Banking in Kenya dates back to the pre-colonial periods. The first banks largely concentrated on financing international trade along the Europe-South Africa–India axis, but later diversified operations to tap the opportunities for profitable banking created by a growing farming settler community and pioneer traders in the local economy to whom they provided deposit and credit facilities.
Indian money lenders operating quasi bank services as early as the 18th century were probably the first bankers but the first recognisable bank was Jetha Lila Bankers from India, which was established in Zanzibar in 1880. In 1889 the National Bank of India appointed the trade house of Smith Mackenzie to be their agent in Zanzibar. Smith Mackenzie had a Mombasa branch in 1887 which was taken over by the Imperial British East Africa (IBEA) in 1888. The National Bank of India established its own office in Zanzibar in 1892. In July 1896 the National Bank of India established a branch in Mombasa renting premises from Sheriff Jaffer.
In April 1909, the East Africa Post Office Savings Bank Ordinance was passed and in April of the following year, the Ordinance for the Regulation of Banks established in the East Africa Protectorate was passed. The former Ordinance established the first bank in the formal sense while the latter enabled the National Bank of India to become the first commercial bank. By 1911 there were only three banks: The National Bank of India, The Standard Bank of South Africa that came in December 1910 which later merged with Anglo-Egyptian Bank Ltd to form Barclays Bank in 1926 and Kathiawad and Ahmedabad Banking Corporation which had a short-lived presence in Mombasa from 1910 to 1915.
In 1920 the East Africa Protectorate was declared a colony of the British Empire and its name changed to Kenya. The new colonial starters helped the Banks grow rapidly mainly through European Deposits and Asian customers. The banking services were not available to Africans, the only banking sources for Africans was the Post Office savings bank which started in 1910 as a department of the Colonial Postal service, even then the service was only available in places where Officials of the colonial service were stationed and therefore did not reach the majority of Africans who resided in rural areas.
The steadily growing economy in Kenya would soon lead to an influx of new banks between 1950 and 1959. In 1951 the Dutch bank Nedelandsche opened a branch in Nairobi. It was followed by the Bank of India which opened its first branch in Treasury square in Mombasa on January 17th 1953 and the Bank of Baroda on December 4th of the same year with its first branch also in Mombasa. The Pakistan based Habib Bank AG Zurich Ltd came in 1956 while the Ottoman Bank and Commercial Bank of Africa (CBA) rounded off the rush by establishing branches in the country in 1958.
After Indian attaining independence from Britain in 1947 and the subsequent hiving off of Pakistan, India changed its name in 1958 to National Oversees and Grindlays bank later called National and Grindlays Bank following its merger with Grindlays bank another landing based bank which traced its roots to Calcutta India. By 1951 the Banks had expanded its branches considerably but employment opportunities for Africans in the Banking industry took a long time to materialize. Indeed, it was not until June 1963 a few months before the country attained independence that the first African manager of a Bank branch Peter Nyakiamo was appointed.
After independence, the changing landscape of banking began to note the entrance of fully indigenous banks. In June 1965 the first fully locally owned Commercial Bank, the Cooperative Bank of Kenya was registered as a Cooperative Society; initially, it served the growing farming community. Cooperative bank as it came to be known commenced its operations as a Bank on January 10th 1968. The first fully Government-owned Bank the National Bank of Kenya was established on June 19th 1968. In 1971, the Kenya Commercial Bank was formed following the merger of the National and Grindlays Bank, with the government owning a 60-per cent majority stake. It took the poll position as the largest of the country’s commercial banks in terms of deposits and number of branches.
The formation of the Government-owned Banks had the desire to fight the speeding of the provision of affordable banking services to the majority of the population. It also prompted Foreign-owned bank to take measures to remain relevant in the Kenyan markets and beyond. Today, according to the Bank supervision annual report 2017, Kenya currently has 44 banks. 31 of the banks are locally owned while the remaining 13 are foreign-owned. Among the 31 locally owned banks, the government of Kenya has a shareholding in three of them, 27 of them are commercial banks and one is a mortgage finance institution, known as Housing Finance.
Of the 44 banks, ten are listed on the Nairobi Securities Exchange with respect to the names of their shareholders namely Barclays Bank of Kenya Ltd, Stanbic Bank Kenya Limited, Equity Bank Ltd, Housing Finance Ltd, Kenya Commercial Bank Ltd, NIC Bank Ltd, Standard Chartered Bank (K) Ltd, Diamond Trust Bank Kenya Ltd, National Bank of Kenya and Co-operative Bank of Kenya Ltd. The shareholding structure of these banks constitutes, one that is state-owned, six locally owned and three that are foreign-owned.
