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Kenyan traders want long-running business war with Tanzania solved




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Kenyan traders say they have had enough with Tanzania playing hard ball when it comes to local products entering its market.

From requirements to label items in Kiswahili to concealed visa fees for traders entering Tanzania and loaded taxes that make products hard to sell there, Kenyan traders are now pushing for retaliation in what may result in spasmodic bilateral tiffs between the two East African neighbours.

Tanzania, according to details of multiple meetings meant to break trade stalemates between the pair, has continued to tilt the playground even as goods from the country enter Kenya freely.

The simmering tit-for-tat feud, according to sources familiar with the ongoings, started after a Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) meeting held in Arusha between November 12-16 last year.

The Kenyan delegation led by Trade and Industrialisation Cabinet Secretary Peter Munya was in Tanzania for the second time after a similar forum in May raised concerns over multiple non-tariff barriers placed on Kenyan goods entering Tanzania.

While partner states of the East African region are required to treat goods manufactured from one another’s country like local, Tanzania has been finding various reasons to slap heavy duty on Kenyan products.

It cites several inconsistencies including duty-free importation of sugar into the Kenyan market in 2017.

Tanzanian authorities insist that Kenyan manufacturers had used the duty-free product to make sweets and other confectioneries.

Dar then slapped a 25 per cent import duty on Kenyan confectionery, juice, ice cream and chewing gum. The duty went on for months forcing Kenya to threaten its neighbour with a ban after Tanzanian officials set to visit Kenyan factories to verify the claim kept postponing the tour.

Uganda had joined the punitive duty as Kenyan products became uncompetitive in the two markets and traders suffered massive losses.

When they finally visited in June 2018 and found that none of the Kenyan manufacturers of confectioneries and sugar-based products benefited from sugar imported under zero duty, only Uganda lifted the duty. Tanzania refused to bulge.

“Uganda has implemented the findings while Tanzania reported that they have reservations. Further, Tanzania charges 35 per cent duty to confectionery and sugar-based products, in addition they also charge Railway Development Levy at 1.5 per cent and Tanzania Food and Drugs Authority (TFDA) levy of 1.5 per cent, among others. This is contrary to what Tanzania was directed not to charge stayed tariffs during the SCTIFI May2018,” read a briefing prepared by the Kenya Association of Manufacturers after the November meeting.

Tanzania reportedly wrote to the EAC secretariat informing the reasons for not granting preferential treatment to confectioneries from Kenya. The matter remains unresolved.

Tanzania has since asked for a second verification; a move Kenya has rejected, according to the KAM brief.

“The Republic of Kenya does not find merit in the second verification proposed by the United Republic of Tanzania and therefore rejects it. This also requires Kenya to retaliate to Tanzania’s similar products: juices, confectionery, ice cream,” reads the KAM brief.

The East Africa Community common market made up of Tanzania, Kenya, Uganda, Rwanda and Burundi allows free movement of locally manufactured goods within the bloc.


Duty free sugar is not only the bone of contention between the two countries, Tanzania has been punishing Kenyan tobacco manufacturers exporting the commodity into the country in a dispute that remains unresolved since 2005 when the custom union commenced.

Not even the various forums including bilateral meetings and at the presidential level between the two countries have been able to resolve the issue. Tanzania continues to levy a discriminatory excise duty of 80 per cent on tobacco products from Kenya making them too expensive to compete in the country.

In August, Tanzania through a gazette notice restricted its beef product dealers on where to source from locking out some Kenyans from the market. The increased fees also rendered animal and their products from Kenya uncompetitive in Tanzania.

A litre of Kenya’s UHT milk for example rose to Tz Sh3,300 (Sh145) to Tz Sh6,500 (Sh284) against local products which are retailing at Tz Sh3,300 after the fees were lumped on them against the Custom Union Protocol which prohibits partner states from imposing protective taxation to local out products from partner states.

Kenyan traders have also been unhappy with Tanzania for charging $250 for a business visa. The fees charged on all the EAC business persons entering Tanzania is branded a ‘Certificate of Temporary Assignment (CTA) as Tanzania maintains that the charge is just a ‘fee on a pass.’

Kenyan traders are now pushing for a similar discriminative visa or pass fee until the charges are dropped by Tanzania.

Kenya largely imports wheat, textiles and clothing, cooking gas, hides and skin, oil seeds, vegetables, rice, paper and paperboard, footwear, wood, plastic and rubber, among other products from Tanzania.

Exporters who spoke to Sunday Nation incognito for fear of further product discrimination said goods from Tanzania get smoothly in Kenya with some of the traders bragging of having Kenyan authorities ‘in their pockets.’

“When we make any ban, Tanzania pulls the diplomatic card and then we go into negations, temporary truce and then back to where we were. It is tiring and Kenya must now act to save us from this unfair trade,” the exporter said, adding that senior trade authorities are aware of the simmering trade tiff.

Such barriers including a lengthy processing of single Customs Territory (SCT) export documents which take up to 10 days to be cleared instead of three adding to the cost of business as transporters charge up to Sh30,000 for the delay have tilted cross-border trade in favour of Tanzania in what is fanning protests from local manufacturers.

Tanzania’s hardball is part of the reasons Kenya’s exports in EAC declined by 30 per cent from $1.6 billion to $1.1 billion in the period 2012 to 2017 while imports have expanded by 60 per cent from $0.4 billion to $0.6 billion in the same period.

Increased exports by Tanzania and Uganda, however, drove up intra-regional exports from $2.7 billion in 2016 to $2.9 billion in 2017. Tanzania and Uganda export grew by 18.4 per cent and 37.3 per cent respectively.

Rwanda recorded intra-regional export growth of 6.4 per cent while Kenya, South Sudan and Burundi recorded a decline of 7.4 per cent, 24.2 per cent and 6 per cent, respectively.



Sordid tale of the bank ‘that would bribe God’




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




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.

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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.

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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.

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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.

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