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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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Romy van der Burgh (@BurghRomy) is an investigative freelance journalist. Linda van der Pol (@lindapolski) is a cultural historian and a freelance journalist based in The Netherlands.

Politics

Kenya Chooses Its Next Chief Justice

The search for Kenya’s next Chief Justice that commenced Monday will seek to replace Justice David Maraga, who retired early this year, has captured the attention of the nation.

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Kenya Chooses Its Next Chief Justice
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Since Monday, the 12th of April 2021, interviews to replace retired Chief Justice David Maraga for the post of the most important jurist in Kenya and the president of the Supreme Court have been underway.

The Judiciary is one of the three State organs established under Chapter 10, Article 159 of the Constitution of Kenya. It establishes the Judiciary as an independent custodian of justice in Kenya. Its primary role is to exercise judicial authority given to it, by the people of Kenya.

The institution is mandated to deliver justice in line with the Constitution and other laws. It is expected to resolve disputes in a just manner with a view to protecting the rights and liberties of all, thereby facilitating the attainment of the ideal rule of law.

The man or woman who will take up this mantle will lead the Judiciary at a time when its independence and leadership will be paramount for the nation. He or she will be selected by the Judicial Service Commission in a competitive process.

KWAMCHETSI MAKOKHA profiles the ten candidates shortlisted by the JSC.

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Politics

IMF and SAPs 2.0: The Four Horsemen of the Apocalypse are Riding into Town

Stabilisation, liberalisation, deregulation, and privatisation: what do these four pillars of structural adjustment augur for Kenya’s beleaguered public health sector?

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IMF and SAPs 2.0: The Four Horsemen of the Apocalypse are Riding into Town
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The International Monetary Fund’s announcement on the 2nd of April 2020 that it had approved a US$ 2.3 billion loan for Kenya prompted David Ndii to spell it out to young #KOT (Kenyans on Twitter) that “the loan Kenya has taken is called a structural adjustment loan (SAPs). It comes with austerity (tax raises, spending cuts, downsizing) to keep Kenya creditworthy so that we can continue borrowing and servicing debt”, adding that the “IMF is not here for fun. Ask older people.” With this last quip, Ndii was referring to the economic hardship visited on Kenyans under the structural adjustment programmes of the 80s and 90s.

Well, I’m old enough to remember; except that I was not in the country. I had left home, left the country, leaving behind parents who were still working, still putting my siblings through school. Parents with permanent and pensionable jobs, who were still paying the mortgage on their modest “maisonette” in a middle class Nairobi neighbourhood.

In those pre-Internet, pre-WhatsApp days, much use was made of the post office and I have kept the piles of aerogramme letters that used to bring me news of home. In those letters my parents said nothing of the deteriorating economic situation, unwilling to burden me with worries about which I could do nothing, keeping body and soul together being just about all I could manage in that foreign land where I had gone to further my education.

My brother Tony’s letters should have warned me that all was not well back home but he wrote so hilariously about the status conferred on those men who could afford second-hand underwear from America, complete with stars and stripes, that the sub-text went right over my head. I came back home for the first time after five years — having left college and found a first job — to find parents that had visibly aged beyond their years and a home that was palpably less well-off financially than when I had left. I’m a Kicomi girl and something in me rebelled against second-hand clothes, second-hand things. It seemed that in my absence Kenya had regressed to the time before independence, the years of hope and optimism wiped away by the neoliberal designs of the Bretton Woods twins. I remember wanting to flee; I wanted to go back to not knowing, to finding my family exactly as I had left it — seemingly thriving, happy, hopeful.

Now, after eight years of irresponsible government borrowing, it appears that I am to experience the effects of a Structural Adjustment Programme first-hand, and I wonder how things could possibly be worse than they already are.

When speaking to Nancy* a couple of weeks back about the COVID-19 situation at the Nyahururu County Referral Hospital in Laikipia County, she brought up the issue of pregnant women having to share beds in the maternity ward yet — quite apart from the fact that this arrangement is unacceptable whichever way you look at it — patients admitted to the ward are not routinely tested for COVID-19.

