Kenyan Treasury’s KSh 2.6 Bn Tax Exemptions Reveal Deep Government Corruption
NAIROBI – Outrage has erupted following the Kenyan Treasury’s decision to grant Ksh 2.6 billion in tax exemptions to the electric motorcycle firm Africa Smart Mobility Solutions, exposing significant top-level corruption within the government.
In September 2023, during a financial crisis, the Treasury controversially waived import duties, the Import Declaration Fee (IDF), and the Railway Development Levy (RDL) for the company, which has substantial international backing. These exemptions were granted under the pretense of promoting the burgeoning electric mobility sector.
Former Treasury CS Njuguna Ndung’u, on behalf of then-Ministry of Trade CS Moses Kuria, facilitated these tax breaks for the importation of 10,000 electric motorcycles and 80,000 lithium-ion batteries. This preferential treatment undermines fair competition and highlights a pattern of government corruption and favoritism.
Evidence indicates that Africa Smart Mobility Solutions is entirely owned by a Dubai-based holding company, reminiscent of the controversial Adani deal with JKIA. This raises questions about potential political affiliations and vested interests, explaining the generous tax incentives.
The fallout has severely impacted other players in the electric mobility sector, with at least 15 competitors now struggling to cope with higher costs while Africa Smart Mobility Solutions enjoys an unfair advantage.
This scandal is part of a broader regional trend, with similar preferential treatment observed in Uganda. President Museveni’s recent commissioning of SPIRO electric motorcycles and support for firms like Roam and Ampersand, which have raised substantial international funds, reflect a troubling pattern of selective government backing.
The actions of the Kenyan and Ugandan governments raise serious concerns about fair business practices and equitable economic progress. Until these practices undergo thorough and transparent review, the commitment to fair competition and sustainable economic reform remains at risk.