Together, they act as representatives of local, foreign, state, single and block shareholding in Kenya.
In 2016, in the wake of the collapse of three lenders —Dubai, Imperial and Chase banks — precipitated by weak corporate governance practices that allowed irregular issuing of loans to politically connected customers, wanton insider lending and running of parallel banks, the Central Bank of Kenya issued orders for banks to disclose top shareholders on their websites. An outcome of this has been greater transparency and public trust. However, as this analysis illustrates, is a network of individuals, companies and banks who are the major shareholders of Kenyan banks.
Let us examine this?
The National Bank of Kenya’s two key shareholders are the National Treasury of Kenya and the National Social Security Fund (NSSF). The NSSF holds 48.1% of the ordinary shares as well as 20.7% (253 million) of the non-cumulative preference shares in the Bank. The National Treasury holds 22.5% of the ordinary shares as well as 79.3% (900 million shares) of the Bank’s non-cumulative preference shares. The remaining 29.5% of the ordinary shares are held by the general public through the NSE namely, Kenya Reinsurance Corporations, Best Investments Decisions Ltd, Co-op bank custody a/c 4003a, Craysell Investments Limited, NIC Custodial Services a/c 077, Equity nominee Ltd a/c 00084, NBK Client a/c 1( Anonymous) and Eng. Ephraim Mwangi Maina who has 0.3% shares.
Co-operative Bank of Kenya public and was listed on December 22nd 2008.
Shares previously held by the 3,805 Co-operative Societies and unions were ring-fenced under Co-op Holdings Co-operative Society Ltd which became a strategic investor in the Bank with a 64.56% stake (3 Billion shares), followed by Gideon Maina Muriuki with 1.9% shares, Kenya Commercial Bank nominees a/c 915B 0.8% shares, NIC Custodial Services a/c 077 0.7% shares,Stanbic Nominees Ltd a/c Nr 1030682 0.5% ,Aunali Fidahussein Rajabali and Sajjad Fidahussein Rajabali 0.4%, Amarjeet Balooobhai Patel and Baloobhai Chhotabhai Patel, Old Mutual Life Assurance Company,Kenya Reinsurance Corporations and Standard Chartered Nominees Resd a/c ke11443 hold 0.3% shares each.
Co-op bank custody a/c 4003a (anonymous) has shares in two banks, National Bank of Kenya and Standard Chartered.
On 31st December 2014, Equity Group holdings PLC finalized an internal restructuring that culminated in its conversion into a non-operating holding company, Equity Group Holdings Limited (EGHL) in order to further meet its objectives. The Bank arm was founded in 1984 as Equity Building Society (EBS). In 2006, the Bank was listed at the Nairobi Securities Exchange where it has become the largest Bank by market capitalization. The listing also attracted Helios, a strategic investor, to invest USD 185 million in 2007.
Arise BV is the top investor at Equity Bank Limited with 12% shares. Aris-constituting Norfund, FMO and Rabobank-paid kes17.6 billion for a share of Equity Group Holdings KES147 billion market valuation. Aris took over the shares held by Norfininvest.
Other shareholders include James Mwangi and British American Investment Company Kenya Ltd with 127 Million shares, Standard Chartered Nominees with 121 Million shares, Equity Bank ESOP 117 Million shares, Standard Chartered Kenya Nominees Ltd a/c 107 Million Shares, Fortress Highlands Ltd 101 Million shares, Equity nominees Ltd a/c 93 Million shares, Stanbic Nominees Ltd a/c and Aib Nominee a/c Solidus Holdings Ltd hold 92Million shares.
Kenya Commercial Bank, Eastern Africa is the oldest and largest commercial bank started its operations in Zanzibar as a branch of National Bank of India In 1896. The bank extended its operation to Nairobi in 1902, which had become the headquarters of the expanding railway line to Uganda. In 1975, The Government of Kenya acquired majority shareholding and changed the name to Kenya Commercial Bank. In 1988, the Government sold 20%of its shares at NSE through an IPO that saw 120,000 new shareholders acquire the bank. The National Treasury is the top investor at Kenya Commercial Bank with 17.5% shares, followed by National Social Security Fund (NSSF) with 173 Million shares, Standard Chartered Nominee a/c with 69 Million shares, Standard Chartered Nominees Ltd a/c with 63 Million shares,CFC Stanbic Nominees Ltd a/c with 61 Million shares, Standard Chartered Kenya Nominee a/c with 58 Million shares, Standard Chartered Kenya Nominees Ltd a/c with 52 Million shares ,Standard Chartered nominees a/c ke002382 with 46 Million shares, Standard Chartered nominees a/c ke9688 with 45 Million shares and Standard Chartered Kenya nominees non-resd a/c 9069 with 36 Million shares.
