To many, Tatu City on the outskirts of Nairobi looks like a success.
The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya.
Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region.
Photo: AP
However, to some local politicians, Tatu City has looked more like a target for extortion.
A parade of governors have demanded land worth millions of dollars in exchange for building permits, the city’s owners said.
A few years ago, a governor “drove around with us, just pointing at different plots of land, saying: ‘I want that, I want that,’” said Preston Mendenhall, Kenya country head for Rendeavour, the company building the city.
Photo: AP
Mendenhall responded with a tactic rarely attempted in Kenya: going public.
More than once, Mendenhall has held news conferences detailing the alleged extortion attempts of local politicians.
“They thought that we, as foreign investors, would leave the country,” he said. “[But] we’re looking at a 50-year time horizon. For us to challenge somebody, if need be in public, who is trying to extort us... We believe that’s the right thing to do.”
Last year, he publicly accused Kiambu Governor Kimani Wamatangi of demanding 22 hectares of Tatu City, worth US$33 million, free of charge.
Wamatangi denied the accusation.
It is a risky strategy.
“I’m subject to four defamation cases. It’s their intimidation tactic, and they’re used to getting what they want,” Mendenhall said. “But the first case goes back to 2015, and we haven’t had a hearing yet, so I’m not too worried.”
The waiting game appears to be paying off. The first governor who targeted them, Ferdinand Waititu, is now in prison from a separate corruption case.
Wamatangi was arrested last month by anti-corruption officers who found about US$13,000 in cash in his home, also in an unrelated case.
Meanwhile, Tatu City is slowly but steadily growing.
The resident population is still small, but the 2023-hectare site already includes a supermarket, health clinic and two schools with 5,000 pupils. There are 2,400 homes ranging from studios to lakeside mansions and 2,000 more on the way.
Many are attracted by that it has its own electricity and water supply to prevent cuts that are highly common across Africa.
“That is why we chose Tatu City,” said Hannington Opot, commercial director of Hewa Tele, which is currently building a factory to produce medical-grade oxygen for hospitals — a chemical process requiring uninterrupted power and water.
Cold Solutions, which provides storage for food and pharmaceutical partners, also highlighted the infrastructure.
“We wanted to put a stake in the ground and say that Africans can build world-class facilities ... and it marries nicely with what Tatu is trying to do,” managing director Fredd Kambo said.
Unity Homes has built more than 1,500 apartments. Buyers are attracted by the “playgrounds, parks, the fact they can drink the water from the tap ... and knowing no one will build 2cm in front of your balcony,” commercial director Mina Stiernblad said.
Tatu City is the most advanced of six cities Rendeavour is building across Africa — in the Democratic Republic of the Congo, Ghana, Nigeria, Uganda and Zambia.
Kenyan corruption has made it “by far the hardest,” Mendenhall said.
Anger over corruption was one of the key drivers of mass protests in Kenya last year.
However, Rendeavour’s founders made their fortunes in the free-for-all of 1990s Russia and are unfazed.
The owners have faced their own allegations, including claims of tax evasion, but investigations have been ongoing for years without resulting in any charges.
Mendenhall said they are just more extortion attempts by “bad actors.”
Many in the Kenyan government are “incredibly supportive,” he said.
“They understand the vision of this project, understand the number of jobs that it’s created,” he said.
Mendenhall said that despite all the corruption attempts, he has great faith in Kenya.
“Kenya is really an economic hub of the region, [and] we think Nairobi will become the capital of Africa,” he said.
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