The standoff at Kenya’s Youth Fund does not serve the youth

On Wednesday 21st October 2009, the Minister of Youth Affairs and Sports, Hon. Prof. Hellen Sambili reinstated the Youth Enterprise Development Fund’s former CEO Mr. Umuro Wario, after a - yet to be made public - Kenya Anti Corruption Commission investigation report that cleared Mr. Wario of any criminal culpability in his activities prior to his suspension and subsequent termination by the Youth Fund’s Board.

In June 2009, the Partnership for Change released a report (published here on this blog) questioning the true reasons for Mr. Wario’s dismissal from the fund, in addition to queries concerning:

• Single sourcing of contracts prior to and during Mr. Wario’s tenure as CEO.
• The contentious partnership with Enablis East Africa, that Mr. Wario himself claimed was the main reason behind his termination, and
• The corporate governance structure of the Youth Fund's Board with regards to conflicts of interests among named members.

So far the Youth Fund’s Board has not deigned to acknowledge nor respond to the questions, despite the Partnership posing the queries not only in the mainstream media but in youth forums. As Yipe.org’s work is focused on the youth entrepreneurs, we too tried to ask questions when given the opportunity, only to be met with the response that our enquiries lacked any substance, and were based on fallacious reports.

As a result of the Fund's deafening silence, sadly we have become fully aware that the Youth Fund’s Board is only interested in retaining full and complete control over this most important national fund; so much so that the Board will go to any lengths (at whatever cost and detriment to its reaching the 3 million of unemployed youth that require it’s assistance) to ensure that Mr. Wario is not allowed back into the Fund’s secretariat.

To spend in the range of millions of precious Kenya shillings  to reiterate what has been roundly publicized on our television screens and radios to endear Kenyans to their point of view, has exposed the high handed attitude by the Youth Fund’s Board. Why run to the media now, when in June 2009 the Board fronted by the Chairperson disparaged the same media as being in cahoots with political enemies?

Nevertheless, the Youth Fund’s public statement and extract of the auditors investigation published on Wednesday October 28th, brings onto the fore further questions. 

On reading the two page - full colour advertisements* placed in yesterdays Daily Nation and Standard newspapers, it is indeed stupendous that the Kenya Anti Corruption Commission (KACC) exonerated Mr. Wario if the Commission’s investigators were aware of the damning evidence of the State Corporation Inspectorate’s office outlined in the published extract. Surely the KACC investigations would have involved interviewing the Fund’s staff and Board members in addition to the State Inspectorate?

The Youth Fund's Board has stated that it never referred Mr. Wario’s case to the KACC, though in their published statement released yesterday, Mr. Wario is guilty of a wide range of derelictions and/or omissions of duty that would have landed any other public officer in an interrogation room at Integrity House. Yet the Board was benevolent enough to not forward Mr. Wario’s case to the KACC even as they accused him of mismanagement of funds and assets.

Indeed the extract from the report by the Inspectorate of State Corporations confirms the Board’s allegations of gross violations that are in contravention of both the Anti-Corruption Economic Crimes Act 2003, as well as the Public Officers Ethics Act.

1.    The Anti-Corruption and Economic Crimes Act, 2003 (ACECA)

The Youth Fund by virtue of being a State Corporation is a public body as per the 2003 Act; and Mr. Wario by virtue of his employment at the Youth Enterprise Development Fund fell into the category of a public officer.

The Act defines corruption as including abuse of office or breach of trust. Mr. Wario’s disregard for financial and recruitment procedures (concern #4), attempted diversion of funds without adherence to due process (concern #6) and non-transparent use of financial resources (concern #8) would have surely made him culpable of being charged with corruption.

Furthermore, Mr. Wario’s acts regarding procurement outlined in the advertisement are in breach of the ACECA 2003 s. 45(2), which states that:

(2) An officer or person whose functions concern the administration, custody, management, receipt or use of any part of the public revenue or public property is guilty of an offence if the person —
 (b) wilfully or carelessly fails to comply with any law or applicable procedures and guidelines relating to the procurement, allocation, sale or disposal of property, tendering of contracts, management of funds or incurring of expenditures.

According to concern #5 of the extract from the report by the Inspectorate of State Corporations, Mr. Wario was guilty of flouting established procurement rules, and as such is liable under ACECA s. 45(2)(b).

2.     The Public Officer Ethics Act, 2003. (POEA)


Under the POEA 2003, Mr. Wario flouted s. 8 which states that:

8. A public officer shall, to the best of his ability, carry out his duties and ensure that the services that he provides are provided efficiently and honestly.

According to the published extract of the Inspectorate’s report, Mr. Wario was guilty of insubordination (concern #1), had a dismal performance in discharging his duties (concern #2) and lacked strategic direction and execution (concern #3).

