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Uganda Since 1986: Museveni, the World Bank and the Coming of Neoliberalism

17 min read. Was Uganda’s economic miracle a donor-inspired lie? A new book mines the data and presents an alternative economic history of the Museveni era. By MARY SERUMAGA

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Uganda Since 1986: Museveni, the World Bank and the Coming of Neoliberalism
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Title: Uganda, The Dynamics of Neoliberal Transformation
Editors: Jörg Wiegratz, Giuliano Martiniello and Elisa Greco
Pub.r: Zed Books, 2018
Pages: 408
Reviewer: Mary Serumaga, January 2019

Any political debate about Uganda tends to become polarised very quickly. Champions of the prevailing economic orthodoxy speak of the past 30 years as an almost unqualified development success. Critics of the establishment point to the absence of tangible benefits for a broad range of the population. These positions came into sharp focus in 2018 when the People Power movement gained momentum following the international outcry triggered by the abduction and torture of its de facto leader, R. Kyagulanyi, MP.

It is possible to argue either position depending on where one sits on a sliding timeline between 1986 and the present. After four coups d’état in the 24 years following independence – a time when, as was often pointed out to me by an NRM diehard, ‘Even Kampala Road was murram!’ – the economic developments after the NRM takeover in 1986 look like miracles: the introduction and spread of mobile telephony and the internet, construction and tarmacking of major highways, the availability of foreign currency, freedom to travel abroad, etc. It is this contrast, with its racist undertones – what more does a Third World country expect? – on which the ‘Uganda as a success story’ argument is built. It is the line adopted by champions of neoliberal policies, the IMF (“This is an African success story”, Lagarde in 2017), the ruling junta and the bilateral partners and foreign investors who benefit from the liberalization of key sectors of the economy and dismantling of the public service. They are positioned in or close to 1986.

After four coups d’état in the 24 years following independence the economic developments after the NRM takeover in 1986 look like miracles.

Those outside that elite circle, referred to by the authors of this timely collection of essays on the neoliberal project in Uganda, as ‘the wretched of the earth’, are located in the present day. Economically and spatially removed from elite society, what they witness and experience 33 years after the NRM took power is described thus: “High levels of suicide (especially among the youth), poverty-driven deaths, preventable illnesses and generalised destitution.” There is more: 80% youth unemployment, collapse of the education system, ever-recurring stock outs of essential drugs, high maternal and neo-natal death rates, land-grabbing by the rich, embezzlement of public funds, fraudulent grabbing of commercial banks by the Central Bank for sale to the competition or elimination from the market.

In 2018, President Museveni and his Foreign Minister, Sam Kutesa, were cited in a New York criminal court for receiving bribes in exchange of access to public assets. These things are all connected, and held in place by state brutality.

Those outside that elite circle…’the wretched of the earth’, are located in the present day. Economically and spatially removed from elite society, what they witness and experience 33 years after the NRM took power…is “high levels of suicide (especially among the youth), poverty-driven deaths, preventable illnesses and generalised destitution.”

For ‘the wretched of the earth’, this is the story of ‘Uganda in crisis’.

While affirming the physical, political and economic transformation of Uganda since 1986, the authors interrogate both the drivers of the changes (the regime or its foreign financiers?) and identify the beneficiaries.

First the changes. Taking Nystrand and Tamm’s definition of neoliberal interventions, they can be summed up as: “downsizing of the public sector, including retrenchment of staff; privatisation of social services and social protections; and decentralisation or devolution of state power.”

The main premise of the collection is that in addition to the sliding timeline, the discourse is skewed by the lack of scholarly attention to the ongoing processes of transformation. One important dynamic remarked on is that much of the existing social science analyses has been carried out by donor-funded academics and consultants who have in turn produced studies that have tended to support the ‘Uganda as a success story’ point of view. Their collective check-list has included progress in: governance, poverty reduction and political power dynamics including political settlements, political emergencies, party and electoral politics, patronage politics, conflict management, humanitarian assistance, or peace-making. Testing this proposition, it is clear to see how apologists for the military junta that rules Uganda can be portrayed as developmental. For example, poverty as measured by the neoliberals (dubbed by the authors as ‘official poverty’) fell sharply in the first decade reaching a low of 19% from a high of over 50%. (It has risen two percentage points to over 21% in recent years.)

In 2018, President Museveni and his Foreign Minister, Sam Kutesa, were cited in a New York criminal court for receiving bribes in exchange of access to public assets. These things are all connected, and held in place by state brutality.

However the recent sharp rise in undernourishment of 13% between 2006 and 2015 went largely unremarked. Similarly, wealth inequalities created by the restructuring were overlooked in the celebrations. As with the health sector, analyses of governance have been managed by gatekeepers and reported in Bank-speak. For example, small shifts in Uganda’s Transparency International rankings based on the perceptions of foreign investors have been reported as progress, regardless of the facts presented by Uganda’s own Auditor General, Ombudsman, local media and the public. (Note: Transparency International was discredited by its 2018 award to President Museveni for his ‘fight’ against corruption in the same year that he was named as a recipient of a bribe from the now convicted Patrick Ho.)

Much of the existing social science analyses has been carried out by donor-funded academics and consultants who have in turn produced studies that have tended to support the ‘Uganda as a success story’ point of view.

This narrow approach excludes areas of research that would address the issues raised by the increasingly vocal and genuinely suffering majority:

“The first gap is the impact of global capitalism and global political economy on Uganda. This requires a study of the dynamics of Western and Eastern imperialism and their political, economic and cultural dimensions. The second under-researched area concerns the processes of societal transformation, including class formation, consolidation, struggle and compromise (and related core aspects such as dispossession, exploitation etc.), and the ways in which they shape, for instance, political power and market structures. A third overlooked area is the interaction of local and national power structures and dynamics with international political economic patterns.”

More directly put, the impact of Western and Eastern imperialism manifested in the debt-trap, privatization and the foreign direct investment for which privatization made room, and which provides free assets, has not been adequately scrutinized. Indeed, the emergence of a ruling oligarchy (beneficiaries of said privatization, and FDI), and a faux middle class (founded on patronage and corruption – not production), is treated as anecdotal evidence of something amiss rather than a serious existential issue for the majority. This book is timely in pointing out a lack of interrogation of capital accumulation by the politically connected and its impact on the rest of the population by current social science studies on Uganda.

Nor is due attention paid to the fact that 60 years after independence Uganda is still an exporter of primary commodities because that is what her ‘development partners’ require for their own development. All of this occurs alongside the ‘successes’ such as regular elections, ‘concessions’ or ‘reforms’ such as decentralization, expenditure on civil service reform (without actual civil service reform) and the universal primary education programme (which fewer than 50% of programme pupils complete) and which in turn trigger further disbursements of foreign loans and grants.

