The deal had a sweet taste, but the system remains rotten to the core. A multi-million-dollar scandal involving contraband sugar has hit Kenya, amid evidence that smugglers have been colluding with corrupt officials to flood the market with goods unfit for consumption. One of these dubious products has included illegally-imported, potentially-toxic sugar, putting the health of millions at risk. Yet this suspected conspiracy is only the tip of the iceberg in a country struggling with illicit trade, widespread negligence and entrenched graft. The Kenyan state cannot solve these systemic issues without rooting out both deep-seated corruption and incompetent officials.
The sugar-scandal investigation is gaining momentum. Raids on warehouses and trucks nationwide have netted thousands of sugar sacks worth over $17.8 million. Police say some of the sugar was imported from Brazil, then repackaged into bags that indicated it was sourced from Zambia. Staff in Kenya’s Revenue Authority (KRA)—which is tasked with collecting taxes—and Kenya’s Bureau of Standards (Kebs)—in charge of checking product quality—are suspected of conspiring with traders and owners of sugar-importing companies.
Police have already detained more than 25 people nationwide while multi-agency investigators consider widening the net to ensnare senior officials and businesspeople. The scale of the crime is likely to be massive. Insiders say it is impossible to import sugar illegally without the involvement of the Agriculture and Food Authority and police officers manning Kenya’s roadblocks.
Lab tests have reportedly shown that the sugar is contaminated with mercury and copper. Furthermore, a high moisture content in the sacks could cause pathogens to proliferate during storage. Both issues present a severe concern for public health, putting much of Kenya’s population at risk. In the words of one scientist quoted by Kenyan media: “This was, simply, poison.”
It appears that smugglers and counterfeiters have long been running the show at Kebs. Scientists there claim that a cabal of senior officials overrule their warnings about dodgy goods—from sugar to fruit juice to biscuits—and ensure these products pass quality control. This syndicate is accused of overseeing the manufacture of fake stickers by an Indian company, Madras Security Printers Private Limited, that the government has contracted to produce all mark-of-quality labels. The national market is awash with these fake stickers, which are used on inferior and counterfeit products.
Eyebrows were raised when, during the government’s tender to print millions of these stickers annually, Madras beat more established companies, some of which were knocked out at the preliminary stage. And rather than using high-quality stickers, the firm has reportedly opted for cheap, easy-to-copy material. As such, even importers of genuine products now cannot securely trace counterfeited products in the market, complicating regional trade.
Sugarcane farmers have welcomed the new crackdown on cheap imports, which have crippled their livelihoods and benefited only a small elite. But some have questioned why the authorities waited to act until public outrage had reached a tipping point; thriving trade in contraband sugar is an open secret. Many are now calling for an increase in the surveillance of outlets countrywide.
Yet who is watching the watchdogs? Kenyan media have reported on numerous scandals in which officials at several government bodies have overlooked clear acts of fraud or stolen hundreds of millions of shillings from the public purse. And while numerous officials have been investigated, none have been convicted. According to President Uhuru Kenyatta, tax evasion, counterfeiting and unlicensed products in Kenya results in approximately $300m lost in annual revenue, aggravating unemployment and hindering foreign investment. Kenyatta claims that the ACA last year seized goods worth $16.8 million, though this only represents around 5% of the total national estimate.
Kenya’s corruption crisis is so pervasive and severe across all levels of government that the country’s auditor general, Edward Ouko, has warned the integrity and basic functioning of the state is threatened. “If we don’t watch out, it will engulf us,” he said in a recent interview with Reuters. Collusion by civil servants to steal billions annually, Ouko claims, is coordinated at a high level. “It makes me angry that the weaknesses which we had revealed […] were not acted upon,” he added.
Ouko is among those who are skeptical that a sea change is in sight. There are concerns that institutions tasked with investigating and prosecuting corruption will not, in their present state, bring about reform as they are poorly run, threatened by vested interests and charged with too wide a remit. Clearly, Kenya has a long way to go in its war on counterfeits and corruption.
But the rule of law—across the board—is imperative and the black market needs to be cleaned up decisively, not least to prevent further public-health crises in the future. The government must end its complacency and hold perpetrators to account, promoting transparency and overhauling its convoluted procurement and payments system.
Better coordination among state agencies manning the country’s borders is needed, as are more resources (ACA is reported to have only 24 inspectors nationwide). To bring in adequate revenue for Kenya, the KRA must keep informing the public about the importance of paying taxes while stepping up the fight against untaxed counterfeit products amid wider efforts to stamp out corrupt practices.
As for Kebs—damaged deeply by the latest sugar scandal—this agency must assert itself as a beacon of trust and shed its reputation as an understaffed department infiltrated by pro-counterfeit cartels. Without sustained and ruthless reform, the looting of state coffers will persist and the counterfeiters will continue to run amok. It is ordinary Kenyans who will pay the price.