Category Archives: kenyamoneyinthepast

Kenya’s Money in the Past: TJRC

From reading the introduction to a new book (available on Amazon) by Ronald C. Slye,  a Commissioner with the defunct Kenya Truth, Justice, and Reconciliation Commission, he narrates how the Commission evolved and troubles it encountered as it sought to carry out  investigations, through to completing its report and handing it over to Kenya’s President. These included accusations again their Commission Chairman and delays to the release of their report so it did not clash with the 2012-13 Kenya electioneering period as well as demands that some clauses be deleted from the final report.

The foreword of the book written by Reverend Desmond Tutu is also available and he gives some more background to the Commission and Slye’s writing. Tutu writes that the Kenya Government did not support the report, and printed as few of them as possible and Parliament has not debated the TJRC report.

In a chapter, available online, Slye explains how he came to join the Commission and some to the things he went through. He thanks his university, the Seattle University School of Law,  for making the complete TJRC report, in sectors and versions, available online on its website as well as also hosting supporting documents that he researched as the basis for his book.

In terms of finance and budgets, there were allegations against that the commission was a waster of public funds and Slye has dedicated a separate page called “Financial Scandals” that contains documents and correspondence on the financial affairs of the Commission. .. includes the letters written by the Commission to the relevant Parliamentary Committee’s requesting an investigation into the handling of the Commission’s finances by the Ministry of Justice. It also includes the only document the Commission received from the Ministry of Justice in response to our inquiry concerning how our monies were being spent.

Excerpts from the documents;

  • The Commission, while independent, never really had control of its monies which was stipulated in the TJRC act; that was done by the (Justice) Ministry. The Ministry also communicated that the Commission would have no control of funds until much later.
  • Some trips Commissioners made e.g to hear facts at the Kenya Coast were paid for out of their pockets but were never reimbursed. Nor did they get reimbursed for some medical expenses, some local travel which were done out-of-pocket, as well as for moving expenses of foreign Commissioners.
  • Money was spent on their behalf for activities which the Commissioners were not aware of e.g. Kshs 16 million to host a “council of elders.”

TJRC financial report from the Justice Ministry

  • In October 2009,  the Ministry sent three different sets of papers to JTRC purporting to give a breakdown of usage of their funds and Slye writes that it included bulk payment for Ministry of Justice retreats and bulk payments for unidentified casual workers when the Commission had just a CEO and two consultants
  • In December 2009, the TJRC submitted a two-year budget request for Kshs 2.06 billion. It also submitted a supplementary request for Kshs 631 million. When no answer was received, it wrote, in January 2010, requesting for a lower amount Kshs 480 million. In March 2010, the Ministry wrote that, of this request, they had been allocated Kshs 30 million in the budget for the rest of the fiscal year. The Commissioners soldiered on and decided to pursue alternative means of funding.
  • The page also contains a press release the Commissioner put out that stated:  “The TJRC would like to emphasise the need for financial independence and to restate that at no time has the TJRC had control over any finances. The Ministry, which has seconded one of its finance officers to the Commission, controls all and every aspect of our budget.”

In July 2011 the Commission was accused of corruption through media reports. Slye writes that internal investigations concluded there was no foundation. In their first year (2009-10), their budget was controlled by the Ministry and they had no control of finances till their second financial year. They lacked financial independence, they had to seek Ministry approval of all activities (delayed processes), and had no authority to approve /disapprove expenditure incurred by the Ministry on behalf of TJRC with no knowledge the ministry expenditure beforehand and they were not given a true account of expenditure in the first year. 

During their second year (2010-11), they ran low on funds and had to seek advances from the Treasury for 44 million and 80 million from the Ministry of Justice. They requested supplementary funding which never came which allowed hearing in Mount Elgon, Upper Eastern and North Eastern. Eventually, 650 million of the 1.2 billion was released. There were recurrent delays, payments came in tranches, they had to seek loans, and were only able to visit two provinces and hold public hearings.