Amalgamated Banks of South Africa (ABSA) Group Limited formerly known as Barclays Africa Group Ltd has the highest shares, 68.5% at Barclays Bank of Kenya, followed by Standard Chartered Nominees Resd a/c ke8723 e with 75 Million shares, Standard Chartered nominees resd a/c ke11401 with 46 Million shares, Kenya Commercial Bank Nominees Limited a/c 915b with 41 Million shares,Standard Chartered nominees resd a/c ke11450 with 38 Million shares, Kenya Commercial Bank Nominees Limited a/c 915a with 34 Million shares, Standard Chartered nominees a/c 9230 and Standard Chartered nominees non-resd. a/c 9913 hold 23 Million shares, Goodwill (Nairobi) Limited a/c 94 with 21 Million shares and the Jubilee Insurance Company of Kenya Limited with 20 Million shares.
Standard Chartered Bank Kenya Limited was established in 1911 with the first branch opened in Mombasa Treasury Square. The Bank was listed on the Nairobi Securities Exchange in 1989. The public shareholding is just over 25% (remainder held by Standard Chartered PLC) and comprises over 30,000 shareholders. Standard Chartered Holdings is the top shareholder with 73.5% shares and operates as a subsidiary of Standard Chartered Holdings International B.V. Standard Chartered Holdings (Africa) BV is an Overseas UK company opened on 17 May 2002. Kabarak Limited follows with 3.5 Million shares, Co-op Bank Custody a/c 4003A with 1.9 Million shares , Standard Chartered Kenya Nominees – a/c KE002382 and Standard Chartered Nominees – resd a/c KE11450 they both hold 1.7 Million shares, Standard Chartered Nominees – a/c 9230 they both hold 1.5 Million shares, Kenya Commercial Bank Nominees Limited – a/c 915B and Standard Chartered Africa Limited, they both hold 1.4 Million shares, Old Mutual Life Assurance Company Limited with 1.3Million shares and Standard Chartered Nominees – resd a/c KE11401 holds 1.1Million shares.
Standard Chartered Kenya Nominees Ltd a/c (anonymous) has almost equal shares in two banks, Equity Bank limited and Kenya Commercial Bank.
Standard Chartered nominees a/c ke002382 (anonymous) has shares in two banks, Diamond Trust Bank and Kenya Commercial Bank.
Standard Chartered nominees a/c ke11450 (anonymous) has shares in two banks, Housing Finance and Barclays Bank of Kenya
Stanbic Bank Kenya Limited (SBK) was established in 1958 when Ottoman Bank incorporated its first subsidiary in the region. In 1969, Ottoman Bank sold its Kenyan operations to National and Grindlays Bank (NGB Kenya) making its exit from the East African market. Stanbic nominees ltd a/c nr00901 is the top shareholder at Stanbic bank with 60.0% shares, followed by Standard Chartered nominees non-resd. a/c 9866 with 34 Million shares, Standard Chartered nominees non -resd. a/c 9867 with 13 Million shares, Standard Chartered Kenya nominees Ltd, a/c ke20510 with 9 Million shares, Standard Chartered Kenya nominees Ltd a/c ke002012 with 8 Million shares, Standard Chartered nominees Ltd non-resd a/cke11663 with 7 Million shares, Standard Chartered nominees non-resd. a/c ke9053 with 5 Million shares, the Permanent Secretary to the Treasury of Kenya with 4.3 Million shares, Standard Chartered nominee account ke17661 with 4.1 Million shares and Standard Chartered Kenya nominees ltd a/c ke23050 with 3.6 Million shares.
