When Austerity Measures Become the Answer: On Statements of Convenience

Image: Courtesy

“…But we still face a financing gap. This measure will not suffice to balance our budget, as required by law. It is my responsibility to put Kenyans first. I must balance between short-term pain and long-term gain.” – Uhuru Kenyatta.

“We must grow the economy, and we can only do this through additional taxes, so Kenyans must dig deeper into their pockets for this to happen.” – Henry Rotich.

When desperate situations dictate that desperate measures be adopted, then wobbly, wanton statements of convenience such as the above two become common.

I still find it ridiculous that members of the general public are up in arms against the proposed taxation measures contained in the Finance Bill 2018 signed into law by Uhuru Kenyatta.

Any sober Kenyan ought not to be surprised by the Executive’s desperate attempts to clutch at a straw considering that the Jubilee administration has a record of being in favour of contorted economic policies, a clear demonstration of its incompetence.

Economic mismanagement under the Jubilee administration is no longer news with the undemocratic process of passing the Finance Bill in the National Assembly sending a signal of a broke government managed by masters of “brick and mortar development.”

“Brick and mortar development” in this case refers to the development narrative fashioned by the current administration that hugely focuses on very costly infrastructural projects with lower returns on investment than say agriculture whose potential in terms of reducing poverty levels is quite high.

Kenya’s public finance is faced with the problem of unnecessary spending which the Executive is running around like headless chicken to curb.

It is on record that the Jubilee administration has adopted the liking for huge budgets with massive deficits. Financing these massive deficits necessitated increased borrowing in the name of prioritizing flagship mega projects none of which seems to have yielded any returns or promising to do so in the long-term.

Good examples of such projects include the standard gauge railway line and the Galana-Kulalu food security project whose dismal performances raise serious doubts on whether feasibility studies were conducted before being commissioned.

Just like business enterprises or organizations which collapse majorly due to poor cash flow management, the case is not different for countries which are brought down because of poor management of public finances.

Each spending ought to be accounted for but owing to Kenya’s disturbing public finance history then the misses in regards to spending are highly visible. It is well known that a third of the country’s budget is never accounted for, a fact ignored by the Executive and Parliament, and leads to billions of shillings being lost.

Big budgets have no merit at all if the process of accountability is not taken seriously. In as much as the Jubilee administration would want to pretend to be keen on driving the development agenda, the truth of the matter is that development cannot be achieved by failing to take into account the fundamentals that occasion socio-economic progress.

Fundamentals such as allocating financial resources to sectors where the poor eke out their living like the informal sector in addition to running a clean, mean and lean government are prerequisites for moving all people up the escalator.

One of the unnecessary narratives sold at the moment by the Jubilee administration is the legacy of one Uhuru Kenyatta premised on the 2022 succession politics. I believe his legacy was framed during his first term in office and there is nothing much he can convincingly do to be in the right books of Kenya’s politico-economic history.

With the austerity measures targeting to cut spending by Kshs.52 billion, there are grave concerns on how Treasury will plug the Kshs.600 billion deficit for the current financial year. The country’s economic woes in regards to raising revenue and spending primarily stem from the borrowing which the Jubilee administration has used as a tool to pursue its development agenda hinged on mega projects.

Economically speaking, the most suitable way to address an economic challenge is to identify its root-cause. For the current situation, the root-cause lies first in the administration’s big budgets with huge deficits and secondly, the excessive borrowing.

Fronting austerity measures would not be the ideal policy prescription to curb the budgetary constraints. Rather, the most viable policy at this time would be to heavily cut on borrowing though it is a policy that can't be used in isolation. It can best be used by combining it with significant cuts on spending. 

Governments facing financial crises have always turned to austerity policy measures as shock therapy to address their economic difficulties. Austerity measures hardly lead to economic progress since people’s levels of income in the economy do not rise in line with the tax increases. In fact, considering the tax increases that lead to a rise in the cost of living, people’s level of income actually falls.

Historically, when governments are suddenly compelled to pursue austerity policies there is no doubt that they are staring at economic crises.

Good politics, as they say, is bad economics. This has highly been exemplified by the Jubilee administration. Amid concerns that the debt level was spiraling upwards at an alarming rate due to excessive borrowing, the issue turned political with the administration defending itself on the basis of various globally approved metrics.

Firstly, the administration’s top guns and ignorant supporters would state that the World Bank’s threshold for public debt to GDP ratio for developing economies is 74%. Kenya’s current debt to GDP ratio is 60%. Secondly, unintelligent comparisons of the country’s public debt with that of other developed or strong emerging economies would be put up.

There is a fundamental problem when a country spends half of its revenue on debt repayment. Such is Kenya’s case with Treasury having allocated Kshs.870 billion towards repayment of debt against targeted revenue of Kshs.1.8 trillion for the 2018/2019 financial year.

