Economic and political analysts argue the overriding motive to control the outcome of the March elections was to ensure whoever took over from former President Kibaki not only protected existing interests of these powers but, most importantly, kept away other encroaching foreign interests.
The Kibaki administration’s good rapport with other foreign powers, especially the Chinese, caused jitters in Western capitals to a point where they were not about to take chances again come the elections. That one set of candidates in the polls had pending cases at The Hague was just the excuse the West needed to bulldoze their preferred person to office.
Remember the pre-election subtle threats by Western diplomats as they tried to influence the outcome: “Choices have consequences” and “we shall have only minimal contacts”. Curiously, the talk of choices with consequences and minimal contacts somewhat disappeared once Kenyans made a decision on who they wanted as their leaders and the West had just to live with it.
Today, we tell the story of who owns Kenya’s wealth. It is a revealing account of who exactly controls key sectors of Kenya’s economy, from tourism, agriculture, ICT and manufacturing to banking and insurance. Tourism The big boys (and girls) of the industry are hotel owners and tour operators. Here, British and American interests take almost the entire cake through the hotels chains of Fairmont (the Norfolk, Mount Kenya Safari Club and Mara Safari Club), the Serena hotels, and the Blackstone group (Hilton), the Intercontinental group, Mayfair and the Fairview group.
On a good day in Kenya’s tourism cycle, tourists from Europe, the Americas or Asia will be booked into a Fairmont The Norfolk Hotel for an overnight stay before they proceed with their itinerary. The following morning, Ambercrombie and Kent, the tour operator in charge of their itinerary, will pick them up and drive them to the Masai Mara Game Reserve where they will only part with a few dollars to access the park.
After a day of feasting their eyes on Kenya’s famed Big Five, the tour firm will drive them to the Fairmont Mara Safari Club for a sumptuous dinner and luxury accommodation which will cost them a premium. The next day, they will drive back to The Norfolk in Nairobi where they will cool off for the night before they head off the following morning to watch the snow-capped peaks of Mount Kenya.
Again, after the day’s activities they will retreat to the Fairmont Mt Kenya Safari Club for a short stay. At the end of the itinerary, Thomas J Barrack, the 833rd richest person in the world and Geoffrey Kent will be laughing all the way to the bank as most of the money spent by the tourists in this trip will be transferred to their accounts.
Barrack, a former US Undersecretary for the Interior is the owner, chairman and chief executive of a private equity investment company, Colony Capital which, in turn, owns the Fairmont Raffles Hotels International, which in turn, owns the Fairmont hotel chain in Kenya. Geoffrey Kent, a British national who was born in Kenya 69 years ago on the other hand, together with his wife, Jorie Butler Kent, own Abercrombie and Kent which organises most of the tourism itineraries in Kenya.
Agriculture Kenya is known all over the world for her tea and coffee. But it is hardly told that leading tea firms in the country are British-owned, including Brooke Bond, James Finlay, Kapchorua and Williamson. Foreigners also dominate the tea and coffee auctions at Mombasa. Kenyan coffee is also used to blend coffee from the rest of the world but nowhere is it marketed as Kenyan coffee.
While small scale farmers produce the bulk of coffee and tea, the best value in from the two crops is harvested by the foreign companies, some of which are listed at the NSE. Kakuzi is is 70 percent owned by foreigners led by Carmelia Plc, a London Securities Exchange listed company but which is registered in tax evaders and money laundering Shangrila of Bermuda Island.
Carmelia shares in Kakuzi are held through Bordure Ltd and Lintak ltd. Other foreign owners of Kakuzi are masked through nominee accounts registered under CFC Stanbic and HSBC Custody. Horticulture Kenyans are merely spectators in the multi-billion flower industry. The owners of the big game are foreigners through Sher Karuturi, Oserian and Finlay.
Cut flower exports for example are the second biggest income earners after tea earning Kenya about Sh21.2 billion a year. The country has about 5000 flower farms. However, Sh15.9billion goes into the pockets of foreigners who own the 25 flower farms that control 75 percent of the flower export business. The other flower farms, largely owned by Kenyans, share 25 percent of the income; equivalent to Sh5.3billion.
Karuturi, one of the major in floriculture has a curious history in the country. Owned by Indian billionaire Sai Ramakhrishna Karururi, the flower farm was last year found by Kenya Revenue Authority to have evaded tax amounting to Sh975 million through transfers mispricing and fake invoicing. The Indian billionaire landed in Kenya in 2007 armed with Sh5billion to shop for a flower farm he could buy.
Luckily, for him Dutch owned farm Sher Agencies wanted out following prolonged drought, rising costs and bad press regarding employees’ welfare. Karuturi snapped up the company in an acquisition deal that gave him market leadership position with an export portfolio of 650million stems a year. Foreigners also control vegetable and fruit exports through Rea Vipingo, Del Monte, Kakuzi and Frigoken.
Another money minter in Kenya’s horticultural export stable is French Beans or Fresh Beans. The crop is mainly produced by small scale farmers who number about 100,000 spread across the country. According to Horticultural Crops Development Authority, Fresh Beans exports accounts for 29 percent of Kenya’s vegetable exports, earning the country Sh4.4 billion in 2011.
But most of the income will end up in the Aga Khan’s pockets. Here is how it happens. The Aga Khan is the biggest exporter of Fresh beans in Kenya controlling about 80 percent through Industrial Promotion Services (IPS) which owns Frigoken, his horticultural business front. Frigoken buys the beans from farmers in prices that have attracted international criticism, and then packages them for the export market.
A study conducted on Fresh Beans farming by Dutch Aid organisation SNV in 2011 found that the French bean exporters buy a kg of beans from small scale farmers at Sh28.70 on average while average export value for the same one Kg is Sh238. In other words, while a farmer will take home Sh86,100 for 3000 Kgs harvested from one acre, the Aga Khan will take home Sh855,000 for taking the same beans, packaging them and sending them to the export market.
At the end of the year, the 100,000 small scale farmer will take home Sh1.6billion. The Aga Khan, on the other hand, will pocket Sh3.5billion from the export income while the other 35 exporters market will share Sh900million.
- The People
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