The emergence of a ruling oligarchy (beneficiaries of said privatization, and FDI), and a faux middle class (founded on patronage and corruption – not production), is treated as anecdotal evidence of something amiss rather than a serious existential issue for the majority.

The authors confirm this reviewer’s assertions elsewhere that the facts were deliberately distorted. For example, the Bank publishes impressive statistics for vaccination coverage in Uganda ranging between 82% and 93% (Source: World Bank database – Health Nutrition and Population Statistics as updated on 12/18/2017). It has stopped publishing the percentage of immunizations actually paid for by the government of the country which is nowhere near as impressive. If the percentage of coverage funded by government resources is stagnant or falling, that is not just a development issue. It is a crisis. And with changing funding priorities owing to the rise of nationalism in Europe and America, will most likely result in further reductions in health sector aid.

The authors predict a future of ‘enclave economies’: large-scale plantations – tracts of land are already being distributed free of charge to foreign investors – tax and other concessions for ‘investors’ in mining, oil and gas. These enclave economies will have minimal linkages to the rest of the economy and will aggravate poverty and accelerate environmental degradation. A proposal for a Chinese fishing project on River Katonga is a case in point. It will come with 300 Chinese staff precluding any possibilities of indigenous job creation, and adding to the current trend of imported unskilled and semi-skilled labour. Fiscal delinking occurs when foreign investors are given tax holidays.

60 years after independence Uganda is still an exporter of primary commodities because that is what her ‘development partners’ require for their own development.

In his December 2018 report, the Auditor General points out for the second time in three years that there is no clear policy regarding tax waivers for investors. In 2016 one hotel was in its fifth year of an open-ended tax holiday. In 2018:

“[…] because of lack of a proper policy, tax incentives are given to Investors without an accompanying budget. Close of financial year debts for the incentives had grown by 83% to UGX 153.6 billion up from UGX 83.8 billion in the previous year.”

Therefore, a lot of development is not accompanied by jobs and only yields limited tax revenues. Activists find that discussions of the impact of corruption on lives unsupported by relevant studies are easily and routinely derailed with one or a selection of approved Bank statistics. It is gratifying to see apologist denials of these simple facts revealed as mere political gaslighting of opposition politicians and activists. The World Bank, through its monopoly of knowledge production about its clients has developed what is called here “Bank Speak’ with which it disseminates “severely a-historical, abstract and flawed accounts” of Uganda’s political-economic history (Mitchell 2002 cited by Wiegratz et al). By becoming the gatekeeper, the Bank has succeeded in manufacturing consents to their global programme of which Uganda has been made a partner through the NRM ruling class, itself a product of the Bank.

The authors confirm this reviewer’s assertions elsewhere that the facts were deliberately distorted.

Apart from important omissions in telling the Uganda story, the veracity of Bank statistics is questioned. Note the authors say ‘veracity’ as well as ‘accuracy,’ again suggesting intent.

Their finding that the World Bank minimizes embezzlement and incompetence in the public service is in line with the misreporting of planning, implementation and outcomes of Uganda’s foundational economic and social reform programmes comprehensively documented in The Case for Repudiation of Uganda’s Public Debt (Serumaga, cadtm.org, 2017). This book makes it clear that in addition to relevant studies, there is a need for an audit to establish completeness, accuracy and timeliness of World Bank and IMF data and other information on which Uganda’s development policies are based.

The authors predict a future of ‘enclave economies’: large-scale plantations – tracts of land are already being distributed free of charge to foreign investors – tax and other concessions for ‘investors’ in mining, oil and gas…[with] minimal linkages to the rest of the economy…

Also debunked is the link between public service reform and poverty reduction claimed by earlier studies. They are inapplicable in much of Eastern and Northern Uganda where poverty has barely been dented. In these studies, deep wealth inequality; wealth concentration among politically powerful beneficiaries of reform programmes, unemployment (and under-employment), and food insecurity is found to be a characteristic of neoliberalised countries (say WB/IMF clients) the world over.

In Uganda, corruption and incompetence, major barriers to implementation of the planned transformation from a peasant to an industrialized economy has created the opportunity to transfer public service delivery functions to the military. Notably Operation Wealth Creation (OWC) which has over the past five years edged out NAADS, the government agency responsible for distribution of and sensitisation about farm inputs (Wiegratz et al). NAADS was established with a repayable US$50 million loan (and the same amount in grants). OWC is run by the President’s brother and, unsurprisingly, has featured strongly in reports of the Auditor General. In 2016 deliveries of farm inputs worth close to UGX 3 billion were unverified; UGX 1.1 billion said to be expenditure on fuel lacked supporting documents. The fisheries department of the Ministry of Agriculture is now also under military command.

The World Bank, through its monopoly of knowledge production about its clients has developed what is called here “Bank Speak’ with which it disseminates “severely a-historical, abstract and flawed accounts” of Uganda’s political-economic history.

In the meantime, accumulated wealth has driven up land speculation, making it unavailable for productive investment.

What is interesting is that the current crop of political commentators and activists, the punditocracy increasingly visible in debates around politics, governance and development happen to have been founded, financed or otherwise supported by International Financial Institutions (IFIs). Advocates Coalition for Development and Environment (ACODE), Anti-Corruption Coalition Uganda (ACCU), Uganda Debt Network (UDN), Civil Society Budget Advocacy Group (CSBAG), Private Sector Foundation Uganda (PSFU).

Apart from important omissions in telling the Uganda story, the veracity of Bank statistics is questioned…Their finding that the World Bank minimizes embezzlement and incompetence in the public service is in line with the misreporting of planning, implementation and outcomes of Uganda’s foundational economic and social reform programmes.

While the book was produced primarily as a source to enable future scholars to avoid the omissions and errors of the past, the introduction alone is invaluable for navigating the miasma of Ugandan political affairs. It goes some way in answering the rhetorical demand put to activists: what are your policy alternatives? After reading this it should become evident what needs to be done.

Part I. The State, donors and development aid

Although much is made of the purported partnership between Uganda and the WB and indeed other development partners, Lie is of the view that the concept of partnership is merely a cover for the WB’s indirect rule over Uganda through its poverty reduction strategy mechanisms. In Donor-driven State Formation: Friction in the WB–Uganda Partnership he demonstrates with evidence that partnership “‘exists when they [government] do as we [WB] want them to do, but they do so voluntarily’” (Lie citing Randel et al. 2002: 8)

The current crop of political commentators and activists, the punditocracy increasingly visible in debates around politics, governance and development happen to have been founded, financed or otherwise supported by International Financial Institutions (IFIs).