Elementally, the World Bank’s metric on debt to GDP ratio ignores the fact that the 74% has to be considered in the context of an economy’s productivity. Kenya’s debt repayment taking half of the revenue is a sign of the economy’s low productivity.

Drawing comparisons between Kenya’s debt level with those of advanced economies misses the mark. More developed economies are highly productive and repay their debts at lower interest rates unlike Kenya.

As a matter of fact, comparing the debt situation with say USA (105% of GDP) or Japan (253%) or any other advanced economy is a statement of convenience. Folks fond of propagating this argument would never want to mention some of the African countries whose economic fortunes faltered with relatively high debt levels.

Ghana, for instance, experienced financial problems when its debt to GDP ratio hit above 65%. Mozambique’s ratio was 115% as at 2017 with the country’s economy grinding to a halt forcing government officials to endlessly knock the doors of the International Monetary Fund (IMF). Zambia’s debt to GDP ratio in 2017 was 62% yet the country is experiencing economic difficulties due to debt distress. These are examples of what the supporters of the regime failed/fail to mention.

Reality of the austerity measures has suddenly enraged the administration’s supporters to regret their voting decision. This is pretence. Jubilee has messed up the economy from 2013 and it has nothing new to offer Kenyans except presiding over more economic misery.

Uhuru Kenyatta definitely lied about short-term pain and long-term gain. Kenyans should instead prepare for long-term pain with the gain not in any way in sight.

Rotich bears the tag of Kenya’s most incompetent Treasury chief since 1963. Additional taxes cannot grow the economy, instead they are bound to increase inequality and make the society worse off.

But even as Kenyans complain loudly about Jubilee’s incompetence it should serve as a reminder on why elections are moments to evaluate those in power and vote them out for their failures. Let the administration increase taxes the way it wants after all it is the government of the so-called majority that voted without serious thinking.

Sometimes enduring moments of pain does not necessarily lead to making a gain, and that is the case when administering shock therapy (austerity policy prescriptions) to a mismanaged economy.

On IMF’s Visible Hand: A Look into the Outcry on the Fuel Prices, Policy Missteps & the Dishonesty about It.

The National Treasury
Image: Courtesy

It’s a herculean task to be a Kenyan, a situation exacerbated by the policy missteps and misgovernance of the Jubilee administration.

From the plundering of trillions of money, the implementation of cost-ineffective projects, the dominance of two ethnic communities in government, a dejected and highly unemployed youth, hoarding of maize, consumption of poisonous food products, wanton increase in taxes and many others, it requires the common Kenyan some world-class grit to go through all these necessary evils.

But considering the concerns raised by the Kenyan public in regards to the aforementioned issues, one should not forget the dishonesty that is conveniently sidestepped while debating on these policy matters.

A good example is the debate on the recent increase in prices of petroleum products which has to be revisited while drawing out the facts and fallacies, the faults and dishonesty about it.

General Understanding

A general understanding of the visible hand of the International Monetary Fund (IMF) in view of Kenya’s situation is elemental bearing in mind that this debate is full of misinformation.

To begin with, it would be important to look at the primary role (s) of the IMF for the benefit of the general public and the pseudo-economists.

IMF has three main functions: monitoring of economic and financial developments and offering policy advice to prevent economic/financial crises; offering loans to countries facing balance of payments difficulties; and provision of technical assistance and training in line with its scope of work.

As matter-of-factly, the institution’s Stand-By Arrangement (SBA) and Standby Credit Facility (SCF) are primarily lending frameworks that are intended to help countries facing the balance of payments difficulties.

Essentially, the balance of payments difficulties refer to a situation whereby a country is importing more goods, services and capital than what it is exporting. Thus, the SBA is a lending framework that allows the IMF to provide financial assistance mostly to the middle-income and advanced economies in the event of a financial crisis. On the other hand, the SCF is a framework that allows the IMF to provide financial assistance to low-income countries with the goal of correcting the short-term balance of payments problems.

Kenya’s agreement with IMF comprises of an SBA of $989.9 million and SCF of approximately $494.9 million.

Fundamentally, access to the SBA and SCF is based on the criteria determined by the IMF and at its minimum, the consenting countries are expected to implement conditionalities fronted by the Fund and pursue policies aimed at correcting the balance of payment problems.

Genesis of the Current Situation

In 2013, the Executive through The National Treasury and the Central Bank outlined a raft of policy measures meant to improve revenue collection and general economic performance of the country.

On 28th of March 2013, through a letter signed by the Treasury Cabinet Secretary Henry Rotich and then Central Bank Governor Njuguna Ndung’u, the Executive was committed to full implementation of the proposed changes to value-added tax (VAT).

Among the proposed changes to the country’s VAT structure was to do away with VAT exemption on petroleum. Parliament’s intervention saved face as the VAT proposals were put on hold for three years till 2016.

Amendments to the Finance Act 2016 on August 31^st 2016 extended the exemption of the VAT on petroleum products for two years with the exemption coming to an end on September 1^st 2018.

