The much anticipated ruling of Malawi’s Constitutional Court was somberly delivered to an anxious, tense, and polarised nation on February 3, 2020. In a unanimous decision, the court nullified the hotly contested and rigged presidential election of May 21, 2019. It was a brilliant legal victory for the opposition parties, and a profound political watershed for the country.
The level of public anticipation and apprehension was so high that in many parts of the country businesses, schools, offices, and public transport were closed or suspended. It felt like a national holiday. Like millions of spellbound Malawians at home and in the diaspora, I was glued to the radio. It made watching the impeachment trial of President Trump in the US Senate – where the Republicans, save for two, refused to allow additional witnesses and documents – seem farcical in comparison. So much for mature and emerging democracies!
In a lengthy judgement comprising more than 500 pages, but summarised in a proceeding that was broadcast live to an anxious nation, the court noted that it was alive to the enormous importance of the case given that this is the first time in the country’s history that a presidential election has been subjected to a court dispute and ruling. The court stressed that the Constitution calls for an open, transparent and accountable government through the democratic choice exercised by its citizens. The right to vote is guaranteed and entrenched in the Constitution under the Bill of Rights.
It affirmed that elections must be managed with all due diligence and integrity, and conducted in a fair and transparent manner. Clearly, this was not the case with the May 21 presidential election. In more than ten hours of reading the summary judgement, the court systematically demolished the arguments of the respondents. There was substantial compromise of citizens’ voting rights and the principles and processes of free and fair elections. The magnitude of the irregularities and anomalies were so widespread, systematic and grave that the results were compromised, and could not be trusted as a true reflection of the will of the voters.
In a meticulous and masterly exhibition of jurisprudence and judgement, the judges painstakingly outlined and analysed all the issues in contention and the applicable laws, and interrogated relevant legal precedents from other countries. The defence of the respondents against the charges of the petitioners was left in tatters. They lost on the important issues of proof in an election case and the processes of election management. The court found the Malawi Electoral Commission (MEC) committed multiple breaches against several pertinent sections of the Constitution, and even created illegal processes, thereby raising serious doubts about the validity of the election results. In its ruling, the court called for the appointment of new officers for the commission.
On May 27, 2019, the deeply compromised Electoral Commission had declared the incumbent, Professor Peter Arthur Mutharika of the ruling Democratic People’s Party (DPP), the winner, with 38.57% of the popular vote, against 35.41% garnered by Dr. Lazarus Chakwera of the Malawi Congress Party (MCP), the age-old independence party, and 20.24% for Dr. Saulos Chilima of the insurgent United Transformation Party (UTM) formed in 2018 by the country’s former Vice President. The rest was shared by four other minor candidates.
The court found the Malawi Electoral Commission (MEC) committed multiple breaches against several pertinent sections of the Constitution, and even created illegal processes, thereby raising serious doubts about the validity of the election results.
The results provoked angry nationwide protests led by the followers of the two main opposition parties and civil society organisations, most notably the Human Rights Defenders Coalition, which paralysed the major cities in the months that followed. The protesters accused the DPP and MEC led by Dr. Jane Ansah of gross electoral fraud. They called for the ouster of President Mutharika and Dr. Ansah, the latter under the #AnsahMustFall campaign, and demanded fresh elections. DPP supporters responded with counter-demonstrations, state-sanctioned intimidation, and support rallies for the beleaguered Chair of MEC led by women functionaries of the regime. Sporadic violence broke out in several areas.
The country was on fire, staring at the abyss of ungovernability. Public order virtually collapsed in some parts of the country as the discredited police lost their credibility and authority. Even the president could no longer travel freely to many parts of the country outside his ethnic laager, including the capital, Lilongwe, without a convoy of heavily armed military vehicles. The popularity of the Malawi Defence Force rose, and a few misguided elements even seemed to yearn for the dangerous respite of a military coup. Predictably, businesses and the economy were shuttered.
The other institution in which the disaffected and inflamed masses placed their political desires and demands for electoral justice was the judiciary. Within a week after the general elections were held, the two opposition parties filed separate petitions with the High Court for the nullification of the presidential elections over alleged irregularities and mismanagement of the electoral system.