Diamond Trust Bank Group is an African banking group active in Burundi, Kenya, Tanzania, and Uganda. It has operated in East Africa for over 70 years. It is an affiliate of the Aga Khan Development Network (AKDN) and the flagship of DTB Group is Diamond Trust Bank (Kenya), which was founded in 1946. Aga Khan Fund for Economic Development is the top shareholder at Diamond Trust Bank with 16.5% shares, followed by Habib Bank Limited with 45 Million shares, The Jubilee Insurance Company of Kenya Limited with 27 Million shares, Standard Chartered Nominees a/c KE18965 and ,Standard Chartered Nominees a/c KE18972 have 5.2 Million shares, The Diamond Jubilee Investment Trust (U) Limited with 3.8 Million shares, Standard Chartered Nominees a/c KE002382 with 3.5 Million shares, Aunali Fidahussein Rajabali and Sajjad Fidahussein Rajabali with 3.3 Million shares, Standard Chartered Nominee Non Resd a/c KE11752 and CFC Stanbic Nominee Limited a/c NR1873738 have with 2.7 Million shares.
Housing Finance Limited is a large mortgage finance company in Kenya. The company was established in November 1965, to promote a savings culture and homeownership among the citizens of newly independent Kenya. Major investors in the company include the Commonwealth Development Corporation (CDC), whose shareholding at one time was as high as 60%, and the Government of Kenya, which at one time owned 50% of the company. CDC has since divested from Housing Finance Limited and the Kenyan Government has substantially reduced its shareholding.
In 1992 Housing Finance Company of Kenya became listed on the Nairobi Stock Exchange.
Britam Investment Company (Kenya) Ltd is the top shareholder at Housing Finance with 19.9% shares, followed by Equity Nominees Limited a/c 00104 with 44 Million shares, Britam Insurance Company (Kenya) Ltd with 33 Million shares, Britam Insurance Company (Kenya) Ltd with 23 Million shares,Standard Chartered Nominees Resd a/c KE 11401 with 14 Million shares, SCB a/c Pan African Unit Linked FD with 11 Million shares,Permanent Secretary Treasury with 8 Million shares,Kenya Commercial Bank Nominees Ltd a/c 915B with 5 Million shares,Standard Chartered Nominees Resd a/c KE11450 and Kenya Commercial Bank Nominees Ltd a/c 915A have 4 Million shares.
Investments & Mortgages Limited was formed as a private company providing personalised financial services to business people in the Nairobi area. In 1980, I&M, as the company was known at that time, was registered as a Financial Institution under the Banking Act. Following changes in the regulations of the Central Bank of Kenya, I&M became a commercial bank in 1996. In 2013, I&M Bank created I&M Holdings Limited, as the holding company of all the group’s businesses and subsidiaries. The holding company’s shares of stock are listed and publicly traded on the Nairobi Securities Exchange under the symbol I&M. Minard Holdings Limited is the top shareholder at I&M Holdings with 19.9% shares, followed by Tecoma Limited with 76 Million shares, Ziyungi Limited with 73 Million shares, Standard Chartered Kenya nominees Ltd a/c ke002796 with 41 Million shares.
Kenya Reinsurance Corporation has shares in two banks, Cooperative Bank and National Bank of Kenya.
National Social Security Fund (NSSF) has shares in two banks, National Bank of Kenya and Kenya Commercial Bank.
NIC Custodial Services a/c 077 (anonymous) has shares in two banks, Cooperative Bank of Kenya and National Bank of Kenya.
The National Treasury has shares in two banks, Kenya Commercial Bank and National Bank of Kenya.
The Jubilee Insurance Company of Kenya Limited has shares in two banks, Diamond Trust Bank and Barclays Bank of Kenya.
Banks play an important role in the economy of a country. When banks efficiently mobilize and allocate funds, this lowers the cost of capital to firms, boosts capital formation, and stimulates economic activities. Thus, weak governance in the banking sector can have far-reaching consequences to the economy of a country. In the recent past, the banking sector in Kenya has witnessed a number of corporate governance issues that sent jitters among millions of bank customers resulting in a confidence crisis. While banks have begun to adhere to disclosure requirements spelt out in the prudential guidelines issued by the Central Bank of Kenya (CBK) much more needs to be done, particularly pertaining to competition policy and regulation to put checks and balances on the monopolisation of the banking sector in Kenya.
This story was produced in partnership with Code for Africa’s iLAB data journalism programme, with support from Deutsche Welle Akademie.
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Tech Disruption in the Agricultural Sector
The future of farming in Kenya counties, whether in knowledge sharing, collaborations, funding, or market access primarily lies in the farmer’s abilities to harness the respective strengths of the available and emerging Disruptive Agricultural Technologies. As the tech-platforms become cheaper, more available and affordable farmers yield and fortunes will likely inch upwards.