Subsequent extensions by Parliament to postpone the implementation of VAT on petroleum products among others can only be termed as symptomatic responses to the hazy economic policies pursued by the Jubilee administration.

Ascending to power following the highly divisive 2013 general elections, the Jubilee administration was out of favour with half of the Kenyan citizenry and the West. Therefore, it was out to mend fences by embarking on ambitious infrastructural projects which would ordinarily require to be highly financed either through borrowing or revenue collected.

Institutionalization of various infrastructural projects was intended to improve the administration’s political fortunes. With the desire to increase the collected revenue, the Executive engineered the move to restructure the VAT system.

Being in good books with the IMF would aid the Jubilee administration just in case Kenya’s economy was to be hit by a crisis. We should not forget that IMF and extensively the West have proved to be the chief lenders of last resort when economies of poor countries experience economic crises.

In any case, if the Kenyan economy was to be hit by an economic crisis under a Jubilee administration not in good terms with IMF, then regime change – a common foreign policy tool fashioned by the West – would possibly be sanctioned.

With the country’s public debt level running into headwinds, Kenyans are left with no choice but to pay high taxes to finance the costly mega-projects which make little economic sense, though politically sensible to the current administration.

Rationale of VAT on Petroleum Products

No rocket science is required to know whether the government is broke or not. Levying VAT on petroleum products is meant to raise more revenue for a Republic whose Executive and Legislature have failed in view of essentials of public finance.

Details captured in an IMF Country Report dated March 2018 indicate the commitment of the Kenyan government in implementing a number of policies.

Key among these policies include cutting expenditure, increasing revenue and the removal or significant modification of the interest rate caps. In regards to cutting expenditure, lower-priority capital projects are not to be financed.

Few weeks ago, Uhuru Kenyatta apparently issued an order stopping any new projects from being sanctioned with majority of Kenyans thinking it is a move meant to curb corruption. Essentially, the order is rooted in the administration’s commitment with the agreement reached by IMF.

Levying of the VAT on petroleum products is expected to generate Kshs.71 billion in revenue. Considering, however, the amount of finances lost through corruption, tax evasion and unnecessary tax holidays, then Treasury is clearly missing the boat.

Treasury expects that the revenue to be collected this financial year would amount to Kshs.1.92 trillion. At the beginning of the last financial year (2017/2018), Treasury targeted to collect Kshs.1.7 trillion in revenue before revising the estimates to Kshs.1.4 trillion. For the last five financial years, Kenya Revenue Authority (KRA) has never been able to achieve its targets in regards to revenue and the current financial year won’t be an exception.

Rotich’s bravado not to concede to the public’s outcry on the increase in prices of petroleum products is an indication of how Treasury is desperate to raise funds bearing in mind that grave concerns have been raised on the administration’s zeal for borrowing.

Dishonesty

Inherently, the current uproar on the fuel prices and the administration’s hell-bent nature to effect the VAT on petroleum products is a game of absolute dishonesty.

Firstly, the Executive is dishonest on this policy issue. Was it not aware about this policy that would occasion a rise in the cost of living? This is incompetency at its best.

Secondly, the Treasury chiefs are a bunch of dishonest bureaucrats. For the last five years, the country’s budgets have been characterized with massive deficits. Though revenue collected has significantly increased, it is the nature of KRA to continually miss targets, and this has raised concerns on Treasury’s fiscal approach and KRA’s inefficiency.

A 2015 joint report by the African Union and the Economic Commission for Africa pointed out that Kenya loses over Kshs.600 billion as a result of tax evasion. In six months leading to August 2018 tax evasion at the port of Mombasa, as reported, amounted to Kshs.100 billion. In a report published by Oxfam in January 2017, it is estimated that Kenya loses over Kshs.100 billion annually due to tax exemptions given to global corporations.

One should also consider that a third of the national budget is never accounted for then think about the billions of shillings lost. So, who is fooling who? The government should be busy sealing all these loopholes that lead to trillions of money being lost instead of pursuing policies that will ultimately generate unintended consequences. Treasury’s ineptness certainly means that looking at the bigger picture is a mirage.

Parliament as usual is full of dishonest individuals who are starkly corrupt and lack any intellectual capacity to prioritize weighty policy issues. Did Parliamentarians not foresee the impending rise in prices of petroleum products? Some have come out making claims on how the Treasury duped them to passing the VAT Act 2013 on the account that the country was expected to produce oil which would stabilize domestic petroleum prices.

Lack of Parliament’s independence is a factor that has incapacitated the institution from representing citizens in a dignified manner. Parliament operates under the wings of the Executive particularly for the ruling party, the Jubilee Party. Rigorous debates cannot take place under such conditions.

Voters are also to be blamed in regards to this game of dishonesty. It was pretty clear that the economic policies of the Jubilee administration were deeply flawed but this hardly convinced a significant number of voters to vote otherwise.

