don’t buy a rose with blood on it. Social responsibility is part of the brand of these companies. They build hospitals, schools. That gives the consumer who buys such a rose a good feeling – the idea that they are making a contribution to the development of such a country. Nothing is further from the truth. These people work under very precarious conditions for a minimum wage. It is rather paternalistic: you give them jobs, and a school. But you also buy people around with it. They are happy with such an investment. ‘Look,’ they say to the government, ‘this company takes care of us, the government does not do that’. No, that’s because the government has no money for that, and also because the same companies are engaged in aggressive tax evasion.”

This article was previously published in the Dutch language in the Netherlands in the following papers/ online: (frontpage) daily paper Trouw, weekly paper De Groene Amsterdammer and online investigative journalism platform Investico

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