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THE TRUMP PHENOMENON IS REAL: How the Counterculture Inspired Trumpism

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The Great U S of A

“If democracy is someday to regain control of capitalism, it must start by recognising that the concrete institutions in which democracy and capitalism are embodied need to be reinvented again and again.” (Piketty 2014: 570).

During the run-up to the US elections in November, a number of my African colleagues and friends told me that Trump would win the presidency. Several even opined that something good would come out of it in the end. Experience has taught me to treat such counterintuitive observations with a degree of cautious respect. But this particular appraisal was a tricky proposition.

Trump ran more on outrage with the status quo, homespun economic nationalism, and anti-Hillary sentiment than workable policies for reversing the domestic malaise framing his rude political rhetoric. The Tea Party crowd flocked to Trump’s campaign, presenting Trump with the kind of political stage suited to his unconventional and often reptilian behaviour. The national media feasted on Trump’s antics and divisive positions, but the condescending coverage of the campaign of a candidate who started out as an outlier also camouflaged the more clinical aspects of his strategy to defeat Hillary Clinton.

The poll numbers and sophisticated data analyses dismissed the likelihood of a Trump victory. But then the same electorate who twice elected Obama by sizeable majorities propelled his polar opposite into the White House.

For the many millions of Americans and others around the world distressed by the Trump campaign, the implications of his electoral-college victory was like waking up to a collective nightmare. Most of my friends, family and colleagues were stunned. Anger and agitation quickly replaced the shock. Obama’s bleak reaction, “Well, it’s not the Apocalypse,” offered little comfort.

This added up to a lot to think about as I made my way back to the US for the first time since 2004, arriving in the country two days after Trump’s inauguration. I was told to expect massive changes. My destination was Salt Lake City, the capital of Utah, socially the most conservative of the red states of the American West.

Exposure to racist theology like that of the Church of Latter Day Saints was a primary motivator for the black power salute at the 1968 Olympics in Mexico. Tommy Smith won the 200 metres in world record time followed by John Carlos in third place. The medallists mounted the podium barefoot, to symbolise the poverty of their African-American community, and raised black-gloved fists in defiance during the raising of the American flag. The protest triggered an explosion of institutional indignation and recriminations portraying Smith and Carlos as Nazis and traitors

For decades, many Americans considered the Mormon-dominated state to be a quasi-theocratic no-go zone with a unique past that set Utah apart from other ultra-conservative Western states like Wyoming, Idaho, Montana, and the Dakotas.

During my two previous trips I had found a large and variegated landscape of rangeland, desert, and mountains, with a large inland sea thrown in to boot. I found many similarities between Utah and Marsabit and the Lake Turkana region, including its traditional spatial and social separation from the rest of the country.

Mormons fleeing religious persecution in the East settled in Utah at a time when almost everyone else was heading to California. The Territory of Utah was officially recognised in 1851. It was the only Western state to allow slavery, and attempted to secede from the Union shortly afterwards. Washington was compelled to send in the army. Brigham Young, who had succeeded the religion’s founder, Joseph Smith, capitulated, but with the promise that the government would grant the Mormons autonomy to live according to their religion. The Church of Latter Day Saints has dominated the state’s economy and government ever since.

The Book of Mormon stated that the indigenous peoples the white settlers found in their new home originally came from the Middle East, but had divided into two antagonistic groups. The “Lamanites” were idolaters revealed to have extinguished a population of “Nephrite” Hebrews who had migrated to the New World several hundred years before the coming of Christ. Mormon scripture saw dark skin as a curse from God for wickedness, but otherwise taught that peoples of colour who converted and abandoned their culture would become white over time.

Exposure to this racist theology was a primary motivator for the black power salute at the 1968 Olympics in Mexico. Tommy Smith won the 200 metres in world record time followed by John Carlos in third place. The medallists mounted the podium barefoot, to symbolise the poverty of their African-American community, and raised black-gloved fists in defiance during the raising of the American flag. The protest triggered an explosion of institutional indignation and recriminations portraying Smith and Carlos as Nazis and traitors. The firestorm also curtailed the running career of the Australian silver medallist who in solidarity wore the same human rights badge pinned to the Americans’ jerseys.