Elections need to be a matter of assessing policies aimed at improving the lives of the citizens. In the event that policies pursued by the ruling political formation lead to more misery than prosperity, then morally such an entity does not deserve to be voted in.

The IMF is dishonest about the austerity policies that it recommends for countries. Historically, IMF has fashioned this policy misstep which ignores the fortunes of residents of countries that they push to adopt policies that cut spending and raise taxes.

Spending may be reduced especially for the case of Kenya where public funds are largely wasted. Increasing taxes raises the cost of living but the IMF seems to be hell-bent in fronting this policy recommendation.

Implications & the Future

An increase in the prices of petroleum products is bound to trigger ripple effects across other sectors of the economy and social structure. Prices of other products will definitely go up as a result of the increase in the transportation costs. With the income earned by Kenya’s residents expected to be fairly stagnant then inflation will certainly occasion a rise in the cost of living, a diabolical economic and social outcome.

Furtherly, postponement of levying VAT on petroleum products would definitely lead to a catch-22 situation. In the event that Uhuru Kenyatta assents to the Finance Bill 2018, it would just be two years before we voice out our disappointment at the economically imprudent Jubilee administration.

Failure to implement the VAT on petroleum products, in CS Rotich’s words, will occasion difficulties in financing the country’s budget thus necessitating more borrowing or increasing the VAT rate on other products from 16% to 18%.

Either way, my hunch is that VAT will soon be levied on other non-VATable products as the Treasury desperately seeks to raise finances through taxation with the room for further borrowing fast contracting.

Politically, there will be no consequences going by the nature of majority of Kenyans who forget rather quickly. If a significant majority of the Republic’s voters would be voting on the basis of policy proposals and performance of the incumbents, perhaps the noises being made would only be grave wishes.

Voting is not enough. Constitutionally, citizens are empowered to air their concerns on issues affecting them. I long for the day when Kenyans will march on the streets en masse to demonstrate against nefarious policies pursued by government institutions.

On how not to manage the economy, CS Rotich and the Presidency offer crucial lessons for historical purposes. Running an economy depends on getting the fundamentals right. Trading-off an economy’s cost of living with poor, inefficient and punctured policies is a validation of getting it wrong on the fundamentals. The goose is cooked!

On Kenya’s Oligarchy, Twisted Democracy & Dashed Hopes of the Third Liberation

Kenyans queuing to vote in the 2017 elections
Photo Courtesy: CNN 

A year after Kenyans took to the polls, a number of political events have occurred, and have shaped the country’s political landscape in some respects.

From nullification of the outcome of the presidential election, the repeat presidential election boycotted by Raila Odinga, the historical swearing-in of Odinga as the people’s president, the muzzling of dissenting voices by the administration of the day to the unexpected handshake, it’s been a political melodrama of sorts.

Reflecting on the pre-election and post-election happenings, Kenya comes out as a flourishing oligarchy and a failing democracy, a twisted one for that matter.

Fundamentally, a democracy is a political system characterized by a free, fair and credible electoral process. On the other hand, the electoral process in an oligarchy comes out as fraudulent, fake and crooked.

Basing on the credibility of the electoral process in the lead up to the 2018 general elections, it is correct to assert that Kenya’s trajectory towards a vibrant democracy is twisted.

Historically, Kenya’s political system, and extensively the economic system, only benefit few individuals who control the means of production and the balance of power. This is an explicit manifestation of an oligarchy.

Kenya’s pre-supposed democratic tendencies, to say the least, are far-fetched and illusionary. Politically and economically, the majority, whom democracy accords the right to call the shots, have never had their way in the country with the exception of the formation of the NARC administration and the institutionalization of the current constitutional dispensation.

An honest rumination in view of Kenya’s political and electoral malfeasance wouldn’t take place without weighty consideration of the compromised Independent Electoral and Boundaries Commission (IEBC), the role and influence of the Western states – the so-called masters and defenders of democratic ideals, the excessively irrational average voter, the highly deceptive public relations (PR) and political consultancy firms, and the Third Liberation whose conceptualization is fast waning.

Basically, an institution is as good or bad as the people charged with the mandate to steer it. From the family – the basic unit of social organization, a school, an organization, a football team and a government, competence is a tenet necessary for the success or failure of an entity.

In the run up to the 2018 general elections IEBC’s senior officers proved to be partisan and compromised thus jeopardizing the independence of the electoral body.

Independence of an electoral body is the foremost step in having a free, fair and credible electoral process. The independence of the IEBC is interfered with right from the appointments of the commissioners and other senior officers of the country’s electoral body.

The embattled chair of IEBC Wafula Chebukati has proven to be quite incompetent but this is not a surprise anyway given his subpar performance while being vetted by Parliament for the hot seat. He was not the best out of the other candidates and being appointed to chair the IEBC fixed him in a corner.