Office of the Auditor General (OAG): 

Meanwhile, the Office of the Auditor General of Kenya mentions the TJRC in some reports:

  • In the report for 2010/2011, reference was made to the Commission’s failure to deduct Pay As You Earn (PAYE) from the salaries of 304 statement takers totalling Kshs.13,077,033. A review of the position during the year under review revealed that no attempt was made to recover the amount.
  • The statement of financial position of the Truth, Justice and Reconciliation Commission (TJRC) lacked opening balances. Further, the statement of management responsibilities was not signed by the officials as required. The whole financial statements were not dated and the necessary supporting documents and schedules including cash books and government ledgers, were not provided for audit review.
  • Although notes to the financial statements were provided, they were poorly numbered and arranged such that it was not easy to follow the financial statements. The financial statements also lacked numbered pages and headings.
  • In the circumstance, the accuracy and completeness of the financial statements could not be ascertained.
  • With regard to truth, justice and reconciliation activities, the Ministry reported to the OAG that it had facilitated the enactment of the Truth, Justice and Reconciliation Act, 2008 and the appointment of the TJRC Commissioners. 

Kenya’s Money in the Past: Bethwell Ogot Footprints on the Sands of Time

My Footprints on the Sands of Time is an autobiography by Professor Bethwell Ogot (wikipedia),  an eminent academic scholar. It is a tale of a young man overcoming incredible hardships, and going through early schooling at Maseno, and later through winning scholarships and prizes, on to excelling at Makerere, St. Andrews (Scotland) and teaching with Carey Francis at Alliance High School. It also touches on his work and roles in the establishment of the University of Nairobi, and Maseno University, and at his travels to present papers and speak at prestigious conferences and other institutions across the world.

Ogot narrates tales on growing up in Luo culture, seeing emerging economic changes e.g. he took a honeymoon trip to Uganda in 1959 traveling on first class from Kisumu to Kampala via Nakuru, a twenty-seven-hour train journey. Later, when his father died on August 30, 1978, this was the day before Kenya’s first president Mzee Jomo Kenyatta was to be buried, and it was a period when the sole broadcaster – the Voice of Kenya refused to publish any other death announcements, newspapers would not publish any other obituaries as a sign of respect to Kenyatta, and coffin-makers were not willing to make any other coffins.

He was close to former schoolmates, who were now in government and its leaders. Ogot was waiting to meet Tom Mboya for lunch at the New Stanley Hotel when Mboya was shot (his death was not unexpected to his friends), and Ogot had an encounter with Mboya’s killer who was fleeing the scene.  He writes of his work to establish and get government and financial support for the Ramogi Institute of Advanced Technology – RIAT and a delicate dance with community leaders including Oginga Odinga who was firmly out of government.

The book has a wealth of information on corporate governance and management from Ogot’s time at regional bodies, parastatals, international organizations, donor-funded ones, universities that were in slow decline and government. He writes of working in research and publishing, and struggling to document and publish African history. Also of his times at the East African Publishing House that published books on political science, history, geography and a modern African library with much opposition from British Publishers who controlled publishing and later from government officials who set out to shut down independent academic stories. They published Okot p’Bitek’s Song of Lawino that some critics considered a terrible poem ahead of its publication but which went on to be celebrated and sell over 25,000 copies.

There are also stories of navigating the East African Legislative Assembly, travels around East Africa, interacting with leaders and observing actions that were either supporting or undermining the East African Community. Uganda’s President Amin spoke of supporting the community even as he launched Uganda Airlines that he said would only do domestic flights in Uganda. There was also the importation of goods for Zambia through Mombasa that undermined the Dar es Salaam port and the Tazara railway, so Tanzania banned Kenyans trucks with excess tonnage from using their highways, and Kenya retaliated by closing its border with Tanzania. Officials in different countries also tried to keep community assets from leaving their borders, and Kenya grounded planes and withheld fuel of East Africa Airways which owed money to Kenya banks in a move designed to hurt vast Tanzania the most.

The most shocking tales are from his time working at the Museums of Kenya and its spinoff that saw Ogot as the first director of The International Louis Leakey Memorial Institute for African Prehistory – TILLMIAP (see an excerpt). It is a serious indictment of Richard Leakey who regarded TILLMIAP as his personal family fund-raising institution and who, with the support of Charles Njonjo in government and diplomats and donor agencies, warded off transparency and Africanization efforts – and was eventually to hound Ogot out of the institution.

Another tale is of when, as the candidate representing Africa on the executive board of UNESCO, he ran for the Presidency of the General Conference. But what should have been a formality of confirming his position became a long process after a surprise Senegalese candidate emerged to run against him – and France lobbied Francophone countries to only vote for a French-speaking African candidate, rules were changed, documents forged, and additional multiple election steps added before Ogot finally won.