It was a radicalising moment: I compiled a comprehensive report of the protest and the conditions leading up to it for a high school project. The racism of the church of Latter Day Saints added to my impressions of the state based on the gruesome fate of the Westward-bound Donner party caravan and the numerous massacres of the local Amerindian communities during the early days of the territory. Many of us growing up at that time saw Utah as the American equivalent of Albania or North Korea.

The Civil Rights movement had already done most of the heavy lifting. This in turn provided a platform for the anti-war movement. Before long, what began as a political movement for peace and racial inclusion coalesced into a much broader social upheaval

Utah has evolved during the intervening decades. The US government has resettled refugees of diverse backgrounds in the state. Salt Lake City’s industry-friendly environment also attracted the tech companies relocating from California, bringing the formerly isolated state into the American mainstream over the past two decades. Readily available jobs, a reasonable cost of living, and a network of Kenyan friends and family already established in the former no-go zone attracted several of my kids to Salt Lake City.

The growing cultural diversity has not altered the state’s bedrock conservatism. Mitt Romney and George Bush Jr still received a phenomenal 72 per cent of Utah’s vote in 2012 and 2008. Although Donald Trump’s tally did not reach these heights in 2016, the sum of these factors designated this most red of states an appropriate re-entry point for my tour of Trump’s America.

Steve Bannon, the Breitbart News executive who became one of the key architects of the Trump campaign, declared that if you want to change politics you have to change culture first. There was the angst on the surface and uncertainty lurking underneath, but was the Republican clean sweep of White House, the Senate, and House of representatives really a marker of far-reaching culture change?

THE COUNTERCULTURAL ROOTS OF THE TRUMP PRESIDENCY

Bannon clearly arrived at his change-the-culture thesis by observing the counterculture that emerged while my generation came of age, a phenomenon that reshaped American society and politics along the way.

The post-World War II period was an era of unprecedented prosperity, middle-class growth and technological progress for the USA. Politics was something that our parents followed as it came around in four-year cycles. America was a truly great place to grow up, as long as you could keep the fear of nuclear Armageddon, and other industrial-scale threats, at a safe distance.

For the young Americans growing up in customisable bubbles coloured by the scientific advances underpinning the futuristic orientation of American society, that was harder to do as the 1960s wore on. The raised fists in Mexico City — along with other radicalising events like the Vietnam war, the violent suppression of the Yippie protests at the Chicago Democratic Convention, and the river in Cleveland that actually caught fire and burnt for 17 days — confirmed my own doubts about how wonderful everything was or was supposed to be.

The Civil Rights movement had already done most of the heavy lifting. This in turn provided a platform for the anti-war movement. Before long, what began as a political movement for peace and racial inclusion coalesced into a much broader social upheaval. The country entered a state of agitation sustained by an expanding range of worthy causes from the conditions of migrant farm workers to rampant industrial pollution. Much of the conflict was generational, and reflected a polarising explosion of new memes, pheromones, and mind-altering visions.

As the awakening and the activism of the Vietnam era ran its course, American conservatives felt increasingly isolated. Not only had their values been shunted aside, the country’s conservative hard core saw the reforms and new liberalism as a direct threat to the sources of their wealth. Conservative partisans like Steve Bannon may have missed the party, but they were taking notes

The sentiment at the time was that only a far-reaching cultural reorientation could triumph against the entrenched political order and the military-industrial complex controlling it. The mix of hot politics and cool culture was always more about challenging the conventional assumptions underpinning American exceptionalism than the political revolution advocated by the far-left fringe.

Waves of new music, innovative lifestyles, radical role models, and more mundane concerns like promoting healthy dietary choices rocked the national status quo. People started searching for alternatives to the mindless consumption of the planet’s limited resources. Tabs, buttons, and mushrooms opened up new internal vistas that encouraged interest in ancient cultures and their spiritual religious traditions. We probed the mystical symbols adorning the dollar bill and investigated the esoteric philosophies guiding the new nation’s founding fathers.

The combination of protests, new cultural orientations, and developments in the war zones of Southeast Asia shifted public opinion. Withdrawal from Vietnam accompanied progress on other fronts from race relations to female liberation. New legislation addressed discrimination based on colour, creed, and gender, reined in the CIA, and created the Environmental Protection Agency to control serial polluters.

The ship had been righted, the course of the nation redirected, and use of the term “politically correct” offered backhanded acknowledgement of the nation’s cultural makeover in politics. In the end, many of the political attitudes engendered by the counterculture followed long hair, frayed jeans, and recreational marijuana use into mainstream America.