Disruptive technologies in agriculture (DATs) have been in Kenya since the early 1900s and can simply be defined as the digital and technical innovations that enable farmers and agri-firms to increase their productivity, efficiency, and competitive edge.
These platforms essentially help local farmers make more precise decisions about resource use through accurate, timely, and location-specific price, weather predictions. The agronomic data and information that they provide in Kenya is becoming increasingly important in the context of climate change. Besides, leveling the playing field, it can make small-scale or local marginalized farmers in Kenya to be more competitive.
Sophisticated off-line digital agri-tech can provide opportunities even in poorly-connected rural contexts, or with marginalized groups who have lower access to information and markets. In short, Disruptive Agricultural Technologies (DATs) are overturning the sector status quo.
Some of the key disruptive technologies in agriculture (DAT’s) include Waterwatch Cooperative in Kenya (Real-time alert system), Tulaa and Farmshine (Digital platform for finding buyers and linking buyers and sellers).
There is also Agri-wallet (platform for input credit/e-wallets/insurance products), dutch-based Agrocares operating in Kenya and Ujuzi Kilimo (portable soil testers, satellite images, remote sensing) as well as SunCulture (solar-powered irrigation pumps)
These platforms have helped to facilitate access to local markets in counties such as Makueni and West Pokot, improve nutritional outcomes, and enhance resilience to climate change. Disruptive agricultural technologies are designed to help stakeholders by reducing the costs of linking various actors of the agri-food system both within and across countries through faster provision, processing, and analyzing of large amounts of data.
The Disruptive Agricultural Technologies Landscape
Over 75% of Disruptive Agricultural Technologies are digital. The remaining 25% of non-digital are either focused on energy (solar), or producers/suppliers of bio-products for agriculture.
Approximately 32% of the Disruptive Agricultural Technologies aim to enhance agricultural productivity, 26% are working to improve market linkages, 23% are engaged in data analytics, and another 15% are working on financial inclusion.
According to a 2019 World Bank report, Kenya has become a leading agri-tech hub with nearly 60 scalable Disruptive Agricultural Technologies (DATs) operational in the country, followed by South Africa and Nigeria. Kenya is said to have the third largest technology incubation and acceleration hub in the region. Examples of those technologies in Kenya include: Data-connected devices which use ICT to collect, store, and analyze data. This includes GPS, machine learning, and artificial intelligence. The Africa’s Regional Data Cube hosted in Nairobi,Kenya is a tool that helps various countries address issues related to agriculture, water, and sanitation.
The use of robotics and automation in farming in Kenya has gained widespread acceptance. For instance, drones are used to monitor and improve the efficiency of agricultural operations and its usage is governed by the Civil Aviation Act.
Majority of farmers in Kenya are smallholder farmers and having access to Disruptive agricultural technologies helps even the competition with medium and large scale farmers as tools are created for both low and high connectivity areas.
Over 83 percent of Disruptive agricultural technologies are e-marketplaces that do not require high connectivity. Example is Twiga Foods whose digital platform connects retailers and food manufacturers, delivering a streamlined and efficient supply chain.
Kenya’s financial sector is characterized by a robust mobile money ecosystem (MPESA) with over 70 percent of the population using mobile money regularly which increases its potential for farming for smallholder farmers.
Despite that one of the biggest challenges facing the agriculture sector in Kenya is access to finance. This is largely due to the high risk of loaning to small holder farmers. FinTech apps use alternative data and machine learning to improve the credit scoring of smallholder farmers.
These apps help minimize the gap between the demand for credit and the supply of financing for smallholder farmers. Kenya is a hotspot for agricultural apps. There are numerous organizations working on developing digital solutions that combine precision farming with remote sensing data.
Connectivity and Adoption of DATSs
A significant number of the existing digital tools and technologies can be utilized in areas with low network to improve the productivity of the agriculture sector. Despite the increasing number of mobile phone users in Kenya, the penetration rate among smallholder farmers remains relatively low.
It may be difficult for many of these smallholder farmers to adopt Disruptive agricultural technologies (DATs) due to the high costs, complexity and capabilities required. Meanwhile for large scale farmers, the DATs highly boost their productivity, especially if they have already developed the capabilities in-house to accelerate adoption of these tech platforms. Therefore, from the onset, we need to understand who uses the technology and the implications of this.
Kenya has a well-established start-up ecosystem, made up of mostly young, adaptive and brilliant innovators who are leveraging low-cost digital platforms. This is coupled with funding from international donors and incubation activities address agricultural value-chain issues. There is a mix of actors for Disruptive agricultural technologies depending on the categorization of the technology.
