The Looting of Africa )3 -- Kenya

On June 15, 1987, Martin Shikuku, Kenya's member of parliament for Butere, stormed into parliament to accuse wealthy Kenyans of siphoning billions of shillings out of the country and depositing them in foreign banks. New African reported that "he produced a copy of Finance and Development, a publication of the International Monetary Fund (June 1986) which showed that funds held by Kenyans in foreign banks amounted to Ksh 930 million in 1982, Ksh 870 million in 1983 and Ksh 830 million in 1984. It amounted to Ksh 43.396 billion (sic), a figure he later told the New African "might not represent the aggregate total but it very well illustrated the kind of money held outside, when the country is passing the hat around for aid" (Oct, 1987; p. 45).

South reported that since Kenya gained its independence in 1963, the amount of capital wealth that residents have stashed abroad exceeded $5 billion. This is "more than the total amount of Western investment and aid" (June 1989; p. 30) and exceeds Kenya's total foreign debt of $4 billion. In other words, Kenya would have no foreign debt problem if its rich citizens returned the loot that they have accumulated abroad.

One often hears the argument that corruption is rife in Africa because the African people are inexperienced and incompetent in management. This argument derives from the inability to distinguish between the real people of Africa--the peasants--and the vampire elites. Detailing the corruption of the elite in Kenya, Koigi wa Wamwere, a former member of parliament, asserted that "[t]he educated use their knowledge to advance corruption, which is more difficult to fight [because] the powerful. . .are protected." He pointed out that in each instance the corrupt acts by top government and corporate officials were motivated by greed and were not the result of mismanagement or incompetence. He concluded that President Daniel arap Moi "has privatised power and property to serve his personal ends. President Moi acts as if what belongs to the state is his. This is why African presidents like Moi are richer and more powerful than the governments they lead (Index on Censorship, July 1990; p. 19).

The pervasiveness of corruption is only possible when those at the very top are actively engaged in it. Corruption emerged in Kenya soon after independence and got progressively worse: "The first President of independent Kenya, Jomo Kenyatta, and his family amassed a large fortune in land, precious gems, ivory and casinos during his rule from 1963 to 1978" (The New York Times, Oct 21, 1991; p. A9). After Daniel arap Moi took over from Kenyatta, corruption became institutionalized.

According to U.S. officials, four Kenyan government officials and three relatives of Moi had greatly enriched themselves at the expense of Kenyan mwananchi. These officials were: Mr. Moi, Energy Minister Biwott, Vice President George Saitoti, and the Permanent Secretary in the President's Office for Internal Security, Hezekiah Oyugi.

President Moi sat at the apex of a growing empire of graft. He is worth at least $3 billion. As he has tightened his authoritarian control of political life, he has continued his conspicuous acquisition of personal wealth and built an economic empire of vast fortune. His business interests are reported to include $100 million worth of prime real estate in Nairobi, a transport corporation, the oil company (Kobil) that bought out Mobil's interests in Kenya, and a cinema chain with monopoly control over movie distribution in Kenya. His numerous business concerns always manage to win huge government contracts and charge the state exorbitant fees and prices. He is "believed to be a partner in an oil refinery in Puerto Rico with an Israeli businessman and has a share in a Nairobi casino and a hotel in the Masai Mara game park" (The New York Times, Oct 21, 1991; p. A9).

Kiptiuiu Investment Corporation, with its head office in the City Hall Annex, Nairobi, for example, imports fertilizer. Moi forces the state run Kenya Tea Development Authority and another government owned agency Kenya Planters Cooperative Union, which grows coffee, to purchase the fertilizer at inflated prices, often running 300 percent higher than elsewhere.

Another Moi company, Trans World Importers, headquartered in the State House in Nairobi and headed by Abraham Kiptanui, the comptroller of the State House and principal private secretary to Moi, imported so much sugar in mid 1987 that the Kenya National Trading Corporation (KNTC) could not buy even half of it. Worse, the importation occurred when Kenya had a sugar surplus and was having difficulty finding storage space for it. Because of the dumping of sugar on KNTC and Moi's insistence for immediate cash payment, KNTC could not accept any more sugar from millers, and many went unpaid for 14 months. In another example, "Moi received a `seven-figure commission when Kenya bought two airplanes from the European consortium Airbus Industries in the late 1980s.' He also profited from the sale of wheat from Saudi Arabia. The Saudi government, as part of its aid program, `provides wheat to Kenya at $145 a ton. Traders acting for Moi then resold it to the Kenyan Government grain agency for between $207 and $220. The profit on one such deal was $16 million' " (The New York Times, Oct 21, 1991; p. A9).