Other commissioners were clearly partisan and their political intentions well known. We can’t have a clean electoral process with such poisoned minds running an exercise that determines the fate of Kenyans economically, socially and politically.

Western states – the masters of impunity and double-standards – supported a corrupt regime out of geo-political and geo-economic interests. Led by the American government, they pronounced the legitimacy of an administration which they were not in favour of in 2013.

Who offers support and confers legitimacy to a regime whose rogue police officers killed and injured innocent Kenyans including harmless children?

Setting the record straight, political correctness is the language preferred by the governments of the Western states. Kenya’s case and other immoral governments across Africa being cheered on by the West is largely informed by their (Western states) intentions to counter China’s influence on the continent.

If the likes of the American, British, French and other Western governments are champions and crusaders of democracy, then it would make sense if they were not funding undemocratic regimes and toppling legitimate governments around the world.

As matter-of-factly, Western governments have never condemned the rogue and undemocratic regime in Saudi Arabia. They wreaked havoc in Afghanistan, Libya, Yemen, Syria and other nations but only as a divide and rule scheme driven by paranoia and economic interests.

Apart from the political relief offered by the West, the deception and destruction caused by the global political consultancy firms such as Cambridge Analytica should never be forgotten going forward.

The political consultancy firms are in pursuit of profits, economic capital and economic power as the political parties and formations are hell-bent in pursuit of political capital and political power. But to what extent is the price to be paid for the trade-off between business profits and political power?

Apparently, the price is costly and takes the form of a disintegrated country. These firms pursue their profits by optimizing on the structural weaknesses of a country.

For instance, in Kenya, Cambridge Analytica which was responsible for running the Jubilee Party’s political campaign ostensibly capitalized on the ethnic fault lines that are highly visible in the Kenyan society.

So far no serious step has been made in banning such firms from operating in Kenya especially in running political campaigns. This country is a joke. Pressure from various entities eventually forced Cambridge Analytica to shut down its operations.

In South Africa, PR firm Bell Pottinger, known to work for despots, was chased from the country after running racially charged campaigns especially on economic reform and the prevalent socio-economic inequalities in the country.

But unlike in Kenya where the public never protested about Cambridge Analytica’s divisive campaign, the publics in Britain and South Africa were vocal on the firms’ PR gimmicks.

Involvement of these firms in Kenya’s political space with the intention of driving narratives that are misleading and dangerous casts the country as a twisted democracy.

Embers of the Third Liberation that flamed up following the flawed electoral process flickered out as soon as the ‘handshake’ between Raila Odinga and Uhuru Kenyatta came to the fore.

Doubts have been cast on the supposed Building Bridges Initiative and yours truly is among the doubters. Judging from Kenya’s political history the ‘handshake’ is as good as any other political deal and its abandonment would not be a surprise.

Political (electoral) justice and economic justice should be the key drivers of the Third Liberation. But with political interests taking centre stage the hopes for a new Kenya are dashed.

Failure to address injustices committed in recent times and long before that will not actualize building bridges on the social, political and economic issues that divide Kenyans. Ignoring the implementation of the recommendations put forth by the Truth Justice and Reconciliation Commission (TJRC) only sets the country on a path for intensified calls for secession, massive socioeconomic inequality and electoral skullduggery in the near future.

In view of the aforementioned weighty issues, where does the Kenyan public stand? There is no hope for a better Kenya considering the dubious electoral and political decisions made by majority of members of the public.

Can the Kenyan public dislodge the oligarchs that have patronized the country’s politics and economy since the dawn of independence? This is a question of fundamental importance. But with a significant number of Kenyans voting in an unintelligent fashion and being unapologetic about their ethnic political ideologies there is no hope of Kenya transitioning to a nation.

Kenya has never been a nation. All the episodic moments of nationhood – independence, the Second Liberation, dethronement of the rogue and despotic KANU regime and promulgation of the current Constitution – involved elements of disenchantment with individuals at the centre of the government preferring to subscribe to the ideals of an oligarchy.

Let’s not pretend to pursue national unity in the spirit of the ‘handshake’ and the doctrine of accepting and moving on while escaping from addressing the country’s problems. That is not how a nation is built.

Of Whales, Sharks, the Big Fish & the Small Fish: On Kenya’s State of Corruption

Image: Courtesy. 

The same administration, the same storyline, the same state of affairs! That is the Jubilee administration for you folks! The recent revelations of the grand looting at the National Youth Service (NYS), and at the National Cereals and Produce Board (NCPB) among other scams are a reminder of the failures and incompetence of the Jubilee administration.

I’m not engaging in a kind of a guns-blazing-no-holds-barred attack against the purported government of the majority, whose legitimacy is a knife-edge question, but undertaking an almost saintly act of expressing my disenchantment regarding the theft of public funds and immorality at the heart of government institutions.