The odour of electoral malfeasance began days after the election as stories of rigging started circulating, buttressed by delays in announcing the results. Soon a new word entered Malawi’s political vocabulary: Tip-ex, a correction fluid used to alter vote results sheets. The elections were Tip-exed, Mutharika was Tip-Ex president. The overwrought social media went into overdrive. On May 25, UTM called for nullification of the election, while the DPP requested the immediate release of the election results, and MCP applied for a judicial review of the presidential election results from several districts and constituencies.
MEC proceeded first to release the results of the parliamentary election, and briefly withheld results of the presidential vote for a few more days, which raised much suspicion. The influential and quasi-religious body, Public Affairs Committee (PAC), issued a press statement on May 30, 2019, stating categorically that the elections lacked credibility. The next day, on May 31, the two main opposition parties filed separate election cases, which were consolidated by the High Court four days later because they were similar.
Efforts by lawyers for the Electoral Commission and the ruling party first to dismiss the case and later to extend the time for disclosures of documents and information by the 2nd respondent (Malawi Electoral Commission) to the 2nd petitioner (Lazarus Chakwera of MCP) were curtailed. The case was referred to select High Court judges sitting as a Constitutional Court (such a court doesn’t exist as a separate entity). The court also dismissed several applications by the Attorney General in August and September for sanctions and an injunction against political demonstrations.
The drama continues
Thus began the months-long election case that was broadcast live and transfixed the troubled nation. The hearing of the case commenced on August 8 and ended on December 20, 2019. The hearings lasted 61 days and, according to the Constitution, judgement had to be rendered within 45 days. February 3, 2020 marks the 45th day. The court hearings, with all their gravity and levity, enraptured the population as no other event since the transition from one-party dictatorship to multiparty democracy in the early 1990s. It raised national awareness about election laws and processes, and democratic rights and responsibilities. The country’s crass and corrupt ruling cabal was exposed for all its impunity, iniquity, and ineptitude.
Some lawyers and pundits were applauded; others damaged their reputations for their mediocrity and mendacity. Similarly, some witnesses were celebrated and others were ridiculed into ignominy. The latter included an insufferably arrogant cabinet minister who flaunted a fake doctorate degree (an unearned accolade so beloved by African elites), but couldn’t mention his alma mater, a term he didn’t seem to know! In the meantime, large demonstrations and counter-demonstrations continued.
The country seemed to be spiralling out of control and the acrimony between the ruling and opposition parties intensified. PAC called for dialogue on the electoral stalemate to no avail. Appeals for an open and inclusive dialogue by the foreign diplomatic missions of Germany, Ireland, Japan, Norway, the United Kingdom, and the United States also proved ineffectual.
The court hearings systematically revealed blatant manipulation and mismanagement of the electoral process and system. The submissions by the lawyers of the opposition parties vigorously argued that the Electoral Commission had breached its duty and infringed on the petitioners’ and citizens’ political rights under various sections of the Constitution. They concluded; “The irregularity and fraud in the elections were substantial and significant that they affected the integrity of the elections.”
The country seemed to be spiralling out of control and the acrimony between the ruling and opposition parties intensified. PAC called for dialogue on the electoral stalemate to no avail.
The petitioners sought nullification of the presidential election of May 21, 2019 and the declaration of Peter Mutharika as president-elect as invalid, null and void. In their lengthy submissions, the respondents accused the petitioners of relying on hearsay evidence, and claimed “there were no irregularities or other factors that beset the election and that even if any were there, they did not affect the result of the election.” They requested dismissal of the petitions with costs.
In January 2020, the drama continued as the nation eagerly awaited the ruling of the Constitutional Court. Two particular events caught public attention and wrath. One was a visit by the European Union’s election observation mission. They announced plans to release their report on the May 21 election, which was met with outrage by the opposition parties, civil society, and the general public; the EU team was forced into a hasty retreat.