Nancy told me that candidates for emergency caesarean sections or surgery for ectopic and intra-abdominal pregnancies must wait their turn at the door to the operating theatre. Construction of a new maternity wing, complete with its own operating theatre, has ground to a halt because, rumour has it, the contractor has not been paid. The 120-bed facility should have been completed in mid-2020 to ease congestion at the Nyahururu hospital whose catchment area for referrals includes large swathes of both Nyandarua and Laikipia counties because of its geographical location.

According to Nancy, vital medicine used to prevent excessive bleeding in newly delivered mothers has not been available at her hospital since January; patients have to buy the medication themselves. This issue was also raised on Twitter by Dr Mercy Korir who, referring to the Nanyuki Teaching and Referral Hospital — the only other major hospital in Laikipia County — said that lack of emergency medication in the maternity ward was putting the lives of mothers at risk. Judging by the responses to that tweet, this dire situation is not peculiar to the Nanyuki hospital; how much worse is it going to get under the imminent SAP?

Kenya was among the first countries to sign on for a SAP in 1980 when commodity prices went through the floor and the 1973 oil crisis hit, bringing to a painful halt a post-independence decade of sustained growth and prosperity. The country was to remain under one form of structural adjustment or another from then on until 1996.

Damaris Parsitau, who has written about the impact of Structural Adjustment Programmes on women’s health in Kenya, already reported in her 2008 study that, “at Nakuru District Hospital in Kenya, for example, expectant mothers are required to buy gloves, surgical blades, disinfectants and syringes in preparation for childbirth”. It would appear that not much has changed since then.

The constitution of the World Health Organisation states that “the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition” and that “governments have a responsibility for the health of their peoples which can be fulfilled only by the provision of adequate health and social measures.”

The WHO should have added gender as a discrimination criteria. Parsitau notes that “compared to men, women in Kenya have less access to medical care, are more likely to be malnourished, poor, and illiterate, and even work longer and harder. The situation exacerbates women’s reproductive role, which increases their vulnerability to morbidity and mortality.”

With economic decline in the 80s, and the implementation of structural adjustment measures that resulted in cutbacks in funding and the introduction of cost sharing in a sector where from independence the government had borne the cost of providing free healthcare, the effects were inevitably felt most by the poor, the majority of who — in Kenya as in the rest of the world — are women.

A more recent review of studies carried out on the effect of SAPs on child and maternal health published in 2017 finds that “in their current form, structural adjustment programmes are incongruous with achieving SDGs [Sustainable Development Goals] 3.1 and 3.2, which stipulate reductions in neonatal, under-5, and maternal mortality rates. It is telling that even the IMF’s Independent Evaluation Office, in assessing the performance of structural adjustment loans, noted that ‘outcomes such as maternal and infant mortality rates have generally not improved.’”

The review also says that “adjustment programmes commonly promote decentralisation of health systems [which] may produce a more fractious and unequal implementation of services — including those for child and maternal health — nationally. Furthermore, lack of co-ordination in decentralised systems can hinder efforts to combat major disease outbreaks”. Well, we are in the throes of a devastating global pandemic which has brought this observation into sharp relief. According to the Ministry of Health, as of the 6th of April, 325,592 people had been vaccinated against COVID-19. Of those, 33 per cent were in Nairobi County, which accounts for just 9.2 per cent of the country’s total population of 47,564,296 people.

The Constitution of Kenya 2010 provides the legal framework for a rights-based approach to health and is the basis for the rollout of Universal Health Coverage (UHC) that was announced by President Uhuru Kenyatta on 12 December 2018 — with the customary fanfare — as part of the “Big Four Agenda” to be fulfilled before his departure in 2022.

However, a KEMRI-Wellcome Trust policy brief states that UHC is still some distance to achieving 100 per cent population coverage and recommends that “the Kenyan government should increase public financing of the health sector. Specifically, the level of public funding for healthcare in Kenya should double, if the threshold (5% of GDP) … is to be reached” and that “Kenya should reorient its health financing strategy away from a focus on contributory, voluntary health insurance, and instead recognize that increased tax funding is critical.”

These recommendations, it would seem to me, run counter to the conditionalities habitually imposed by the IMF and it is therefore not clear how the government will deliver UHC nation-wide by next year if this latest SAP is accompanied by budgetary cutbacks in the healthcare sector.

