By Albert Rudatsimburwa
On Tuesday January 29, the Daily Monitor published a story, “We are never motivated by profit margins alone,” profiling, “Africa’s tobacco mogul Rujugiro.”
Mr. Tribert Ayabatwa Rujugiro is painted as a humble humanitarian and peace-loving PanAfrican, who puts the greater good above everything else and driven by the model of Corporate Social Responsibility, the likes of Bill Gates and Michael Bloomberg.
Rujugiro is no Michael Bloomberg. Here’s why.
The name Pan African Tobacco Group (PTG) says the obvious.
Rujugiro is explicitly saying that his company “has always been a Pan African group as opposed to being a Rwanda company” and goes on to detail the “crucial contribution” that he has been able to make on “the continent.”
It is in the public interest to present an accurate picture of who he is and how he has gotten to where he is.
It is true that Rujugiro launched his businesses in the 1970s in Burundi. It is there that he piloted his business model to great success.
It is to this model that he owes his status as a “mogul.” A few examples illustrate how the model works.
Rujugiro learned very early on that the nature of the state can determine the fortunes of an individual and those of a company.
In a country lacking strong accountability, it is possible to circumvent the law and to ride roughshod over its institutions.
Specifically, he learned that by befriending the political elite (corrupt by disposition) in such a country, it is possible to lock out competition and enjoy monopoly power. Equally important, you can avoid taxes.
Rujugiro was inseparable from the Burundian political elite, particularly the cabal around then President Jean Baptiste Bagaza that ruled that country for a decade in the 1970s.
Burundians were impoverished, but Rujugiro and this elite thrived. This in a nutshell, is the business model on which he excels.
Rujugiro’s closeness with the Bagaza elite made him a target of the Pierre Buyoya regime that replaced Bagaza.
Along with the previous Minister of Finance Albert Muganga and one for Mining Isidore Nyaboya, he was jailed at Bubanza Central Prison.
In March 1990, Rujugiro conspired with an army officer, poisoned the guards, and the two fled to South Africa, where the latter soon died in a mysterious accident.
In South Africa, Rujugiro’s warped version of “Pan Africanism” took root. He replicated the business model that had brought him so much success in Burundi, penetrating into the elite network with vast business interests across much of Southern Africa.
In his book,“ The President’s Keepers: Those Keeping Zuma in power and Out of Prison,” South African journalist Jacques Pauw details a network of Tobacco smugglers in Southern Africa, explicitly listing Rujugiro as a central actor in this new “black gold.”
“Tobacco smuggling doesn’t just deprive the state of taxes and duties, but it often masks other crimes, including money laundering, fraud, drug smuggling and human trafficking.”
Moreover, “the smuggling of tobacco costs government 3bn Rand because of tax evasion, money laundering and corruption,” Pauw writes.
As in Burundi, Rujugiro conspires with the elite to deprive the state of revenue that ordinarily should go into the public purse to transform people’s lives; instead, the money is diverted to private gain.
Such smuggling has earned Rujugiro “Profit margins [that] approach 1,000% in an industry that has grown into one of the largest organized criminal enterprises.”
This contradicts his claim that his investments are not profit-motivated. On the contrary, the obscene profits in this “black gold” enterprise helped to attract “assassins, arms-dealers, and gangsters,” according to Pauw.
As a result, South Africa is among the “top five countries in the world with the highest incidence of trade in illicit cigarettes.”
But South Africa is not Burundi. The South African Prosecution Services came knocking on Rujugiro’s door in 2007.
They were investigating tax evasion amounting to seven million dollars and soon charged him with 25 counts of money laundering and six counts of tax fraud.
An arrest warrant was issued while Rujugiro was on a business trip in the United Kingdom where he was arrested, held and adorned with a leg electronic tag.
He was then repatriated to South Africa to face the charges. South Africa attached his Mastermind Tobacco Company, located in Wilsonia, South Africa.
A few years later, Rwanda similarly moved against Rujugiro on tax evasion charges, confiscating his properties.
Rujugiro was, among other things, caught smuggling tobacco using ambulances. On September 13, 2005, a land cruiser ambulance with his employees Antoine Kayiranga, Octave Mutijima, and Javier Gahizi was stopped in the then Kibungo prefecture, searched, and was found with contraband cigarettes.
A case file was opened on September 19, 2005 in Nyarugenge district court. In subsequent interrogation the suspects admitted to have been working on Rujugiro’s direct orders.
Busted in both South Africa and Rwanda, Rujugiro moved to Nigeria where he continued the same business practices: He was given concessions on condition he builds a factory in three years, took the benefits and reneged on his promise – six years and counting into the deal.
The results there were no different from those of every place he has ever operated.
In Uganda, like everywhere else, taxes that he should be paying into public coffers are never paid; instead, Rujugiro pays off highly placed individuals.
It is these same individuals who provide exceptional security to him and his sons and to his publicist David Himbara whenever they are visiting.
Their security detail often rivals that of visiting foreign dignitaries. This was the case when Himbara was in Kampala last November with a film crew to produce a documentary promoting his employer Rujugo’s purported image as a philanthropist.
The above are Rujugiro’s real “pan-African” footsteps, not those his publicists, like Himbara, are trying to push in all these recent puff-pieces in The Daily Monitor and a few other newspapers across Africa.
Has he done some good? The individual beneficiaries would certainly claim so. However, whatever good he may have done has certainly come at much greater cost than any benefits.
It is difficult to separate Rujugiro’s business model –that subverts state accountability and costs the state revenue – from the great human suffering that results from a decayed social welfare infrastructure in areas like education and health.
Those who benefit most from Rujugiro’s business model would rather go abroad for medical care, where they also send their children to be educated.
When you take this into account, Rujugiro’s self-claimed “crucial contributions” on the African continent ring hollow.
Finally, Rujugiro can also be particularly vengeful. Which is why he must be taken on his word when he says that his entry into Uganda is not entirely “motivated by profits alone.”
If this is in reference to his machinations against a neighbouring country where his smuggling schemes were thwarted and exposed, then this would be the sole accurate part of The Daily Monitor’s Rujugiro puff story.
Source: The New Times