Saturday, 22 August 2015

Contextualizing Kenya’s Sugarnomics.

The last one week has been characterized by politicization of the now famous sugar deal between Kenya and Uganda. Our primary problem as a nation is the rate at which we tend to lace issues and matters of great importance with cheap politics that is only full of propaganda. These political gimmicks and silly political games are often orchestrated by the so-called political “leaders” whose aim is to further their own interests by making vital issues to be nebulous. Before we delve into cheap politicking and mud-slinging, I wish that we should have a clear understanding of this sugar deal that is now aiding politicians to gain political mileage to sustain and maintain their political lifeline.

The past regimes and the present one have done very little to resuscitate the sugar sub-sector because evidently all the government-owned millers are on the death bed. I have always been hearing of the plan by the government to privatize these firms but the pace at which this plan is being translated into action leaves a lot to be desired. In any case, what is the economic role of the government in face of state enterprises which aren’t realizing par performance? If privatization would have taken place, at least it gives hope of having better management, ceteris paribus.

But here we have the sugar deal that has been the oven for all these hoopla and political braggadocio. Before we criticize the agreement between the governments of Kenya and Uganda, it is important to gain a meaningful understanding of the fundamentals that underline this trade agreement. The first fundamental aspect that we need to be aware of is the agreement and concessions regarding trade in sugar among the COMESA member states way back in 2002. All the member states were to eradicate the existing protectionist measures that would hinder the flow of sugar from one country to another one. But the then government of the day made a trade interception and pleaded for the continuation of the protectionist measures and as a result in March 2002, COMESA granted Kenya protectionist measures for one year so as to prevent cheap sugar from member countries from entering Kenya. 

However, in March 2003, this deal concerning protectionism of the sugar sub-sector was extended for one year and it was to come to a halt in March 2004. Seemingly this never happened because in same month the protectionist measures were extended for the second time to cover four years up to 2008. Come 2008, Kenya pleaded for another extension which came to an end in February 2014. This expiry of the protectionist measures gives rise to the question: is it economically correct for Kenya to allow importation of Ugandan sugar? Certainly, the answer is yes because both Kenya and Uganda are COMESA members and the protectionist measures granted to Kenya by COMESA came to an end and this hence justifies importation of Ugandan sugar.

The second fundamental aspect that we need to look at is the need to curb the deficit in sugar production that we experience as a country. Statistically, we have a shortage of approximately 200,000 tonnes per year. Our consumption is definitely higher than our rate of production. To be able to meet the quantity demanded then it warrants the importation of sugar from whichever country and in this case from Uganda. So, the question is: is it appropriate for Kenya to import Ugandan sugar? Of course yes as our demand levels for sugar outrun the total output of sugar that is produced. On a general scale, therefore, it is okay for us as a country to import Ugandan sugar.

As a nation we also ought to have taken advantage of the COMESA concessions to allow trade and free flow of sugar among the member states to ensure that we strategically position ourselves as a leading country in production of sugar. Kenya has the ability to produce sugar enough to cater for her domestic consumption and export the surplus. In fact, this should be the major issue of concern; why are we not producing sufficient quantities to meet our domestic sugar demand and export the extra quantities? This boils down to the inefficiencies that exist in the sugar industry which are due to the high costs of production. For instance, the cost of producing sugar in Kenya is Kshs.87,000 per tonne. This is considered to be very high in comparison with other countries producing sugar like Malawi whose costs of producing sugar range between Kshs.30,000 to Kshs.35,000 per tonne.

These costs are astronomical because of several reasons and key among them is the obsolete level of technology that is employed. Research and development focusing on the sugar sub-sector has not been carried out with the expected efficacy. This has led to the planting of poor sugarcane varieties occasioned with the use of traditional and odd methods of cultivation. The government should strive to give subsidies to reduce these costs. In addition, the sugar firms have fallen victim of maladministration and perennial mismanagement which is a primary feature of government-owned corporations. This calls for fast-tracking the process of privatization to salvage these firms.  Mismanagement is the reason as to why sugarcane farmers will always cry foul of delayed payments and other vices that crop up. At the end of it all, it  narrows down to the government to orchestrate all the necessary strategies to revive this important agro-economic industry. This is the bottom-line and there should be no debate about this. 

What irks me is the politicization of this matter as I stated earlier on. I suppose this is the Kenyan brand of politics of seizing any opportunity that involves a national issue and seeking and squeezing political rejuvenation and salvation from it. I register my utmost displeasure with both the opposition and the government for engaging in political side-shows as far as sugarnomics is concerned. It is immature and amateurish for the Deputy President William Ruto and the opposition chief Raila Odinga to engage in unending ranting and squabbling with each seeking to prove how politically correct they are with regard to this sugar deal.

For Odinga and the Coalition for Reforms and Democracy (CORD) to urge their supporters not purchase milk and milk products from Brookside Dairies that is owned by the Kenyatta family sounds sick and stupid. This depicts a lack of a clear development agenda. William Ruto, on the other hand, is not different because it is during his tenure as minister for agriculture that sugar cartels made colossal amount of money and he never blew the whistle. His advisors and PR team should try to advise him on how to portray an image of a leader who is way over and above cheap politicking. It is nauseating for him to go from one political rally to another one talking about the same issue. President Kenyatta talked about this issue once if not twice. You can see the difference between these two leaders. 

What really flummoxes my inner-self are the political arguments that supporters from the either side of the political divide are fronting which ooze a lot of ignorance. No politician will ever knock on your door to give you food or wine. Why are we always falling in the trap of these politicians? I understand that people will always seek to be identified as supporters of certain politicians but we always follow them blindly. The Kenyan political testament perhaps states that thou shall religiously follow what hath been sayeth by the politicians. Let the political leaders irrespective of belonging to the government or opposition show initiative of coming to the rescue of the sugarcane farmers, otherwise a delayed and effective intervention would lead the farmers to uproot the sugarcane. Finally, the government should ensure that we import Ugandan sugar and not sugar from Uganda. Get the difference and have a good day.

