Does Kenya Really Belong To Us??

Posted on October 14, 2008. Filed under: Uncategorized |

If Kenya were a cake to be shared out, Kenyans would only lay claim to 31 per cent of the country’s total wealth. The rest would go to foreigners. Agriculture, tourism and banking, which combined bring in the country’s largest earnings, are in foreign hands. Last year, tea, tourism, flowers and coffee earned the country Sh140 billion, nearly half of the annual national budget. Of this money, only 31 per cent ended up in the country – as tax and real earnings to the nationals. And shareholding in the richest 20 companies that trade at the Nairobi Stock Exchange is foreign. The skewed distribution of wealth between foreigners and Kenyans puts paid to all efforts since independence to hand control of the country to its citizens.

Tea growing, which earned the country Sh43.5 billion last year, is concentrated in the hands of six leading agricultural companies whose shareholding is largely foreign. Up to 78 per cent of earnings from tea went, therefore, to foreigners – leaving the balance for Kenyans. The Big Six in the tea sector are Unilever Tea Kenya, Kakuzi Ltd, Williamson Tea Company, Kapchorua Tea, Limuru Tea Company and Sasini Coffee and Tea. The British-owned Brooke Bond Group holds 43.1 million shares of the total 48.8 million shares issued in Univeler Tea Kenya . The same group owns 54 per cent of the total 3.9 million shares issued in Limuru Tea Company. In Kakuzi Ltd, foreigners have a total shareholding of 68.3 per cent of the total 19.6 million shares issued. They hold the shares through Bordure Ltd and Lintak Investment Ltd, with 35.1 and 33.2 per cent shareholding, respectively. Britain’s Williamson family has a controlling majority shareholding in both Williamson Tea and Kapchorua Tea companies. In Williamson Tea,it holds 67.2 per cent of the total 8.8 million shares issued through their company, Ngong Tea Holding PLC. In Kapchorua tea, they hold 40 per cent of the 3.9 million shares issued. Sasini Tea and Coffee Ltd is 87.3 per cent owned by business magnate Naushad Merali, a Kenyan. Merali’s companies hold his shares in these businesses; Legend Investments Ltd (51.7 per cent), East African Batteries (18.7 per cent), Yana Towers (15.9 per cent) and Swan Estates (1.04 per cent).

The reinvigorated tourism sector, which earned Sh42 billion last year, is also foreign-owned. And just as the Sh43.5 billion earnings from tea sector ended up in foreign pockets, so did the Sh42 billion that came from tourism. Tourism earnings went into three directions: Hotels, airlines, and travel/booking agents, in that order. Of Kenya ’s 290,000-plus tourist hotel bed spaces, foreign hoteliers own 74.3 per cent of it. Tour flights to Kenya are entirely in the hands of foreign airlines. It is all the more foreign-dominated in the traditional tourist peak periods of Easter and Christmas, when there are no scheduled flights to Kenya ’s tourist hub of Mombasa . During the two seasons, tourists arrive in Mombasa in chartered jets arranged by European tour operators. Foreign companies stationed in European and American capitals also entirely control hotel bookings and transfers. Where internal travel is concerned, foreigners too, dominate by owning 7 of the 11 leading local tour travel firms. At the end of the day, tourism in Kenya remains a foreigners’ enclave with indigenous Kenyans left to scratch the surface on petty trades like selling curios and prostitution. After years of lobbying, last year the European Union set aside Sh250 million to economically empower indigenous Kenyans to get a fair share of the lucrative industry. Seven projects were targeted to tilt the balance in a program called Tourism Diversification and Empowerment Project. But a spokesman at the Nairobi EU office said the money is yet to be released as project proposals submitted are still under evaluation. The only hotel chain listed on the Nairobi Stock Exchange is the TPS Serena. The Aga Khan Fund for Economic Development holds the company’s majority shareholding through its company, TPS Holdings Limited.

