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Kenya says Tanzania, Uganda are distorting maize market

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By NJIRAINI MUCHIRA
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Kenyan farmers have raised the alarm on the saturation of the cereals market with maize from Uganda and Tanzania, causing a glut and denying them income.

A bumper harvest across the region last year caused an oversupply and a subsequent fall in prices, resulting in farmers struggling to get market access and leaving governments unable to buy all the maize for their strategic reserves.

A presidential task force formed last year has released a report reiterating the farmers’ concerns, accusing the two East African states of distorting the Kenyan market by over-exporting maize to the country.

The report, dated January 28, 2019, cites an imbalance of trade between Kenya and the other EAC states, which has seen the country import more maize than required in spite of a bumper harvest in the North Rift region.

The report, which will be presented to President Uhuru Kenyatta, comes at a time when maize farmers are embroiled in a tussle with the government over prices that they say are too low, and the failure by the National Cereals and Produce Board (NCPB) to buy all their produce.

The farmers were outraged by the government’s announcement that it can only buy two million bags worth $50 million under a quota system, where each farmer is to deliver not more than 400 bags to the NCPB at a cost of $23 per bag: The farmers have 46 million bags of maize.

The 13-member Maize Industry Task Force, co-chaired by Governors Jackson Mandago of Uasin Gishu and Patrick Khaemba of Trans-Nzoia county — Kenya’s leading maize producing regions — blames the state of affairs on poor implementation of the legal and regulatory frameworks meant to safeguard the country from dumping and over-importation.

In recent years, Kenya’s annual maize production has averaged 40 million bags against an annual demand of 52 million. But, lately, there has been over-importation, causing a glut and impacting prices.

The report, which The EastAfrican has seen, says poor implementation of the EAC Common Market and Customs Union provisions and the Kenya government’s failure to implement the Kenya Trade Remedies Act — which recommends the establishment of the Kenya Trade Remedies Agency to investigate dumping and impose trade safeguards — have led to the trade imbalance.

“Kenya must stop the market distortion by ensuring it imports the quantity and quality of maize it only requires to avoid over-importation of maize from other EAC states,” the report states.

The task force was set up by President Kenyatta late last year to review the maize sub-sector and come up with solutions to guarantee stability.

The EAC allows free movement of maize produced within the region, and recommends high tariffs on maize coming from outside.

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In 2018, Kenya produced 46 million bags of maize, up from 35 million bags the previous year.

Tanzania had a stockpile of more than four million tonnes of maize last year, and is expected to produce 16 million tonnes more, against a local demand of 13 million tonnes annually.

Data from the East Africa Grain Council (EAGC) shows that 111,000 tonnes of maize grain were traded in the region in the fourth quarter of 2018, with Uganda, Tanzania and Kenya accounting for 57 per cent, 32 per cent and nine per cent of the total exports respectively.

The main destinations were Kenya, South Sudan, Rwanda and northwestern Tanzania, which accounted for 56 per cent, 17 per cent, 15 per cent and nine per cent of the total respectively.

During that period, Uganda’s exports to Kenya stood at 29,752 tonnes, while Tanzania exported 31,963 tonnes, a 36 per cent and 14 per cent decline respectively from the previous quarter.

“The seasonal decrease in the maize trade was attributed to high maize availability among most countries in the region, following the October-to-December harvest,” says the EAGC in its latest East Africa Cross-border Trade Bulletin.

It adds that this year, exports from Uganda to Kenya, South Sudan and Rwanda are expected to increase seasonally, while exports from Kenya to parts of south-western Tanzania are expected to end by March.

Exports from Tanzania to Kenya, especially from the main producing regions in the south, where prices are lower, are expected to increase in the first quarter and peak in the second quarter of 2019.

Although the EAC Treaty provides for trade liberation in the region, the Kenyan task force has recommended the implementation of “tenets” relating to the balance of trade in order to ensure competitiveness in the maize sub-sector.

The task force has also demanded effective and efficient implementation of and adherence to trade protocols to curb dumping and over-importation and promote fair competition to ensure farmers across the region benefit from their labour.

According to the task force, Kenya’s maize sub-sector is facing myriad challenges ranging from climate change, diseases and pests to high cost of inputs, post-harvest losses, unstructured market systems, acidic soils, unpredictable produce prices, poor agronomic practices, inadequate storage infrastructure and competition for land with other enterprises.

These challenges have negatively affected the sub-sector, leading to declining production, and exposing Kenya to recurring food insecurity and high food prices.

“Cycles of severe national food insecurity persist to date, occasioned by population increase and numerous farming challenges,” states the report, which also calls for increasing the strategic food reserve stocks to six million bags from the average of 1.2 million bags over the past five years.