This ranges from DATS that support creation, facilitate adoption and oversee diffusion of innovation.
These actors need strong and cohesive ties, both between, the regulatory bodies, farmers, county leaders, financiers, state agencies, and fellow developers. The nature of the collaborations could be cohesive and cooperative, where all the local actors have shared goals, to fragmented, where not all actors are on board, causing resistance and slowing down the process.
Despite a myriad challenges these radical and innovative (DATs) are revolutionizing and changing the farming landscape in the counties and working with the Ministry of Agriculture using technologies to deliver agricultural services more efficiently and accountable.
The future of farming in Kenya counties whether in knowledge sharing, collaborations, funding, or market access primarily lies in the farmer’s abilities to harness the respective strengths of the available and emerging Disruptive Agricultural Technologies. As the tech-platforms become cheaper, more available and affordable farmers yield and fortunes will likely inch upwards.
Revealed: Majority of US Voters Support Patent Waiver on COVID-19 Vaccines
Shock poll reveals majority support for Joe Biden to suspend TRIPS and support global vaccination.
A new poll finds that 60% of US voters want President Joe Biden to endorse the motion by more than 100 lower- and middle-income countries to temporarily waive patent protections on Covid-19 vaccines at the World Trade Organization. Only 28% disagreed.
The survey, carried out by Data for Progress and the Progressive International, shows a super majority of 72% registered Democrats want Biden to temporarily waive patent barriers to speed vaccine roll out and reduce costs for developing nations. Even registered Republicans support the action by margin of 50% in favor to 36% opposed.
The new polling shows that “there is a popular mandate from the US American people to put human life and economic recovery ahead of corporate profits and a broken intellectual property system,” said David Adler, the general coordinator of the Progressive International. Burcu Kilic, research director of the access to medicines program at Public Citizen and member of Progressive International’s Council, called on Biden to “listen to Americans who put him in power” and “do the right thing.”
Due to WTO intellectual property rules, countries are barred from producing the current leading approved vaccines, including US-produced Moderna, Pfizer and Johnson & Johnson. In October of 2020, South Africa and India presented the WTO with a proposal to temporarily waive these rules for the duration of the pandemic so that vaccines can be manufactured across different countries, increasing their availability, reducing their cost and ensuring that they are delivered to everyone on earth as quickly as possible.
In the absence of the waiver, the current manufacturing and distribution rates are unlikely to stem the pandemic’s momentum, especially as new variants, which are more infectious and seem to evade the acquired immunity from prior infection or from the current vaccines, continue to emerge. The US under President Trump joined other richer nations to block them.
The shock poll reveals a level of public support for intellectual property waivers that will likely add to growing congressional pressure on Biden to join those pushing to save lives through a global vaccination drive. Congresswoman Jan Schakowsky is working on a letter to the president to which Schakowsky says more than 60 lawmakers have added their signature, including House Speaker Nancy Pelosi.
Senator Bernie Sanders, Chair of the Senate Budget Committee, responded to the poll saying the US should be “leading the global effort to end the coronavirus pandemic.” According to Sanders, “a temporary WTO waiver, which would enable the transfer of vaccine technologies to poorer countries, is a good way to do that.”
Responding to the new poll, Representative Ilhan Omar called on Biden to “support a waiver to boost the production of vaccines, treatment and tests worldwide,” arguing that it was “not just an issue of basic morality, but of public health.”
Adler argues, “US Americans know rigged rules to prop up big pharma’s profits are not in their interest. The longer the virus has to spread, the more it can mutate and become vaccine-resistant. Covid-19 anywhere is a threat to public health and economic wellbeing everywhere. If intellectual property restrictions are not lifted, the pandemic will go on for longer, killing more people and damaging more livelihoods.”
The threat to the Global South from vaccine apartheid is a “death sentence for millions around the world—and it is because giant pharmaceutical corporations would rather maximize profit than provide vaccines to people who need it,” according to Omar.
Sanders agrees, saying “the bottom line is, the faster we help vaccinate the global population, the safer we will all be. That should be our number one priority, not maximizing the profits of pharmaceutical companies and their shareholders.”
Erosion of Civil and Political Rights in Africa: Ibrahim Index (IIAG) 2020 Report
The IIAG report concludes that 2020 was a terrible year for democracy in Sub-Saharan Africa where political freedoms have deteriorated over the last decade, with citizens having less freedom to assemble in 2019 than they did in 2010.
