Kenya: Kazungu Denies Endorsing Shadowy Firm in Cashew Nuts Deal

Kenyan ambassador to Tanzania Dan Kazungu has dismissed claims that he endorsed a shadowy firm in a Sh18 billion cashew nuts deal with President John Magufuli's country.

Mr Kazungu issued a statement on Wednesday in response to a story published in the Nation, which said he endorsed Indo Power Solutions and that it took President Magufuli's government for a ride in the deal.

On January 30, Tanzanian cereals board director Dr Hussein Mansoor and Indo Power's Chief Executive Officer Brian Mutembei signed a deal for the sale of 100,000 tonnes of cashew nuts at the East African Community headquarters in Arusha.

The deal was signed in the presence of Mr Kazungu; Tanzanian Minister for Industries and Trade, Joseph Kakundi; Minister for Constitutional and Legal Affairs, Prof Palamagamba Kabudi; and Deputy Minister for Agriculture Dr Innocent Bashungwa.

RIGHT PROCEDURE

Mr Kazungu noted that Indo Power, a Kenyan company, followed the right procedure of transacting businesses between the two states.

The former Mining Cabinet Secretary further explained that a total of 18 firms from countries including China and India contested for the bid and that Indo Power, the only Kenyans firm to bid, won.

"Ultimately though, the final decision to award or reject any bid rested with the buying entity, the Nation Cereals and Produce Board of Tanzania," he stated.

Mr Kazungu said he rejoiced when the Kenyan firm was selected over international competitors since it is his role to promote legal Kenyan businesses in both the formal and informal sectors.

He said the business should deeply concern the two states bearing in mind that the volume of trade between Kenya and Tanzania has been declining drastically - from Sh46 billion in 2012 to Sh28 billion in 2018.

"Note that Kenya is the number one country in Africa that has invested in Tanzania and that overall, we are placed at position five behind UK, US and India," he said.

"Kenyan firms have invested over Sh170 billion in Tanzania and created over 56,000 for locals and Tanzanians."

REGISTRATION

Mr Kazungu further said that the Tanzanian Embassy in Kenya confirmed registration of the company in Kenya when the Minister for Trade and Industry directed it to do a background check in December 2018.

"When the minister wrote to Indo Power Solutions in January, requesting our mission to present the company's documentation, we dutifully obliged and asked the company to furnish the mission with general 'Know-Your-Customer' documentation for us to determine its legality," he explained.

He said that through Kenyan's commercial division, the mission wrote to the Ministry of Trade and Industry in Kenya on January 22, confirming that Indo Power was registered and incorporated on October 6, 2016 under Companies Act, 2015.

"The company had an import certificate number KRA201700650595 to operate in the business of importation and exportation of Soya and Pigeon beans, cashew nuts, wheat, sun flower and Carola oils, black pepper, green mug among others," Mr Kazungu said.

In light of the above, the Kenyan envoy said, the mission, whose aim is to promote trade and investment facilitation as part of economic diplomacy, "encouraged persons and organisation to be at liberty to do businesses with the company."

He noted, however, that allowing the company to do business did not amount to an endorsement as purported in the story.

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