Under Uhuru Kenyatta, KDF commercial interests grow

Within a span of five years, it has rolled out an industrial complex that will be earning it billions every year.

Previously only known for its weaponry might and boots on the ground, the military has been expanding its forte in revenue generating activities, following in the footsteps of its neighbours. The Ugandan and Tanzanian armies are active in business.

In the lead up to the recent Madaraka Day celebrations in Kisumu, President Kenyatta officially launched Kenya Shipyards Ltd, a ship building firm owned by the military. It is building a shipyard in Kisumu.

“The new shipyard will play a pivotal role in growing Kisumu Port into a modern regional lake transport hub. The Kisumu yard is the second of KSL’s facilities, with others under construction in Mombasa,” the Kenya Defence Forces (KDF) says. It adds that the company aims to establish and develop the shipbuilding industry in Kenya.

Through its navy arm, the military is building a shipyard at the coast that will be used for planned maintenance, refits, construction, repairs and conversion of ships at a fee for private companies. It also has a facility that will allow the navy to guide ships from the sea to the land. Guiding ships was initially the preserve of a department of the Kenya Ports Authority, which does it at a fee.

The launch came days after the military completed the takeover of the Kenya Meat Commission (KMC), adding to its growing industrial complex under President Kenyatta.

The revamped KMC has hit the ground running, aggressively marketing its meat and meat products.

“KMC was transferred to the Ministry of Defence in September 2020 by an Executive order of the President. The transfer mandated KDF to restore infrastructure and develop an ambitious business plan to spur socio-economic growth and accelerate realisation of food security,” the KDF says. Besides KMC, the military is also running a vegetable and food factory to cut its reliance on food purchase from the public.

President Kenyatta launched the KDF’s Gilgil-based food-processing factory in October 2018. The factory, strategically tucked between Nyandarua and Nakuru counties, which are food baskets of the region, aims to make the military food secure, and sell the excess to the public. Already, the military is giving the public a taste of its food products, among them dehydrated vegetables, through targeted donations to schools and other communities.

In April, the military started the journey of becoming an exporter of weapons after completing a Sh4 billion small arms factory in Ruiru, Kiambu County.

President Kenyatta said the factory, with a single-shift annual production capacity of 12,000 assault rifles, is part of a broad multi-agency national security industries strategy. The factory draws 60 per cent of its input from local resources.

He said the arms factory will lower the cost of acquiring weapons for Kenya’s security agencies and establish a sustainable national security industrial base that provides jobs for Kenyan youths.

“This ground-breaking initiative will allow us to lay the foundation for addressing the high cost of weapons acquisition, free us from the complex foreign export approval processes currently in place, provide Kenya with greater security sector independence and flexibility, and allow Kenya to design and produce high-quality weapons, customised to our unique needs and operating environments,” President Kenyatta said.

KDF engineers have also been involved in major rehabilitation projects. Besides the rehabilitation of key infrastructure, including the Nairobi-Nanyuki and Nakuru-Kisumu railway lines, they have been involved in the refurbishment of vehicles and equipment for Nairobi County.

The military had not responded to our emailed inquiry on their increased involvement in the business by the time of going to press.

Supporters of the move argue that the military’s forays into business are good for the country as it secures strategic assets and also makes Kenya’s defence more independent. However, lack of clear reporting of how much the industries in the military consume could also lead to corruption or misuse of public funds.

Kenya’s security budget is usually covered in secrecy on grounds of national security.

In the new budget estimates to be read next week, the Defence ministry says it is planning to start more revenue-generating activities following budget cuts that have marginally affected the security docket.

In the 2021/22 budget estimates, the ministry notes that it continues to face a number of emerging issues and challenges in delivering its mandate. These include the negative impact of the Covid-19 pandemic on the economy and national security, increased demand for the KDF to be involved in national development projects and humanitarian aid, maritime boundary disputes, high cost of equipment and systems, pending bills and inadequate funding.

“Some of the measures that the ministry intends to put in place to mitigate against these challenges include establishment of revenue generating activities, enhancement of multi-agency approach to create synergy, among others,” the budget document reads. It does not list specific revenue generating activities.

The Defence ministry, which is led by Cabinet Secretary Monica Juma, has experienced a marginal budget cut in the new financial year that starts in July, putting an end to a near steady rise of the ministry’s budget year on year over the last decade.

 The Treasury has allocated Sh119.8 billion to the ministry in the new financial year, compared to the Sh122.3 billion it was given in the current financial year. This is a Sh2.5 billion cut.

Some of the main activities the ministry says it will undertake in the new fiscal year are revamping KMC to an optimal operational capacity, operationalising the National Aviation Services Department, acquiring new equipment and developing related infrastructure. It also expects to commission and operationalise the Mombasa and Kisumu shipyards as well as complete the building of MV Jamhuri. The military also plans to develop an earth observation satellite in the new financial year to support national space management.

The core mandate of the Defence ministry is securing the sovereignty of the Republic of Kenya. But it also gets involved in other activities, among them the development and formulation of various policies and strategies, such as the Peace Support Policy and Defence Industrialisation Policy.

Its budget is also used to sustain appropriate force posture by recruiting, training and equipping its personnel. In the last financial year, it also conducted successful multi-agency operations such as Operation Amani Boni, metre gauge railway line rehabilitation, Covid-19 response, responding to intelligence and security threats, offering humanitarian assistance, participating in peace support operations and validating and implementing the Kenya Space Policy.

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