Is there a link between democratic liberties and human rights on one hand, and good governance and economic progress on the other? Ever since the fall of the Berlin wall, a thirty-year orthodoxy has argued that the former are indispensable to the latter. However, a report by the Mo Ibrahim Foundation raises questions about this.
According to the 2020 Ibrahim Index of African Governance (IIAG), political freedoms across the African continent have continued to deteriorate over the last decade, with citizens having less freedom to assemble in 2019 than they did in 2010, and the trend has accelerated since 2015. On the other hand, countries’ scores in the Human Development and Foundations for Economic Opportunity categories have improved, with the biggest strides being made in infrastructure and health.
And although African countries made progress in overall governance during the last decade, the rate of improvement has slowed down over the last five years which explains the below average score in 2019.
Does this mean that the Chinese model of development—which views human and political rights as a barrier to economic progress—is supplanting the Western model, which proposes that they should go hand-in-hand on the continent?
Andrea Ngombet, a human rights activist and former presidential candidate in the Republic of Congo, says that there is more to it than that.
“To be completely honest, the combination of Chinese money, Western companies’ corruption and African autocrats’ lust for power are the causes of the retreat of democracy. All of them have no interest in a democratic Africa with tax to pay, protected workers and protected environment,” he said.
When asked why democracy is in retreat in African countries, Ngombet explained, “China [reinforces] African autocrats with cheap loans which they use for clientelism and populist projects. As the loans are without any democratic conditions, it allows the autocrats to resist the civil society pressure for democracy and accountability.”
Ngombet also explains that, “When looking at the quality of economic growth, it comes with bad loans over authoritarian regimes and those loans finance unprogressive infrastructure.”
The IIAG report shows that Gambia—the most improved of the 54 African countries—experienced the most changes after 2016 when Yahya Jammeh’s repressive 22-year-reign ended, although the current regime still faces challenges in enforcing environmental policies and in the areas of quality of education, law enforcement and compliance with international health regulations.
The study, whose goal was to help further the conversation on governance in the continent and assess current and emerging trends, analysed 237 variables from 40 different sources. It revealed that African countries are performing the worst in the Participation, Rights & Inclusion category (with an overall average score of 46.2 in 2019). This decline is caused by a deteriorating security situation and an increasingly “precarious environment for human rights and civic participation”.
Nearly half the countries on the continent had less freedom to associate and assemble and a shrinking space for political pluralism and civil society at the close of the 2010s than they had at the beginning of the decade. This was the continuation of a diminution of civil liberties in the second half of the 2000s following improvements in the first half of that decade.
In particular, compared to the country’s scores in 2010, Kenya’s scores for freedom of association and assembly as well as media freedom fell by over 20 per cent from 2015 while the indicators for transparency and accountability, as well as anti-corruption mechanisms also fell during the same period.
However, the Ibrahim report does indicate that the indicators for digital access, energy access, infrastructure and human resources in the education sector have shown a marked improvement under the current Kenyan regime. This is despite a huge debt burden and numerous unresolved corruption cases.
Increased restrictions have been placed on the establishment and operations of civil society and non-governmental organisations which have also experienced higher cases of repression and persecution in most African countries. Political parties have experienced reduced access to state-owned media and public financing for their campaigns which has curtailed their operations.
Democratic elections, the only indicator that had shown a steady improvement since 2010, took a downward spiral in 2015. Election results in countries such as Uganda, Kenya, Côte d’Ivoire, Central Africa Republic, Gabon and the Democratic Republic of Congo have been consistently disputed as the integrity of the electoral process and the independent functioning of election-monitoring bodies have been compromised.
“You can not have democratic elections in the absence of strong institutions such as Independent judiciary, a parliament that is not completely corrupted, independent press, civil societies to monitor and people to engage citizens ahead of elections and inform them by helping them understand democracy rest on their shoulders, governance rests on their shoulder, and not the person that they’ll vote in for,” Tutu Alicante, executive director at EG Justice in Equatorial Guinea explains.
“It is us that [create] democracy. It is us that [create] governance and all the security, rule of law and human development and not the person [who] as soon as elected will focus on their pockets and family.”
Countries such as Equatorial Guinea, Eritrea, Chad, DRC, Rwanda and Cameroon that have scored dismally in the participation, rights and inclusion category, have all been under the rule of African leaders who have clung on to power.
