How multibillion edible oils plan became the elites’ new gold mine
Commodity imports and trading are clearly emerging as the new frontier for the rent-seeking elite in Kenya, The Weekly Review has established.
Trends suggest that the UAE capital of Dubai is the node and core of the activities of the elite.
Consider the following recent case: An analysis of Kenya Revenue Authority import entries – which are accountable documents – of three large consignments of cooking oil that were brought into the country by a Dubai-based entity under the government’s duty-free import programme, not only uncovered red flags of rent-seeking behaviour but revealed how big bucks are being made by these well-connected traders.
Rent-seeking is an economic concept that occurs when privileged groups and the well-connected seek to gain wealth without no reciprocal productivity in the economy.
According to the import entry documents for the three consignments of 85,120 20-litre jerricans of cooking oil that landed in Mombasa on May 17, the landed cost is stated at US$26 per jerrican.
The Dubai company made massive margins because the prevailing international prices quoted daily on commodity exchanges such as the Kuala Lumpur Commodity Exchange show that the landing price of a 20-litre jerrican of cooking oil is US$19.
Clearly, the nouveau rich of the duty-free cooking oil imports game are making tidy margins. Even more revealing in the import entry documents is the fact that the origin of the cooking oil is stated as Malaysia while the exporter and the invoices are from a Dubai-based entity by the name Multi Commerce FZC whose address is stated as Sharjah, UAE.
The Kenya National Trading Company (KNTC) is named in the documents as the final consignee of the cooking oil. Thus, the big bucks were made in Dubai by the exporter of these three large consignments of cooking oil, which were subsequently sold to the KNTC.