It is immoral to embezzle resources that belong to the public. For the last five years, there is no doubt whatsoever that the Jubilee administration has presided over world class corruption and unrivalled immorality.

Recently, the Principal Secretary of the Interior Ministry, Karanja Kibicho, admitted that in the last five years corruption has gone up by 240%. One wonders how such public theft occurs while no individuals can be held accountable.

Normally, an incident of theft requires an agent before it is sanctioned and in due course materializes. This raises a fundamental concern in regards to why perpetrators of these scams especially under the Jubilee administration are yet to be jailed. Does it mean that corruption involving government agencies involves faceless individuals?

Kenya, under the rule of the Jubilee administration is a total joke, and as a matter of fact it can hardly be thought of as a country let alone a nation. And to set the record straight, Kenya cannot be thought of as a nation.

In fact, Kenya has only flirted with the state of nationhood thrice: the first time at the dawn of independence; the second time in 2002/2003 when NARC took over; and in 2010 following the promulgation of the current constitution.

Going by the political definition of the term ‘country’, Kenya does not qualify as one because of the immorality sanctioned by government officers in the form of plundering resources. Thus, Kenya is a den of corruption and a haven to the corrupt. This is the major reason why the proceeds from the economy only benefit a few individuals and not the majority.

Yes to Vice, No to Virtue

Profiting from vice is the order of the day in Kenya and this is an indication of a society characterized by systemic failure. The high affinity to vice than virtue in Kenya is not just a black spot for the public sector as the private sector is equally corrupt.

From the so-called whales, sharks, the big fish to the small fish of the rungs of the Kenyan society, the vice of corruption rules; its tentacles are widely spread and the culture is deeply entrenched.

Corruption has evolved over the years and it has become a national culture. Even with a constitution that lays a lot of emphasis on integrity, efforts to de-institutionalize the culture of corruption have proven to be futile.

It is nonsensical to have a government that is dominated with robber barons, individuals whose main motive is to speculate how they can orchestrate looting of public resources and from where.

We should not forget that by the term government reference is drawn to the national government and the county governments including their various arms. For instance, at the national level we have the Executive, Parliament and Judiciary. At the county level, we have the county assemblies and the county executives.

Sadly, these organs are dominated by people who are short of character, and in any case they would hardly meet the threshold of occupying state offices in countries or nations that are serious democracies and where integrity is highly regarded.

But, with a saintly reflection it is clear that citizens have given consent to the culture of corruption to permeate in the Republic. Look, majority of the citizens – those eligible to vote – are either compromised and vote for the wrong people or do not vote at all hence allowing the corrupt to be elected in office.

Kenya began its post-independence journey on a path that can be described as evil, highly immoral and certainly vicious. The Jomo Kenyatta-led administration was full of individuals whose desire was to amass wealth at the expense of fighting poverty, disease and ignorance – the main challenges that Kenyans faced at the dawn of independence.

Unfortunately, the three challenges still bedevil the Republic primarily due to corruption that has been handed down in ceremonious fashion from the Jomo Kenyatta regime, to the perpetually corrupt Moi regime, to the Kibaki administration and to the current rogue and fundamentally corrupt Jubilee administration.

Dealing with corruption in the Republic calls for not only upholding the rule of law but also advocating for a culture change in the various levels and classes of the Kenyan society. This means in essence that the social aspects need to be looked at to ensure that Kenyans begin to endear themselves to virtue and not vice.

For instance, the role of the family in the socialization and enculturation process of an individual needs to be revisited. Nowadays, the family is a neglected institution that no longer imparts the socially approved morals like integrity and being mindful of others’ welfare. The family has instead degenerated into an entity where greed is hatched, preached and practiced.

Additionally, the education system has failed to teach learners about morality and integrity. How do we expect students and pupils who steal exams to be the yardsticks of morality in the Republic? And hopelessly, teachers and parents facilitate the culture of cheating in examinations. Is the present and future of Kenya not doomed?

On the Price of Corruption

Corruption is a commodity and just like other valuable products, it has a price and a market determined by the forces of demand and supply.

Normally, the production of a commodity and distribution are determined by a set of incentives. Incentives motivate the producers to produce commodities and enable traders to engage in trading activities. For instance, the primary incentive for capitalists is to make profits.

Since corruption is a commodity, its value is attached to the various socio-economic classes that exist in Kenya with each class engaging in corruption activities it can easily afford. The rich – those with means – can easily afford to engage in corruption in the upper echelons of government. The poor – the have nots, the scum of the Kenyan society – and the hoi polloi can afford to pay for corruption that takes place at the lower levels of the Republic’s socio-economic and political strata.

The bottom line, however, is that each social and economic class can afford to pay for corruption depending on the socio-economic stratification, just like in a normal product market where the rich can afford purchasing luxurious commodities and the poor can afford buying low quality sometimes cheap counterfeit goods.

Thence, the price of corruption is too low in Kenya in that it can easily be afforded by majority of the citizens whether one is looting billions from state institutions or paying a fifty shilling bribe for easier access to public services.