These findings resonate with those of the 2020 Economist Intelligence Unit Democracy Index which placed Chad, Central African Republic and Democratic Republic of Congo at the bottom of the rankings in democracy in Africa, measured by electoral process and pluralism, functioning of government, political participation, political culture and civil liberties.
It may be encouraging for citizens of Djibouti, Somalia and Eswatini that although their countries are among those with the least scores in terms of participation, they have registered improvements over the decade.
“Full democratic participation is essential for the development in our society. In Africa if we are thinking about Ubuntu as a basic principle of our society, then clearly democracy is needed in a way in which we all participate in order for us as a society to rise up,” Tutu adds.
Egypt has performed exceedingly well in the score for infrastructure (80/100), and health development indicators (all above 60/100) yet, surprisingly, the country is the third least performing country in Africa, after Burundi and Eritrea—with a score of 7.9/100—when it comes to participation as a principal of good governance.
Egypt has been under dictatorship since the Arab Spring overthrew Hosni Mubarak in 2011. The government has authorised the blocking of close to 500 websites belonging to news outlets, blogs and human rights organisations, and in 2017 blocked the use of internet tools such as VPNs.
Other countries that have experienced drastic internet shutdowns, legal digital restrictions and surveillance include Ethiopia, Zimbabwe, Morocco, Benin, Rwanda, Morocco, DRC and Uganda. This often happens during electioneering periods or citizen protests despite “freedom of expression being a fundamental human right enshrined in Article 19 of the Universal Declaration of Human Rights and the cornerstone of democracy”, according to UNESCO, an organisation to which most of these countries belong.
Countries that have managed to transition from dictatorships or civil wars, such as Sierra Leone, Gambia, Togo, Angola and Sudan manifest increasing improvement in their citizens’ access to the fundamental civil rights.
African governments are slowly becoming more inclusive and equal in the provision of public services and the creation of socioeconomic opportunities.
Kenya and Somalia have seen the most improvements under the Gender indicator. Although Kenya has faced difficulties in passing the two-thirds gender rule (leading former Chief Justice Maraga to direct that the president dissolve parliament), it has made impressive strides in providing social-economic opportunities for women and in the representation of women in the executive even though gender equality in civil rights has declined substantially.
In contrast, women in South Africa, Ghana and Equatorial Guinea are enjoying less protection against gender violence.
Is it a question of striking a delicate balance between good overall governance and maintaining the economic growth and security of a country? Or might too much freedom lead to coups and mutiny?
The EUI Democracy report ranked Mali and Burkina Faso—both of which do not have full control over their territories and experience rampant insecurity precipitated by jihadist insurgents—as the worst performing countries in West Africa in terms of democracy. They were downgraded from “hybrid regime” to “authoritarian regime”. The report concludes that overall it was a terrible year for democracy in Sub-Saharan Africa, where 31 countries were downgraded, eight stagnated and only five improved their scores.
It is an interesting phenomenon that, despite low scores in civil and political rights, the best scores are to be found in the Foundations for Economic Opportunity and Human Development categories with 20 countries having improved their governance score in these two areas, albeit at a slowed rate in the last five years. The biggest strides have been made in the Infrastructure and Health indicators, complemented by improvements in Environmental Sustainability.
More often than not, infrastructure and health projects are marred by allegations of corruption and lack of transparency. Yet, a correlation model run by the Mo Ibrahim Foundation shows that there is a strong and positive correlation between the overall governance score and specific indicators such as rule of law and justice, inclusion and equality, anti-corruption, transparency and accountability and business environment. Even though statisticians agree that “correlation does not imply causation”, this model indicates that countries with higher scores in those indicators also have higher overall governance scores.
Yuen Ang argues that “the idea that economic growth needs good governance and good governance needs economic growth takes us to a perennial chicken-and-egg debate” whereas Meles Zenawi has claimed “There is no direct relationship between economic growth and democracy historically or theoretically. Democracy is a good thing in and of itself irrespective of its impact on economic growth and my view is that in Africa most of our countries are extremely diverse that maybe the only option of keeping relationships within nations sane. Democracy may be the only viable option of keeping these diverse nations together, we need to democratise but not in order to grow, we need to democratise in order to survive as a united same nation.”
The 2020 IIAG report paints a picture of a continent that had long embarked on the road to decline in rights, civil society space and participation before it was hit by COVID-19. Even though Africa accounts for 3.5 per cent of the global reported COVID-19 deaths, the pandemic is now threatening hard-won gains in areas such as foundations for economic opportunity and human development.
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