The 500+ page book by Prof. Ogot does not have an index, but it’s worth reading all over again.

Banking History in Colonial Kenya

This morning there was a talk given by Christian Velasco of Warwick University on A Colony of Bankers: New Approaches to Commercial Banking History in Colonial Kenya. He said there have been very few books written about the early banking history of Kenya and East Africa and he had sourced information from the Kenya National Archives in Nairobi, and scattered bank archives in the UK, South Africa, or Australia, but that many records were now lost.

Excerpts 

There were the banks that came before the first World War and a raft of banks that started after the end of the Mau Mau war – and the banks could fall into three categories: Colonial banks (state-supported banks that were the only ones that could handle government accounts, and which disappeared after independence), Imperial banks (less dependent on government business, and who focused more on trade and agriculture) and multinationals (who had most of their business abroad).

The story is of Kenya’s colonial banking era is really about three banks – the National Bank of India (NBI), Standard Bank of South Africa (SBSA) and Barclays. The arrival of Barclays in Kenya changed the banking sector greatly as it sought to end the long relationship that the National Bank of India had with the colonial government in Kenya. Also when Barclays arrived, they found that the Standard Bank controlled many of the white accounts, so they set out to include more Africans as customers. Africans had bank accounts from around 1926, and by the 1950’s Barclays had more African accounts than settler accounts. 

Banks were mostly found in urban areas and with the ending of the Mau Mau uprising, there was an expectation that Kenya would remain a British colony for many decades. This resulted in several new banks setting up in Kenya in the 1950’s. Meanwhile, NBI, SBSA, and Barclays all expanded by 100% opening up in new places around the country, even with mobile bank units to attract customers. Despite the arrival of the new banks, the main competition remained between these three established big banks, and in 1954, Barclays sent a memo to the colonial government complaining about the unfair practice of them favouring the NBI who retained a monopoly of new business that dated back 60 years. 

All banks eventually had to break with their colonial past and the British empire, and a big loser in the period was SBSA which had concentrated on the white settler population. Kenyan politicians tried to engineer boycotts of businesses related to South Africa due to the Apartheid regime and African customers now shunned it. Officials at the bank wrote to their headquarters about the problem and as a result, the name was changed by dropping “South Africa” from the name, and SBSA became “Standard Bank.”

However Africanization of staff did not start until quote late – Barclays had 1,000 employees, and just 70 were Africans with many more who were Indians. There was a hierarchy in banks of having whites being top managers, middle jobs were done by Indians and Africans, the clerical jobs – and this was because customers did not want to deal with African staff.

Kenatco Receivership Assets

From a Kenyan magazine issue – The Weekly Review in September 1985.

The Receiver & Manager of Kenatco offered for sale the business and assets of the two businesses – haulage and taxis, either together or separately as going concerns. This meant the businesses were operating, and receiver/managers are usually appointed by financial institutions to take over what they see as struggling businesses that are having trouble paying their bank debts, but which could be turned around with better management. Banks do this before the businesses shut down completely. The Kenatco businesses were: 

  • Haulage Comprising: 85 haulage trucks of various makes including Mack, Fiat, Mercedes, Leyland, and Volvo and 90 trailers of various makes including Vibert, York, and Miller.
  • Taxis: comprising 79 Mercedes-Benz 200 Saloon Car Taxis – petrol and diesel-powered.
  • The two businesses shared land including two leasehold plots – at Likoni Road, Nairobi (5.9 acres) and Changamwe Industrial Area, Mombasa (7.9 acres). Also on sale were service & administration vehicles, workshop plant & equipment as well as office furniture &  equipment.

A document giving full particulars of the business and assets for sale was made available and could be obtained at a cost of Kshs 300/ – (refundable in the event of a successful purchase of the assets) from J .K. Muiruri, Joint Receiver and Manager, Kenatco Transport Company, Ltd., Alico House, P.O. Box 44286, NAIROBI Tel. 721833. 

Offers were to reach the Receivers and Managers by 30th November 1985, and conditions were that the Receivers and Managers did not bind themselves to accept the highest or any tender for the businesses, and offers for individual assets would not be entertained.