This raises the following questions:

• Why did the YEDF Board not forward Mr. Wario’s case to the KACC seeing that in their paid advertisement they claim that he is responsible for the loss or mismanagement of tax payer funds? This points to the Board’s failure in stewardship of public funds and accountability not only to the Exchequer, but to all Kenyan taxpayers and most importantly to the nation’s youth entrepreneurs.
• The KACC should also answer how it found Mr. Wario not culpable in the face of the damning report by the Inspectorate of State Corporations. If the Commission was diligent in its duties, surely it would have discovered the report; or have they investigated the report and subsequently dismissed it?

However one cuts it, due process of the law must and should be followed. Instead of publishing expensive advertisements in the local dailies, the YEDF should press for Mr. Wario being charged and if guilty convicted under ACECA.

Justice can still be done. Under ACECA 2003, the YEDF can now forward their evidence to the KACC which stipulates penalties under  section 48:

48. (1) A person convicted of an offence under this Part shall be liable to —
(a) a fine not exceeding one million shillings, or to imprisonment for a term not exceeding ten years, or to both

Section 35(4) of the Act further allows the Board to pursue Mr. Wario even after they terminated his services, which is what any steward of public resources would have done.

Mr. Wario can only be judged in a court of law and not in the public court. To spend money that COULD and SHOULD have been used to empower young business people, only makes the Youth Fund look just like what they accuse Youth Minister Hellen Sambili of – acting with impunity!

Read the Youth Fund Board's statement

* A phone call to the Daily Nation this afternoon quoted Kshs. 437,000 per full colour full page. Advertisements were also placed in the Standard thus costing approximately 1.5 million shillings. Such a sum could have been invested at Kshs. 50,000 per venture in 30 youth owned enterprises

Youth Voices and Actions on the Reform Agenda

The youth of Kenya, uniting under the leadership of the following organizations namely; The Youth Agenda (YAA), Nyanza Youth Coalition, Kenya Muslim Youth Alliance (KMYA), Kenyan Network of Grassroots Organizations (KENGO), Coast Education Centre (COEC), and Citizens Assembly meet in Nairobi beginning October 24, 2009 to discuss the pressing issues surrounding the reform agenda. 

Taking cognizance of the fact that Kenya has a large, ever growing, educated, and yet increasingly frustrated youth population; and acknowledging that the unprecedented violence sparked off by the dispute over results of the 2007 presidential election brought a new focus on the large number of dissatisfied youths, a section of youth leaders was prompted to come together upon realizing that there is an urgent need to sensitize and mobilize young people towards a reconstruction of their country by constructively getting them involved in taking control of their political, social and economic welfare through a creative and strategic engagement in the reform process. 

It is in view of the foregoing that the youth leaders have mobilized young people to a national conference in Nairobi to enable them add their voices to, and take both personal and collective responsibility in demanding the implementation of  fundamental reforms as stipulated in the National Accord.

In demanding the implementation of the National Accord, the leaders also seek to marshal the youth behind resisting manipulation and plunder of public resources by the ruling elite and instead deploy their numbers, energy, courage and devotion to actively demand for transparency and accountability, and advocate for an end to the pervasive culture of impunity, corruption and violence.

A pre-conference workshop will evaluate the current state of affairs in the country in order to facilitate a comprehensive briefing of participants to be drawn from all constituencies of the Republic of Kenya who will be attending the National Conference scheduled for November 17, 2009.

Signed on behalf of the youth organizations by;

Hassan Ole Naado

Member, Steering Committee

Umuro Wario back at the Youth Fund

So does this mean finally we get answers regarding the Fund's corporate governance?

Read "A Fish Rots From Its Head – Crony Capitalism Exposed At The Kenya Youth Enterprise Development Fund"

Toxic Business: Africa’s Scavenger Entrepreneurs

It’s a common site in most African cities – waste dumping sites where hundreds of scavengers search daily for pieces of scrap metal, plastics and other waste materials to sell for a profit. These scavenger entrepreneurs though are risking their lives in search of money for survival. In these dumps, there are toxic wastes that can be fatal. 

Just this week on twitter the most famous tag word was “Trafigura”, the company accused of condoning the illegal toxic dumping of a mix of petroleum residues, sulphur and caustic soda that in August 2006 led to the death of 12 people and more than 100,000 Ivorians seeking medical treatment.

According to the Basel Action Network (BAN), a disproportionate burden of toxic waste, dangerous products and polluting technologies are currently being exported from rich industrialised countries to poorer developing countries.

And mass-scale instances of toxic waste poisoning such as that in Ivory Coast is not unique. In March 2008, hundreds of people in Mombasa complained of illness after a consignment of leaking chemical containers were dumped in Kipevu near the port. The symptoms experienced by the residents of the nearby slum were eerily similar to those who suffered from the toxic slops distributed in 18 dumping sites around Abidjan. Nausea, miscarriages and diarrhoea amongst other symptoms caused many to seek treatment.

In February 2009 a joint investigation by the Independent newspaper, Sky News, and Greenpeace also exposed the story of tonnes of toxic waste collected from British municipal dumps and sent illegally to Africa in flagrant violation of UK laws to ensure that “its rapidly growing mountain of defunct televisions, computers and gadgets are disposed of safely”.