The second was a shocking leak in mid-January 2020. It was reported that on November 28, 2019, the Chief Justice had lodged a formal complaint with the Anti-Corruption Bureau (ACB) about a bribery attempt targeting the judges hearing the case for the nullification of the presidential election. On January 22, the ACB ordered the arrest of Mr. Thom Mpinganjira, a leading business tycoon. But later that same night, Mr. Mpinganjira’s lawyers managed to get an order from a magistrate in another city quashing the arrest warrant. Several days later, on January 28, a High Court judge ordered the re-arrest of Mr. Mpinganjira, and called for disciplinary action to be taken against the errant magistrate and lawyer. The case underscored both the rot and rectitude of the country’s besieged judicial system.
Pivotal moments in Malawi’s history
As February 3, 2020 approached, everyone wondered which face of the courts would show up. There are few dates in any nation’s history that mark pivotal moments. In Malawi’s history they include February 3, 1915, when the leader of the first major uprising against colonial rule, John Chilembwe, an American-educated Baptist pastor, was killed. Chilembwe Day is commemorated every January 15. Another key date is March 3, 1957, the day the British colonial government declared a state of emergency to quell nationalist agitation by arresting leading nationalists, which provoked more protests. The day is marked as a national holiday called Martyrs’ Day in honour of nationalist heroes who sacrificed their lives in the protracted struggle for decolonization.
Then there is of course July 6, Malawi’s Independence Day. In the postcolonial era, June 14, 1993, marks a significant day when a referendum was held to abolish President Banda’s ruthless MCP dictatorship and introduce multiparty democracy. The referendum was approved by nearly 65% of the voters. My parents’ generation had fought for the “first independence”; mine was at the forefront of the “second independence”. In recognition of my own role in the democratic struggle, the opposition party, the United Democratic Front appointed me Shadow Minister, but I turned down a Cabinet appointment when the party won the elections in May 1994. Unfortunately, my initial misgivings about the leadership and integrity of President Bakili Muluzi’s ten-year corrupt and lacklustre administration were borne out.
A day of infamy in Malawi’s political trajectory under the “Second Republic” is July 20, 2011, when nationwide protests broke out against economic mismanagement and creeping political authoritarianism by the DPP government led by President Bingu wa Mutharika, the elder brother of the current president. The draconian crackdown against the demonstrations over the next several days resulted in nearly 20 people killed and another 58 injured and up to 275 arrested. The country was shaken to its knees. The hapless president never regained his political footing, and less than a year later, on April 5, 2012, he died of a heart attack at the age of 78.
The landmark verdict nullifying the presidential election will mark February 3, 2020 as another milestone in the history of this incredibly beautiful, but badly governed, and desperately poor country. One of Malawi’s most renowned intellectuals, Thandika Mkandawire, noted for his caustic wit, told a Malawian friend that visiting Nairobi in December 2019 served as a grim reminder of Malawi’s lost fifty years of independence; much as one might find visiting the Asian economic tigers a sobering testimony to Africa’s lost years of independence.
The Kenya case
Malawi follows Kenya, where on September 1, 2017, the Supreme Court annulled the country’s presidential election held on August 8, 2017. In fact, in its judgement, the Malawi Constitutional Court frequently referred to the Kenya case. Cancelling presidential elections is extremely rare given the high levels of substantiality of evidence required in such cases. Thus Malawi has joined an exclusive club of world democracies. Annulment of an election represents a grave indictment of the electoral body. The Constitutional Court was unsparing in castigating the Malawi Electoral Commission for its incompetent and improper management of the entire presidential election process.
The court called for fresh elections within 150 days. The offices of the President and Vice President were returned to the status quo before the May 21 election, thereby reinstating Vice President Chilima and retaining President Mutharika till new elections. Parliament was urged to meet within 21 days to pass legislation on new presidential, parliamentary, and local elections and maintain the principle of concurrent tripartite elections every 5 years.
Malawi follows Kenya, where on September 1, 2017, the Supreme Court annulled the country’s presidential election held on August 8, 2017. In fact, in its judgement, the Malawi Constitutional Court frequently referred to the Kenya case.