It is a clear conflict of interest for the president of a country to run businesses and to force the government to make purchases from these businesses. Ministers should guard against and condemn such practices. But many of them were Moi's friends and clients, who had also amassed fortunes from their political positions. For example, Nicholas arap Biwott, Moi's most trusted ally in government, was embroiled in a huge corruption scandal to which Moi, of course, turned a deaf ear. According to Edward Odoi Abuor, Kenyan reporter with the Standard newspapers, in 1987 the government invited bids for a $400 million agricultural project and Turkwell Gorge Dam in the Elgeyo Marakwet district. Initially, a Chinese and later a French firm won the contract. But when they declined to pay a Ksh 75 million ($5 million) bribe Biwott demanded, he cancelled the contract and reopened the bidding process. The construction contract was eventually awarded to the French firm Spie Batignolles, and French companies were also selected to supply turbines, generators, and transmission equipment. After paying the bribe, the company doubled the cost of the project to recoup, according to journalist Abuor. This was confirmed in an interim memorandum drawn up by Mr. Achim Kratz, then European Commission delegate to Kenya (Financial Times, Nov 27, 1991; p. 4). [Abuor was hounded by Kenyan security agents. He fled to Tanzania in July 1988 and with the help of U.S. Embassy officials immigrated to the United States via West Germany.]

Subsequently, in March 1989 Moi sent Biwott to Britain to inquire about purchasing 12 new Hawk 2000 fighter jets that the military had requested. British Aerospace refused to offer a personal bribe but instead offered 100,000 (pounds sterling) to move personnel to patrol Kenya's game parks and to protect elephants and rhinos from poachers. An angered Biwott left London for Paris, where he visited the French aeronautical firm, Marcel Dassault Preguet. He found that the French fighter jets cost twice as much as the British ones, but the French offered to give Moi a free presidential jet. Subsequently, Moi flew to Paris to sign a contract to purchase 12 Mirage fighter jets and 60 Panhard automatic guns at a hefty price of $637 million. Koigi wa Wamwere, a former MP, who was detained for three years (1975 - 1978) and subsequently fled to Norway in 1986, gave a trenchant insight into the workings of the corrupt Moi regime:

“When a former chairman of the National Bank of Kenya took over 300 million shillings from the Bank, that was robbery, not incompetent management.

When the Kenya Chemical and Food Corporation in Kisumu cost 1.3 billion shillings instead of 540 million shillings and then hired MPs to defend it in parliament in return for personal rewards, that was theft, not incompetent management. (Weekly Review, Feb 19, 1982).

When in March 1982 Joseph Kamere, an attorney general, and Titus Mbathi, a minister for labor, received three million and one million shillings respectively to cover up illegal foreign repatriation by the bank of Baroda, that was corruption.

When government ministries engaged in the employment of 85,397 bogus employees that allowed government officers to receive from the government nearly 85,397,000 shillings every month in the form of fake salaries, the creation of such a hole in government coffers was corruption. (Weekly Review, April 26, 1985).

On January 24, 1986, the Kenyan Minister for Finance, Professor George Saitoti, officials of the French government and representatives of a consortium of Paris-based banks, under the leadership of the Banque de l'Union Europeenne, signed a contract with the French contractor Spie Batignolles, to finance the Turkwel Gorge Hydro-Electric Project at a price that was more than double what the Kenyan government had budgeted for by international tender -- despite warnings by the European Commission in Kenya. It was not lack of competence but greed for gain and lack of patriotism.

According to a confidential European Commission report by Mr. A. Katz, `the Kenyan government officials who are involved in the project are fully aware of the disadvantages of the deal . . . but they nevertheless accepted it because of high personal advantages' . . . When Kenyan politicians and top civil servants form an alliance with foreigners to take billions in hard currency abroad while knowing that the country is dying for lack of foreign exchange for the import of drugs, and other essentials, that is outright war against one's own country and people (Index on Censorship, Aug 1990; p. 19).

Nicholas Biwott, a member of Moi's Kalenjin tribe and considered to be President Moi's closest political confidant, was paid an official salary of Ksh 21,033 but was worth "hundreds of millions of dollars, chiefly in offshore holdings" (The New York Times, Oct 21, 1991; p. A9). He "amassed large interests in construction, petroleum distribution, aviation and property. He first entered the business world in 1975 in partnership with Mr. Moi in a company called Lima Ltd. Lima became the bedrock of a business empire which expanded into Lima Finance, which in turn acquired large holdings in the prominent Kenyan private companies, Trade Bank, Trade Finance and Prudential Assurance" (Financial Times, Nov 27, 1991; p. 4).

Biwott and two other cabinet ministers demanded kickbacks from BAK, a Swiss-based consultancy firm, in return for a multi-million dollar contract to rehabilitate a molasses plant in the late Robert Ouko's constituency. Ouko "clashed with Biwott during a trip to the U.S. over foreign accounts Biwott and other government ministers held in other countries" (Financial Times, Nov 27, 1991; p. 4). Ouko was brutally murdered on his return to Kenya. Mr. John Troon, the British detective who investigated, named Biwott and one other senior government official as prime suspects. Biwott was arrested by Moi and later released "for lack of evidence."

In June 1991 a quarrel broke out between Kenya's Energy Minister, Nicholas Biwott, and Terry Davidson, managing director of Citibank in Nairobi. As the New York Times (Oct 21, 1991) reported: "The trouble arose when Citibank sought to collect on $14 million in loans to some of Mr. Biwott's companies. Western diplomats said Mr. Biwott's lawyers went to Kenya's High Court and got an injunction that blocked the bank from collecting on the loans, of which $11.2 million worth was secured by letters of credit in a Swiss bank account of Mr. Biwott . . . Western diplomats added that an employee of Mr. Biwott cautioned the managing director of Citibank, Terry Davidson, to be prepared for strange car accidents and fraudulent foreign currency transactions" (p. A9) (Emphasis added).