Tuesday, 11 August 2015

Corruption; The Hillock To Kenya’s Prosperity.

Since we attained our independence in 1963, as a state and as a nation we have staggered on the path towards prosperity which was the ultimate Kenyan Dream as envisaged by our independence heroes. This mark-timing has been occasioned by astronomical levels of corruption which now seem to be somewhat irreparable. If in the 1960s we were at par and even better than some of the Asian nations like Malaysia, Singapore, Taiwan, South Korea among others, then it is a big shame for us a country to be trailing these nations economically. Often-times, you will hear politicians speaking and talking about this comparative fact and even going ahead to proclaim how they will institute measures to effectively deal with graft issues. Unfortunately, once in power, they become opportunistic and simplistic by using power as a shield to protect themselves against activities which have been laced with corruption.

Corruption is the primary reason why nearly all of our nation’s economic development plans register high rates of failure; they are hardly implemented. Most of the various plans drafted by the previous governments seem to have been failing since independence to date. In fact, it is more of common sense that our grand master plan, Vision 2030, will remain a mirage if decisive and pragmatic steps and approaches are not adopted to tackle corruption. It is because of this cancerous issue that year in year out we lose 30% of our national budget due to corruption. Take for instance the latest report from the Auditor General concerning the 2014/15 fiscal year in which a whooping shs.450 billion cannot be properly accounted for. Mark you the budget for this 2014/15 financial year was shs.1.6 trillion.

The recent budgetary estimates from the National Treasury which were read out this year to cater for the 2015/16 fiscal year totaled to an all time high of shs.2.2 trillion. If the menace of corruption is not going to be dealt with, then next year we should be prepared to get audit reports which may indicate a loss of approximately shs.660 billion if the 30% mark-up in losses is going to be sustained. The direct losses and indirect losses realized are massive and this drags us in our efforts to transform Kenya into a middle-income economy. The indirect losses are in the form of the number of jobs that are lost, the kilometers of roads foregone as a result of corruption, the number of hospitals and health centres that would have otherwise been constructed, the number of additional police officers that would have improved the ratio of police officers to citizens, the salary increment to the teachers and health personnel which has been a source of industrial strikes. These are just some of the opportunity costs due to corruption.

When the United States of America President Barack Obama was in the country he really lectured us on how corruption is derailing our concerted efforts directed towards socio-economic improvement and transmogrification. In fact, he gave an example of how as a state we are losing approximately 250,000 jobs due to corruption. In as much as he challenged the leaders to fight corruption, he also challenged the citizens to rise up and say “enough is enough”. From my opinion, I will support the US president because it is we the citizens who dish out the bribes as we are ignorant. We are totally ignorant because we think that services offered by state agencies are a privilege but in real sense they are our rights. Therefore, we should not rely on the leaders to stamp out corruption as it is systemic; it is embodied in our daily lives. Hence, in tackling this cancerous issue, the citizens have to be ethically correct and morally right by denouncing any act that breeds corruption.

But from the other side of the coin, it will be a bit of foolhardy to imagine that the citizens alone can sweep away corruption to the bins without goodwill from the political leaders. The major bottleneck that impedes the war against graft is the lack of political goodwill coupled with the politicization of cases that deal with corruption. Take for instance the move by President Uhuru Kenyatta in May to name and shame government officers who were accused to have been involved in corruption in which several Cabinet Secretaries including Charity Ngilu, Davis Chirchir, Felix Kosgei and Engineer Michael Kamau were mentioned. What followed was the propaganda by the former vice president Kalonzo Musyoka and other leaders from the Akamba community who claimed that their ethnic community was being targeted and subsequently victimized following the prosecution of Charity Ngilu. This is utter non-sense. 

The anti-corruption agency in Kenya has always been subjected to hegemonic ideals of the political ruling class. The then Kenya Anti-Corruption Commission under Prof. PLO Lumumba was a victim of this political hegemony. The distinguished and flamboyant lawyer was sent packing and the agency taken to the dogs by Members of Parliament for showing intentions of prosecuting the so called “big fish”. Lumumba was seen as the ideal person to tackle graft after succeeding Aaron Ringera whom to me was highly incompetent. Following the promulgation of the new Constitution in 2010, the Ethics and Anti-Corruption Commission (EACC) was established whose first chairman was the learned friend Mumo Matemu who seem not to have understood his work. Since taking over as the chairperson of EACC until his resignation this year, Matemu hardly oversaw the prosecution of a single corruption case. Is this not gross incompetence? What of the recent rejection by President Kenyatta not to sign the bill that would otherwise have sent the EACC secretariat home? This is a point to ponder about. To be sincere, how do we expect corruption to be tackled if the EACC is to be disbanded?

Methinks that Parliament ought to have discussed on how the anti-graft agency would be accorded more prosecution powers other than advocating for its disbandment. This is where our political leaders err and it clearly depicts a lack of an agenda to deal with corruption. The moment we shall be able to strengthen our anti-corruption body then it will be the first step towards tackling graft.  Political leaders must also dance to the drumbeats uniformly instead of the unnecessary politicking and empty rhetoric. The opposition should be in unison with the government in advancing the war against graft. However, the bottom line remains the holistic involvement and initiative of all the people towards fighting this monster of corruption.

As you move on with life every day and every single moment, can you challenge yourself not to be corrupt and be corrupted because the change we always yearn for starts with you and I. Have a successful week devoid of corruption.