Inside Somalis are on a property spree Parselelo Kantai reports FINANCIAL TIMES SPECIAL REPORT | Thursday October 29 2009 Page 5 www.ft.com/kenya­2009 Hamstrung by a crisis of leadership

The state appears to be Kofi Annan (centre) finds that Prime Minister Raila Odinga (left) and in retreat, less able than President (right) no longer ever to guarantee the have full control over their parties Getty welfare of its people, could not be independent. Successful writes Barney Jopson prosecutions at the ICC could make a difference too, by spelling an end – at n the lurching evolution of its least symbolically – to a decades-long young democracy, Kenya has culture of political impunity. covered more ground in less time Otherwise, pressure from the Ken- than many African countries, yan people could make a difference, Iand developed a bewildering tendency but there are doubts about whether to swing from despair to hope and they can be unified around a common back again in the space of weeks or purpose. In the multi-ethnic slums of even days. Nairobi, there are signs of class con- On December 27 2007, millions of sciousness taking hold. Young people optimistic Kenyans queued for hours are recognising that all Kenya’s main to vote in the tightest presidential tribes are now represented in govern- race since the emergence of multi- ment but their poor kinsmen are not party democracy in 1992. But the benefiting. result was disputed and the violence But in many rural areas – especially of the two-month crisis that it trig- the Rift Valley, where violence last gered pushed the country to the brink year was at its worst – politics is still of civil war. highly ethnicised. Grievances remain The power-sharing agreement that raw and some analysts say the ICC ended the crisis inspired hope once itself could trigger renewed violence, again, as the electoral rivals – Presi- if indicted politicians portray the dent Mwai Kibaki and Raila Odinga, court as a vehicle being used to perse- now prime minister – buried their dif- cute their ethnic group. ferences and heralded a new era of Then there are those Kenyans who co-operative politics. have given up on politics entirely. But 18 months later, those expecta- That is an attitude that could suit tions have been ground down to noth- some members of the government just ing by the coalition’s lacklustre per- fine. Last month, , formance, leaving a dark pall of fear energy minister and a Kibaki ally, and disillusionment. called for power to be concentrated in An economic and transport hub, the presidency under the new consti- and a vital base for the United tution and said: “Too much democ- Nations and aid agencies, Kenya is racy, as being witnessed now, is dan- entering a decisive period that will gerous.” determine not only the future of its Jimmy Kibaki, the president’s son, democracy, but its stability and viabil- told the FT he did not agree with Mr ity as a state. Murungi’s statement. But, if he was The government is beset by in-fight- asked to choose between democracy ing and corruption and unable or and prosperity, he said, he would unwilling to implement the reforms it choose the latter, as Asia’s tiger econ- pledged to tackle the injustices that omies once had. underlay last year’s crisis. “The coali- “Really, you know, we Kenyans love tion is dysfunctional,” , our freedom. But countries in Africa lands minister and an Odinga ally, fill empty stomachs. the Mau forest. In the muggy western “There’s a need to appreciate that Mr Kibaki had improved in recent … I don’t know how to put this, admitted in July. In need of reform are Kenya’s police town of Kisumu cash is drying up as progress is being made, but that more months, but that within their parties because it’s a delicate issue … they Because the government failed to force, its corrupt judiciary, land own- the fish stocks of Lake Victoria are could be made. But when this all “the factions and divisions have inten- have to be governed with a firm hand, set up a local tribunal to try the “big ership and the constitution, in which depleted. And in the semi-desert turns into rubbishing virtually every- sified so much that party leaders no with a real firm hand, otherwise men” suspected of organising last many Kenyans want to see the power north, nomadic herders are asking thing the government is doing, then longer have absolute control and there’s a danger of them breaking up year’s violence, some unnamed cabi- of the presidency reduced. But Kenya whether their way of life can survive. people get confused,” Mr Odinga says. influence”. into different tribal entities.” net ministers now face the possibility has more to worry about because suf- Kenya has problems created by a He suggests that Kenya’s boisterous If foreign pressure cannot break the Kenya is still one of the most open of trial at the International Criminal fering across the country is increasing confluence of trends that emerged free press and civil society tend to deadlock, it is possible parliament democracies on the continent, but if Court in The Hague. by the day. long before the coalition was formed, amplify the negatives unfairly. could: it was lawmakers who blocked the discontent stirred by the coalition This month Kofi Annan, the man In the Rift Valley, supposed to be its but they are being aggravated by a An independent report for a group the establishment of a local tribunal means its next lurch is backwards, it who brokered the power-sharing deal, bread basket, farmers pick their way lack of leadership. “Climate change set up by Mr Annan said this month for the suspects behind the post- will be an ominous shift not just for returned to Nairobi to try to press its through fields of crops withered by and population growth, combined that relations between Mr Odinga and election violence, because some said it Kenyans but for all Africans. signatories into action. “It is clear this drought and the effects of the destruc- with a history of poor management of is a moment of truth for Kenya’s polit- tion of a vital water catchment area, the natural resource base, have cre- ical leadership,” the former UN secre- ated an enormous crisis,” says Johan- tary-general said. nes Zutt, head of the World Bank’s Perceived as aloof and indifferent, Kenya office. the coalition has alienated many Ken- Across the country, the state yans. But beneath the common dis- appears to be in retreat, less able than content, people are divided over what ever to guarantee the security or wel- kind of political system and what kind fare of its people. In its annual rank- of country they want to live in. That ings of the world’s most failed states, is why businesspeople and diplomats the US Fund for Peace placed Kenya are increasingly worried about the 14th this July, up from 26th last year next election. It could be the trigger and 31st before the 2007 election. for more conflict if politicians again Inside this issue The international community is exploit the desperation of the poor by The economy The biggest risk faced frustrated and its relations with the convincing them that putting one of by business is political, writes Barney government are at a low not seen their own ethnic barons in power will Jopson Page 2 since the era of President Daniel arap lead to a better life. Moi, a venal autocrat in power until There are decades of precedent: The stock exchange Crisis of 2002. Criticism has been led by the US Kenya has more than 40 tribes, each confidence has little to do with administration of Barack Obama, with a different language and differ- external factors, writes Parselelo whose father was Kenyan. Last month ent customs and they have become Kantai Page 2 it said it would ban politicians and highly politicised as protagonists have bureaucrats who were blocking Politics Some Kenyans long for an stirred up ethnic hatred and turned reform from travelling to the US. end to dynasties that have held elections into tribal battles over power since independence Page 3 The criticism has not been well access to state resources. received, including by Mr Odinga, If reports – strenuously denied by The Mau forest Destruction is who is closer to the west than Mr the government and police – of ethnic precipitating an unprecedented Kibaki, the man he accused of rigging militias arming themselves with environmental crisis Page 4 the 2007 poll. Mr Odinga told the FT AK-47s rather than the machetes of that reforms could not happen over- 2007 are true, the violence could be on Drought Extreme climate events are night and that a series of commis- an altogether more gruesome scale. It making the daily battle for survival sions and reports organised by the could also cross a class divide, with ever more difficult Page 4 coalition were evidence of progress. the poor attacking rich neighbour- Critics say they are being used to par- hoods, regardless of tribe, to loot and alyse reform through “process”.

