The Danish Institute for International Studies (DIIS) have had a study into the border trade and sugar exports through Somalia into Kenya. How it is used and how it gets to the market. Clearly, the market for sugar is there in Kenya. As the Sugar Industry is struggling to deliver enough sugar and the state has embargoed imports. Still, the same actors and the same politicians are doing behind closed doors agreements that put the sugar in stores through the porous borders of the Kenyan-Somalian border.
The paper itself paint the picture very well and show the importance of the export, since the magnitude on both economies are affected by it. It is also implicating big names and their organizations. As the politicians has another black-market cartel item to sell to the public. What was striking was that the importers together with local merchants are repacking the sugar into bags of the State Owned Entity (SOE) of Mumias. The Company that has been saved the state after devastating corruption and also lacking investment into the mills. Therefore, the politicians has used this name to trade illegal sugar with name. That they even used the stickers to prove it was of Kenyan quality while selling it to the public.
The quotes I have taken, is what see as important. But its compelling to show the this illegal imports into Kenya affects the politicians and the economy in general. Take a look!
The Amount of Money:
“Raw sugar accounts for 10% of total Somali imports rated at US $188 billion (Observatory of Economic Complexity 2016). In other words, sugar importing is enormously lucrative and important for the local economy on both sides of the border. The sugar imported from Somalia is central for covering the production and import deficit in Kenya. Most sugar enters through Kismayu port where it is manually loaded onto trucks and driven to the Kenyan border. There it is re-loaded onto other trucks, four-wheel drive vehicles and even donkey carts to cross the border on the so-called ‘rat routes’ that circumvent the border posts to avoid the payment of bribes, random checks by the Kenyan Revenue Authority (KRA), and the occasional confiscation. Based on interviews and observation JFJ estimates that 150,000 tons of illegal sugar entered Kenya from Kismayu in 2014 (JFJ 2015). This amounts to US $400 million worth of annual revenue divided between KDF, Al-Shabaab, local businessmen and politicians, as well as local police and border patrols, including the KRA (though this is not formal revenue) (JFJ 2015)” (DIIS Working Paper, P: 10, 2017).
KRA:
“The investigator explained how his unit, in collaboration with the Kenyan Revenue Authorities (KRA) and the Kenya Bureau of Standards (KEBS), had planned the raid of a warehouse in an industrial area of Nairobi. They had found tons of processed Brazilian sugar allegedly smuggled into Kenya via Somalia, and it was now being repackaged from 50 kilo sacks into 500 gram and 1 kilo bags bearing the Kenyan brand Mumias Sugar and with added stickers from KEBS showing that the product meets Kenyan standards of production and quality. The repackaged sugar is – when not confiscated by the authorities – sold to retailers as refined Kenyan sugar at a huge profit. In 2014 a one kilo sugar bag sold for KES 133 in Nairobi supermarkets, and by May 2017 prices had gone up to KES 170 with some supermarkets rationing it to one package per customer” (DIIS Working Paper, P: 12, 2017).
Political Influence:
“Like the former Nairobi governor Evans Kidero, the Garissa governor Nathif Jama Adam, and the Garissa-born majority speaker of parliament Aden Duale are rumoured to be implicated in the sugar trade (Rawlence 2016: 236). These rumours reach all the way to Nairobi where they can be voiced more freely than in the north. The power of the people implicated by the rumours is more distant in Nairobi, whereas in the northern parts of Kenya the secrecy associated with the rumours points to the importance and power of those involved” (…) “With devolution, local government has become more powerful and more is at stake for locally elected officials due to their increased budget responsibilities and decision-making powers. Concomitantly, local government has become more vulnerable to pressures from local stakeholders like strong businessmen, militias and other state actors. The porous border, the circumvention of border patrols, and the implication of government officials ranging from KDF to KRA means that much of the sugar is not declared to Kenyan customs officials, making Garissa county one of the largest illicit markets in the country. The flow of goods across the border and further into Kenya formally falls under the responsibility of KRA and the national government. Yet the county government is responsible for local revenue collection and enforcement at local markets and car parks, and they also issue licenses for traders. In that sense the warehouses in the region fall under county administration. The latter thus plays an important role in the possibilities for the redistribution of smuggled goods” (DIIS Working Paper, P: 15, 18, 2017).
This here is evidence of cartels, illegal trade that is benefiting the political elites in Kenya and in Somalia. They are both having knowledge of it and its undermining the embargoes and also the activity itself. Since the politicians are the ones that has put in the provisions and the laws to stop imports to secure the local sugar industry.
This paper shows how much money that is involved. It is big business and the cartels are earning fortunes on lie, where they take foreign cheap sugar and trade it as Kenyan sugar with stickers of authenticity of KEBS. That is clearly a violation in itself, but combined with the illegal sugar, they are even using sophisticated methods to trade it to the public. To make the sugar seem like Kenya, when it isn’t.
That this money is shared by many different part of government officials was implicated int the trade from Kenya Defense Force Officials, Kenya Revenue Authority Officials, Border Patrol, Politicians and even Somali terrorist organization Al-Shabab. So the Kenyan are sending military to Somali to fight Al-Shabab, but at the same time giving them revenue with illegal sugar trade. That is a striking a fact considering the use of military to secure safety for Kenyans. Therefore, the cartels are also making sure the reason they are fighting inside Somalia are funded by the stakes into the illegal sugar industry. That should put some alarm bells on. That the politicians are playing with matches and should know that this cartel plus funding of Al-Shabab might hurt them in the long-run. Instead of being just a profitable business.
This is eye-opening and also a tale of corruption and sugar-cartels using the porous borders between the republics in favor of those dealing illegal sugar and selling it on the Kenyan market. Certainly, this sort of thing will implicate bigger names, than the ones mentioned in the paper. If investigated and looked through. You could certainly also find many bigger names who has created massive wealth within short amount of time. Peace.
Reference:
Rasmussen, Jacob – ‘SWEET SECRETS: SUGAR SMUGGLING AND STATE FORMATION IN THE KENYA–SOMALIA BORDERLANDS’ (December 2017) – DIIS Working Paper 2017:11
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