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Inside Garissa Lodge, Nairobi’s Somali trading hub

Posted on Monday, 31 January 2011 17:47

Once a refuge for Somalis fleeing the country’s civil war, Garissa Lodge in Nairobi’s Eastleigh district has become an unsung economic triumph.

Read more on Somalia from Parselelo Kantai on the hunt for pirate treasure and Somalia’s double piracy.

Garissa Lodge is known far beyond its birthplace in Nairobi’s Eastleigh District. Opened as a lodge for travellers in the aftermath of Siad Barre’s fall in 1987, it soon became a refuge for Somalis fleeing the country’s civil war.

For a time, the Somali migrants eked out a living with their savings. When that money ran out, the legend goes, the migrants opened their bags, spread out the last of their goods on their beds and began selling. Soon, Garissa Lodge evolved from a simple boarding house into a bustling trading centre in a neighbourhood that was about to see a commercial explosion.

The first wave of Somali refugees into Kenya numbered about 400,000. Many of the first settlers in Eastleigh had been traders in Mogadishu – beneficiaries of the Barre regime and hugely lucrative trucking and logistics operations financed by the USAID-backed Commodiity Import Programme (CIP) and Italian aid.

Donors designed the CIP to redistribute largesse from aid programmes, giving Somali businessmen tenders to supply food and medicines. They were worth hundreds of thousands of dollars and created a business class outside the tightly regulated command economy and Barre’s Marehan clan patronage system.

Initially, barred from working and trading in Kenya, these businessmen started circulating their money in an underground economy. It fuelled the growing trade in khat: Eastleigh is both a major consumption centre of khat as well as a distribution hub for Nairobi and beyond. Somali business people also moved into the poorly regulated Nairobi matatu shared taxi industry.

With refugees also came the trade in small arms. Eastleigh’s reputation for violence grew as pistols and other weapons were rented or bought outright from backstreet traders. A wave of Kenyan passport thefts starting in the mid-1990s also coincided with the beginning of mass emigration of Somalis to the west.

Kenyan passports and driving licences – stolen or counterfeit – were valuable in other ways: traders, previously harassed by police, tax officers and the Nairobi City Council, could now operate under cover of these apparently legal documents, claiming that they were Kenyan Somalis. Then, in the late 1990s, President Daniel arap Moi’s government distributed Alien Cards to the refugees, allowing them to work legally.

Along with Kenya’s economic liberalisation in the mid-1990s, a new class of traders emerged. Mostly women who had made money in the booming second-hand clothes business, these traders came to be known as ‘Dubai mamas’, travelling to the Middle East and later Southeast Asia to access textiles and electronics at ex-factory prices for sale in Kenya.

Previously grounded by their lack of travel documents, Somali traders initially sent these women with orders. Later, they took to travelling themselves, and gradually took control of the ‘Dubai’ import business. In this way, they began to displace Kenyan South Asian merchants who had been the premier traders of imported textiles, shoes and electronics in East Africa.

Unlike their South Asian counterparts, Somali traders kept their margins low. Shoppers, attracted to the cheap prices of textiles, clothes and electronics, headed to Eastleigh in droves.

“In those days, I would open my stall early in the morning,” recalls one of the early stall-owners in Garissa Lodge who dealt in Javanese cloth. “There would be a line of customers waiting and I would sell until evening without a break. Sometimes we would make Ksh 200,000 (US$ 2,500) in a day.” His clients, like those of many of Eastleigh’s merchants, included market women buying wholesale from as far away as Eastern Congo, Rwanda, Burundi and Tanzania.

In late 2000, a fire gutted Garissa Lodge and some suspected arson. Virtually everything was destroyed. For the nascent trading community, a lot more than their stock was lost. Without proper ID cards, many had been unable to bank their money. They kept it in their stalls. Onlookers saw burning bank notes floating from the gutted building.

The New Garissa Lodge rose from the ashes of the original building. And ‘Garissa Lodge’ is now the by-word for the entire Eastleigh market area. It houses 40 shopping malls that have been built over the past decade. Each mall is a three- or four-storey concrete building with about 70 shops. There are also restaurants and hotels, clinics, schools and trade colleges serving the hundreds of thousands living in the area.

Eastleigh is perhaps Nairobi’s only truly 24-hour economy. There are 13 major banks, all of which have opened recently; and they adjust to the traders’ business hours, opening for 12 hours, seven days a week.

Business ethics

“It was Somali communal bonds that allowed them to capitalise each others’ businesses,” says Hussein Mohammed, the vice-chairman of the Eastleigh Business District Association. “That was how they were able to recover from the Garissa Lodge fire.”?

Mohammed, an elderly Kenyan Somali, says the immigrants from Somalia brought a business ethic into his community. “We were not traders until these people arrived,” he explains. “They have been successful because of how they do business. Instead of selling two shirts a day at a huge profit, the Somali trader tries to sell 200 at a minimal profit.”?

First Avenue Eastleigh, the main thoroughfare, teems with people, cars and mikokoteni handcarts. It is a mess of crater-pocked roadway, sewage water mixing freely with rainwater and rubbish, testament to the City Council’s willful neglect of the area.

“Our relationship with the City Council is very bad at the moment,” says Omar Ahmed, an executive member of the Eastleigh Business District Association. “There are virtually no roads, the drainage is appalling and the sewage is a threat to residents.”?

In June, the EBDA obtained a court order preventing the Council from collecting taxes from the area until they improved services there. With more than 20,000 members, the association is trying to fight perceptions that Somali businesses are somehow illegal.

“Eastleigh business is clean,” says Omar Ahmed. “Each and every shop in these malls has a permit and a VAT certificate. You cannot stand outside on the street and sell a pair of trousers without a permit. And if this were not the case, the government would know: there is a team of Kenya Revenue Authority officers stationed here. They visit the malls every day. There isn’t a single receipt they are not aware of.”?

The association’s members paid some Ksh780 million about $10 million) in taxes last year, suggesting profits of at least three times that amount.

Ahmed is one of a younger generation of Somali businesspeople. A graduate, he is pursuing a post-graduate business degree while working as a trader in the malls in Eastleigh. He pushed for the association to take legal action against the Council. Somalis need a collective voice, he argues, to change prejudices about links with extremism and piracy.

“We have spoken out against terrorism. At the very least it is bad for business here,” Ahmed points out. “We are honest businessmen and we pay our taxes. And yet the police continue to harass us. People are scared of going to the mosque because of harassment from the police.”

This article was first published in the December 2010-January 2011 edition of The Africa Report magazine.

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