Kidnappers draw up price scale based on local incomes

CRIME & SECURITY security company that pub- lishes a weekly crime Parselelo Kantai report, also has statistics reports on the that indicate an increasing incidence of abductions. exponential rise Until recently, most kid- in abductions nappings were being reported in low- and middle- income suburbs in Nairobi’s They came for the business- sprawling Eastlands estates man, a property developer and in the slum quarters of in his mid-30s, on a Friday Nairobi and other cities. morning in October. He was However, more recent inspecting one of his con- cases have shown the crime struction sites in Gachie, a rapidly diversifying. There peri-urban settlement west are even signs of a kind of of Nairobi. disaggregation by neigh- Four youngish men, well- Sect suspect: police arrest member of Mungiki movement bourhood; grapevine reports dressed, smooth-talking and suggest that kidnappers wielding pistols, forced him frantic series of phone calls of intermediaries and the have now drawn up a price into their car, blindfolded between the businessman’s businessman was set free, scale according to perceived him and drove off. He did wife in Nairobi, his father unharmed, the following average neighbourhood not know where they took in Dubai, friends and other Monday. income levels. him, but from the floor by relatives – all monitored by Welcome to Kenya’s lat- Technology too, has made the back seat, reckons they the kidnappers. est criminal fad. criminals more efficient; drove for about an hour. “The men seemed to be Even as national crime the kidnappers communi- When they reached their able to trace every call that levels have steadily dropped cate with the victims’ fami- destination, they asked him his wife and father were over the past year, accord- lies via mobile phone, and for his wife’s mobile phone making,” says a relative ing to police statistics, in some cases, demand pay- number, called her and who was involved in the abductions for ransom have ment via the M-Pesa mobile informed her that if she negotiations. “They would been rising exponentially. banking system. ever wanted to see her hus- call them both up and tell Between 2007 and the While this easily exposes band alive again, she them whom they had last middle of this year, the their locations to police needed to pay KSh 700,000 called and how long the call police reported 27 abduction traces, hardly any arrests (about $9,300). had lasted.” cases. Now, there are an have been made. Perhaps The police were never In the end, the money average of six a week. Many the most infamous kidnap- involved, for obvious rea- was delivered in cash more go unreported. sons. The weekend saw a through a complicated set KK Security, a private Continued on Page 4 2 ★ FINANCIAL TIMES THURSDAY OCTOBER 29 2009 Kenya Trouble at the ‘old boys club’

THE STOCK EXCHANGE ble to cover its clients’ invest- ments. The NSE board quickly Parselelo Kantai on organised a bail-out, but this too the ebbing away of failed to get Nyaga out of the red. The firm shut down. Two confidence, most of it other firms, Francis Thuo and due to local factors Associates and Discount Securi- ties, both well respected, were similarly wound up. The Tsavo Investment Securi- The situation was exacerbated ties briefing had been moved by the fact that, according to old once already, from 9am on a rules set by the regulator, the Saturday morning to 11am. Half Capital Markets Authority, an hour later, there were still investors can only reclaim a only five people in the large con- maximum of KSh50,000. ference hall. Fifty had con- The queues outside the firmed attendance. Fred Mweni, swanky offices of the defunct chief executive, tried to make Nyaga Stockbrokers early this light of it. Another half hour year included elderly village went by. Finally, when there women, many of whom had were 10 people present, he entrusted their life savings to began. the firm. It was, bizarrely, a lively pres- Patrick Ndwiga Gachiavih, entation – a Billy Graham per- the managing director, had his Paradox: Nairobi looks in fine fettle with new office towers and swanky apartment blocks, many funded by Somali businesspeople, continuing to pop up Panos formance booming out to a pud- assets frozen and has been dle of believers in the middle of charged in court. He remains a a vast, empty hall. free man. Mr Mweni went through the The situation was exacerbated depressing statistics. The Nai- by a leaked forensic audit that Problems compounded by politics robi Stock Exchange 20-share implicated officials in dubious index, temporarily falling below deals. Regulatory weaknesses at the 3,000-point psychological the CMA and cronyism at the THE ECONOMY per cent this year, underper- under the country’s previous June the construction sector barrier over the past year, had NSE are at the root of the stock forming Uganda, Tanzania and president, , GDP growth grew at an annualised 10.7 per now inched just above it. The market’s difficulties. Executives are worried Ethiopia and its own 2003-07 whose regime hampered busi- Annual % change cent. exchange had lost KSh500bn or “There are integrity issues at by the government’s boom, which ended with growth ness with red tape and demands 15 The constant bustle in the close to half its value since June the Nairobi Stock Exchange, of 7.1 per cent growth in its final for bribes and ownership stakes. shopping malls suggests that 2008, when trading averaged and these are historical,” uninspiring year. That is why President Mwai Ethiopia middle-class spending is holding KSh3bn a day. Now the NSE explains a former regulator, The impact of the weak global Kibaki and the hands-off up too. However, the activity is could barely pull off those num- hinting at the NSE’s reputation performance, writes 10 economy on Kenyan exports is approach of his first five-year Uganda in large part thanks to the thou- bers in a month. of being little more than an old Tanzania Barney Jopson one reason for the flat perform- term were welcomed as such a sands of diplomats and United Perhaps the most telling indi- boys club. ance – flat when you consider breath of fresh air. Nations officials in Nairobi, cation of the NSE’s declining “Many of these brokerages are that the population is growing Today, however, under the 5 whose jobs are unaffected by fortunes were the investor num- one-man shows. All it takes to wo years ago the Ken- at between 2 and 3 per cent. coalition that Mr Kibaki leads swings in the world economy. bers. In June last year, in the become a stockbroker is KSh5m, yan business world was Drought is another: it helps with Raila Odinga, the prime Kenya “How do you equate the froth immediate aftermath of the big- and yet you are entrusted with bubbling with talk of explain why agriculture