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How Kenya snatched Kenya Airways from under Uganda, Tanzania noses

FINANCIAL STANDARD
By Dominic Omondi | June 29th 2021
Presidents Jomo Kenyatta and Julius Nyerere at Port Reitz Airport when the Tanzanian leader called for a top-level discussion. April 15, 1975. [File Standard]

Long before Dar es Salaam had an iconic Bus Rapid Transit (BRT) that is the envy of her neighbours, it built an airport that was graced more by grazing cows than aircraft.

Those were the days before the dramatic collapse of the East African Community (EAC) in 1977.

Tanzania’s President Julius Nyerere accused Kenya of monopolising the community and using corporations such as East African Airways as its properties.  

“In an attempt to counter the dominance of the Nairobi airport, the Tanzanians built an international airport at Mount Kilimanjaro, which remains all but unused, as international airlines, as well as East African, continue to fly to Nairobi,” reported the New York Times on December 20, 1976.

The spat would end acrimoniously, with Nyerere closing Tanzanian borders in a huff, while Kenya grabbed all the corporations that were headquartered in Nairobi, including East African Airways and the East African Railways, leaving Dar es Salaam with various political offices for the defunct regional bloc and Uganda with nothing but misery under the tumultuous reign of dictator Idi Amin. 

For the Tanzanians, the failure of its airport to attract traffic was seen as proof that the cards were stacked against them.

Kenya, Nyerere argued, had inherited more investments from the colonialists than its peers with whom it was expected to operate as co-equals.

A stronger Kenyan economy meant that Ugandans and Tanzanians consumed mostly Kenyan goods.

Unfortunately, in a duty-free environment, Uganda and Tanzania were denied revenues from the exports that came through Kenya.

A study by the International Monetary Fund (IMF) two years after the collapse of the EAC in 1977 showed that Kenya controlled up to 70 per cent of the export market in the region.

Consequently, the two countries wanted the by-laws that established the EAC in 1967 revised to give Tanzania and Uganda a level playing field in the community.

Kenyans chided Nyerere for his scheme to extend his planned economy to the EAC, noting that no number of flights to the Kilimanjaro airport would help matters if no one wanted to go there.

Nyerere’s socialist vision included creating a pious nation not profaned by Western values that had eroded many countries’ pride and destroyed their tradition through the incursion of tourists.

Thus, despite possessing some of the most beautiful parks, lakes and mountains on the continent, Tanzania was reluctant to exploit the potential of tourism.

East Africa Airways Corporation planes at Nairobi Airport (JKIA) 1960. [File, Standard]

Kenya sneered at the role of Uganda and Tanzania in the community, increasingly seeing them as deadweights.

Things came to a head when Tanzania and Uganda refused to pay close to $6 million (Sh642 million in today’s exchange rate) in revenues from ticket sales to Nairobi, where the East African Airways Corporation was headquartered.

But the sharp difference among the EAC member states on how to run the East African Airways Corporation was largely ideological.

Kenyans in the airline wanted to buy big planes for the most profitable international routes.

This is not any different from the route taken by their counterparts today that saw Kenya Airways - the successor of East African Airways - purchase some big aeroplanes and venture into new routes.

On the other hand, Uganda and Tanzania wanted the airline to concentrate on the shorter, internal flights, accusing Kenya of being obsessed with profits instead of self-reliance.

When Uganda and Tanzania refused to remit their ticket sales, the airline ran out of operating revenues.

Some employees went unpaid, while lights, particularly to Uganda and Tanzania, were cancelled.

Banks refused to issue new credit unless Uganda and Tanzania released the funds from the ticket sales.

In February 1977, an exasperated Nyerere decided to shut Tanzania’s borders, signalling the end of the decade-old EAC.

He was even willing to sacrifice 250 of his citizens at the East African Airways Corporation headquarters.

He accused Kenya of greed and dishonesty, which led to the disintegration of the EAC, by then a model regional economic community for most of the developing countries that were trying to shake off from the after-shocks of colonialism.

“Kenya broke up the East African Harbours Corporation; Kenya unilaterally closed down the headquarters of the East African Railways system; Kenya seized a number of ships on Lake Victoria, and Kenya has now grounded the East African Airways,” Nyerere said in an interview with The New York Times.

He seized Kenyan trucks, cars and private planes. It looked as though the two countries would go to war. Fortunately, the tiff remained largely diplomatic just as it has recently been.

In the same year, the East African Airways Corporation collapsed, with Kenya announcing its withdrawal even as it took over all EAC services operating within its borders, including the airline, which was renamed Kenya Airways.

Mwalimu Nyerere never hid his disdain for Kenya, a nation he famously described as a man-eat-man society for its unbridled capitalism.

On their part, Kenyan officials reckoned it was a case of sour grapes informed by the spectacular failure of his socialist experiment, Ujamaa.

To Nyerere’s jibe that Kenya was a man-eat-man society, they retorted that Tanzania was a society-eat-man society.  

However, things started going bad for the EAC immediately after Nyerere’s friend, Uganda’s President Milton Obote, was overthrown by Idi Amin.

Initially, when things frayed, the community’s highest decision-making body, the East African authority, which consisted of the three presidents, would meet and iron out things.

However, the authority did not meet after 1971 because of Nyerere’s refusal to meet with Uganda’s President Amin.

When the EAC was formed, the members were Presidents Kenyatta, Obote, and Nyerere, who met periodically.

“Whenever the EAC was under strain, the presence of the East African Authority provided a forum for final appeal and resolution of difficult problems,” said the IMF in a paper.  

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