A vicious fight against corruption in the Republic, therefore, requires that this vice be made unaffordable. In essence, this calls for the cost of engaging in corruption to be increased, and as a result eliminate the incentives that facilitate graft to take place.

In increasing the cost of engaging in corruption and subsequently its price, it implies that punitive measures such as death sentence should be experimented and eventually instituted.

Just like a typical economy with extractive institutions where inequality between the poor and the rich is massive - with the rich getting away with whatever economic benefit as the have nots hope for the better – the legal system in Kenya is rogue and unequal with the whales, the sharks and the big fish that engage in corruption going scot free as the small fish literally face the full force of the law. This is outright subversion of the rule of law.

As matter-of-factly, the Jubilee administration is busy engaging in mere publicity stunts of arresting the NYS scandal suspects and talking tough as usual while the politicians, and other wheeler-dealers in government circles who choreograph the looting are yet to be prosecuted.

What happened to the first NYS scandal investigations? The Executive, Parliament and the Judiciary owe the tax payers an explanation on this.

By the way, in the month of May 2018 a clerk at the Kibera Huduma Centre was sentenced to two years in jail and fined Kshs. 500,000 for taking a bribe of Kshs. 2,500. This clerk is a small fish. What about the big fish, the whales and the sharks of the NYS scandals, the NCPB looting, and other scams engineered under the watch of the Jubilee administration?

Ours is not a country; it is a den of thieves and a haven for the robber barons and the irredeemably corrupt.

The Political Economy of the South Sudan Conflict

A section of rebels in South Sudan.
Image: Courtesy. 

It is close to five years since civil war began in South Sudan with negotiations failing to broker a peace deal between the warring groups. The unending conflict that started in December 2013 has resulted in destitution with thousands murdered and millions displaced.

The Council on Foreign Relations estimates that 50,000 South Sudanese have died since December 2013 when the war began. The Human Rights Watch approximates that 2 million South Sudanese have been internally displaced due to the conflict, while a further 2 million have sought for refuge in the neighboring countries.

Of the 2 million refugees beyond the borders of South Sudan, 1 million are in Uganda. Of the 2 million people that are internally displaced, 230,000 are camping at various United Nations’ bases across the country.

As war ravages Africa’s youngest state, the country’s economy has collapsed. As highlighted by the African Development Bank, the economic growth of the South Sudanese economy is on a freefall with the country’s real Gross Domestic Product (GDP) contracting. For instance, the country’s GDP shrank by 5.3% in 2015, contracted by 13.1% in 2016 and it is estimated to have declined by 6.1% in 2017.

Additionally, the country’s inflation rate reveals the ebbing of the economy’s fortunes with the latest figures indicating that the rate of inflation is 161%.

Following the economic hardship experienced in South Sudan, President Salva Kiir recently fired the Governor of the Central Bank and his deputy over the failure to deal with inflation. This was a symptomatic gesture bearing in mind that the country’s sinking economy is only reacting to the volatile political situation, and the sacking of the two officials is a scapegoat of the structural challenges that bedevil South Sudan.

Structurally, the primary reason why the conflict in South Sudan will not be ending anytime soon regards the distribution of wealth and the proceeds generated from the wealth. Internally and externally, conflicting interests among various groups have stalled the peace process and in any case, these groups continue to fuel the civil strife.

Internally, the desire to amass wealth is driving more entities into the war. Recently, Paul Malong, a former chief of staff of the army formed a rebel movement with the intention of fighting against the current administration which he considers to have failed in regards to restoring peace in the country.

Each of the existing militia groups seeks to impose some form of territorial control over the regions which are considered to be highly endowed with natural resources. The corrupt nature of the Salva Kiir led administration prompted the onset of the crisis with his family members and cronies looting the country’s national wealth at the expense of the ordinary South Sudanese citizens.

Transparency International ranks South Sudan at position 179 out of 180 countries as per the 2017 Corruption Perception Index report. This implies that South Sudan is an excessively corrupt state.

The question of who controls what in view of the natural resources is fundamental in understanding the genesis and nature of the conflict. From the exploration of oil, to gold mining activities as well as poaching and trafficking of wildlife, few individuals have strategically positioned themselves to benefit from the country’s natural resources.

With the economy grounded, oil exploration activities seem to be on a lull. But illicit trading of fuel is vibrant in the country an act that occasioned President Salva Kiir to issue a stern warning to the illegal fuel traders in July 2017.

However, the warning by the incompetent president can be regarded as a sideshow if the information documented in the Sentry Report is factual. The Sentry Report, titled “Fueling Atrocities: Oil and War in South Sudan”, outlines how funds from the oil exploration activities are used to fund militia groups and in due course aggravate the conflict.