The changes, affected over a relatively short period, had made America even more exceptional in our eyes. But some observers disagreed. The eminent anthropologist Marvin Harris opined that the main impact of the counterculture was selling a lot of records. Iconoclastic musician Frank Zappa said that rock music’s potential revolutionary impact had been felt mostly in the textile industry. Cultural revolution did little to change the nation’s political structures and economy.

As the awakening and the activism of the Vietnam era ran its course, American conservatives felt increasingly isolated. Their champion, the embattled president Nixon, resigned office in disgrace. Not only had their values been shunted aside, the country’s conservative hard core saw the reforms and new liberalism as a direct threat to the sources of their wealth. They were still wealthy, but had become dinosaurs inhabiting a political landscape dominated by progressive ideas and proponents of activist government. Conservative partisans like Steve Bannon may have missed the party, but they were taking notes.

IT’S NOT REALLY ABOUT TRUMP

The Koch brothers are ferociously independent heirs to one of the largest private corporations in the United States. Like the Bush family and their cronies, their father, Fred Koch, built up his fortune during the 1930s, training Bolshevik engineers and selling his advanced oil refining technology and refineries to Stalin and Hitler’s Germany. His children’s nanny was a Hitler sympathiser, and after the war Fred Koch became a strong supporter of the rabidly anti-Communist John Birch Society to assuage his guilt over aiding the USSR. He transferred his extreme libertarian values to his sons, and after his death in 1967, Charles and David Koch bought out their two more liberal minded siblings.

In Dark Money, a book first released in 2016, Jane Mayer tells the story of how the Koch Brothers assembled a network of 400 über-wealthy industrialists. Mayer’s documentation of their activities reads like a virtual symphony of corporate crime in the form of fraud, tax avoidance, violations of workplace safety and employee welfare, foreign bribery, and environmental violations

Under the brothers, Koch Industries became the country’s second wealthiest private corporation, and they parlayed their financial muscle into the single most influential political machine in the country. Their first venture, David Koch’s run for the presidency on the Libertarian Party ticket in 1980, failed miserably. Plan B was based on a totally different approach. It began with annual summits attended by a handpicked list of like-minded individuals opposed to most forms of government regulation and taxation.

In Dark Money, a book first released in 2016, Jane Mayer tells the story of how the Koch Brothers assembled a network of 400 über-wealthy industrialists who leveraged their money and influence to penetrate the American political system for their personal financial benefit. The brothers are the sixth and seventh wealthiest Americans and their combined wealth makes them number one. Most of those they recruited belong to the top .01% of the country’s wealthiest billionaires and are known as the “invisible rich” because they operate private companies that shield them from public scrutiny and government rules for fiscal disclosure.

Mayer’s documentation of their activities reads like a virtual symphony of corporate crime in the form of fraud, tax avoidance, violations of workplace safety and employee welfare, foreign bribery, and environmental violations. Over several decades, this network, or the Kochtopus as it was dubbed by one analyst, spent billions of dollars funnelled through tax-free foundations and charities exempted from public oversight to promote their objectives.

The Koch summits provided the institutional foundation and financial support for a long-term strategy based on three overlapping components: The reformulation of libertarian ideology in terms of ideas and concepts enabling its propagation within mainstream society; the creation of institutions for translating this free-market ideology into policy positions and legislation; and building political vehicles on the ground for placing politicians aligned with their ideas and policies into public office.

Most of the Koch-networked and -funded institutions and political action committees, like Americans for Prosperity, flew underneath the radar. At the same time, an array of media personalities, talk show hosts, and academic celebrities duplicated the role that rock musicians, intellectuals and artists, political activists, and outspoken athletes like Mohammed Ali played in energising the masses several decades before. They elevated the role of divisive social issues like abortion rights in the political arena, fuelling the culture wars that influenced otherwise politically moderate citizens.

The Koch network funded think tanks based in respected universities to reinforce their anti-government ideology and critiques of public spending. Covertly funded political action committees were used to gain control of executive offices and legislative bodies. Over a period of 40 years, the Koch Brothers and their clique of archconservative supporters patiently cultivated a right-wing movement, often with more power to block and obstruct than to legislate their own agenda.