He uses the gradual displacement of Uganda government’s Poverty Eradication Action Plan by the WB’s Poverty Reduction Strategy Paper (PRSP) to demonstrate this unequal relationship. The author reveals how Bank staff evaluate the implementation in four visits made during the year, putting a gloss on unfavourable outcomes to allow further disbursements for budget support yet sending messages of disapproval by reducing the amounts released (and disrupting implementation). He calls this process ‘developmentality.’

It is a little irksome that Lie’s chosen example dates from 1999 and no attention is given to the beginning of the relationship, the Economic Recovery Programme circa 1987. It is under this umbrella that work meant to provide the administrative foundation for future work like PEAP and PRSP was done with frankly disastrous results and undermined the possibility of success of later work.

Most importantly the legal implications of ‘developmentality’ are not addressed in the essay, namely that the appearance of voluntary cooperation gives the unsustainable loan agreements some legal standing in the event of attempted repudiation in the future. Lie’s conclusion after he has so ably demonstrated indirect rule by the WB, is that the WB is not hegemonic and that the government has not fallen prey to the donor community is perverse.

Readers of this collection will find a vocabulary with which to capture Uganda’s situation and to relate it to countries facing the same predicament – particularly useful are concepts such as ‘procedural democracy” as opposed substantial democracy. Rubongoya in his essay ‘Movement Legacy’ and neoliberalism as political settlement in Uganda’s political economy describes a transaction between the junta and foreign implementers of neoliberalism. In return for a free hand in forming and introducing policies favourable to their own constituencies, foreign actors provide the NRM the means to consolidate and prolong its grip on the State.

A related transaction took place in Acholi. There, even though the armed conflict continued for two decades after 1986, there was an agreement to treat it as a post-conflict zone. In Our Friends at the Bank? The Adverse Effects of Neoliberalism in Acholi Atkinson reveals that development partners turned a blind eye as increasing amounts of aid intended for development of the ‘post-conflict’ zone were channeled to the armed coercion of the Acholi.

Readers of this collection will find a vocabulary with which to capture Uganda’s situation and to relate it to countries facing the same predicament – particularly useful are concepts such as ‘procedural democracy” as opposed substantial democracy.

Without the more recent experience of the Arua Atrocities in 2018 and the internet connectivity that allowed the news to spread across the country it would be difficult to believe that foreign actors could be so cynical. Yet in August 2018, the donor community that had armed the junta sat silent as elected leaders were abducted and tortured. These essays serve to open eyes and minds to the magnitude of what is at stake for them and why in fact their cynicism is to be expected.

African dependency is a myth created to gain access to resources without which Western populations would have to live within their means and in relative austerity. The myth allows austerity and poverty to be permanently transferred to Uganda and other African countries via neoliberal policies. This reviewer has argued elsewhere that this manufactured poverty is mitigated by emergency aid, post-conflict aid, humanitarian aid and non-specific aid from Western tax-payers. The fears surrounding Brexit and the stocking up of emergency drugs and foodstuffs are a further indication that they enjoy a standard of living subsidized for example by Ugandan farmers, that would be otherwise impossible to maintain.

African dependency is a myth created to gain access to resources without which Western populations would have to live within their means and in relative austerity.

But they are secondary beneficiaries. The primary beneficiaries of neoliberalism are a class unto themselves: the Davos elite which includes individuals in autocratic regimes like the NRM, IFIs and foreign investors all of who became fabulously wealthy and influential via the proceeds from this system. Like their counterparts in other African IMF outposts, billionaires Museveni, Sam Kutesa, Muhwezi were all penniless in their pre-regime lives.

Part II: Economic restructuring and social services

As with many of the findings of these studies, the basic facts will not be new to Ugandans, for instance the rise in poverty alongside increasingly visible trappings of extreme wealth of the oligarchs. In The Impact of neo-liberal reforms on Uganda’s Socio-economic Landscape Asiimwe throws light on the mystery of how development by-passed some and benefited others.:

“Asiimwe’s chapter shows that the economic growth miracle was to a significant extent based on the effect of large sums of aid, which sometimes constituted half of the national budget, creating public-expenditure-driven growth. The reforms induced stagnation, decline or minimal growth in key productive sectors, such as agriculture and industry. Small-scale producers and workers –mostly youth and women – were systematically marginalised by the policy reforms. Asiimwe argues that Uganda’s growth is not based on a structural transformation of the economy, but rather on a deepening of primitive accumulation occurring through corruption – which is the use of extra-economic force to access and control resources – aid dependence, widespread economic trickery and the dumping of low quality foreign products that crowd out local products. Asiimwe observes that donors’ policy preferences systematically produced anti-poor and anti-development effects, as the commodification of health and education left the majority of the population with sub-par access, or denied access altogether.” (Wiegratz et al).

The primary beneficiaries of neoliberalism are a class unto themselves: the Davos elite which includes individuals in autocratic regimes like the NRM, IFIs and foreign investors all of who became fabulously wealthy and influential via the proceeds from this system. Like their counterparts in other African IMF outposts, billionaires Museveni, Sam Kutesa, Muhwezi were all penniless in their pre-regime lives.

The impact of neoliberal reforms on social services has been equally damaging. In Social service provision and social security in Uganda: entrenched inequality under a neoliberal regime Nystrand and Tamm describe how the commodification of basic healthcare and education – they are now consumer products rather than citizen entitlements – has increased inequalities along class, regional and urban/rural lines. Those locked out from access to the services evolve into the ‘chronic poor’.

“Those who have gained from neoliberal reform are, for example, not primarily the Ugandan business sector at large – as the domestic private sector is very weak with the exception of a few large companies and individual businesspersons close to the ruling elite – but rather the ruling elite, which has been able to use donor funding to preserve their power through patronage.” (Nystrand and Tamm citing Whitfield et al. 2015)

Primary health and education, two of what used to be known as priority programme areas, are reviewed in detail, restating familiar data showing low completion rate, high teacher absenteeism (60 percent on any given day), and demonstrating how the majority of UPE pupils never attain functional literacy or numeracy. The result has been migration to proliferating private services to avoid the deterioration and the gradual fall in the quality of public education. The authors thus demonstrate that migration was the goal of neoliberalisation but that decentralized government has failed to either improve or maintain quality.

Ssali in Neoliberal health reforms and citizenship in Uganda also states that quality as well as availability of health services has suffered. Although expenditure per capita on healthcare has increased threefold, service delivery has not improved. Her essay highlights the way in which governments surrendered health services to market forces thus creating two streams, a service for the spatially marginal (the rural population) and poor, and one for the rich. This is borne out by the previously known fact that even where maternal and neo-natal services are available, less than 20 percent of women use them opting for reliance on the extended family and other support networks.

Those who have gained from neoliberal reform are…not primarily the Ugandan business sector at large – as the domestic private sector is very weak with the exception of a few large companies and individual businesspersons close to the ruling elite – but rather the ruling elite, which has been able to use donor funding to preserve their power through patronage.

