 When
the deal is too good, please think twice
by Vincent Obiro Orute
Plans by a shadow South African firm to take over the fisheries management of
Lake Victoria on the Kenyan may have been nipped in the bud, but there is little
celebration on the beaches.
Even as the East African Community Secretariat based in Arusha sought to assure
Kenyans that the Lake is a natural resource shared between all the three East
African countries namely Kenya, Tanzania and Uganda and that no single country
could broker a deal with a foreign firm (read investor)without involving others,
the members of the fishing fraternity say they wouldn't trust anybody with their
Ksh.6 billion a year natural resource. Although the chief executive of the East
African Community said the lake was a shared natural resource and that no single
country could broker a deal on the lake without involving others, the ordinary
fishermen say there could be more than meets the eye. Nobody knew what was
happening until the chief Executive of the East African Community spoke out
against the sale plans.
What amazes me is that long before the South African investors came calling,
wealthy businessmen some from as far as North Eastern Kenya, had secretly
privatised fish landing beaches.
A Nation survey confirmed that middlemen had taken over beaches from the fish
cooperative societies whose officials have been employed to work on the fishing
boats.
The worst affected areas according to the survey are Suba where private fish "bandas"
dot beaches in Sindo, Mbita, Remba and several other islands.
The takeover of the beaches is a well orchestrated plan by the rich to takeover
the management of the lake from poor fishermen who derive their livelihood from
fishing.
Although the takeover bid has been stopped, the fishermen say the rich will stop
at nothing to take overthe lake.
The proposal for a multi-billion shillings by South Africans to build massive
physical infrastructure should immediately raise eyebrows, especially when the
proposal is that it will be funded through the expensive commercial loans from
European banks.
In these days and age, you have to establish the credentials of the sponsors of
people who approach you with such large projects. You have to conduct due
diligence and seek references to enable you to know whether the contractor has
successfully implemented such a project elsewhere in the past.
We should also be wary of projects designed to create fertile grounds for
kickbacks. Indeed, what we ought to understand is that today's shrewd
international businessman is one who loves to sponsor projects involving the
purchase of billions worth of equipment, especially where he is allowed to be
the one to negotiate, arrange and source for commercial loans to implement such
projects.
The history of this continent is replete with cases of large projects which were
touted as meant to improve the lives of poor Africans, but which later turned
out to have been conceived and designed merely to make it possible for power
brokers to make money through procurement commissions and kickbacks.
What is my point? That the proposal to concession Lake Victoria to a South
African firm on the Kenyan side should be given a thorough going over before a
decision is made.
Considering the fact that no single member state has the legal right to
negotiate the "concessioning" of the lake without consulting other member
states, I don't know whether we should be listening to the South African
investors in the first place.
Without doubt, the fishermen on Lake Victoria badly need better marketing
outlets and better prices for their labour.
The proposal by the South Africans to introduce ferries which will collect and
transport the fish from the beaches around the lake to the proposed auction in
Kisumu is clearly a very attractive investment. It is estimated that the lake
supports 24.4 million people in the three countries of East Africa a quarter of
whom live on the Kenyan side. Because of her small fishing portion coupled with
their aggressiveness many Kenyans have been accused of crossing the boundaries
in search of fish although they say they have never been shown the boundaries
they have been accused of crossing.
In essence, what the South Africans are attempting to do is that they be allowed
to step in to provide what we have been unable to provide to the ordinary poor
fishermen - water purification plants, refrigerated ferries, jetties and cold
storage facilities.
But how do we deal with the sticky issue of regulation? Once you bring in a
profiteer and allow him to take control of a natural resource, you must bring in
a strong regulator to ensure that monopoly power exercised by the profiteer is
not used against the interest of an ordinary fisherman whose livelihood depends
on fish.
The rule of the thumb which I believe the South Africans know better than the
ordinary fishermen is that any private firm which provides a service to the
people at a profit must be regulated by an independent body.
In my view a private company can only be allowed to operate under circumstances
where obligations and performance benchmarks are clearly spelt out.
Where are the safety nets to ensure that the South Africans will not deny the
ordinary Luo fishermen whose livelihood depends on fish access to the lake?
Where has this experiment worked and where has it failed and why? All these
pertinent questions have not been addressed in the proposal by the South
Africans.
In the meantime, we must hope that the proposals by the South Africans will
serve as a wake up call for our governments to consider the plight of the
fishermen. They need better prices and better marketing outlets for their sweat.
In a sense, what the South Africans are attempting to do is not completely
without merit.
I must confess that there are many aspects or facets of it which make economic
sense to any right thinking East African.
Vincent Obiro Orute is a seasoned banker and micro finance expert.
email: orute-obiro@hotmail.com
or orutev@yahoo.com
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