An array of media personalities, talk show hosts, and academic celebrities duplicated the role that rock musicians, intellectuals and artists, political activists, and outspoken athletes like Mohammed Ali played in energising the masses several decades before. They elevated the role of divisive social issues like abortion rights in the political arena

But despite the inroads and influence generated by their free-flowing money, the Koch network still lacked a nation-wide vehicle for mobilising grassroots supporters.

ENTER BARACK OBAMA, PURSUED BY MAD HATTERS

Help came from an unexpected source.

The election of Barrack Obama in 2008 triggered the formation of the anti-government Tea Party movement. Its emergence enabled the Koch network to dedicate their annual summit in 2009 to organise an all-out assault on the Democrats during the 2010 mid-term elections. Tea Party candidates defeated Democrat and mainstream Republican incumbents as the GOP regained control of the House and Senate. The trend continued in 2012, even though Obama retained the White House with a 5.5 million-vote margin of victory.

Despite their growing clout within the federal and state governments, the Koch-Tea Party coalition could not field a viable presidential candidate of their own creation, as demonstrated by the succession of inchoate candidates like Marco Rubio, Ted Cruz, Rand Paul, Rick Santorum, Ben Carson, Michelle Bachmann, and the pizza king Herman Cain.

The problem was about to repeat itself in 2016, until along came the Donald. Trump blitzed the field, reducing both establishment candidates like Jeb Bush and Tea Party aspirants to props in his carnival-style campaign. He proceeded to tweet himself into the White House, portraying himself as a new and independent force in American politics.

That he was. “I even did without a guitar and piano,” he quipped, a jibe referring to the star power Hillary Clinton trundled out at the end of her self-satisfied campaign.

Actually, the Trump team had something much better. Cambridge Analytica is a company dedicated to “the use of data to change behaviour,” or in the case of the 2016 election, using emotional manipulation based on psychological profiling to induce people to vote against their own socioeconomic interest. Electoral analysts confirm that CA helped sway the vote in key swing states like Florida, North Carolina, and Michigan, but their advanced analytics arguably required the distortionary prism cultivated by the alt-right players like Breitbart News and Steve Bannon to be effective.

THE REAL HOMELAND INSECURITY

It is easy to denigrate Trump the person. But Trump the politician scored some important points on my political scorecard. I had witnessed the beginning of the decline overtaking rural areas in the American South, and now even communities and people in America’s heartland who did everything by the book to adapt to the industrial decline still couldn’t win. The economic nationalism agenda clearly spoke to their concerns, even if it was short on viable solutions.

Despite their growing clout within the federal and state governments, the Koch-Tea Party coalition could not field a viable presidential candidate of their own creation, as demonstrated by the succession of inchoate candidates like Marco Rubio, Ted Cruz, Rand Paul, Rick Santorum, Ben Carson, Michelle Bachmann, and the pizza king Herman Cain. The problem was about to repeat itself in 2016, until along came the Donald

A Trump versus Bernie Sanders contest focusing debate on the overlapping issues at the core of both candidates’ campaigns would have been much better for the country and the eventual winner. That did not happen thanks to the Democratic National Committee’s pro-Hillary machinations. Instead, we got a noisy post-truth spectacle that made one candidate look like a sleazy demagogue while the other came across as an opportunistic mannikin compromised by special interests.

The country emerged from the polls more polarised than ever, and the acrimony of the aftermath offered little hope for improvement. The fact that Trump was not part of the Kochtopus and the Koch brothers did not support his campaign offered some hope: Maybe the guy would revert to the former Democrat who was cool with Dennis Rodman on The Celebrity Apprentice. But then again, Vice President Michael Pence was a Koch-funded poodle; Trump promptly loaded his Cabinet with Koch partisans like Betsy DeVoss and Ben Carson.

It was not easy to see where my friend’s “something good will come out this” would come from with these people in charge.

A few days after I arrived in Utah, Trump announced his Muslim travel ban. A wave of spontaneous protests erupted as airport authorities detained several hundred arrivals from abroad including a former Middle Eastern head of state. The mainstream media went into overdrive and anti-Trump posts proliferated on social media, many of them creative, incisive, and entertaining. This and the breaking news about Russia drove a former State Department official to lament that the US has become a “Banana Republic.”