As happened in Kenya after the presidential election was annulled on September 1, 2017, the annulment in Malawi will be greeted with jubilation by the leaders and followers of the opposition parties, and with trepidation by those affiliated to the ruling party, including some professionals and former activists who sold their souls for tarnished pieces of silver. In the days leading to the Constitutional Court ruling, political and religious leaders, the security services, foreign diplomatic missions, as well as the United Nations and the African Union, appealed for calm and urged citizens to accept the court’s decision.
One hopes President Mutharika will try to salvage his tattered reputation by gracefully accepting the court decision, as his predecessors, President Banda did when he lost the 1993 referendum, and President Muluzi lost an ill-guided attempt at a third term.
As became evident in Kenya, annulling a presidential election does not guarantee a smooth re-election process. In fact, the opposition in Kenya proceeded to boycott the repeat election in October, which led the incumbent, President Uhuru Kenyatta, to cruise to victory unopposed. This is unlikely to happen in Malawi. In fact, what might be in question is not whether the main contending parties will contest the fresh presidential election, but how. Will the opposition parties proceed separately as before or form an electoral alliance to fight the fresh election?
In its ruling, the Constitutional Court found that no candidate in the May 21, 2019 presidential election had secured a majority and proclaimed that from the next election only a candidate who secured 50+1 would be deemed elected as President. Parliament was asked to make the necessary amendments to the electoral law. In 2017 the DPP, supported by a minority party, had blocked the Presidential, Parliamentary and Local Government Amendments Bill that would have allowed a 50+1 electoral system.
The court ruling might facilitate much-needed political realignment. The two leading parties, UTM and MCP, must seriously pursue forming a possible coalition to beat the DPP and any coalition it might cobble together. Malawi cannot afford to mortgage its future to the DPP, a party that has degenerated into an incompetent, sleazy, tribalistic, nepotistic, and kleptocratic cabal. Creating meaningful and durable political coalitions require statesmanship and compromise that is quite rare among politicians.
Malawi has been offered a historic opportunity to reclaim its future, to change direction and to fulfill the dreams of millions of its people who fought for the “second independence”. The opposition parties and politicians who succeeded in nullifying the presidential election must not seek to become a reincarnation of the discredited DPP regime, greedily awaiting their chance to “eat” from the paltry state coffers. They owe it to history, and to the past, current and future generations of citizens of this aggrieved country to pursue and realise persistent yearnings for an inclusive, integrated, innovative and sustainable democratic developmental state and society.
As we’ve learned from development studies and histories and economies of some Asian countries, creating such a state and society is not a mystery: it is not a matter of ethnicity or race or nationality, neither is it dictated by the peculiarities of culture or the imagined genius of a particular civilization, let alone the endowments of natural resources. Rather, it is determined by the quality of institutions and leadership, the development of human capital, and the prevalence of the social capital of trust. The future will centre on confronting many challenges and seizing new opportunities. Two stand out.
First, there is need to undertake profound political reforms, including of the electoral system. There are, of course, many other electoral systems, including single member or multi-member constituencies under which there are several variants; they can also be complemented by majoritarian or proportional or mixed majoritarian and proportional features. Malawi must introduce an electoral system that best promotes proportionality of seats to votes, accountability to constituents, inter-ethnic and inter-religious conciliation, and minority office holding. The decentralisation and devolution of power from a highly centralised presidency should also be on the table.
The newly empowered masses must maintain pressure on the politicians to embrace the politics of policy differences rather than that of ethnic chauvinism and personal self-aggrandizement. They must resist the self-serving machinations and shenanigans of the political class. As we have learned in African studies and from the rise of contemporary political populisms around the world, ethnicity (or race), overlaid by all manner of regionalisms, is often a more powerful predictor of political loyalties and voting behavior than class and social interests.
But ethnicity itself is a complex phenomenon. “Moral ethnicity” differs from “political ethnicity”. The former represents a complex web of social obligations and belonging, while the latter reflects the competitive confrontation of “ethnic contenders and constituencies” for state power and national resources. As I wrote elsewhere, “Both are socially constructed, but one as an identity, the other as an ideology. Ethnicity may serve as a cultural public for the masses estranged from the civic public of the elites, a sanctuary that extends its comforts and protective tentacles to the victims of political disenfranchisement, economic impoverishment, state terror and group rivalry. In other words, it is not the existence of ethnic groups (or racial groups) that is a problem in itself, a predictor of social conviviality or conflict, but their political mobilisation.” This is the struggle Malawians committed to a more inclusive future must fight.