According to the report, several militia groups exist among the Dinka community (Salva Kiir’s ethnic group) and they are tasked with protecting the oil reserves, an act that has led them to be widely known as the “Oil Protection Force.” The report further highlights on how the government finances the activities of the militia groups allied to the government.

Externally, geopolitical and geoeconomic factors continue to exacerbate the conflict in South Sudan. Both regional and foreign states have a hand in the unending crisis. The scramble for the natural resources in South Sudan and the benefits derived from the war occasion a number of states to hatch strategies intended to prolong the war.

In as much as the USA is vocal in pushing for the South Sudanese president to restore peace mainly through the use of sanctions and other threats, it cannot be denied that the American government is also responsible for the chaos.

With hindsight, the USA government played a primary role in the creation of the South Sudanese state. In fact, as highlighted by the Foreign Policy magazine, George W. Bush prioritized the creation of South Sudan in his foreign policy agenda.

Historically, the USA has greatly been involved in countries that are rich in oil and South Sudan is not an exception. The USA has a penchant of creating chaos and instability in order to profit economically from natural resources in states perceived as fragile. With Chinese presence in South Sudan being visible, USA may be using the chaos as a counter-strategy of China’s commercial interests in the country.

It is on record that the USA government declared President Salva Kiir as “an unfit partner.” Later on speaking before the United Nations Security Council, US Ambassador to the UN Nikki Haley warned that “words are no longer sufficient” in regards to the ongoing civil war. Such sentiments are an indication of a gloomy situation perhaps involving the violent removal of Salva Kiir from power.

But the forceful removal of Salva Kiir as president will be recipe for more chaos and the state building process will be even harder than it is at the moment. History shows that USA’s violent interventions result in the formation of puppet governments working for the interest of USA rather than for the collective interest of the citizens.

Though China has actively intervened in the conflict contrary to the fundamental ideals of its hands-off foreign policy, it cannot be ruled out that Beijing supports the Kiir administration with weapons to fight the various rebel groups.

Furthermore, Ukraine was accused in May last year for supplying arms to the South Sudanese government. It cannot be ruled out at the moment that such a similar activity is going on.

Regionally, various states are responsible for the civil strife in South Sudan. For instance, Sudan has a hand in the chaos rocking the world’s youngest state. Before gaining independence, the south battled with the north for a record 22 years between 1983 and 2005 in what has come to be referred to as the Second Sudan Civil War.

Origin of the Second Sudan Civil War can be traced to the attempt by former Sudanese president, Gaafar Mohamed el-Nimeiri to create an Islamic state, a move which forced the southerners under the leadership of John Garang de Mabior to put up an armed struggle.

With the independence of the southerners, however, Khartoum’s nosiness in the affairs of Juba is a fundamental factor that has prolonged the conflict. This follows the disagreement between the north and the south over the oil-rich region of Abyei.

Abyei belongs to South Sudan but since it is endowed with a lot of oil, the north keeps preying on the oil with total disregard of the Abyei Protocol which required that the region holds a referendum to decide whether it belongs to the south or the north.

Currently, Khartoum continues to run the affairs of Abyei with President Omar al-Bashir declaring in February last year that the region was part of the north and ordered the residents to apply for identification documents as per the laws of Sudan.

Khartoum offers support, financially and militarily, to some of the rebel groups in South Sudan in order to prolong the conflict and in due course profit from the oil in Abyei.

Uganda’s interests in South Sudan play a major role in the conflict. Uganda is South Sudan’s largest trading partner with various Ugandan entities engaged in the trading of oil, agricultural produce like maize among other commodities. As reported in February last year, Uganda was set to import gold from South Sudan.

Military interventions of the Ugandan army serve to protect the interests of Kampala in South Sudan. Additionally, driven by the paranoia of the Lord’s Resistance Army (LRA), President Yoweri Museveni finds a justification to stir the waters in South Sudan. The Ugandan government collectively supports the South Sudanese government and various militias so that Uganda can continue profiteering from the civil strife. Uganda is home to 1 million South Sudanese refugees and this means money from the West to the government and its cronies.

In January 2018, Adama Dieng, the U. N secretary general’s special adviser for the prevention of genocide, accused Kenya and Uganda of fueling the conflict by allowing weapons and ammunitions destined for South Sudan to pass through their territories.

The corrupt nature of the Kenyan and Ugandan governments is a precipitating factor for the shipment and transportation of large quantities of weapons and ammunitions to South Sudan.

Kenya and Uganda host a large number of South Sudanese nationals. Majority of the South Sudanese government officials and their families lead opulent lifestyles in Nairobi and Kampala. The rich government officials and their cronies as well as the wealthy individuals financing the militias profit from the civil war as the average and poor South Sudanese languish in destitution.

Resolving the conflict calls for setting up mechanisms to look into the distribution of the natural resources and/or wealth in the country. Until the question of “who profits from the natural resources” is effectively answered, chaos will continue rocking South Sudan.

This post was first published on The Africa Vigil.