and for- minister, hands-off government 0 in Nairobi with 2 per cent gest IPO in the 55-year history billions. When you default, you “decoupling” – the coun- estry, which (including tea and seems to have deteriorated into growth and an uncertain politi- of the NSE, that of mobile serv- get a slap on the wrist.” Ttry’s economy had finally coffee) make up roughly one the polar opposite of Moi-era cal future?” asks Michael ice provider, Safaricom, local Within the stockbroker com- become detached from the quarter of the economy, have interventionism: off-duty gov- Turner, head of the Nairobi investors constituted 70 per cent munity, collusion between intrigues of politics, executives been contracting since the sec- ernment. -5 office of the private equity of the total. Now, foreign inves- account auditors and IT opera- declared with evident relief. ond half of 2007. Kenya is confronted by an 2003 04 05 06 07 08 09* group Actis, which has invested tors account for 70 per cent of tors made it difficult for the How wrong they were. The But politics are at play too overwhelming range of prob- Source: IMF * Estimates $55m in the country. the total. CMA to spot anomalies. paralysis caused by last year’s because the drought’s withering lems that have the potential to “It’s the great dichotomy of Between 2003 and 2007, more “We have an honesty deficit,” post-election crisis, together impact has been aggravated by choke off the supply of inputs, he describes as: “Sit back and Kenya, but it’s not inconsistent than 500,000 Kenyans became says the former regulator. with the uninspiring perform- poor management of environ- drive up costs, stifle domestic let them fight. Then pick up the with its history either.” Even in investors. A mix of central bank Reforms within the CMA are ance of the coalition govern- mental resources and a failure consumption and make running pieces.” the Moi era, some businesses intervention and technological slowly being put in place. There ment formed to end it, have to put in place contingency a business ever more difficult. One bright spot is infrastruc- managed to succeed, he says, innovations made it easier for is now an anti-fraud unit staffed landed political risk back on plans, say businesspeople and Only the government can ture. Mr Smith and others say thanks to the “entrepreneur- investors to register accounts. by criminal investigations offic- executive agendas. diplomats. tackle food shortages, power the coalition is making progress ship, resilience and adaptabil- Fortunes were made, as share ers, and brokers must disclose The country’s economy is Worse still, executives say the cuts, water scarcity, spiralling in fixing roads, such as the cru- ity” of Kenyans. prices soared on post-Moi politi- their annual accounts. forecast by the International economy could fall backwards crime, widening inequality, cor- cial Nairobi-Mombasa route, and One sector familiar with cri- cal optimism and a raft of public Is it enough to restore public Monetary Fund to grow at 2.5 once again – it shrank in the ruption and the ever-present pushing ahead with plans to ses – sun-and-safari tourism – is sector IPOs, all of them mas- confidence? Mr Mweni wistfully crisis-hit first quarter of last threat of ethno-political vio- develop wind and geothermal rebounding from the post-elec- sively over-subscribed. recalls the boom years: “We year – if the government’s fail- lence. The private sector is power as an alternative to tion violence. From January to The index rose from slightly used to have four training ses- Contributors ure to reform sets the stage for pressing it to act. hydro. August the number of tourists above 2,000 points in late 2002 to sions, each with more than 50 Barney Jopson worse bloodshed at the 2012 Yet, if you want the govern- However, the poorest are who arrived by air was 611,000, a high of 6,000 four years later. people. Then came the Safari- ‘If you want the East Africa Correspondent election. ment to do something, says still not feeling the benefits of only 11 per cent behind a 2007 The trouble did not really com IPO and everybody went “The biggest risk we face is Michael Joseph, chief executive what little growth there is – record. begin with the economic skid of mad with unrealistic expecta- government to do Parselelo Kantai political in nature,” says David of Safaricom, Kenya’s biggest although some are cushioned by Still, businesspeople say that, the post-election violence, or tions. They were accusing me of FT Contributor Mousley, a former tea executive mobile operator, one problem is remittances from relatives on the global stage, Kenya even the global credit crunch. misleading them. But everybody something, one with James Finlay who works in working out where to start. abroad, which are probably remains an expensive and ineffi- Neither of these things ade- lost,” he says, gesturing at the problem is working Stephanie Gray the flower industry. “Who do you talk to? Who’s in Kenya’s biggest source of for- cient place in which to operate quately explains the enormous emptying room. Commissioning Editor He explains: “If the Mau forest charge? Is it the president? The eign currency. and that is now overlaid with loss of confidence. One of his clients, a young out where to start’ Steven Bird [a vital rain catchment] is prime minister? The head of the One paradox is that Nairobi the dangers created by a govern- Between 2007 and late last woman in her 20s, interjects. Michael Joseph, chief Designer destroyed and we don’t have civil service?” he says. looks to be in fine fettle. United ment short on leadership. year, as share prices began to Five years ago, she and her executive of Safaricom water, it’s because the politi- Steve Smith, chairman of the Bank of Africa, a Nigerian insti- “We’re tied to the politicians fall, a number of prominent friends started an investment Andy Mears cians didn’t do anything about Kenya Private Sector Alliance tution, has just set up a regional at the hip. We’ve got to help stockbrokers were exposed as club, one of thousands formed Picture Editor it. If there’s conflict between dif- and managing director of office in town and so has Afric- them to help us,” says Mr having made transactions with during the boom years. ferent ethnic communities, it’s Eveready East Africa, a battery invest, a private equity group Smith. their clients’ money. Today, despite everything, For advertising details, contact: because of the politicians. It all maker, complains there are that plans to invest at least Decoupling has been replaced Perhaps the most infamous they have made enough on the Mark Carwardine on: comes back to the management “silos” in government. $20m in Kenya. by recoupling and if the coali- has been Nyaga Stockbrokers, stock market to cash in on their +44 (0) 207 873 4880: of the affairs of state.” Ministries do not co-ordinate New office towers and swanky tion’s course does not change, which managed almost 200,000 dream: a KSh5m house. “It’s not [email protected] There is an irony that the with each other and the situa- apartment blocks, many funded there is a risk that an enabling accounts. As the index fell, the how much you can make at one or your usual representative gripes of businesspeople today tion is not helped by the presi- by Somali businesspeople, con- environment will become a disa- firm began experiencing severe go,” she says. “It’s how much are so different from those dent’s management style, which tinue to pop up: from April to bling one. liquidity problems and was una- you can slowly build up.” Cables set to transform business