"Many people in government have the biggest accounts in foreign banks. Critics of the Moi government say there is more money from Kenyans in foreign banks than the entire Kenyan foreign debt, which is about $8 billion. Kenya's situation is not unique to the country. It is a reality found throughout Africa" (The Washington Times, 3 August 1995, A18). Nairobi businessman, Peter Wamai, charged that, “If they are serious about eradicating poverty, they should start by returning the money that has been stolen” (The Washington Times, June 3, 1999; p.A12). The situation in Kenya so deteriorated that 84 members of parliament 71 from the opposition and 13 from President Moi’s own ruling party vowed to oust the Moi regime and replace it with an all-party interim government. A July 28, 1999 statement, signed by the MPs and read by lawyer and opposition MP, George Kaptain, they said: “Corruption within the top leadership of the government had reached endemic levels and the only solution is for Mr. Moi’s regime to be kicked out. It is not possible for the accused [the government] to probe themselves and [Attorney General Amos Wako] should stop making a mockery of an already desperate situation” (The Washington Times, July 30, 1999; p.A15).

This escalating greed -along with the increasingly arbitrary and oppressive character of Moi's rule and the growing economic problems of unemployment and rural and urban landlessness -threatens Kenya's tradition of stability. As the decay and repression deepen, the prospect that change will come not through gradual political liberalization, but rather through abrupt and violent military intervention, increases.

Fortunately, Kenya was able to avoid violent change with the election of Mwai Kibaki but the rapacious plunder continued despite his promises to end it. “The Mount Kenya mafia, as the Kikuyu cabal became known within weeks of Mr. Mwai Kibaki’s inauguration, appears to have renounced reform in favor of shoring up its ailing patron’s power” (The Economist, Oct 11, 2003; p.52). In September 2003, Odhiambo Mbai, a leading political scientist and key man in efforts to redraft Kenya’s lumpen constitution and introduce fundamental reforms, such as paring the president’s almost limitless powers and independent judiciary, was assassinated in his home. “Three men were charged with the murder but not the senior government figure they accuse of hiring them. Three top people from the East African Standard newspaper were also arrested after publishing one of the suspects’ confessions – minus the alleged paymaster’s name. Mr. Mbai’s fellow delegates to Kenya’s constitutional review team have since accused the ruling politicians of bribery and intimidation” (The Economist, Oct 11, 2003; p.50).

The constitutional reform process stalled under the watchful eyes of the “Mount Kenya mafia,” as the ruling elite are called. Widespread government corruption caused international donors to withhold money allocated to fight AIDS. The disease has killed about 1.5 million in Kenya since 1984. The government estimates that about 1.4 million Kenyans are still infected. U.S. ambassador William Bellamy criticized the government for failing to account for money already distributed and warned Kenyan officials that they must end graft or face the loss of more assistance. Kenya’s Health Ministry is riddled with graft. A recent audit revealed the existence of “ghost workers” with their annual $6.5 million salaries collected by living workers. In June 20, 2004, the same Health Ministry paid KSh140 million ($1.8 million) for a radiography machine for Kenyatta National Hospital that was never delivered.

In 2005, Kenya was rocked by corruption scandals over KSh 22 billion ($284 million) contract awarded to Anglo Leasing for the E-Cop police computer project; KSh2.7 billion ($35 million) contract to Anglo Leasing Finance for the issuance of tamper-proof passports; KSh4.2 billion ($54 million) contract for the construction of forensic laboratories for the Criminal Investigations Department at Karura, Nairobi (no work done); KSh12.3 billion ($159 million) contract to purchase of fighter jets rejected by pilots; KSh2 billion ($25 million) a debt refinancing contract awarded by Kenya Pipeline Company to Tripple A; KSh1.5 ($19 million) billion tender for the purchase of cranes for the Kenya Ports Authority; multi million shilling maize import tenders to import 180,000 metric tons of maize awarded to shadowy firms by the Agriculture ministry. In case after case, no action was taken and ministers involved were merely sacked, not prosecuted to recover the loot.

NEPAD seeks $64 billion from the West in investments. Back in June, 2002, when the presidents of Algeria, Nigeria, Senegal and South Africa, trekked to Kananaski, Alberta (Canada) to present NEPAD to the G-8 Summit for funding by the rich nations, an enthusiastic Jean Chretien, the then Canadian prime minister and chairman of the G-8 plunked down $500 million as down payment. Mercy Muigai, an unemployed Kenyan woman, was not impressed:

"All these people (African leaders) do is talk, talk, talk. Then if they do get any money from the wazungu (white men), they just steal it for themselves. And what about us? We have no food. We have no schools. We have no future. We are just left to die" (The Washington Times, June 28, 2002; p.A17).

Indeed, there is no future for the mwananchi after the vampire elites have finished sucking the life blood out of them.

George Ayittey,
Washington, DC