The late Prof. George Saitoti - former Finance Minister and beneficiary of the Goldenberg scam.

The death of George Saitoti in a helicopter crash on June 10^th removes one of the most important players in Kenya’s piranha pool politics. Saitoti served as a senior minister in the presidencies of Daniel arap Moi and Mwai Kibaki for more than 30 years, but he was more of an executive prime minister than a political boss. Although he was planning to run for the presidency, his mixed parentage – Kikuyu and Masai – would never have given him unqualified support among the Kikuyu in Kenya’s highly tribalised politics, while the Masai are not numerous enough to be big political players. Although Kenya’s professional classes may have voted for Saitoti, he was not a populist speaker and would have stood no chance against Uhuru Kenyatta for the Kikuyu vote. According to Charles Hornsby author of Kenya: a History Since Independence, “Saitoti was simply too reserved, distant, academic, and non-tribal – and he didn’t have the common touch.”

A maths lecturer at Nairobi University who also wrote an influential book on development, he was invited by President Moi to become Finance Minister in 1983. The end of the Cold War in the late 1990s meant that Britain and other western donors could force multi party democracy on Kenya and also move the economy from a highly regulated state managed model to a free market. Structural Adjustment accelerated that process but without the aid needed to support the transition. It was introduced at the same time as the one party state gave way to a multi-party democracy. Ironically, Kenya (the African nation most favoured by the West) was one of the last to introduce a multiparty system. Saitoti was a central figure in implementing both of these fundamental changes.

Multi party democracy meant competition and that meant Harambees to get the Wananchi to vote for the ruling party. Harambees are open air rallies at which the Wananchi – the ordinary people – are persuaded by the Big Men to vote for them. This means Nyama Choma (roasted meat), drink and wads of cash for the people.

But how was KANU, the Kenya African National Union, ruling party since independence, to raise money for Nyama Choma? The answer was Goldenberg – an export promotion scheme whereby anyone who exported gold or diamonds could claim 35 percent of their value as a state subsidy. The joke was that Kenya has very little gold and no diamonds.

Payment for the scheme came under the consolidated fund and therefore did not need parliamentary approval. But it did have to be signed off and Saitoti, as Minister of Finance, did just that. He even extended it. Whilst he may not have actually constructed Goldenberg, Saitoti  implemented it, and almost certainly benefitted from it personally.

Some £2 billion were stolen from the Kenyan state. Most of the money went to individuals, Kamlesh Pattni who founded Goldenberg International, and Gideon Moi, President Daniel arap Moi’s son. In all 487 companies, many set up just for the purpose, collected money from the scam. It was the moment when corruption in Kenya became the norm in big businesses and the upper echelons of state affairs. It was a moment when the corruption tick became almost bigger than the state dog it fed on.

In a subsequent inquiry, Saitoti and Pattni were named as culprits and Pattni was detained for a while. Then the whole affair was quietly dropped. The election had been won, and some of Kenya’s richest politicians, including Moi himself, were now multi-millionaires. No money was returned. Later, some 23 senior judges were forced to resign as a result of their involvement in the scandal. In a strange way the Kenyan state survived.

Throughout all of this Saitoti, as well as other senior Kenyan politicians involved in the scam, were welcomed to London. This was despite a former head of the Africa department of MI6 heading a forensic investigation into where the Goldenberg money had gone. To the British and US governments the strategic and economic importance of Kenya trumped corruption.

Kenya’s senior politicians became so wealthy that politics became a game based on “˜eating’ and “˜feeding’ – stealing and spreading the proceeds around an ethnic support base in return for votes. Appealing to and buying tribal loyalty became the name of the game. Kenya is probably now the most tribally divided nation in Africa. No wonder the 2007 election exploded into such  violence.

Will it happen again?

With two tribalist leaders, Uhuru Kenyaata and William Ruto, facing a trial at The Hague which may start in March next year (the exact date will be announced on July 13^th), the Kenyan election is wide open. Victory will go to the person who builds an alliance of tribal leaders. One thing is certain: Luo and Kikuyu will be on opposite sides. Raila Odinga, the Luo leader, will run and elements among the Kikuyu will do anything to stop him becoming president. For a while I thought that in 2008 Kenyans had reached the edge of the cliff and looked down. They wavered and pulled back. The militants were called off by their paymasters. Kofi Annan was on hand to help. Kenyans had seen a future that looked like hell and chose a fudged alliance of enemies instead.

That alliance is now falling apart. The new constitution has recreated a Kenya of 47 counties, whose elected governments will be funded by the state to spend as they wish.  It is, however, likely that a local politician from the dominant ethnic group in each county will be playing the ethnic card to garner support.

In 2008 the main wars were in Nyanza Province (Luoland) where (Kikuyu) police shot down Luo protesters, around Eldoret where Kikuyu immigrants were burned out of their homes and murdered by Kalenjin, and in Nairobi where battles took place in the poor slum areas between different ethnic groups. If politicians play the ethnic card in the next election, this winner-takes-all war could be fought in most of the new counties between any or all of Kenya’s 40-odd ethnic groups.

Richard Dowden is Director of the Royal African Society and author of Africa; altered states, ordinary miracles. For more of Richard’s blogs click here