BROADBAND packages Safaricom offered, he set up his own cyber Online: the internet no longer raises blood pressure Alamy Barney Jopson café in Kilometre Moja, a examines ‘the most commercial enclave of con- ates, where Etisalat, the using voice over internet crete-cube stores and listing UAE’s dominant telecoms protocol (VoIP) services and important wooden kiosks, separated company, also has a stake. linking in to the real-time development by bare earth and smoulder- The cables have reduced transaction reporting sys- ing piles of rubbish. prices from about $3,000 per tems of overseas head in decades’ Kilometre Moja is a megabit per month to as lit- offices. Kenya’s nascent call peripheral place that serves tle as $200. In common with centre industry should be a the students of Kenyatta many of its rivals, Access big beneficiary. Having just lost his job as University north of Nairobi, Kenya, one of the biggest Kenyan businesspeople an advertising salesman reached by turning off the providers, says it has are excited about selling due to the downturn, it was Thika Road on to a dirt passed the savings on to their products online – it a Safaricom ad in a Kenyan track, crossing a railway customers by giving them used to be a non-starter – newspaper that caught line, and skirting round a twice as much bandwidth and are picking up on the Michael Wanganga’s eye. pack of grazing goats. for the same price. late 1990s vocabulary of The country’s biggest tel- But it is also a reminder But the arrival of broad- “B2B” (business-to-busi- ecoms provider was promot- that there are smart young band has not been without ness) and “B2C” (business- ing a seminar for cyber café people in all corners of to-consumer) transactions. owners in July at which it Kenya with entrepreneurial One of the only internet promised important news get-up-and-go. For years, east retailers is OnlineDuka, on its internet services. Many executives from Africa had been the which sells everything from In spite of his lack of businesses much bigger moisturising cream to hub cyber credentials Mr Wan- than Mr Wanganga’s six- only part of the caps. It had roughly 20,000 ganga went along and was computer outlet say the world not visitors a day before the ushered into a new era: arrival of the two cables – cables but now the figure where the internet does not called Seacom and Teams – connected to has jumped to 50,000, says send your blood pressure is the most important devel- Joel Amenya, its co- soaring. opment in Kenyan infra- broadband founder. For years, east Africa had structure in decades. Kenya does not have leg- been stuck in an internet The $600m Seacom cable, controversy. Bitange islation in place for online backwater as the only part which was the first to get Ndemo, a senior official at payment by credit card. But of the world not connected connected in July, is whol- the ministry of communica- Mr Amenya allows custom- to the global broadband net- ly-owned by private inves- tion, has accused some ers to pay using M-Pesa, work. tors and connects several internet service providers of Safaricom’s mobile phone Consumers had no choice points on the east African acting like a “cartel” by not money transfer service. but to pay sky-high fees for coast with India and, in due passing on a more generous Back in Kilometre Moja, ultra-slow satellite links, course, Europe. chunk of savings. Mr Wanganga takes cash but this year’s arrival of The $110m Teams cable is The ISPs respond that only. Does he keep two submarine cables has a Kenyan initiative part- their own costs have not accounts? “Not really.” So turned the dearth of band- owned by the government yet fallen because they how does he keep track of width into a glut. and telecoms companies – have to see out their exist- business? “I check my Mr Wanganga has become including affiliates of Voda- ing satellite contracts. pocket.” And how is it one of the first to take fone and France Telecom – Corporate users can now doing? “I’m breaking even,” advantage. and connects Mombasa do things that were barely he says. “But it has poten- Inspired by the low-cost with the United Arab Emir- possible before such as tial.” FINANCIAL TIMES THURSDAY OCTOBER 29 2009 ★ 3 Kenya New blood unlikely to dislodge old habits

POLITICS most obvious reason is that the electorate is generally fed up A thorn in the side Barney Jopson on the with the arrogance of the fami- iron triangle of ethnic lies of an incumbent president, and other leading political per- rivalry, corruption sonalities who use their position and patronage when in power to enrich them- selves in many different fields.” For many politicians – but not enya’s first liberation all – the iron triangle of ethnic- was from the injustice ity, corruption and patronage of colonial rule. Its sec- remains strong. Politics is a The coalition government has ond was from the one- means of gaining access to many critics, but the biggest Kparty rule of President Daniel power for the sake of enriching thorn in its side is Michael arap Moi. Now some Kenyans themselves and their kin, if not Ranneberger, the tweeting are longing for a third libera- their entire tribe, generally at ambassador, writes Barney tion: from the dynasties that the expense of others. Jopson. The US envoy has have dominated the country’s Wealth is also crucial to the deployed Twitter, the politics since independence. endurance of dynasties because microblogging website, to For many ordinary citizens, cash hand-outs can secure votes hector Kenya’s political leaders. the country’s malaise is the in a country where so many Tweeting under the name result of a crisis in the leader- people are living on the margins USAMB4REFORM (US ship of a political class with of survival. One diplomat in ambassador for reform), he roots in the independence strug- Nairobi laments the lack of poli- comments on news events and gle, whose members have cycled ticians who want to work for posts links to items in the through every possible combina- the good of the whole