Horticulture, which earned Kenya Sh28.2 billion last year, is the country’s third largest foreign exchange earner. It, too, is a foreigners’ affair. Indigenous Kenyans mainly come in as casual laborers’ on the flower farms. Of the 44 certified companies dealing with horticulture products,26 are foreign-owned. But an even bigger irony is that the leading 10 players in the industry – all foreign-owned – bag 83 per cent of the total income from the sector. Flower farming (floriculture) is the key plank in Kenya ’s agriculture sector. Seventy six per cent of Kenya ’s total flower production is concentrated in foreign-owned flowers farms around the Naivasha area. The big three are Homegrown, Sulmac and Oserian. Late last year, Kenya overtook Israel and Columbia as leading exporters of cut flowers. But you would not know that from the world’s leading flower auctions in Amsterdam and London . Why? Foreign flower exporters in Kenya have registered their companies abroad – mainly in Amsterdam – and sell flowers they have grown in Kenya under a foreign label. In that case, while flowers from a local company are sold in Amsterdam as flowers from Kenya ,Dutch companies growing their flowers in Naivasha sell theirs as flowers from Holland . The consequence of it is that flowers owned by Dutch companies receive preferential treatment at the auction, including exemption from the strict EU-imposed export rules. Flower auctions in Amsterdam and London account for 65 and 25 per cent of Kenya flower sales respectively. Of the approximate 60,000 tonnes of flowers exported from Kenya last year,37,000 tonnes were sold in Amsterdam and London auctions as flowers from Holland . The statistics can make it look like the entire flower industry in Kenya is one big conspiracy against indigenous people. Foreign air charters, the only ones used in flower transport, charge the highest rates in Nairobi . Freight charges on flowers from Kenya are twice those in the capitals of Kenya ’s nearest competitors Israel , Columbia and Costa Rica . There are also 40 to 45 per cent higher than in Egypt and South Africa , Kenya ’s two biggest competitors on the continent. At $400 a day, inspection and storage charges at Jomo Kenyatta International Airport are the highest in the world. So is the freight charge of $1.85-$2.2 per stem. Flowers sold in Kenya ’s name are inspected stem by stem at the JKIA at the cost of 12 Euro cents a stem. Those grown in Kenya but marketed by overseas-accredited companies are only inspected in bulk. On average, it costs upwards of $1 million to set up a typical flower farm on a half acre spread, which in turn brings in a $50,000 a year. Kenya’s fourth leading export earner, coffee ,is equally depressing on the ownership scale. The majority of small-scale coffee growers in Kenya sell coffee raw from the farm, earning less than 10 per cent of what the finished end product earns in foreign markets and in a foreign label. Though touted as an agricultural country, the other large-scale agricultural activities in Kenya are also foreign-owned. Rea-Vipingo Plantations, which deals mainly in sisal and dairy farming is 77 per cent owned by the Robinson family of England . They hold the shares through REA Holdings PLC, Unibuckle Holdings Ltd and REA Trading Ltd.

Del Monte, world famous for pineapple products, is entirely a French affair and sells its products with the label “Made-in-France”. The question of who owns Kenya ’s wealth sticks out like a sore thumb in the banking sector. The leading two banks with a combined market share of 71.4 per cent are Barclays Bank of Kenya and the Standard Chartered. They are foreign-owned. Barclays Bank plc of London owns 68 per cent stake in Barclays Bank of Kenya . Standard Bank Africa, a London outfit, in turn owns 81 per cent shareholding in Standard Chartered Bank. To avoid domination by foreign banks, Nigeria and South Africa enacted laws on percentages of shareholding a foreign bank could own. Foreign ownership is also the same cord that runs through key blue chip companies listed on the Nairobi Stock Exchange. At the East African Breweries, British-owned Guinness plc holds 63.5 per cent of the total equity, leaving Kenyans to scramble for the rest. Guinness shares are held in the names of Diageo Kenya Ltd and Diageo Netherlands B.V.

In the Nation Media Group, the Aga Khan holds 28.2 million shares of the 35.6 million shares issued. The Aga Khan’s shares are held in the names of the Aga Khan Fund for Economic Development and Amin Nanji Juma. In Kenya Airways, Dutch company, KLM, holds 40.6 per cent equity. In Total Kenya Ltd, French companies Total Outre-mer and Elf Oil Kenya Ltd,own 77 per cent of the total shareholding, while in BAT Kenya Ltd, Molensteegh Investment BV of London ,holds 68 per cent of the total shareholding. The question of who owns Kenya ’s wealth generated a national debate in 1968 when the National Council of Churches of Kenya published a paper entitled: “Who Owns Kenya ’s Industry?” In the paper, the late Anglican Bishop, the Rev Henry Okullu, regretted that five years into independence, ”the compass needle had not moved in the direction of indigenous ownership of Kenya ’s wealth.” Thirty-seven years later, the Rev Okullu would turn in his grave to note that the needle has drifted even further away. – Source: Smart Kenyans Tips Club.

Small-scale tea farmers earned a total of Sh19.8 billion in the financial year that ended June 30. This represents a 3.6 per cent increase from the Sh19.1 billion made the previous year. The improved proceeds come amid controversy that has engulfed the country’s tea industry this year with some farmers uprooting the crop due to what they say are poor returns. Farmers have already received an initial payment of Sh8.6 billion at a rate of Sh10.50 paid every month per kilogramme of green leaf and will now receive Sh11.3 billion at a rate of Sh14.10 per kilogramme of green leaf as the second payment; a Sh3.25 increment.

sent in by Muigai

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3 Responses to “Does Kenya Really Belong To Us??”

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Too long… could not follow through. For some of us who cannot concentrate for long, please summarise. Thanks though.

muigai is saying:
If Kenya were a cake to be shared out, Kenyans would only lay claim to 31 per cent of the country’s total wealth. The rest would go to foreigners. Agriculture, tourism and banking, which combined bring in the country’s largest earnings, are in foreign hands.
So, je wajivuna kuwa mkenya?

Thank you for making it easier for me. That is risky I must say if only 31% of Kenya’s wealth really belongs to us and the rest??….


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