A shadowy move by the Treasury in September 2023 has left a bitter taste in the mouths of many Kenyans as it becomes increasingly clear that public funds were used to favour one private company at the expense of fair competition and transparency.
As the Treasury was grappling with a mountain of debt and struggling to fulfil its fiscal responsibilities, it made a highly questionable decision to grant Ksh 2.6 billion in tax exemptions to a company with substantial international backing.
This decision, ostensibly aimed at supporting the country’s nascent electric mobility sector, reeks of corruption and favouritism and exposes a disturbing pattern of government malfeasance.
Under the direction of former Treasury Secretary Njuguna Ndung’u on behalf of then-Ministry of Trade Secretary Moses Kuria, the government waived substantial import duties, the Import Declaration Fee (IDF), and the Railway Development Levy (RDL) for 10,000 electric motorcycles and 80,000 lithium-ion batteries imported by Africa Smart Mobility Solutions.
Under the guise of promoting green technology, international organizations, which were already investing in this company, granted these exemptions.
This preferential treatment is not only a betrayal of fair business practices but a stark illustration of how deeply entrenched corruption can distort public policy.
According to the CR12 document for SPIRO, 100% of this company’s shares are owned by a holding company based in Dubai, drawing parallels to the notorious Adani deal with JKIA.
Do certain parties within the political class have vested interests in this shell company based in Dubai, a known tax haven?
Such affiliations may explain SPIRO’s highly favourable tax incentives.
The tax amnesty directly hurt the other players in the electric mobility sector, leaving them to struggle in a market that now favours one well-connected firm.
With at least 15 other competitors in the field, many of whom have been actively investing in and supporting Kenya’s green transition, the decision to single out Africa Smart Mobility Solutions has created an uneven playing field.
These competitors are now at a severe disadvantage and forced to grapple with higher costs, while their favourite rival enjoys an unfair market advantage thanks to government-sanctioned financial support.
This blatant favouritism demonstrated by Kuria, Ndung’u, and their cronies is a classic case of how our governance system allows a small circle of elites to manipulate public resources for personal gain.
It is also worth noting the broader context of this scandal.
In neighboring Uganda, the government appears to be adopting the same strategy that favored Africa Smart Mobility Solutions in Kenya, giving electric mobility firms preferential treatment.
President Museveni’s recent commissioning of SPIRO electric motorcycles and the backing provided to companies like Roam and Ampersand reflect a similar pattern of support for select entities with substantial international investment.
Ampersand and Roam, who together raised over $20 million to support electric mobility in the region, are part of a larger story that channels international funds into specific enterprises.
Reports show a staggering number of over a million boda bodas across Uganda, with about 200,000 registered in Kampala alone, a city grappling with severe air pollution.
The broader needs of the Ugandan market, particularly in the context of the boda boda industry, sharply contrast with the support these firms are receiving for their role in advancing electric mobility.
Both governments, unsurprisingly, demonstrate a troubling disregard for fair business practices and equitable economic advancement.
Until there is a rigorous and transparent review of these practices, the commitment to fair competition and sustainable economic reform remains in jeopardy.
So, this holding company, Africa Smart Mobility Solutions Kenya Limited, which supplies Spiro bikes and batteries, was registered on June 6, 2023, in Kenya.
However, as money continued to drain from the government, Kenyans could not hold back their sorrow.
Listed as one of the directors of the holding company, Kaushik Burman serves as the current CEO of Spiro. On June 29, 2023, he first took on the role of co-CEO at Spiro alongside Jules Samain.
Burman is the former VP of Strategy for Gogoro India, an e-scooter company. Burman is no stranger to Kenya. He worked on his MBA at INSEAD in 2011. Burman is based in Dubai.
Jules Samain is the other Spiro co-CEO who has since stepped down, according to his LinkedIn profile. He’s from Benin and was a former special advisor to the Togolese President, one of the countries where Spiro operates alongside Kenya, Uganda, Rwanda, and now Nigeria.
Shegun Bakari, the then-Spiro CEO and founder, appointed him in May 2023 after he stepped down to become Benin’s new Minister of Foreign Affairs on June 6, 2023.
The other director listed in the holding company is Wangeci Githinji. Burman tags her in the launch photos, and Spiro appears on her LinkedIn profile.
In the first quarter of 2023, Moses Kuria, then Minister for Trade, held 30 meetings in Saudi Arabia and the UAE.
