Security firms bank billions as guards earn peanuts
At the height of the al-Shabaab attacks, every major installation in the country had to hire a security guard to watch over their entrances.
From hotels to malls, supermarkets, schools, churches and hospitals, every entity needed at least two people at the entrance — a man and a woman — to ensure every visitor is screened before being allowed access.
Besides companies that make metal detectors, CCTV cameras and other security gadgets, the other biggest beneficiaries of this development were private security firms — and they boomed. More manpower was also required for cash-in-transit services. The dog units thrived too.
In less than three years, the sector more than tripled its earnings and numbers. And from below 500 security companies, more investors pumped cash into the sector to take advantage of the growing demand. This saw the number of security companies grow three-fold to over 2,000 now. Today, there is a private security company in almost every major town.
The boom also saw more women get jobs in an industry that had primarily been male-dominated. The number of men and women with boots on the ground now stands at more than half a million, with recent estimates putting the number of security guards at about 700,000. This is more than double the number of teachers, making the sector the biggest employer in the country.
Politicians also found the sector attractive and, using their influence, they have ended up striking deals with many companies and counties to supply security guards.
And it was “party after party” for the sector until the security regulations that promised to streamline its operations were mooted.
To get a sense of how profitable the sector is, security companies recruit men and women suitable for the job and train them on the basics. After that, they look for business at various entities and cash starts pouring in.
There is absolutely nothing wrong with that, until you look at the guards’ miserable pay, which can be 10 times lower than what the employer gets from a client.
If a security company earns just Sh10,000 every month from each of these guards, in total they end up earning over Sh60 billion yearly. The more established ones charge up to Sh60,000 per security guard and, factoring in this, the sector could easily be earning more than Sh100 billion a year in revenue.
It is these billions that are at the centre of a conspiracy between some private security companies and lawmakers that has seen the men and women who do the actual job end up with a sad Christmas as their employers smiled all the way to the bank.
Besides exploitation, more than 200 female employees are fired every year because of being pregnant at the “wrong time”.
Others also pocket statutory fees such as National Health Insurance Fund (NHIF) and National Social Security Fund (NSSF) deductions after deducting them from the poor guards’ pay.
These were some of the issues the new laws were supposed to address.
“We have the responsibility to look at both the interests of the guards and the employer. It is not fair that the consumers pay Sh50,000 but guards get only Sh5,000 from the companies,” said Interior Principal Secretary Karanja Kibicho.
But Mr Kibicho will also have to face government agencies that are part of the entities abetting and perpetuating these injustices.
Several contracts and invoices by more than 10 security companies seen by Smart Company with various clients, among them banks and blue-chip firms listed on the Nairobi Securities Exchange, paint a sorry picture of leeches making billions at the expense of their foot soldiers.
While corporates and other establishments pay between Sh40,000 and Sh65,000 per head, these security firms have found a string of costs to load onto their security personnel and end up pocketing more than half of their earnings.
At the end of the day, some guards end up with a meagre pay of as little as Sh7,000, which is way below the minimum wage guidelines.
It is such injustices and exploitation that are said to contribute to theft in the institutions manned by these security firms, as suffering guards are easily lured by criminals to perpetrate ''inside'' jobs.
New regulations presented to Parliament were supposed to cure these grievances. However, justice for the guards may not be attained soon as the MPs appeared to have had a change of heart at the last minute.
Yet before this about-turn, everything had gone as planned. After the Private Security (General) Regulations, which were to put to effect the 2016 Private Security Regulations Act, were published, various players were invited to give their views before the Committee on Delegated Legislation, chaired by Uasin Gishu County Woman Representative Gladys Boss Shollei.
At least in public, many members of the committee appeared to sympathise with the plight of “watchmen”. But apparently behind the cameras some sort of conspiracy was cooking.
The committee flew to Diani in early November, far from the noisy capital city, to draft its report at the lavish Sh12,000 a night Indian Ocean Beach Resort.
From here, they came back with a verdict that denied security guards a Christmas and New Year gift, after they voted with the big security firms to annul the regulations. This effectively stopped the security employees from getting at least Sh27,993 for a night guard and Sh25,641 for a day guard, in line with minimum wage provisions, leaving them at the mercy of their exploitative employers.
The regulations were supposed to come into force by January 5, 2020.
Smart Company has learnt that there was heavy lobbying from a group of security firms, some owned by the same political class, who colluded to defeat the proposed provisions of the security law.
At the end of the lobbying, legislators made a sharp about-turn and recommended the annulment of the regulations meant to uplift the guards’ standards of living.
The Kenya National Private Security Worker’s Union (KNPSWU) argues that the private security providers want to delay implementation of the regulations for their benefit regarding remuneration of guards.
KNPSWU General Secretary Isaac Andabwa says subsidiaries of foreign security providers, including G4S, Wells Fargo, KK, Ultimate Security and Fidelity Security, are already paying their guards the minimum wage and there is no reason local companies should not.
But the private security firms appeared to celebrate the annulment of the regulations.
“The private security industry associations are in agreement with the annulment by the National Assembly,” they said in a joint statement.
The parliamentary committee gave frivolous excuses to annul the regulations despite having initially shown firm support during the committee sessions.
It cited inadequate public participation, which is a moving target for lawmakers as various thresholds are set depending on the law on the table. They also said the issues in the regulations would be better addressed in a statute and not regulations — another strange excuse.
Although they acknowledged that the regulations were published, received by the Clerk of the National Assembly and tabled in the House within the statutory timelines, they also cited an “unjustifiable delay in publication” as a reason for their recommendations to annul the regulations.
Security firms are not just denying the poorly paid watchmen Sh10,000 every month. Some are taking from them more than double this amount in crafty deals skewed to favour them at the expense of their workers.
This comes even as the government makes good on its threat to start vetting all private security providers.
The Interior ministry last month invited players in the sector to submit to the Private Security Regulatory Authority (PSRA) documents — among them the company certificate of incorporation and identification documents — so they could be cleared.
They will also be required to present certificates of good conduct, a copy of KRA PIN certificates and three years of their audited accounts.
In addition, they are required to present valid work permits for expatriates and contacts of persons performing executive functions.
“Only private security providers who may have been security vetted and cleared will be considered for licensing by March 31, 2020,” the Interior ministry said in a press statement.
Should the ministry push through with these changes, the sector will be next for a major disruption, after the betting industry.