As with education, so with health. The sector is characterised by inadequate resources and high absenteeism (50 per cent no-shows on any given day). Competence is a major challenge: “It was found that only 35 per cent of public health providers can correctly diagnose at least four out of five of the most common conditions, and only one out of five knew how to manage the most common maternal and neo-natal complications.” Public health and education services have thus become the preserve of the poorest and most physically marginalized. Heavily dependent on donor funding, they are assessed to be unsustainable in the long run. (Nystrand and Tamm)

Part III: Extractivism and enclosures

Commodification of forests was executed via the doling out of concessions to private sector players for management. It has had the same result, namely, privileging of capitalist interests over smallholder indigenous interests. Readers may find Nel’s Neoliberalisation as Ugandan Forestry Discourse useful in understanding the impact of privatization on the crater lakes of Kabarole in 2017, which left fishermen without a livelihood and made the lakes vulnerable to environmental degradation. Wedig discusses this in relation to Lake Nalubaale (Victoria) in Water-grabbing or Sustainable Development? The same applies to more recent sand-mining concessions granted by the President’s brother, Caleb Akandwanaho (aka Gen Salim Saleh) to Chinese investors to the exclusion of indigenous artisanal miners.

As Smith and Van Alstine show in Neoliberal oil development in Uganda, any resistance to rampant dispossession is prevented by the deployment of the armed forces. In the case of oil, it has been the presidential elite Special Forces Command armed and trained by the United States. Military deployment together with the use of Public Order Management legislation to subdue populations that make the debt incurred during this phase of history odious and liable to repudiation.

There is similar commercial pressure for land and similar dispossession for the implementation of the envisaged transformation to an industrialized economy as discussed by Nakayi in The politics of land law reform in neoliberal Uganda.

Race, culture and commoditization

A new proposition is that even cultural identity has been commoditized in the neoliberal dispensation. Youth, race and faith are looked at from this perspective. In Youth as ‘Identity Entrepreneurs’; Emerging Neoliberal Subjectivities in Uganda, Vorhöller studies a group of dancers in Northern Uganda and concludes that: “They tend to prioritise short-termism, instrumentalism, flexibility, pragmatism and self-interest and often switch cultural styles and political allegiances depending on situational contexts and according to calculations of expected benefits.

The youth market their youth to the myriad NGOs promoting neoliberal policies and looking for exemplars of how they support and are embraced by the youth. Once sponsored, the youth adapt to the required value system of their sponsors. Another example would be the youth marketing their youth and numbers to political parties. They form savings groups at the behest of the President, which groups are then given cash at public events to demonstrate the regime’s interest in the youth. New enterprises such as radio calling, telephoning radio discussion programmes to push propaganda are performed by groups such as the Lango Radio Callers group. That the group is short-termist and not rooted in ideology or any belief is clear from the fact that it publicly announced its intention to desert the NRM for the opposition if it was not paid the millions of shillings and iron roofing sheets promised before the elections. Besides ethnicity, other identities emerging from youth celebrity culture, academic qualifications and even internet presence are also available for political branding.

The role of Pentecostal-charismatic churches in politics and their rise to prominence (originating in the rise of NGOs and faith-based organisations, the result of the government’s withdrawal from its role as principal driver of development) is covered by Barbara Bompani in Religious Economics: Pentecostal-charismatic Churches and the Framing of a New Moral Order. Bompani posits that PCCs endorsed neoliberal policies by their close relationship with the ruling class, legitimising neoliberalism and provide a moral framework within which those living (or enduring) the neoliberal experience can maintain hope in a country in crisis. It is further argued that they share an exclusionary world view with neoliberalism in which “the sinful, immoral, non-conforming are to be targeted for discipline, reform and legal action.”

The framework provided by this book, its definitions of neoliberal policy and examination of its effects, will facilitate public discussion even of issues as sensitive as race. The elitism created by the exaltation of FDI, where those with access to foreign capital are perpetually entitled to special favours such as tax waivers, is analysed in African Asians and South Asians in Neoliberal Uganda: Culture, History and Political Economy in which Anneeth Kaur Hundle proposes that “the FDI policy opens up new possibilities for racial elite class formation.”

Taken together, this collection of essays is a commendable effort in achieving its objective of determining by whom, why, how and to what effect Uganda was transformed since 1986. A criticism might be that few Ugandan analysts were cited by any of the contributors even where the same ground has been extensively covered by them. Secondly, the book may be slightly behind the curve. Much of this data has been available but is only being published in this context when the effects of the reported activities are leading to seismic changes. The great value of the collection is that it finally ‘mainstreams’ the discourse and will perhaps provoke debate on those issues of which Ugandans have been aware but which have languished in the ‘informal sector’ of scholarship and public debate.

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

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That Sinking Feeling 2.0: Who Is to Blame for Tanzanian’s Ferry Disasters?

5 min read. Systematic overloading of poorly maintained state-owned vessels, compounded by human error, explains why Tanzanian marine transport is so dangerous, but who is answerable for mass deaths on Tanzania’s lakes? nobody, it would appear writes BRIAN COOKSEY

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THAT SINKING FEELING: Who is to blame for the MV Nyerere ferry disaster?
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On the 20th of September 2018, the ferry MV Nyerere capsized in shallow water at the tiny port of Ukara Island on Lake Victoria. Nearly 230 men, women and children drowned, most of them trapped inside the upturned hull. About 40 people were rescued by small boats. The vessel had a capacity of 100 passengers. Many of the dead were buried on the lakeshore, identities unknown, victims of Tanzania’s shoddy, state-run ferry services. President John Pombe Magufuli immediately declared four days of national mourning and flags flew at half-mast on public buildings. “Negligence has cost us so many lives . . . children, mothers, students, old people”, he lamented, ordering the arrest of “all those involved in the ferry.” Three days later, Prime Minister Kassim Majaliwa set up a seven-person Commission of Enquiry led by the former Chief of the Defence Forces, General George Waitara, to establish the cause of the accident and bring those responsible to book. The commission was given a month to report. That was the last the public heard of it, for the commission has shown no signs of life in the twelve months since the accident, during which period the political opposition, media and civil society organisations have kept quiet on the issue of state accountability for the accident. For who else can be held accountable when a state-owned and state-managed boat capsizes? There was no stormy weather to blame. A few commentators, including the state-owned Daily News and commentator Nkwezi Mhango, went so far as to blame the victims for knowingly, recklessly, boarding an overloaded craft. Writing in The Nation, Professor Austin Bukenya recommended “discipline” among passengers who should know better than to clamber onto overcrowded ferries. Presumably, they should wait for the next (uncrowded?) one. . .