country. media that help reinforce his tion of alliances over the years “Why doesn’t someone step out message: “The pace of reform in the search for power. and try to speak for the whole must be quickened. That’s But Kenyans see few signs of nation? Why doesn’t someone what the Kenyan people want.” change when they consider the speak to this? Someone could do When President Mwai Kibaki two most likely candidates for that,” he says. reappointed Aaron Ringera as the next presidential election in This is what Jimmy Kibaki, head of the ineffective Kenya 2012 (when President Mwai the president’s son, says he Anti­Corruption Commission Kibaki will step down after two wants to do. He is starting out last month, Mr Ranneberger terms). on his political career just as his tweeted: “Outraged by One is , the father’s enters its final phase. Ringera’s reappointment. son of Kenya’s first president, Many Kenyans assume he will Indication of impunity. A Jomo Kenyatta, who is finance “inherit” the president’s constit- Kenyan told me it’s a slap in minister and lost the 2002 presi- uency in 2012, but Mr Kibaki is the face of Kenyans. What to dential election to Mr Kibaki. coy on that and says a move- do? Suggestions?” The other is Raila Odinga, the ment he has started – Simama Mr Ringera subsequently prime minister and son of Jara- Kenya – is about empowering stepped down after a mogi Odinga, Kenya’s first vice- the youth and finding a new nationwide outcry. president until he fell out with generation of leaders. Mr Ranneberger also Mr Kenyatta senior. Raila cam- Kenya’s problem is not dynas- regularly holds web chats that paigned for Mr Kibaki in 2002, ties, he says, but the impending are open to ordinary Kenyans, but they fell out too and in 2007 retirement of the politicians in although as the number of he ran against him, only to be their 60s and 70s.“Kenya needs a off­the­wall questions for him robbed of victory amid accusa- new anchor and that anchor piles up, they tend to tions of fraud. should be the majority of the degenerate into online versions The persistence of dynasty people who are young,” he says. of Africa’s fevered and chaotic politics is a “bad culture”, says “Kenya’s stability will be political rallies. Florence Jaoko, chair of the ensured once we have genera- He has succeeded in getting Kenya National Commission on tional change.” up the noses of the coalition’s Human Rights. “It’s totally dis- Mr Kibaki’s motives and com- leaders, who accuse him of empowering . . . Some of [the mitment have been questioned “interference” and say he is politicians] have never cared precisely because of his name giving his bosses in about the interests of Kenya. Dynasties: the 2012 election, in which Mwai Kibaki (above left) will have to step down, will be contested by the sons of former leaders Getty and background. Kenya’s Washington a misleading They’ve been known as the chil- National Youth Convention said account of what is happening. dren of their parents. They have were defeated. But one of them, – that a multi-party system unique to Kenya or unambigu- ple will not be elected because earlier this year that Simama In September, Mutula a right to be in politics, but they Gideon Moi, remains visible and would stoke tribalism and ously good or bad. “I don’t think you are the son of so and so. Kenya was a “cheap political Kilonzo, the justice minister, should not have an advantage. is vice-chairman of his father’s destroy Kenya – is looking that you can talk of dynasties, People are elected because of outfit” constructed to hijack its sent a public message to the They should compete equally.” party, the Kenya African rather less far-fetched than it because this is a democracy, what you represent.” agenda for short-term gains. ambassador, telling him: The 2007 parliamentary elec- National Union. Its chairman is once did. and I think that people really Michael Aronson, a lawyer The challenge for the presi- “Please shut up”. When asked tions showed that the patience Uhuru Kenyatta. Even the sen- Several politicians cite the US have a choice,” says Mr Odinga, and former member of the Brit- dent’s son is therefore to prove about it a few days later, Mr of voters was waning when ior Mr Moi is active again, seem- – with the Bushes, Clintons and the prime minister. “Nobody ish colonial administration, says he is a real liberator – and not Ranneberger responded: “At three sons of former president ingly emboldened by the fact Kennedys – as evidence that has stopped anybody from run- dynasties are not likely to suc- the next instalment of the least he said ‘Please’.” Moi, all members of parliament, that his most famous prediction political dynasties are not ning against these people. Peo- ceed in the long term. “The dynasties. 4 ★ FINANCIAL TIMES THURSDAY OCTOBER 29 2009 Kenya Price scale Attempt to repair a set for damaged ecosystem kidnaps THE MAU FOREST ernment officials and their cro- office. He had never even filed nies had been allocated the land. the case.” Continued from Page 1 Parselelo Kantai He went to Narok town and It is quite possible that Mr reports on a Ponzi hired a lawyer, challenging the Tisia and the Saptet Multipur- ping case, that of an Asian group’s eviction. It was then that pose Group were the first unwit- businessman in 1998, was scheme threatening he began spending his life in ting victims of what has become solved using police tracking environmental disaster Narok-bound matatus (shared Kenya’s greatest environmental devices, technology that taxis). Soon after filing the case, Ponzi scheme: the sale of the now appears to have eluded his lawyer became unavailable. 400,000-hectare Mau Forest com- the force. ilson Sitonik Tisia, a Mr Tisia’s journeys to Narok plex, Kenya’s biggest water Police have linked the soft-spoken, middle- became exercises in futility. catchment area. abductions to Mungiki, the aged man, began to Then one day in 2006, five From the late 1990s, senior offi- banned ultra-conservative grow old on the one- years after he had embarked on cials of the Moi administration religious movement. Once a Whour commute between Bomet his commutes, Mr Tisia received allocated themselves huge pieces vigilante outfit that pro- and Narok towns in the southern an unexpected call. It was from of the Mau forest, the land hav- vided security in the slums, Rift Valley. A headmaster at a his lawyer. He had news, he said. ing been set aside on the pretext Mungiki was sent under- secondary school in Bomet, he They had finally won the case. of resettling Rift Valley residents ground by the first Mwai had been elected chairman of the “That day I was so happy,” he and victims of the ethnic clashes Kibaki administration in Saptet Multipurpose Group, a that preceded the 1992 and 1997 early 2003. 