Merali’s two companies have issued profit warnings. He is blaming it on post-election violence, but why do I think it’s more than that? The CEO of his Sameer Group of companies has effectively been fired and because Merali is an astute businessman, he quickly replaced him with another Kikuyu.
Now, I don’t want people here to start hyperventilating about this statement. If Raila had become the president, Merali would have picked a Jaluo. It’s the way the game is played.
So, what’s happening to Merali? Everyone knew that he run Firestone with Moi and everyone knew that when Moi was in power, it was the Indians who were running those businesses, not people like Moi and Kulei (they just got their cut at the end of the month). Is it getting harder for Merali to extract political favors or is it just pure business as he says? (post-election violence, rising fuel costs, a more competitive economy, etc, etc).
The Sameer Group website doesn’t give a lot of information about who he is. There’s also very little information on other members of the management team. Too many Kenyan “businessmen” operate in secret and it can’t be because they’re all scared of the political winds. There’s a shadiness about business in Kenya and I think it explains why the country is still so poor. When I look at the business moguls in India, it’s refreshing to see how open they are about their businesses. They talk about how they did it, they’ll tell you where they went to school, they’ll give lengthy interviews about their business practices and you can only do this if you have made your money fair and square (& this criticism is not just about Merali, it applies to 90% of the business people in Kenya).
Everyone has said that in order to reduce poverty, you have to create new wealth (this is what the Indians did with their outsourcing industry). You can’t reduce poverty through the redistribution of wealth. However, what’s been happening in Kenya for the last 40 years is very strange: Nobody talks and what that tells me is that you have a few well connected players who are grabbing what they can get and then just hiding it. This is not how a “real” economy is supposed to function. In a real economy, you are supposed to create new wealth by creating new industries in manufacturing, technology and other things like that, but you don’t see that happening in Kenya. It’s not a real economy because nothing is being created. Kenya is an agrarian society, which is fine because people need to eat, but at some point, you have to start producing something, especially if you don’t have oil or diamonds.
So, someone like Merali, is nothing more than a distributor. He doesn’t make the tires. They are made in China. All he is doing is getting a hook-up from Moi that allows him to sell tires to farmers in Kenya. Do you see why these political hook-ups are so crucial? Chris Kirubi gets the hook-up to distribute bic-pens. Those pens are not made in Kenya. They are made in China. Biwott gets the hook-up to distribute oil, but the oil doesn’t come from Kenya.
So, what the heck’s my point? if you want to get rich in Kenya, you better find a way to get the political hook-up so that you can become a distributor. Since we don’t make anything, you have to import and distribute; And of course, hope that the farmers keep making money because they are the main purchasers of these imported goods. It’s an agrarian economy afterall.