A separate notice was also issued for the sale of other assets of Kenatco – which were surplus vehicles, equipment and scrap items that were not part of the “going concern” sale. The assets were located in two towns with offers due on October 19, 1985, and the receivers & managers described them as:

Nairobi (Likoni Road)

  • Administration Vehicles:  6 Peugeot 404 pickup escort vans (1979/1981), Mazda 929 KVV 404,  (1980), 2 Toyota Carinas – KRB150/KRB151 (1977), Peugeot 104 AB38ll (1979).
  • The scrap items included 395 tyres, 117 scrap iron sheets, 56 batteries, 24 fibre glass fuel tanks, 2 safes, 2 steel fuel tanks, 13 tarpaulins and 19 empty oil drums.
  • Spare parts for Chevrolet, Datsun, Land Rover, Volkswagen, Toyota, Renault, and Mercedes vehicles. 

Mombasa:  (Changamwe)

  • 2 Peugeot 404 pickup escort vans, Toyota Carina KRA 910 (1977), Mercedes-Benz 200D KPL 251,
  • Yamaha motorcycle 100cc KTD 207 (1979), Boss forklift KND 686.
  • The scrap items included 468 tyres, 141 batteries (1979), 48 oil drums and 7 tonnes scrap metal (1973).

Other Kenatco articles:

  • Excerpt about the company: KENATCO, a cooperative with 9,000 members was very successful with profitable routes to Zambia, Angola, and Rhodesia until East African problems led to them not being allowed to carry heavy vehicle freight through Tanzania, and that government’s detention of one-third of their fleet. 
  • This article gives the background and history of Kenatco. The Kenya National Transport Co-operative Society, as it was named in 1965, was the first transport business society in Kenya…The Kenatco pioneers had a big dream. So big, that they not only wanted to go into the haulage business, but also to buy some tourism boats and a plane to serve the local tourism market.
  • See the Hansard from Kenya’s parliament on 26 November 2008 that describes how the Kenatco receivership came about. 
  • Kenatco is still under receivership. In 2016, Receiver Manager John Ndung’u said that finance costs are driving the company into losses, even though it has been making an operating profit since 2002.
  • Kenatco still exists as a Kenatco Taxis Ltd. a fully fledged government parastatal wholly owned by ICDC. It is Kenya’s leading, most reliable value-for-money taxi company, with a clean and modern fleet, efficient back-office infrastructure, on-the-road back up services, for that comfortable and safe drive, pick up and drop off at whichever location within Kenya.

Also see this Nation column by John Kamau about how Kenatco re-entered receivership in 1983, leading to this particular auction of their assets.

Loan Interest Rates in 1997

Today, loan interest rates are capped at 14%, but what were they like twenty years ago? Here are excerpts from a  Weekly Review magazine issue from December 1997 a time of pre-election jitters, election financing, donor funding cutoffs, high inflation after Goldenberg, a depressed property market, and collapsing banks. This was after the move to streamline the sector through a universal banking law which led more financial institutions to convert into commercial banks, and later to merge.

Commercial bank base lending rates

24% 
Mashreq Bank
Habib Bank
25%
Development Bank
Kenya Commercial Bank
Equatorial Commercial Bank
Co-Op Merchant Bank
Credit Agricole Indosuez

26%
National Bank of Kenya
Fidelity Commercial Bank
Barclays Bank of Kenya
Investment & Mortgages Bank

27%
Consolidated Bank of Kenya
CFC Bank
Cooperative Bank
City Finance Bank
Habib A.G. Zurich
A.M. Bank
Chase Bank
Bank of Baroda
Habib African Bank
Standard Chartered Bank
Bank of India
First American Bank
Giro Bank

Interest rates, from a Weekly Review magazine, December 1997

28%
Citibank N.A.
Guardian Bank
Prudential Bank
Trust Bank
Paramount Bank
Commercial Bank of Africa
Stanbic Bank
ABN Amro Bank

29%
Universal Bank
African Banking Corporation
Biashara Bank
Prime Bank
Akiba Bank
Middle East Bank
Victoria Bank

30%
Transnational Bank
Imperial Bank
Bullion Bank
First National Fin. Bank
Daima Bank
Guilders Bank
National Industrial Credit Bank
Reliance Bank
Ari Bank Corporation
Credit Bank
Southern Credit Bank
Diamond Trust Bank
Delphis Bank
Fina Bank
Commerce Bank