147-member co-operative. In the general elections. Composed of young men late 1990s, the co-operative had The Mau is the source In 2001, the government for- almost exclusively from bought a piece of land from the of 13 rivers. Its malised the process by excising President Kibaki’s Kikuyu family of an old Maasai man, 67,000 hectares, about 10 per cent community, Mungiki Mzee Kuluo, carved out of a com- ecosystem supports of the Mau complex, despite pub- turned to organised crime. munal ranch. The land bordered about 25m people lic protests and court injunctions Clearance: settlers went on a logging spree, clearing the forests to make way for farmland Getty It has been linked to racket- the Maasai Mau forest. forbidding the government from eering and extortion. The forest, regarded as com- doing so. Thousands of people, Mau saga were fictitious, had commercial loggers. In short, destruction of the Mau precipi- Last month, Emmanuel munal land under the trustee- says. “I told my members. We mostly Kalenjin supporters of been produced within govern- everybody made a killing. Every- tates an unprecedented environ- Agwar Adar, a six-year old ship of the Narok County Coun- celebrated the whole night. Then the Moi government, were set- ment offices through a conspir- body, that is, except for those, mental crisis. The Mau is the boy of Sudanese parents, cil, had never been clearly in the morning, I dressed and got tled inside the forest. acy that involved civil servants, like Mr Tisia who had no idea of source of 13 rivers which feed was abducted while playing demarcated. It was, in fact, forest on to the matatu and went to In the Maasai Mau, where half a Maasai political family and what was at stake. the lakes in western Kenya, outside the family home in land by default, its borders Narok to see the lawyer.” of the forest’s 50,000 hectares Moi-era politicians. The task force recommended including Lake Victoria. Its eco- Eastlands’ Komarock defined by the five group He was not there. The lawyer’s was encroached on, this process The group had reportedly sold that all settlers in the Mau For- system supports about 25m peo- estate. ranches that bordered it. clerk was rude. In despair, Mr was reversed in June, 2005. A the forest land to third parties, est complex be removed, and ple in Kenya and Tanzania. Soon after, the kidnap- Shortly after the Saptet Multi- Tisia walked dumbly out of the government security operation mostly unwitting ordinary folk, only those able to prove genuine Now the task force team is pers demanded KSh500,000. purpose Group purchased the office. As he took the stairs, a evicted 10,000 people from the and used professionals in Narok title be compensated. That last ready to move on the settlers. It The family failed to pay. land, the area district commis- secretary from another office forest, burning houses, schools, and elsewhere in the Rift, law- recommendation set off a politi- will begin issuing eviction Four days later, sioner issued it with an eviction stopped him. “She told me some- churches and market centres. yers and private land surveyors, cal firestorm that threatened to notices at the end of this month Emmanuel’s mutilated body notice. The co-operative had, he thing unbelievable. She said that A task force commissioned by to legitimise the process. The tear Mr Odinga’s ODM party in and will carry out a phased oper- was found in a sack, a said, encroached on forest land. I was being cheated. That for Prime Minister Raila Odinga to new settlers went on a logging half. His aggrieved Kalenjin sup- ation starting in November. It print-out of the notice the When they resisted, they were many years she had been hear- put in place a conservation spree, clearing the forests to porters read it as an attack on has been a long journey. Still, parents had circulated evicted. That was in 2000. ing the lawyer speaking to me on regime for the restoration of the make way for farmland and, in their community. there are no guarantees that pol- stuck on the front. The kid- Soon after they were removed, the phone, telling me he was in Mau Forest Complex, established the process, providing billions of Ever since, the government itics will not, once again, get in nappers were sending a Mr Tisia began hearing that gov- court when in fact he was in the that the title deeds in the Maasai shillings worth of timber for has hesitated, even as the the way of good intentions. message to the neighbour- hood. Many feared that Mungiki was involved. There have been no arrests linking Mungiki to the abductions, however. The police, insisting that the situation is under con- Battered by climate extremes trol, appear to have few answers. Nevertheless, Eric Kiraithe, police spokesman, DROUGHT fact it was dumped there by than brittle acacia thorns for at least four days a “We’ve not had a drought is convinced that the move- a flash flood. and rocks. week. mitigation or recovery ment is behind this new Barney Jopson The truck’s eerie presence As hundreds of thousands The water stopped flow- strategy,” he said. “Every crime. “There are several reports on Kenya’s is a reminder that drought of their animals have per- ing in many residential time we declare it as a studies going on at the is not the only extreme cli- ished due to thirst, hunger areas too, forcing people to national disaster, as if we moment and they all link ever faster mate event that Kenya is and disease, the nomads buy from expensive private didn’t know it was coming.” Mungiki to the kidnappings. weather seesaw suffering with growing fre- have lost their sources of water vendors. The dysfunctional ruling The motive seems clear: quency. milk and cash. Nearly 5m Kenyans coalition has not begun to spreading terror to force the Africa has always been a They are one of the com- require food aid, according turn the tide, even though business community to sub- The red warning triangle continent of extremes, but munities most affected by to the United Nations World it was clear for months that mit to them,” he says. alerting vehicles to the risk the heavy rains are failing the three-year drought, but Food Programme, with a food crisis was looming. Others, however, have of flooding looks out of more often, followed by sud- it has taken its toll across nearly 23m people in need Instead, corruption seems Lifeless: hundreds of thousands of animals have perished AP fingered the police them- place amid the parched den gluts of water that Kenya, pushing the country across east Africa, most to have proliferated. selves, notoriously corrupt semi-desert wastes of the cause mayhem when they into crisis as wheat and notably in Ethiopia. In January, a dozen sen- isfaction,” says one aid WFP spokeswoman. “It’s and recently accused by Turkana district in north- meet the impermeable, maize crops fail and food The worst previous ior