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Why Britain is angry

There is more than meets the eye to the British High Commissioner’s incessant attacks on the government of Kenya.
15 February 2005 - Deremo Maiko

For years, the British have concentrated on quiet diplomacy in their relations with the Kenyan government. Not even the darkest days of the Kanu regime could prod its representatives to alter their stiff hands-off mien.

But as the economic equilibrium changes, commercial interests appear to be reshaping the gentlemanly British diplomacy in favour of more aggression. And having been soft on the 24-year mismanagement of the economy by the Moi Regime, they are finding miserable reception especially on the gravy train, which appears to have taken off yet again.

They have been there done that. Now, from Italians seeking to manage Nairobi water system, to Russians dying to supply the military through the Chinese wanting to cheaply equip the telecoms sector, competition is stiff and unchecked.

The French have now stepped up their bilateral aid, and behind the scenes, it appears this is a crucial diplomatic choice weapon against the UK; timely as the Kenyan economy shows clear signs of emerging from the woods at the vanguard of the East African Community and emerging peace in oil-rich Sudan and lawless Somalia.

For the Britons, corruption has all of a sudden apparently become a reality to be shouted about, not just be rebuked over diplomatic cup of tea. For Kenyans, they have shouted themselves hoarse over nearly three decades.

Commercial problems with the Kenya government appear to revolve around the publicly quoted UK security-document printer De la Rue. In 1994, the transnational firm set up shop at the tax haven zone just outside Nairobi in one of the biggest foreign investment under the Kanu regime. Its proponents have always seized on the investment in arguing that they should get preferential treatment from the Kenyan government.

A less publicised incident involved supply of equipment to Central Bank of Kenya where the firm lost to a competitor last year under hazy circumstances. But what has stolen the limelight certainly is a project to supply the immigration department with terrorist-proof passports. The project was mooted in the last two years of the Kanu government but wasinitialed in 2003, the first year of the Narc administration.

Initially estimated to cost some $10 million, the scope was later expanded under dubious circumstances to cost four times that. When the scandal was revealed by the media and Parliament, it spawned such a brou haha that the new government has never been able to live down.

The truth of the matter is that the project—together with another for building a police forensic lab involving almost the same amount—was to be financed through a shadowy Liverpool, UK-based firm called Anglo-Leasing and Finance.
The principals behind it are known to be a Kenyan-Asian family called the Kamanis who grew extremely rich doing business with the Moi regime. They have invested heavily in hotel business in India under a firm called Unicorn. The family is infamous for supplying security equipment—from guns to non-performing Indian jeeps—to the government at an inflated price.
The Anglo Leasing implementing firm of choice happened to be the Francois-Charles Oberther Fiduciare. To be fair, the French firm is quite competent but failed on one count—getting the contract from a shadowy firm even after the original tendering had been cancelled and declining to cooperate with Kenyan investigators on the scandal. Indeed, years back, the British firm, which has been running a dry patch, sold a good part of their securities printing business to FCOF.

The scandal has led to sacking of two Permanent Secretaries (ministry accounting officers) and a legal top dog at the Attorney General’s office. Little reported is that the Immigration department has been taken from the Vice president Moody Awori’s docket and given to a minister under him, Lina Jebii Kilimo.

Still, the public partly prodded on by the outspoken British ambassador Edward Clay wants prosecutions. The contract together with the one for the forensic labs was cancelled and all the money returned. Some suspect that the British are less concerned by corruption than getting the “right” people in the crucial office of the president ministry now under a Chris Murungaru, a towering presidential confidant whose sudden wealth is a matter of hushed discussion.

Amongst the four contenders was De la Rue and a Kenyan firm associated with millionaire Da Gama Rose who knows his way round when it comes to tendering politics.

Matters came to a head recently when De la Rue lost a currency-printing contract for Kenyan currency. The British firm’s monopoly was terminated when the new government came to power and questioned the rush with which it had been extended during the transition.

Indeed, it had been extended by ten instead of the usual five years. Now the British are not happy that FCOF was included (at the last minute) in the new tendering for currency printing despite their murky Anglo Leasing history. True, the inclusion flew in the face of the new public procurement rules pushed through by the Bretton Woods—and which ironically are working against bilateral-ties inspired procurement.

Britain despite the dwindling fortunes, where Land Rover and UK telecoms/military equipment are no longer able to withstand Asian incursion, remains crucial to Kenya. It is the topmost single trading partner and
source of tourists. Mr Clay’s sensational graft claims are not entirely unfounded though undiplomatic. Anecdotal evidence shows corruption is reinventing itself. But the fact that a good number of the cases mentioned involve already cancelled contracts or merely disputed tender awards has eroded his worth amongst more discerning observers.

In the coming months, the commercial war is expected to hot up as reconstruction picks up. It could draw in non-European Union players including the US.

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