With the coronavirus graft scandal and the disappearance of medical supplies donated by Jack Ma still fresh on their minds, Kenyans are not inclined to believe that the IMF billions will indeed go to “support[ing] the next phase of the authorities’ COVID-19 response and their plan to reduce debt vulnerabilities while safeguarding resources to protect vulnerable groups”, as the IMF has claimed.

#KOT have — with outrage, with humour, vociferously — rejected this latest loan, tweeting the IMF in their hundreds and inundating the organisation’s Facebook page with demands that the IMF rescind its decision. An online petition had garnered more than 200,000 signatures within days of the IMF’s announcement. Whether the IMF will review its decision is moot. The prevailing economic climate is such that we are damned if we do take the loan, and damned if we don’t.

Structural adjustment supposedly “encourages countries to become economically self-sufficient by creating an environment that is friendly to innovation, investment and growth”, but the recidivist nature of the programmes suggests that either the Kenyan government is a recalcitrant pupil or SAPs simply don’t work. I would say it is both.

But the Kenyan government has not just been a recalcitrant pupil; it has also been a consistently profligate one. While SAPs do indeed provide for “safeguarding resources to protect vulnerable groups”, political choices are made that sacrifice the welfare of the ordinary Kenyan at the altar of grandiose infrastructure projects, based on the fiction peddled by international financial institutions that infrastructure-led growth can generate enough income to service debt. And when resources are not being wasted on “legacy” projects, they are embezzled on a scale that literally boggles the mind. We can no longer speak of runaway corruption; a new lexicon is required to describe this phenomenon which pervades every facet of our lives and which has rendered the years of sacrifice our parents endured meaningless and put us in debt bondage for many more generations to come. David Ndii long warned us that this moment was coming. It is here.

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East Africa: A ‘Hotbed of Terror’

African states are involved in the War on Terror more than we think. They’re surrounded by an eco-system of the war industry.

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East Africa: A ‘Hotbed of Terror’
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In late January, reports circulated on social media about a suspected US drone strike in southern Somalia, in the Al-Shabaab controlled Ma’moodow town in Bakool province. Debate quickly ensued on Twitter about whether the newly installed Biden administration was responsible for this strike, which was reported to have occurred at 10 p.m. local time on January 29th, 2021.

Southern Somalia has been the target of an unprecedented escalation of US drone strikes in the last several years, with approximately 900 to 1,000 people killed between 2016 and 2019. According to the nonprofit group Airwars, which monitors and assesses civilian harm from airpower-dominated international military actions, “it was under the Obama administration that a significant US drone and airstrike campaign began,” coupled with the deployment of Special Operations forces inside the country.

Soon after Donald Trump took office in 2017, he signed a directive designating parts of Somalia “areas of active hostilities.” While the US never formally declared war in Somalia, Trump effectively instituted war-zone targeting rules by expanding the discretionary authority of the military to conduct airstrikes and raids. Thus the debate over the January 29 strike largely hinged on the question of whether President Joe Biden was upholding Trump’s “flexible” approach to drone warfare―one that sanctioned more airstrikes in Somalia in the first seven months of 2020 than were carried out during the administrations of George W. Bush and Barack Obama, combined.

In the days following the January 29 strike, the US Military’s Africa Command (AFRICOM) denied responsibility, claiming that the last US military action in Somalia occurred on January 19, the last full day of the Trump presidency. Responding to an inquiry from Airwars, AFRICOM’s public affairs team announced:

We are aware of the reporting. US Africa Command was not involved in the Jan. 29 action referenced below. US Africa Command last strike was conducted on Jan. 19. Our policy of acknowledging all airstrikes by either press release or response to query has not changed.

In early March, The New York Times reported that the Biden administration had in fact imposed temporary limits on the Trump-era directives, thereby constraining drone strikes outside of “conventional battlefield zones.” In practice, this means that the US military and the CIA now require White House permission to pursue terror suspects in places like Somalia and Yemen where the US is not “officially” at war. This does not necessarily reflect a permanent change in policy, but rather a stopgap measure while the Biden administration develops “its own policy and procedures for counterterrorism kill-or-capture operations outside war zones.”