agricultural officials agency official in Nairobi. also going to take some Philip Alston, the United ern Kenya. hard-baked soil. Both are prices rise so high many drought was in 2000 but the were sacked after thou- In the past three weeks, time for cows to start pro- Nations Special Rapporteur, Out of place, that is, until probably linked to climate families cannot afford to current one has been exac- sands of bags of maize dis- however, rain has at long ducing milk, and around of abducting and murdering the tarmac road vanishes change. feed themselves. erbated by man-made fac- appeared from Kenya’s stra- last begun to fall, providing nine months to start calv- youths on the pretext that and drivers are forced to But while the intricacies Even the country’s vital tors that are raising tough tegic grain reserve. some relief for the govern- ing.” they were members of take a bumpy diversion and uncertainties of the sci- safari tourism business has questions for Kenya: why This month Raila Odinga, ment and, more impor- The rain has produced Mungiki. across a dried-out river bed. ence are beyond them, what been affected as elephants does one of the most devel- the prime minister, ordered tantly, the Kenyan people. awful traffic snarl-ups on The police have denied There they find the car- most people in Turkana and other animals have oped countries in Africa an investigation into food It has come thanks to El muddy main roads in south- the charges and accused cass of a truck that has know is that these events died in popular national remain so dependent on for- aid that was thought to Niño, the periodic warming ern Kenya. Prof Alston of bias. How- been flipped on to its back are threatening their liveli- parks such as the Masai eign food aid? have been stolen by local of the tropical Pacific Ocean But in Turkana locals are ever, a 2008 report by the like a helpless beetle – and hoods and making the daily Mara. James Nyoro, a food secu- government officials. that affects weather sys- grateful it has not been Kenya National Commis- buried up to its chassis. battle for survival ever The drought has also led rity expert, told the Finan- As a result, donors are tems worldwide. strong enough to cause the sion on Human Rights doc- All that is visible are four more difficult. to severe power rationing cial Times earlier this growing impatient with “So far, the rains have flooding that can rot crops, umented the disappearance tyre-less wheels protruding The region is home to as Kenya is heavily depend- month that the reason was Kenya. “They permanently been far above average for destroy houses, increase the of at least 300 young from the ground. pastoralists who live a ent on hydro electricity: that successive govern- have their hand out. Their the season, but harvests spread of water-borne dis- Kikuyu men, all suspected It looks as if it has been nomadic existence herding houses in some of Nairobi’s ments have failed to put in reaction to the crisis is to will only come in early 2010, eases such as cholera – and to have been abducted by dropped into quicksand cattle across plains that are plushest neighbourhoods place contingency plans or say: the donors will pay for so the food needs are still upturn unsuspecting the police. from a great height. But in populated by little more have been without power to modernise agriculture. it. So there’s general dissat- great,” says Gabi Menezes, trucks.

KENYA

Constitution Main trading partners Area 569,259 sq km SUDAN Elimi Triange Share of total trade to world, 2008 (%) under Kenyan ETHIOPIA Official name Languages: English, Kiswahili and more administration Republic of Kenya Exports Imports than 40 other ethnic languages Lake Form of state UK 10.0 Turkana Unitary republic Currencies: Shilling (KSh) Netherlands 9.2 Legal System Exchange rate: Based on English common law 2008 average $1=KSh 69.12 KENYA Uganda 9.0 UGANDA and the 1963 constitution; new

Latest figure $1=Ksh 75.28 SOMALIA draft constitutions were Tanzania 8.7 Kisumu Population (2008 UNPOP est) 38.6m Mt Kenya published in 2002 and 2005 5199m Nakuru (the latter was rejected in a India 14.1 Nairobi 1.35m referendum) United Arab Mombasa 465,000 Emirates 11.5 Nairobi National legislature Kisumu 185,000 Unicameral National Assembly of China 10.0 INDIAN 210 elected members plus 12 Nakuru 163,000 Mombasa OCEAN nominated members, the South 5.7 Sovereign credit rating Africa 200 km attorney-general and the S&P B Fitch B+ TANZANIA speaker; a multiparty system was introduced in Dec 1991 Kenya merchandise exports 2008, $m Imports 2008, $m National elections Food and live animals 680.3 Crude materials 226.6 Dec 2007; next presidential and Crude materials 777.1 Manufactured goods 1,611.7 legislative elections are to be held Food and live in Dec 2012 animals 1,841.4 Manufactured goods 665.2 Other 2,552.1 Chemicals 1,460.7 Head of state President, directly elected by simple majority and at least 25% Chemicals 576.4 of the vote in five of Kenya’s eight provinces Machinery 502.5 National government Other 1,184.5 Mineral fuels 185.6 Mineral fuels 3,055.6 Machinery 3,190.1 The president and his cabinet, comprising a grand coalition Economic summary Top 20 countries in sub-Sahara Africa 2008 2009 2010 between the Party of National Ranked by GDP per capita (PPP$ ’000, 2009) (estimate) (forecast) Unity (PNU) and the Orange Seychelles Democratic Movement (ODM) Total GDP (KSh bn) 2,067 2,406 2,645 Equatorial Guinea and allied parties Total GDP ($bn) 29.6 30.2 34.5 Gabon Botswana Real GDP growth (annual % change) 1.7 2.5 4.0 Political parties in parliament Mauritius Orange Democratic Movement GDP per head ($ PPP) 1,712 1,751 1,817 South Africa (ODM), Party of National Unity Inflation (annual % change in CPI) 13.1 12.0 7.8 Namibia (PNU), ODM-Kenya (ODM-K), Agricultural output (annual % change) -5.0 1.0 3.3 Angola Kenya African National Union Swaziland Industrial production (annual % change) 4.8 2.0 2.0 (KANU), Safina, National Congo, Republic of Rainbow Coalition-Kenya Services production (annual % change) 3.7 2.0 2.6 Cape Verde Djibouti (NARC-Kenya), National Money supply M1 (annual % change) 27.3 22.4 20.1 Sudan Rainbow Coalition (NARC), Foreign exchange reserves ($bn) 2.9 2.6 3.1 Nigeria Democratic Party, Forum for the Budget balance (% GDP) -5.0 -5.6 -5.0 Cameroon Restoration of Democracy-Kenya Current account balance ($bn) -2.0 -1.9 -1.3 Mauritania (Ford-Kenya), New Ford-Kenya, São Tomé and Príncipe Ford-People, Ford Asili, Sisi Kwa Exports of goods ($bn, fob) 5.0 4.5 5.0 Senegal Sisi, Mazingira Imports of goods ($bn, fob) 10.7 9.0 9.6 Kenya Trade balance ($bn) -5.6 -4.6 -4.6 Côte d’Ivoire Source: EIU, IMF, Thomson Reuters Datastream: Comtrade Projections 0 5 10 15 20 FINANCIAL TIMES THURSDAY OCTOBER 29 2009 ★ 5 Kenya Somali factor drives up price of property