Systematic overloading of poorly maintained state-owned vessels, compounded by human error, explains why Tanzanian marine transport is so dangerous. Unknown numbers die when small private vessels—mitumbwi (dug-out canoes) and ngalawa (canoes with sails and outriggers)—capsize. But the large steel boats run by the state are supposed to be orders of magnitude safer than the traditional modes of water transport.

Since the MV Bukoba capsized and sank in 1996, with the loss of an estimated 1,000 lives, Tanzanians have continued to die in large numbers in further ferry disasters, including two in Zanzibar waters within less than a year of each other claiming more than 1,800 lives. To date, no government official or private operator (the Zanzibar ferries were privately owned) has been held responsible for any of these disasters.

Accidents Waiting to Happen

Overcrowding ferries is systematic and intentional. A 200-passenger ferry is allowed to carry, for example, 400 passengers. The 200 “official” passengers are recorded on the vessel’s manifest, the 200 “unofficial” ones are not recorded and their fare is pocketed by the officials responsible for the management and the safety of the ship. Income that should be used for maintenance and repairs is similarly pocketed, leading to regular breakdowns and the suspension of services, thus increasing the overcrowding problem. Those anonymous corpses buried on the beach at Ukara are the “collateral damage” caused by rent-seeking government officials. A ferry service that is privately-owned and managed would deprive these officials of their rents; that is why ferry services remain a state monopoly.

Large-scale accidents on Lake Victoria are therefore arguably the result of a state monopoly of formal ferry services which dates back to the colonial period when the East African Harbours Corporation provided ferry services for the three East African countries. President Magufuli is committed to the improvement of lake transport, but it is taken for granted that the state will run the show. Magufuli has commissioned four new ferries and ordered the rehabilitation of old ones.

Marine Services Company Ltd (MSCL) and Tanzania Electrical, Mechanical and Electronics Services Agency (TEMESA) are the two official agencies responsible for running cargo ship and ferry services on Tanzanian waters. Prior to its incorporation in 1997, MSCL was the marine division of Tanzania Railways Corporation (TRC). The rationale for restructuring MSCL was to make it and other parts of TRC semi-independent “business units” to increase efficiency and profitability. According to its website, MSCL “operates ferries, cargo ships and tankers on Lake Victoria, Lake Tanganyika and Lake Nyasa. It provides services to neighbouring Burundi, DR Congo, Zambia and Malawi.” Over the years, these services have steadily dwindled. While MSCL used to run nine sizeable passenger and cargo vessels, breakdowns and lack of maintenance have left the company with only two. Laid up since 2014, the MV Victoria and MV Butiama are finally being rehabilitated at a cost of Sh26 billion, or $11.4 million, but will not be operational before March 2020 according to MSCL project manager Abel Gwanafyo, quoted by the Citizen newspaper on 8 August. Since the “rehabilitation” is only partially complete (22.5 per cent in the case of MV Butiama) further delays may be expected. The rehabilitation is part of a Sh152 billion ($67 million) shipbuilding and infrastructure development project launched by the President in August last year. At the launching ceremony, Magufuli revealed that he once considered disbanding MSCL but changed his mind because of the “exemplary performance” of the company’s new CEO, Eric Hamissi, in beginning to turn the company around.

While MSCL runs larger ships over longer routes, TEMESA—which is an executive agency under the Ministry of Works—serves short river crossings as part of the road network. Established in 2005, TEMESA operates double- and single-ended Roll on-Roll Off (‘ro-ro’) car ferries, mainly in remote locations where traffic volumes do not justify the construction of bridges. TEMESA’s “mission” involves “running safe and reliable ferry services”, including the ill-fated MV Nyerere. As a result of last September’s disaster, the President summarily suspended TEMESA’s Director General Dr Musa Mgwatu and its advisory board.

Finally, after the MV Nyerere disaster Magufuli took to task the country’s transport regulator, the Surface and Marine Transport Regulatory Authority (SUMATRA), summarily suspending its board of directors. In November 2017, the president signed the Tanzania Shipping Agencies Act which established the Tanzania Shipping Agencies Corporation (TSAC) to take over SUMATRA’s responsibility for marine transport regulation. According to lawyers Clyde and Company, TSAC was to become operational in February 2018. With a narrower scope than SUMATRA, it was hoped that the new agency would operate with greater efficiency and bring increased transparency to Tanzania mainland’s marine transport sector. The appointment of board members from the private sector as well as from government should, according to Clyde and Company, allow TSAC “to operate with an effective commercial approach.” It is unclear why SUMATRA rather than TSAC, was taken to task over the MV Nyerere accident.

The ferries the government commissions for service on Tanzanian lakes are mostly built by Songoro Marine Transport Ltd, owned by Mr Saleh Songoro and Sons of Mwanza. Mr Songoro bought the company—which was set up with aid from the Netherlands—when it was privatised in 1998. Songoro has a good working relationship with Dutch firm Damen Shipyards, one of the world’s largest builders of small ships. But a private shipbuilding monopoly serving monopoly state agencies is not going to solve the problem of inadequate and accident-prone transport services on Lake Victoria. The chronic shortage of lake transport is the maritime equivalent of poor urban public transport, which Dar es Salaam suffered during the days of the Usafiri Dar es Salaam (UDA) public transport monopoly. Private minibuses (daladala) were permitted in 1985, much to the relief of Dar es Salaam’s long-suffering citizens. The inhabitants of Lake Victoria’s shores are still waiting for their maritime daladala to come on stream.

Would Private Ferry Services Reduce the Death Toll?

Would privately owned, privately run ferry services be safer and more efficient than what we have now? It is possible that private services would be equally prone to rent-seeking and inefficiency in the absence of transparent and accountable contracting and regulation. On the other hand, private operators are more likely to maintain their vessels in order to maximise profit than state-run services, where all income flows are potentially vulnerable to self-destructive rent-seeking. They are also more likely to take safety issues more seriously than a state-run service, since private operators are more likely than civil servants to be held accountable in the event of a major accident. Since the ruling elite includes those who have little belief in or respect for the private sector, we could expect a more determined search for culprits and sanctions, especially if the boat-owners were Asians, Arabs or Caucasians.

President Magufuli has been widely praised for instilling discipline in government offices, hospitals and schools and sacking top officials deemed not to be performing and promoting those who are. But accountability is personal, not institutional, and the president clearly does not want to challenge all agencies equally. Since there is no public debate over privatising lake transport, we can expect Lake Victoria ferry passengers to continue being the potential victims of overcrowded and dangerous ferry services.

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Charities, Voluntourism and Child Abuse: Is There a Link?