Indeed e-waste is slowly emerging as a major sort of refuse, according to Kenya’s National Environment Management Authority. From these, the scavenger entrepreneurs risk their lives collecting metals for re-sale from disused computers, televisions, VCRs, stereos, copiers, fax machines and mobile phones.

Africa is indeed an ideal dumping ground. Apart from the inability of local environmental agencies (where environmental management laws exist) to adequately police dumping of waste, corruption also allows agents to dump waste throughout cities. And unfortunately, for the Continent’s scavenger entrepreneur’s this is the only way they can make a living.

In pictures: Kenya scavengers

A good story sells

A recently published blog post by David Roodman titled “Kiva is not quite what it seems” has been causing quite a stir in cyber space. Not so much because of the provocative title mentioning Kiva - a pioneer and probably the best known Person to Person (P2P) micro-credit organisation; Roodman’s post also questions the real intentions why people choose to fund a micro entrepreneur from Cambodia, Kenya or Guatemala for that matter.

Roodman posits that a reason for the success of Kiva and similar internet based lending portals is because for as little as US$ 25, more people can become benefactors. Helping others has become a cheap commodity and not only the super-rich Bill Gates and Warren Buffett’s can now claim the title “philanthropist”.

Similar to the P2P lending model, goods from developing countries that sell on western supermarket shelves bear stories – some of them wild. This has been largely propagated by fair trade products. However, nowadays even a pesticide sprayed beetroot from Bulawayo must carry a story. A honey product from Kenya cannot just simply be labelled “Kenyan honey”. What’s required is a long tale weaving in a tapestry of sensory words probably going along the lines of “…this honey comes from the honey bee whose hives are in Africa’s savannah plains ... The scents from the eucalyptus ensure a wild …”.

Indeed, the more evocative the story about the terrain or about how poor the farmers who produced it are, the better.

This is what consumers want – a feeling that when they put a spoon of honey in their morning tea, they feel part of that savannah so alluringly described on the product label. And it is these stories that add a couple of dollars or Euro’s onto the unit retail price. On some e-commerce websites selling African “ethnic” products, 2 kgs of maize flour which is the staple food for most East and Central African countries goes for US$ 10. The same product in an upmarket supermarket in Nairobi costs less than a quarter of that price. The point is that with good marketing, consumers pay more for the “story” than the product itself.

With rampant corruption constantly being reported in Africa, an ennui among citizens of western nations has emerged. Commonly people question why donor aid is poured into large infrastructure projects such as roads and geothermal plants yet there are numerous instances of money being siphoned off by corrupt public officials in Africa. Just last week it emerged that World Bank money earmarked for free primary education in Kenya had been stolen; thus begging the question why fund such a project when if you gave an entrepreneur a bit of money they could then be empowered enough to send their children to a fee paying school?

Media stories on Africa which in most instances focus on crises’ or the potential for crisis have made people who would otherwise dip into their pockets to alleviate hunger on the Continent averse. Thus when one sees a picture of Mary from a village just outside Kampala who has a banana kiosk, the need to assist Mary overrides the need to assist Fatma in a refugee camp in Eastern Congo.

In an age where people are sponsoring small businesses’, children and even guerrillas in Rwanda, what does this all mean for entrepreneurs either seeking funding or wanting to sell their products on the export market?

In a nutshell there is a palpable and growing demand for “virtual tourism” – a state where one can experience a lifestyle from the comfort of their seat in front of a computer monitor, or perhaps when they hold the honey jar from somewhere in Africa, gently open the lid, and smell the scent of the wild.

Read “Kiva is not quite what it seems” here

Much ado about "Governance"

As entrepreneurs facing the worst economic crisis in our lives, it is pretty difficult to keep our businesses’ afloat; let alone take the time to follow all the “reform” talk going on around us.

This week alone, Kenya proved that it did not have the political goodwill to try the perpetrators of 2008’s post election violence and even mediator Kofi Annan is in town to assess the implementation of Agenda 4 of the Accord.

Another development this week is the publishing of the Mo Ibrahim Foundation’s Index on Governance. The word “governance” the way it is bandied about seems to be akin to the word “impunity” which doesn’t seem to have a standard definition. To us business people, governance comes in the form of having public services such as a steady supply of electricity and water. It is also important when it comes to that monster we call “corruption”. In essence, good governance translates into fewer indirect costs.

According to the website, “the Ibrahim Index measures the delivery of public goods and services to citizens by government and non-state actors … using indicators across four main pillars: Safety and Rule of Law; Participation and Human Rights; Sustainable Economic Opportunity; and Human Development".

So what does the Ibrahim Index tell us about the effect of (good) governance on business? In a nutshell the following:

• Good governance ensures our personal security.
• Human rights are not divisible from business competitiveness.
• Social unrest is not good for business.
• Judicial independence and the strength of the judicial process are important for business.
• Transparency, accountability as well as corruption in the public sector adversely affect business.
• Countries scoring high on the Index have a superior quality of infrastructure coupled with the provision of reliable utilities.
• Economic policies that promote sustainable business are vital.
• Rural provision of public goods are essential for growth.