A row over who owns Kenya’s land is making life hard for foreign firms

Kericho, the capital of Kenya’s tea country, is a verdant spot.

Emerald-green estates stretch as far as the eye can see, hugging the western escarpment of the Rift Valley.

Set 7,000 feet above sea level, the climate is perfect for growing tea, Kenya’s biggest export, which fetched $1.4bn last year.

For Paul Chepkwony, the governor of Kericho County, these plantations are a reminder of the way the British stiffed his Kipsigis tribe of their land.

Under British rule the colonists took half the land on which the Kipsigis grazed their cattle, turning it into tea estates.

Mr Chepkwony demands that the British government pay compensation to 115,000 Kipsigis and their descendants, who lost their land. (It will not.)

Mr Chepkwony also says that a ruling in February by the new land commission allows him to increase land taxes on tea estates and demand a preposterous $20bn or so in profits that he claims were illegally acquired—equivalent to nearly a quarter of Kenya’s annual gdp.

The burden, he feels, should fall primarily on three firms that grow tea on disputed land: Finlays, Unilever and George Williamson.

If they cough up, they would be welcome to stay on as tenants of the Kipsigi people, he says.

To Mr Chepkwony’s irritation, the multinationals are not playing ball.

They have resisted his demands to surrender their title deeds for inspection.

They have also challenged the land commission’s ruling.

Kimutai Bosek, the governor’s legal adviser, warns that such recalcitrance could prompt frustrated Kipsigis to take the law into their own hands.

The tea companies do not take such threats lightly.

In June the governor of a neighbouring county led an invasion of an estate, uprooting tea bushes.

Historic land disputes are vexing multinationals in other sectors, too.

Kakuzi, a big British agricultural firm, and Del Monte Kenya, which grows 13,000 acres of pineapples, have faced demands to surrender large chunks of their plantations.

County governors are also using their new powers to make life difficult off the farm.

Tata Chemicals, an Indian soda-ash miner, has been slapped with a $166m land-tax bill it says it cannot pay.

Local politicians are also complicating things for Tullow, an Anglo-Irish company trying to extract oil in northern Kenya.

All this leaves Uhuru Kenyatta, Kenya’s president and Jomo’s son, in a bind.

Aside from fears that those with land grievances could one day turn to his family’s vast holdings, he presents himself as a champion of foreign investors.

Yet, preoccupied by a power struggle in his government and wary of alienating voters ahead of an election in 2022, Mr Kenyatta has remained aloof.

His silence may damage the economy.

Multinationals are not just big taxpayers but also sizeable employers.

Del Monte is Kenya’s largest exporter of canned pineapples.

Nearly two-thirds of tea processed by big firms comes from smallholders.

When landless peasants organised by the ruling party seized big commercial farms in Zimbabwe, the economy collapsed.

Some say Kenya’s land commission should look at under-utilised farms owned by politicians.

Or that Mr Kenyatta could do more good by reducing corruption, boosting urban employment and helping smallholders make their farms more productive.

Many Kenyans have legitimate land grievances, but making implausible demands of profitable firms does not seem the best way of addressing them.

Central Bank of Kenya (CBK) Governor Patrick Njoroge has accused suspended Treasury Cabinet Secretary Henry Rotich of distorting revenue figures.

Dr Njoroge yesterday said the misrepresentation of numbers by the embattled official had driven the government on a borrowing spree.

In a rare bare-knuckle attack on Rotich’s tenure, Njoroge described Treasury’s budget-making process as “abracadabra”, where revenue numbers were randomly included in the budget books “from thin air.”
The governor described the revenue shortfalls by Treasury that resulted in a borrowing spree as “parte after parte” in street parlance.


“There was a lot of abracadabra,” said Njoroge of the budget-making process that was overseen by Rotich and his Principal Secretary Kamau Thugge.
Njoroge spoke at a press briefing in his office a day after the Monetary Policy Committee slashed the benchmark lending rate from nine per cent to 8.5 per cent.

Why can't we have Opus Dei lead this country???

“If the government is short of revenues and wants in a sense to assault the CBK and grab whatever resources there are, that has never worked and will never work,” Dr Njoroge said at the Monetary Policy Committee press briefing on Tuesday.

“Such bailouts monetise the deficit one to one which means the central bank prints money, it will be printing money to cover the deficit and would draw the central bank as a conspirator in fiscal decisions this will subordinate the central bank to fiscal decisions and political imperatives,” he said

CBK trades in Treasury bills under its name to reduce or increase money supply in the economy.

“There were concerns that we also have been commanded to surrender T-bills that we hold. So just like Kenya oil or some parastatal we are thrown into this ring and forced to surrender. That couldn’t be further from the way things work, we do not operate under those sort of regimes,” Dr Njoroge said

“If decisions are made in smoke filled rooms by people who want to send rockets to the sun they end up with those figures. We follow specific laws and we have been doing it for 54 years,” he said.