REAL ESTATE robi have remained high despite a slowdown in diaspora remit- Parselelo Kantai on tances, one of the main driving speculation over the forces in the market, sales had stagnated. origin of large In the port city of Mombasa, amounts of money recent Somali interest in the property market has generated a legion of anecdotes about n First Avenue, Somali investors. The most com- Eastleigh, the centre mon one is of a businessman of the Somali immi- offering double or more for a grants community, the property, in cold, hard cash. Ostart of the El Niño rains, Apocryphal as they may be, eagerly anticipated after the there is little doubt, however, worst drought in living memory, that Somali capital has been the brought with it a familiar story. biggest factor driving up the As rainwater collected in the price of commercial and residen- potholes scattered across the tial apartments in and around lunar-like surface, it mixed with the central business district. sewage from burst underground Because much of this new connections. After the second money tends to circulate in the downpour, the road was a stink- informal economy of second- ing river, impassable for motor hand goods, counterfeit imports vehicles, forcing pedestrians and the bandit economy of into an ant-like procession along drugs, crime and small arms a pebble-strewn pavement and trade – an emerging sector of threatening an outbreak of chol- unlicensed agents and middle- era or typhoid. men have been quick to cash in. While residents and traders “A few years ago, an agent grumble about the possible out- would charge KSh 10,000 to bro- break of disease, most of the ker a property deal. Today, the concerns about the state of the same agent will charge KSh road have to do with the incon- 500,000. But his job now is sim- venience to business. Once a ply to bring a potential Somali quiet Indian residential neigh- investor and a property owner bourhood in east Nairobi, together. Just that.” says Mr Eastleigh is now in the second Mohammed. decade of an economic boom The effects of Somali invest- driven by the influx of Somali ment in the real estate market diaspora money. have been especially felt in Nai- Thus the crisis of burst sew- robi’s middle-class neighbour- age pipes: as people and busi- hoods. Predominantly Christian, ness flooded in, some bearing the establishment of gated, the proceeds of Somalia’s col- Eastleigh: Somalis, operating intricate networks of money transfer systems in the neighbourhood, have become perhaps east Africa’s premier traders Reuters almost exclusively Somali hous- lapse in the early 1990s, busi- ing estates in these neighbour- ness and construction flour- ice a 10th of the resulting popu- in a day,” he says. Recently, however, Somali tinged with “down Kenya” xeno- Security experts agree, pointing hoods has fed rumours that they ished. Old bungalows were lation. And as the tentacles of Kenya’s big banks, including capital has become problematic. phobia (a colloquialism among out that Kenya’s weak money are breeding Islamic fundamen- quickly transformed into high- Somali diaspora money stretch the foreign multinationals, have Often regarded as minority out- Somalis for their southern laundering laws, and an talists. rises. across the global village, from cashed in on the neighbour- siders in Nairobi, when Somali Kenya compatriots), has raised unclear, infrequently enforced “It is a real concern for coun- Long-time home-owners, pre- San Diego, Toronto, Minnesota hood’s boom; nowhere else in money spilled into “mainstream alarm about the possible policy on property acquisition ter-terrorism, especially because sented with offers they could and Dubai, via Eastleigh, this the country does Barclays Bank, sources of Somali money, as are gateways to the entry of these neighbourhoods are gated not refuse, moved out, their old neighbourhood now resem- for example, keep a branch open well as motives. dirty money. and therefore difficult to infil- homes giving way to residential bles a cross between Dubai seven days a week. Whispers of a Somali Now, as Somalis buy real Furthermore, with Kenya’s trate,” says Simiyu Werunga, a apartments and a tumult of downtown glitz and Mogadishu Somalis, operating intricate invasion have estate in upmarket Nairobi, notoriously corrupt public offi- retired army captain and now a Somali-owned trading com- mayhem. networks meshed along the often in hard cash and for sub- cials, there are few safeguards security consultant. “It’s impos- plexes bursting with imports ‘The whole of East Africa spine of the hawala global become a public stantially more than the asking against dubious money entering sible to tell who is al-Shabaab from Dubai, China and Indone- shops in Eastleigh,” Mohammed money-transfer system, have outcry and triggered price, speculation about the the economy. [Somali insurgency group] and sia; Sony hi-fis, Nokia phones, Abdi Mohammed, a Kenyan become perhaps east Africa’s sources of the money have For estate agents, however, who is not,” says Mr Moham- sharp Hugo Boss suits bought at Somali businessman confidently premier traders. a debate tinged raised the spectre of the wind- Somali investment has been med. “But they are here among warehouse prices in Guangdong, asserts. In the mid-1990s, he Little stalls source their prod- falls from the recent spate of nothing but good news: “All of us.” Java cloth. Nairobi City Hall owned a textile shop in Garissa ucts directly from warehouses with xenophobia Indian Ocean pirate attacks. us are targeting them. If you are While these are legitimate officials looked the other way as Lodge, a giant trading complex. in China or Indonesia where “We have no hard proof that looking for buyers for mostly concerns, much of the suspicion a planning nightmare loomed. “I would get clients from Kam- they have agents, undercutting Nairobi”, there were whispers of piracy money is circulating in upscale properties, there are no fuelling them betrays a lack of Property developers tapped pala, Arusha and Bujumbura most other traders in the region a Somali invasion. Now, those the economy,” says Eric better buyers than Somalis,” understanding of the depth and into the mains and connected and also Nairobi Indians. Busi- who have now turned to whispers have become a public Kiraithe, police spokesman. says a salesperson with a lead- sophistication of a global net- their new buildings to a sewer ness was good. Sometimes, I Eastleigh, particularly for their outcry. In national newspapers However, he raises concerns ing estate agency. work of capital that grew in the system that was meant to serv- would make KSh 200,000 ($2,700) textile and electronic imports. and TV stations, a debate, that the money could be hot. While property prices in Nai- shadow of Africa’s first failed state.