8 min read. The recent case of children dying at a feeding centre in Uganda has once again highlighted the issue of whether “voluntourists” and children’s charities operating in Africa are doing more harm than good. RASNA WARAH explains why volunteers and non-profits working in poor countries need to be monitored and vetted more closely.

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Last year I wrote about Katie Meyler, a young American woman who set up an educational charity called More Than Me that ran a school for girls in Liberia and which became the site of sexual abuse perpetrated by one of its founders. It turned out that Meyler had no academic qualifications for teaching and her school, like many foreign NGOs and charities operating in Africa, was not sufficiently monitored by the Liberian authorities. It was only when a Liberian nurse at the school reported cases of sexually transmitted diseases, including HIV, among the students that the authorities took notice and when it became apparent that the girls in the school were being routinely raped by Meyler’s close friend, a Liberian man who recruited the girls from Monrovia’s poorest slums.

Now a similar case has emerged in Uganda. The case of Renee Bach has once again highlighted the dangers of allowing unregulated foreign charities to operate in poor countries. Bach’s case might never have received media attention if two Ugandan women had not sued her and her religious non-profit organisation, Serving His Children, which was ostensibly set up to feed malnourished Ugandan children. Gimbo Zubeda and Kakai Annet claim that their sons died as a result of having been “treated” at the Serving His Children feeding centre in Masese, Jinja. They are suing Bach for negligence.

Zubeda’s and Annet’s children were not the only ones who died at the feeding centre. Between 2010 and 2015, some 105 children died there, according to Bach’s own admission. Medics who have commented on the case say that many of these children were not just malnourished; they also suffered from other acute illnesses that Bach’s centre could neither diagnose nor treat properly. They died because there was no trained medical practitioner at the centre who could either prescribe the right medicine or refer the children to another facility.

What is most astonishing about this case is that Bach apparently passed herself off as a doctor even though she had no medical training. And despite having no credentials to run a feeding programme for severely malnourished children, she managed, like Meyler, to raise hundreds of thousands of dollars from donors in the United States who believed that she was saving African lives.

Orphanage tourism

Like many young naïve white volunteers who come to Africa and then decide to stay – and fund their stay by forming a charity – Bach arrived in Uganda as an 18-year-old volunteer. Two years later, in 2009, this young American women from Virginia registered an NGO in her home state that claimed to provide welfare to the needy and which also engaged in some Christian evangelism on the side. The area in Jinja where she set up her charity has high levels of illiteracy, particularly among women, and high levels of child malnutrition. This combination allowed her to hoodwink the local population and to pass herself off as a medical practitioner.

This particular initiative, which had deadly consequences, has once again raised the question of whether Africa needs more foreign charities and NGOs, and whether there is a direct link between what is often referred to as “voluntourism” and child abuse.

There is a growing awareness of the dangers of young volunteers from the West working for short periods of time in orphanages in poor parts of the world – in essence combining tourism with volunteer work. It appears that the number of orphanages in poor countries is growing in proportion to the number of volunteers. “Orphanage tourism” has now become a business, with tourists and volunteers paying large amounts of money to have an “orphanage experience”. One study in Cambodia found that the number of orphanages in the country had increased by 75 per cent between 2005 and 2010 even though the number of children without parents had declined; the majority of these orphanages were in tourist areas.

Parents or caregivers who give up their children to many of these orphanages are promised better education for the children but very often the children are kept in poor conditions to attract donor funding. This also seems to be the case with local charities run by individuals or which are funded by the government. Recently, a famous children’s home in Nairobi named after Kenya’s first First Lady was criticised for mistreating children under its care.

Many children are, in fact, actively recruited into orphanages to meet the demand of tourists, donors and volunteers – a phenomenon defined as “orphanage trafficking”. Sometimes one can accurately gauge the level of poverty in an area by the number of charities (especially orphanages) there. I once counted five orphanages in the short stretch between Malindi and Watamu, a tourist destination in Kenya that is known for both its high levels of poverty and its beautiful beaches. Is it possible that so many children in this part of Kenya’s coastal region have no parents? I seriously doubt it.

Children’s rights advocates have pointed out the lack of background checks on volunteers and say that the lack of child protection policies in many countries places vulnerable children at the risk of being sexually abused or trafficked by both locals and foreigners. Orphanages allow paedophiles claiming to be volunteers easy access to children.

Mythomaniacs

Many critics of the aid industry say that aid is not so much about making the aid recipient’s life better, but more about making the donor feel good about him or herself. That is why so many young white women, looking for adventure or redemption – or both – like Bach and Meyler, come to Africa when they could be helping poor or underprivileged communities in their own neighbourhoods back home.

The Nigerian-American writer Teju Cole dubbed this phenomenon “The White Saviour Industrial Complex”, which he says is not about justice but about having “a big emotional experience that validates privilege”. In an article published in The Atlantic in March 2012, Cole wrote: “Africa has provided a space onto which white egos can be conveniently projected. It is a liberated space in which the usual rules do not apply: a nobody from America or Europe can go to Africa and become a godlike saviour or, at the very least, have his or her emotional needs satisfied.”

And the writer Paul Theroux observed, “Because Africa seems unfinished and so different from the rest of the world, a landscape on which a person can sketch a new personality, it attracts mythomaniacs.”

Why come all the way to Africa when you could be helping your own people? Well, one reason is that it’s easier for a person in the United States to set up a charity claiming to be helping Africans in a country that a donor might never visit than it is to set up a non-profit for homeless people or drug addicts in your own neighbourhood, which might be monitored more closely by the authorities. Such monitoring and oversight is lacking in most African countries, especially countries that are experiencing conflict or natural disaster.

Secondly, it is easier to get away with all kinds of malpractices in Africa if you are white. Being white guarantees immunity from scrutiny. The women who came to Bach’s feeding centre referred to her as “doctor” simply because she was white. Iris Martor, the nurse who worked at the More Than Me Academy in Monrovia explained how white privilege allowed Meyler to get away with things that would have not been tolerated if she had been a black Liberian. “They think we are stupid, with little or no education, and our system is fragile, and they can get away with things because their skin is white,” she said.

Then there is the huge power imbalance. My friend Lara Pawson, a former BBC journalist, says that when she worked as a foreign correspondent in Africa she rarely saw white people treating Africans as equals. This is partly the Africans’ fault. White people in most former colonies in Africa are still treated like gods. They get the best tables at restaurants and are treated with utmost respect in public spaces. Just being white is enough to guarantee you various privileges.

And when they arrive here, they find that their standard of living improves considerably. A working class white kid from the wrong side of the tracks in Philadelphia or London will find that her UN or NGO job (which she got purely on the basis of skin colour) can afford her a big house in the nicest neighbourhoods – plus cooks and chauffeurs. Who would not want to live in Africa?

What no one asks is why we need a 20-something from Philadelphia to help us with problems that we should be solving ourselves.