If we take AFRICOM at its word about January 29th, this provokes the question of who was behind that particular strike. Following AFRICOM’s denial of responsibility, analysts at Airwars concluded that the strike was likely carried out by forces from the African Union peacekeeping mission in Somali (AMISOM) or by Ethiopian troops, as it occurred soon after Al-Shabaab fighters had ambushed a contingent of Ethiopian troops in the area. If indeed the military of an African state is responsible for the bombing, what does this mean for our analysis of the security assemblages that sustain the US’s war-making apparatus in Africa?

Thanks to the work of scholars, activists, and investigative journalists, we have a growing understanding of what AFRICOM operations look like in practice. Maps of logistics hubs, forward operating sites, cooperative security locations, and contingency locations―from Mali and Niger to Kenya and Djibouti―capture the infrastructures that facilitate militarism and war on a global scale. Yet what the events of January 29th suggest is that AFRICOM is situated within, and often reliant upon, less scrutinized war-making infrastructures that, like those of the United States, claim to operate in the name of security.

A careful examination of the geographies of the US’s so-called war on terror in East Africa points not to one unified structure in the form of AFRICOM, but to multiple, interconnected geopolitical projects. Inspired by the abolitionist thought of Ruth Wilson Gilmore, who cautions activists against focusing exclusively on any one site of violent exception like the prison, I am interested in the relational geographies that sustain the imperial war-making infrastructure in Africa today. Just as the modern prison is “a central but by no means singularly defining institution of carceral geography,” AFRICOM is a fundamental but by no means singularly defining instrument of war-making in Africa today.

Since the US military’s embarrassing exit from Somalia in 1993, the US has shifted from a boots-on-the ground approach to imperial warfare, instead relying on African militaries, private contractors, clandestine ground operations, and drone strikes. To singularly focus on AFRICOM’s drone warfare is therefore to miss the wider matrix of militarized violence that is at work. As Madiha Tahir reminds us, attack drones are only the most visible element of what she refers to as “distributed empire”—differentially distributed opaque networks of technologies and actors that augment the reach of the war on terror to govern more bodies and spaces. This dispersal of power requires careful consideration of the racialized labor that sustains war-making in Somalia, and of the geographical implications of this labor. The vast array of actors involved in the war against Al-Shabaab has generated political and economic entanglements that extend well beyond the territory of Somalia itself.

Ethiopia was the first African military to intervene in Somalia in December 2006, sending thousands of troops across the border, but it did not do so alone. Ethiopia’s effort was backed by US aerial reconnaissance and satellite surveillance, signaling the entanglement of at least two geopolitical projects. While the US was focused on threats from actors with alleged ties to Al-Qaeda, Ethiopia had its own concerns about irredentism and the potential for its then-rival Eritrea to fund Somali militants that would infiltrate and destabilize Ethiopia. As Ethiopian troops drove Somali militant leaders into exile, more violent factions emerged in their place. In short, the 2006 invasion planted the seeds for the growth of what is now known as Al-Shabaab.

The United Nations soon authorized an African Union peacekeeping operation (AMISOM) to “stabilize” Somalia. What began as a small deployment of 1,650 peacekeepers in 2007 gradually transformed into a number that exceeded 22,000 by 2014. The African Union has emerged as a key subcontractor of migrant military labor in Somalia: troops from Burundi, Djibouti, Ethiopia, Kenya, and Uganda deployed to fight Al-Shabaab are paid significantly higher salaries than they receive back home, and their governments obtain generous military aid packages from the US, UK, and increasingly the European Union in the name of “security.”

But because these are African troops rather than American ones, we hear little of lives lost, or of salaries not paid. The rhetoric of “peacekeeping” makes AMISOM seem something other than what it is in practice—a state-sanctioned, transnational apparatus of violent labor that exploits group-differentiated vulnerability to premature death. (This is also how Gilmore defines racism.)

