Editorial: Arms seizure shows govt’s grip on economy weak

It may be passing off as an ordinary security problem in which the police are taking a whacking for sleeping on the job.

But the repeat discovery of a large stock of arms in a private residence in Narok is a reflection of the grim realities of our economy.

Kenyans should be deeply worried that someone has been able to move such large amounts of dangerous weapons without detection by the country’s rather elaborate security machinery or with its tacit participation.

If indeed it is true that the arms moved without the knowledge of the police, it is largely because our security apparatus has not moved with the times.

The truth is that lucrative but illicit trade in illegal substances such as arms, counterfeits and drugs has to be oiled by large sums of money.


That such business appears to be smoothly going on in our economy clearly betrays the loose grip that supervisors have on the financial services sector.

On this front, Kenya appears to be a pure reflection of Peruvian economist Harnando De Soto’s thesis that governments of the so-called Third World countries know and are in control of a mere 30 per cent of their national economies.

They have no idea of the real happenings in the remaining 70 per cent where citizens are making fortunes from a wide range of licit and illicit activities including micro-entrepreneurship, small-scale agriculture, unauthorised harvesting of natural resources, counterfeits and drugs trade.

One only needs to look at recent developments in the real estate sector to fathom the import and the cost of the failure of government to hold its brief.

While it was initially said to have been driven by Kenyans in the diaspora, there has come the realisation that the sharp take-off in the real estate market in the past five years may have had a considerable element of money laundering in it.

Yet even a casual look at the figures should have warned those in charge of the security apparatus that something was amiss in the hallowed story of the real estate boom.

This is because at the height of the boom in 2007 the property market turnover was worth nearly four times the Sh70 billion that the country earned from remittances.

Making it even clearer was the fact that the real estate market appeared to defy the deep economic downturn that began with the post-poll violence in January 2008 and aggravated with the global economic recession later that year.

Add on to this the near total collapse of the home loans market during the same period and it becomes clear that someone in the national security system slept on the job.

The veil of the property lie has actually been unravelling in bits with the sometimes very noisy fallouts between partners who clearly used the proceeds of crime to buy multi-million shilling houses in Nairobi and the frequent arrest at our airports of smugglers with large amounts of drugs.

For ordinary Kenyans the result has been very sharp pangs of economic pain that is driven by high inflationary pressure because they have to compete with their meagre earnings for goods and services against mega money in the hands of drug barons, pirates, peddlers of counterfeits and arms traders.

Movement of money is often the clearest indicator of what activities people are involved in.

And often all deals must get the stamp of government approval from offices that can offer useful information to fight mega crime.

Such data should be available at the lands office, commercial bank accounts, planning departments of municipalities, the immigration office and telephone operators.

That our security apparatus – especially the anti-fraud wing of the Criminal Investigations Department – has failed to use this data to come up to speed to the criminals is a huge indictment of its performance leaving Harnando De Soto’s thesis ever true.