The aid myth

Some of the fiercest critics of the aid industry have been from the African continent. Dambisa Moyo’s Dead Aid became a bestseller because she debunked the myth that aid benefits the poor. The Kenyan columnist Sunny Bindra has talked of how aid dependency erodes people’s dignity and self-respect. Maina Mwangi had called aid a “blunt instrument”. The Tanzanian scholar Issa Shivji has argued that when donors come to an African country, they establish a neoliberal agenda that essentially wrenches policy-making out of the hands of the African state. He says that the rapid rise of NGOs in Africa is part of a neoliberal offensive where the African state is demonised and the NGO is celebrated. Firoze Manji has often accused NGOs of “depoliticising poverty” by casting poverty, rather than social injustice, as the main problem facing so-called developing countries. Once poverty is depoliticised, it is delinked from the real causes of poverty – including corruption and exploitation of African resources by foreign multinationals. (You can read their brilliant essays on this topic in Missionaries, Mercenaries and Misfits, an anthology I edited.)

With so much opposition to aid by none other than Africans, why is it that these NGOs and charities keep coming to Africa? Well, it’s partly because we let them. African governments are only too happy to let charities and NGOs do the work that they should ideally be doing. And if the NGO or charity is run by a white person, all the better because not only will donor funds be guaranteed, but the government will also save its own resources (which can then be diverted to personal projects or can be embezzled).

How do we extricate ourselves from these do-gooders? Well, for one, by putting in place more stringent measures to vet and monitor them. The More Than Me Academy in Liberia had American teachers and volunteers with no experience in education. Both Bach’s and Meyler’s charities did not have boards that were located in the country where their NGOs were operating, which meant that there wasn’t sufficient oversight of their operations. Government inspectors did not come to the Meyler’s school or to Bach’s feeding centre to see if they met the required standards. No one was watching, so the abuse continued.

More importantly, African countries need to wean themselves off aid. NGOs can never replace governments when it comes to providing basic services – they simply do not have the mandate or the kind of resources to undertake service provision on a national scale. Only a government, or its agencies, can provide universal healthcare and education. Only a government can pass laws, regulations and oversight mechanisms that can ensure that NGOs are accountable to the people they purport to serve.

This is not to say that African governments can be relied on to do what is best for their citizens or to do what is in the public interest (as we in Kenya know too well) but to leave entire populations at the mercy of foreign charities and NGOs that are not accountable to anyone is highly irresponsible – and can be extremely dangerous, as the cases in Uganda and Liberia illustrate.

I don’t think all charities and donor organisations are doing harm; on the contrary, many have been crucial during emergency situations. But I do think that there must be more scrutiny of their operations and of their founders’ intentions. African countries should not be fulfilling the misplaced fantasies of naïve and confused white men and women who come to the continent to find themselves, and in the process end up harming those they claim to be helping.

Many countries are now waking up to the risks posed by voluntourism, especially as they relate to children’s charities and orphanages. Last year, Australia became the first country to recognise “orphanage trafficking” as a form of modern slavery. African countries should do the same.

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State Capture Unlimited: The Intrigues Inside the Battle to Control Mombasa’s Second Container Terminal

7 min read. Even without a pecuniary interest in the KNSL transaction, a seamless operation that transfers all the freight logistics to Naivasha is sufficient motivation for Kenyatta to pursue the capture of the terminal as aggressively as he is doing. We may also have our answer as to why the Government is not enticing MSC to Lamu. Kenyatta does not own land there.

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State Capture Unlimited: The Intrigues Inside the Battle to Control Mombasa’s Second Container Terminal
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Sometime in the late 80s, at the tail end of the era of the state commanding the heights of the economy, the Moi government had an idea—to establish a national shipping line. The business case seemed straightforward enough. The country was leaking a substantial amount of its meagre foreign exchange earnings to foreign shipping lines that were ferrying our imports and exports. The total value of shipping services in 1986 was in the order of $230 million (Sh3.7 billion) equivalent to 10 per cent of the country’s $2.2 billion (Sh43 billion) foreign exchange earnings (the exchange rate was Sh16 to the US$). Saving some of this money looked like a splendid idea. As always, the devil is in the detail.

The country was not in a position to buy vessels. The plan was to establish what is referred to in the industry as a Non-Vessel Owning Common Carrier (NVOCC) that would lease space on third-party vessels, essentially a glorified freight forwarding company. The Kenya National Shipping Line (KNSL) was incorporated in 1987 as a joint venture, with Kenya Ports Authority and UNIMAR, a German investor, owning 70 per cent and 30 per cent, respectively (UNIMAR later sold half its stake to DEG, a development finance institution of the German government). KNSL began operations in 1988 by establishing a partnership with Mediterranean Shipping Company (MSC) to charter space on MSC ships plying the Mombasa-Europe route, calling in at Lisbon, Le Havre, Antwerp, Rotterdam, Hamburg and Felixstowe among other ports in that general geographic region.

Business did not go as planned. Chartering slots on ships and hiring containers was easy, getting customers, not so. KNSL quickly racked up debt with the shipping lines and with container leasing companies for slots and containers that it was leasing and not using. But even had business gone according to plan, it is doubtful that it would have saved the country much foreign exchange. At the time, the Mombasa terminal was handling 120,000 TEUs (twenty-foot equivalent units) of containerised freight annually. The total cost of shipping a container to or from Europe would have been in the order of $900, a total of $108 million annually. Even had KNSL been able to secure a monopoly and get a 10 per cent trade margin, which is doubtful, it would have earned the country just over $10 million, about 0.5 per cent of the foreign exchange earnings.

In 1996, Heywood Shipping, an entity linked to MSC, acquired a stake in KNSL. The exact circumstances and nature of the transaction are hazy but it appears that this was part of a restructuring that may have involved converting debt to equity and bringing in MSC as a strategic partner. Heywood Shipping does not appear to be an operating business. An internet search brings up the name in the company registry of the Isle of Man, a British offshore tax haven, which may or may not be of the same company.

Nothing was heard of KNSL for two decades, although to be sure, it had not been making headlines even before. Then, out of the blue, in August 2018, it was reported that the Government had signed a Memorandum of Understanding (MoU) with MSC to revive KNSL. The reports indicated that the government was eyeing a slice of the Sh300 million ($3 billion) that it claimed the country was paying foreign companies for shipping. As usual, the Jubilee numbers are exaggerated. The $3 billion is about right for the total imports of services, of which shipping represents less than a third ($830 million in 2017 according to WTO data). I have two observations. First, this is the same reasoning that had motivated KNSL’s establishment three decades earlier. What has changed? Second, MSC was already a shareholder and strategic partner of KNSL. Why then was the Government signing an MOU with MSC on the same? The plot would soon unfold.