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Sordid tale of the bank ‘that would bribe God’

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Bank of Credit and Commerce International. August 1991. [File, Standard]

“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.
BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.
It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.
BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.
The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.
He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.
In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.  
BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.
The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.
The bank had five branches countrywide and panic had gripped depositors on the state of their money.
Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.
It sent statements assuring depositors that their money was safe.
The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.
It was said that contact between CBK and Abu Dhabi was “likely.”
This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.
The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.
And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.
“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.
BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank.  The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.
“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.
A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.
“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.
CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.
This was meant to stop Kenyans from making panic withdrawals.
For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.
In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.
Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain. 
The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.
Criminal culture
In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).
The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.
This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.
Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.
“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.
These included the Third World Foundation for Social and Economic Studies, a British-registered charity.
“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.
BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).
Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).
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Monitor water pumps remotely via your phone

Tracking and monitoring motor vehicles is not new to Kenyans. Competition to install affordable tracking devices is fierce but essential for fleet managers who receive reports online and track vehicles from the comfort of their desk.

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Agricultural Development Corporation Chief Accountant Gerald Karuga on the Spot Over Fraud –

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Gerald Karuga, the acting chief accountant at the Agricultural Development Corporation (ADC), is on the spot over fraud in land dealings.

ADC was established in 1965 through an Act of Parliament Cap 346 to facilitate the land transfer programme from European settlers to locals after Kenya gained independence.

Karuga is under fire for allegedly aiding a former powerful permanent secretary in the KANU era Benjamin Kipkulei to deprive ADC beneficiaries of their land in Naivasha.

Kahawa Tungu understands that the aggrieved parties continue to protest the injustice and are now asking the Ethics and Anti-corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to probe Karuga.

A source who spoke to Weekly Citizen publication revealed that Managing Director Mohammed Dulle is also involved in the mess at ADC.

Read: Ministry of Agriculture Apologizes After Sending Out Tweets Portraying the President in bad light

Dulle is accused of sidelining a section of staffers in the parastatal.

The sources at ADC intimated that Karuga has been placed strategically at ADC to safeguard interests of many people who acquired the corporations’ land as “donations” from former President Daniel Arap Moi.

Despite working at ADC for many years Karuga has never been transferred, a trend that has raised eyebrows.

“Karuga has worked here for more than 30 years and unlike other senior officers in other parastatals who are transferred after promotion or moved to different ministries, for him, he has stuck here for all these years and we highly suspect that he is aiding people who were dished out with big chunks of land belonging to the corporation in different parts of the country,” said the source.

In the case of Karuga safeguarding Kipkulei’s interests, workers at the parastatals and the victims who claim to have lost their land in Naivasha revealed that during the Moi regime some senior officials used dubious means to register people as beneficiaries of land without their knowledge and later on colluded with rogue land officials at the Ministry of Lands to acquire title deeds in their names instead of those of the benefactors.

Read Also: Galana Kulalu Irrigation Scheme To Undergo Viability Test Before Being Privatised

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“We have information that Karuga has benefitted much from Kipkulei through helping him and this can be proved by the fact that since the matter of the Naivasha land began, he has been seen changing and buying high-end vehicles that many people of his rank in government can’t afford to buy or maintain,” the source added.

“He is even building a big apartment for rent in Ruiru town.”

The wealthy officer is valued at over Sh1.5 billion in prime properties and real estate.

Last month, more than 100 squatters caused scenes in Naivasha after raiding a private firm owned by Kipkulei.

The squatters, who claimed to have lived on the land for more than 40 years, were protesting take over of the land by a private developer who had allegedly bought the land from the former PS.

They pulled down a three-kilometre fence that the private developed had erected.

The squatters claimed that the former PS had not informed them that he had sold the land and that the developer was spraying harmful chemicals on the grass affecting their livestock and homes built on a section of the land.

Read Also: DP Ruto Wants NCPB And Other Agricultural Bodies Merged For Efficiency

Naivasha Deputy County Commissioner Kisilu Mutua later issued a statement warning the squatters against encroaching on Kipkuleir’s land.

“They are illegally invading private land. We shall not allow the rule of the jungle to take root,” warned Mutua.

Meanwhile, a parliamentary committee recently demanded to know identities of 10 faceless people who grabbed 30,350 acres of land belonging to the parastatal, exposing the rot at the corporation.

ADC Chairman Nick Salat, who doubles up as the KANU party Secretary-General, denied knowledge of the individuals and has asked DCI to probe the matter.

Email your news TIPS to [email protected] or WhatsApp +254708677607. You can also find us on Telegram through www.t.me/kahawatungu

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William Ruto eyes Raila Odinga Nyanza backyard

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Deputy President William Ruto will next month take his ‘hustler nation’ campaigns to his main rival, ODM leader Raila Odinga’s Nyanza backyard, in an escalation of the 2022 General Election competition.

Acrimonious fall-out

Development agenda

Won’t bear fruit

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