Meanwhile, Somali analyst Abukar Arman uses the term “predatory capitalism” to describe the hidden economic deals that accompany the so-called stabilization effort, such as “capacity-building” programs for the Somali security apparatus that serve as a cover for oil and gas companies to obtain exploration and drilling rights. Kenya is an important example of a “partner” state that has now become imbricated in this economy of war. Following the Kenya Defense Forces (KDF) invasion of Somalia in October 2011, the African Union’s readiness to incorporate Kenyan troops into AMISOM was a strategic victory for Kenya, as it provided a veneer of legitimacy for maintaining what has amounted to a decade-long military occupation of southern Somalia.

Through carefully constructed discourses of threat that build on colonial-era mappings of alterity in relation to Somalis, the Kenyan political elite have worked to divert attention away from internal troubles and from the economic interests that have shaped its involvement in Somalia. From collusion with Al-Shabaab in the illicit cross-border trade in sugar and charcoal, to pursuing a strategic foothold in offshore oil fields, Kenya is sufficiently ensnared in the business of war that, as Horace Campbell observes, “it is not in the interest of those involved in this business to have peace.”

What began as purportedly targeted interventions spawned increasingly broader projects that expanded across multiple geographies. In the early stages of AMISOM troop deployment, for example, one-third of Mogadishu’s population abandoned the city due to the violence caused by confrontations between the mission and Al-Shabaab forces, with many seeking refuge in Kenya. While the mission’s initial rules of engagement permitted the use of force only when necessary, it gradually assumed an offensive role, engaging in counterinsurgency and counterterror operations.

Rather than weaken Al-Shabaab, the UN Monitoring Group on Somalia observed that offensive military operations exacerbated insecurity. According to the UN, the dislodgment of Al-Shabaab from major urban centers “has prompted its further spread into the broader Horn of Africa region” and resulted in repeated displacements of people from their homes. Meanwhile, targeted operations against individuals with suspected ties to Al-Shabaab are unfolding not only in Somalia itself, but equally in neighboring countries like Kenya, where US-trained Kenyan police employ military tactics of tracking and targeting potential suspects, contributing to what one Kenyan rights group referred to as an “epidemic” of extrajudicial killings and disappearances.

Finally, the fact that some of AMISOM’s troop-contributing states have conducted their own aerial assaults against Al-Shabaab in Somalia demands further attention. A December 2017 United Nations report, for example, alleged that unauthorized Kenyan airstrikes had contributed to at least 40 civilian deaths in a 22-month period between 2015 and 2017. In May 2020, senior military officials in the Somali National Army accused the Kenyan military of indiscriminately bombing pastoralists in the Gedo region, where the KDF reportedly conducted over 50 airstrikes in a two week period. And in January 2021, one week prior to the January 29 strike that Airwars ascribed to Ethiopia, Uganda employed its own fleet of helicopter gunships to launch a simultaneous ground and air assault in southern Somalia, contributing to the deaths—according to the Ugandan military—of 189 people, allegedly all Al-Shabaab fighters.

While each of the governments in question are formally allies of the US, their actions are not reducible to US directives. War making in Somalia relies on contingent and fluid alliances that evolve over time, as each set of actors evaluates and reevaluates their interests. The ability of Ethiopia, Kenya, and Uganda to maintain their own war-making projects requires the active or tacit collaboration of various actors at the national level, including politicians who sanction the purchase of military hardware, political and business elite who glorify militarized masculinities and femininities, media houses that censor the brutalities of war, logistics companies that facilitate the movement of supplies, and the troops themselves, whose morale and faith in their mission must be sustained.

As the Biden administration seeks to restore the image of the United States abroad, it is possible that AFRICOM will gradually assume a backseat role in counterterror operations in Somalia. Officially, at least, US troops have been withdrawn and repositioned in Kenya and Djibouti, while African troops remain on the ground in Somalia. Relying more heavily on its partners in the region would enable the US to offset the public scrutiny and liability that comes with its own direct involvement.

But if our focus is exclusively on the US, then we succumb to its tactics of invisibility and invincibility, and we fail to reckon with the reality that the East African warscape is a terrain shaped by interconnected modes of power. The necessary struggle to abolish AFRICOM requires that we recognize its entanglement in and reliance upon other war-making assemblages, and that we distribute our activism accordingly. Recounting that resistance itself has long been framed as “terrorism,” we would do well to learn from those across the continent who, in various ways over the years, have pushed back, often at a heavy price.

This post is from a partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.
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