Malawi’s current first-past-the-post or winner-take-all system is one of the root causes of political instability. It facilitates minority presidencies. Since the dawn of multiparty democracy in 1994, there have been six elections. Only in two of these did the elected president garner more than half the votes of the electorate (1994–Bakili Muluzi 46.15%; 1999–Bakili Muluzi 52.34%; 2004 Bingu wa Mutharika 35.97%; 2009 Bingu wa Mutharika 66.17%; 2014 Peter Arthur Mutharika 36.4%; 2019 Peter Arthur Mutharika 38.57%).
The newly empowered masses must maintain pressure on the politicians to embrace the politics of policy differences rather than that of ethnic chauvinism and personal self-aggrandizement. They must resist the self-serving machinations and shenanigans of the political class
Incidentally, it is the first-past-the-post system that allowed the election of President Donald Trump, who lost the popular vote to Senator Hilary Clinton by a margin of 2,868,686. Similarly, commenting on Brexit a day after Britain left the European Union, a British journalist wrote in The Guardian: “How did a matter of such momentous constitutional, economic and cultural consequence come to be settled by a first-past-the-post vote and not by a super-majority?…There is much that is historically unjust about the British state, but very little of that injustice derives from the EU…It was the task of the Brexit campaign to persuade the electorate otherwise. In the referendum they succeeded with 37%, enough to transform our collective fate for a generation at least.”
Second, the awakened citizenry must force the political class to attend to the country’s tenacious crises of mass poverty, low economic growth, and rising inequalities. There is a pressing need for strategic and sustainable interventions in the traditional primary, secondary, and tertiary sectors, and what some call the quaternary sector or the knowledge sector comprising high quality education and training, research and development, and the advancement of science, technology and innovation.
In short, a future democratic government will need to focus steadfastly on economic growth and transformation by overcoming the country’s enduring legacies of underdevelopment as it simultaneously embraces, even if belatedly, the unrealised potentialities of the old industrial revolutions and the possibilities of the fourth industrial revolution. At stake is the need to raise the country’s human development index by ensuring the provision of what the United Nations Development Programme calls basic capabilities while moving towards enhanced capabilities. Especially critical is reducing power imbalances and gender inequalities, as well as promoting youth employability and decent work.
Malawi’s development deficits are glaring indeed, ranging from persistent poverty among the rural and urban masses, to poor physical and social infrastructure, abysmally low levels of education at all levels, and extensive unemployment and underemployment. Each time I visit the country, I am struck by how little the cities where I grew up in the 1960s and 1970s have changed. I joke to my relatives and friends that I cannot get lost in Lilongwe, Blantyre, or Zomba, although I left the country 43 years ago! When I visited last December, together with my family, including my son and his fiancée, it was disconcerting to see that the primary and secondary schools I attended look so dilapidated; they are depressing and pale replicas of the fine institutions I attended.
Thus, getting the politics right is only a prelude to getting the economics right for the well-being and dignity of Malawian citizens. The good news from the ruling of the Constitutional Court annulling the presidential election is that an indispensable first step has been taken. This day will be remembered as a turning point in the country’s tortured political history. Perhaps it will be known as Constitutional Democracy Day.
One of my relatives, a young, bright and highly educated professional, said the whole saga had left her proud to be a Malawian. This is a moment of reckoning for the country, she said, when Malawians became active citizens, abandoning the docility of bystanders in the political game created, controlled and manipulated by self-serving, cynical, corrupt and crafty politicians. Her fervent hope is that the citizenry, now informed and inspired by their active involvement in a signal political event, will not retreat to the political sidelines as passive observers. That, too, is my hope and the hope of many in this land of the lake, the Warm Heart of Africa, to use the country’s much beloved national moniker.
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.
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.
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.
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.
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.
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.
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.
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.
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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