In March 2019 the government introduced an amendment to the Merchant Shipping Act to give the Transport Cabinet Secretary power to exempt government entities from some provisions of the statute. The particular provision that needed to be circumvented prohibits a shipping line from operating port facilities. In competition law and policy, this clause is used to prevent vertical integration, the control of many stages in a business chain by one firm to undermine competition. If for example, a manufacturer also controls distribution and retail, it can use its market power to choke competitors by restricting supply and/or overpricing its goods. A shipping line that also operates port facilities can frustrate competitor shipping lines similarly by making it advantageous to use its seamless services while providing competitors with shoddy services. Yet this is precisely what this amendment was about: to pave way for KNSL to be awarded a concession to operate the second container terminal at the Port of Mombasa, referred to in the industry as CT2.

The CT2 facility has been built by the Government with debt financing from Japan. The first phase was completed in 2016. Under the financing agreement, CT2 would be leased out to an independent operator selected through a competitive process. In 2014, the Government invited port operators to make their bids. Several international port operators applied, but the process was cancelled before completion—but not before eliciting uncharacteristically pointed objections from the usually reticent Japan. Long after the bids had closed, the government sought to introduce new conditions that would have opened up financing of the second phase even though the government had already signed a financing agreement with Japan. In a letter to the Treasury, the resident representative of the Japanese aid agency, JICA, talked of their “obligation to assure accountability and transparency in the process”, and warned that mishandling of the process would jeopardise future assistance to Kenya.

In early 2017, it emerged that the government had entered into a bilateral agreement with the United Arab Emirates in which the UAE was to extend a loan of $275 million (Sh28 billion) for improvements to the port at Mombasa, including “enhancing operational and business efficiencies within the Second Container Terminal.” In return, the state-owned port operator, Dubai World, would get the concession for the second container terminal. Dubai World was one of the bidders in the cancelled tender, and according to media reports, it had emerged second. This particular deal seemed to have been designed to circumvent competitive bidding through a ‘government-to-government’ transaction. For whatever reason, it also floundered.

This brings us to the KNSL transaction. Like the UAE agreement, the revived KNSL is devised to circumvent competitive bidding under the guise that KNSL is a state entity. KNSL shareholding stands at 53 per cent Kenya Ports Authority (KPA) and 43 per cent Heywood Shipping. Heywood Shipping has two directors on the board of KNSL: a Mr Peter Reschke and a Captain G. Cuomo. The MoU between the Government and MSC was signed by a Captain Giovanni Cuomo, designated as Vice President. It seems reasonable to assume that Captain G. Cuomo and Captain Giovanni Cuomo are one and the same person.

Financial capacity is one of the standard requirements for concessionaires in public-private partnerships (PPP). According to the 2017 audit, KNSL made a loss of Sh44.7 million, up from Sh37 million the previous year. It had revenues of Sh723,000 against expenses of Sh45 million. On the balance sheet, it has accumulated a deficit of Sh376 million. In short, KNSL is insolvent. The audit is qualified, and the Auditor General’s basis for adverse opinion runs to a couple of pages. KNSL is a shell, and to all intents and purposes, a Trojan horse for MSC.

It has been reported that the business case for single-sourcing MSC is to leverage on the concession to create seafaring jobs for Kenyans on MSC’s ships. Media reports say that MSC has committed to employing several Kenyans on its cruise liners, and to docking them in Mombasa thereby creating more jobs. These may be good intentions, but single-sourcing an operator and stifling competition is not the way to go about it. MSC will be in a position to leverage its position to undermine competitors. The competitors will lose market share in Mombasa but they are unlikely to take it lying down. For transit freight in particular, the competitors are likely to respond by undercutting MSC in competing ports, notably Dar es Salaam, and even Djibouti. Far from enhancing Mombasa as the pre-eminent port in the region, vertical integration will undermine it.

It is worth noting that even as the Government railroads this transaction, it is woefully short of investors for the Lamu port project. So far, the government has completed one of the three berths that it is building—out of a total of 32 in the plan. It is shopping for private investors to build and operate the other 29. The government is also shopping for an operator for the berths that it will have built. According to its website, MSC has a subsidiary—Terminal Investments Limited—that invests in, and manages container terminals. Given that MSC has been a joint venture partner in the KNSL all these years, it is intriguing that the Government has failed to persuade them to take up the Lamu opportunity as either operator, or investor or both.

It is worth noting that even as the Government railroads this transaction, it is woefully short of investors for the Lamu port project. So far, the government has completed one of the three berths that it is building—out of a total of 32 in the plan

We are compelled to infer that someone is out to reap where they have not sown. The initial meddling with the first tender sought to not only influence the award of the operating concession, but to also prevent the Japanese Government from financing the second phase. We infer from this that there was another financier lined up who was amenable to paying the hefty kickbacks that are standard operating procedure for Jubilee mega-infrastructure projects. The deal with the UAE and Dubai Ports had embedded private interests written all over it. The KNSL Trojan horse is the third bite at the cherry.

There is only one office with the power to subvert the competitive bidding process consistently and incessantly, and there are no prizes for guessing which one it is. This is Uhuru Kenyatta’s racket. From the now ill-fated dairy industry regulations to the floundering Huduma Namba, we have learned that wherever you see presidential political capital being expended, family business is involved. Indeed an MP friend remarked the other day that the only business that Parliament is transacting these days is Kenyatta family business.

What we need to know is the what and the how. First, we should demand full disclosure of the ownership and beneficial interests of Heywood Shipping. The two Heywood directors on the KNSL board need to swear affidavits that they have not entered into any agreement to transfer such interest to anyone else in the future. Kenyatta should be asked to declare that he and his family have no current or future beneficial interest in Heywood and MSC.

From the now ill-fated dairy industry regulations to the floundering Huduma Namba, we have learned that wherever you see presidential political capital being expended, family business is involved

A direct beneficial interest in Heywood is by no means the only route that Kenyatta can use to profit from the infrastructure. We know that the terminal integrates with the SGR railway. The railway terminates in Naivasha where the Kenyatta family has extensive landholdings positioned to benefit from the anticipated dry port business. We have seen Uhuru Kenyatta personally offering land for freight stations to Uganda and South Sudan leaders; whether this is public or private land, we do not know, but it does beg the question why Uganda would build a facility in Naivasha if, as we are told, the railway is to be integrated with the revamped meter-gauge rail all the way to the Uganda border.

Even without a pecuniary interest in the KNSL transaction, a seamless operation that transfers all the freight logistics to Naivasha is sufficient motivation for Kenyatta to pursue the capture of the terminal as aggressively as he is doing. We may also have our answer as to why the Government is not enticing MSC to Lamu. Kenyatta does not own land there.

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