Although a federal judge declared the ban unconstitutional on the first working day following the executive order, a Utah-based friend from Lamu, spooked by the ban, still felt it necessary to travel back to Kenya to escort his wife, who had just received her long-awaited US visa, past airport immigration and security. More significantly, three days later, the LDS church issued a statement opposing the ban.

I argued that the election was the best thing that happened for progressive forces in decades. It woke people up, and saved the world from a hawkish and dissembling Hillary. At least the decades of drift culminating in the aristocratic takeover of party and state by the Clinton dynasty were over

This was unexpected news, as was a University of Utah study that reported most Muslim immigrants found the state more welcoming and adjusting to the US easier in Utah’s family oriented and no-alcohol Mormon culture. I also discovered that the religion’s founder and prophet, Joseph Smith, was actually an abolitionist, and that the Utah territory granted women the right to vote in 1870, 50 years before the federal government legislated universal suffrage by passing the 19th Amendment (Congress responded by disenfranchising Utah women with the Edmunds–Tucker Act, which was designed to weaken the Mormons politically and punish them for polygamy).

Red America is not as monolithic as it may appear in media political narratives. I spent Super Bowl Sunday in Salt Lake City with a houseful of Mexican relatives. More of them were more upset with the New England Patriot’s last minute Trump-style victory than worried about Trump’s wall.

I visited blue America. We convened a large family gathering in Los Angeles, and spent time with friends in San Francisco. There were a lot of Teslas and other electric cars, and a few self-driving vehicles on the freeways, their passengers contently working on phones and tablets.

THE COMING SECESSION OF HOTEL CALIFORNIA?

California is the high-tech future. But it is also the land of a new long-tail market peasantry. Internet-savvy entrepreneurs were surviving by reselling appliances and other recycled items. Co-operatives in the form of Internet-based groups were pooling their knowledge to utilise the online economy.

I have in-laws in LA who subsist by swapping coupons and minimising household costs through scientific shopping for bargains and stocking their freezer with food reduced for clearance.

Despite their struggle to keep body and soul intact, every month they host poetry readings and other cultural events in their home that are attended by dozens of friends and associates more concerned with the fate of the country than their own declining incomes.

The two coasts had emerged as the centre of anti-Trump activism, and some of the protests, like the student protests in Berkeley that forced the administration to cancel an appearance by the Breitbart editor, Milo Yiannopoulos, crossed the line, violating basic constitutional and democratic principles. When I mentioned the retrogressive nature of some of these developments, my friends in California ranted about the new regime and talked about secession in terms that recalled my conversations with the Mombasa Republican Council’s leadership.

I responded by arguing that the election was the best thing that happened for progressive forces in decades. It woke people up, and saved the world from a hawkish and dissembling Hillary. Contributions to the American Civil Liberties Union were spiking; at least the decades of drift culminating in the aristocratic takeover of party and state by the Clinton dynasty were over.

Other developments of the past several months painted a much more nuanced picture of the state of the nation. San Francisco 49ers quarterback Colin Kaepernick revisited the spirit of the Mexico Olympic protest by refusing to stand for the national anthem. In pro-Trump Louisiana, the city of New Orleans took down the statue of Robert E. Lee — the state’s last remaining symbol of the Confederacy. John McCain penned an incisive op-ed in the New York Times underscoring the importance of human rights in foreign policy as an extension of domestic American values. Bob Dylan, the first poet of the counterculture, became a Nobel laureate.

The United States is a highly dualistic nation held together by a strong political centre. The nation’s political trajectory has consistently zigzagged between right and left of centre over the course of my lifetime. The transition from Obama to Trump was consistent with this dialectic

After the election, the website for the largest Tea Party PAC crowed that it took the anti-war movement 25 years to elect one of their own to the White House while they had done the same over the course of two electoral cycles. In reality, the success rate of Tea Party candidates peaked in 2012. Now minority politicians with names like Chokwe Lumumba and Khalid Kamau were winning seats in local government. Unheralded candidates recently won by-elections for seats in New Hampshire and New Jersey districts that had never elected a Democrat.

In his book What’s Wrong With Kansas, Thomas Frank describes how conservatives used religion and the culture wars to flip the formerly progressive state into a Republican stronghold. A decade later, the economy is tanking, while the state’s model education system deteriorates due to the spending cuts instituted by the Koch-supported Governor. Back in another flyover state, there are helped wanted signs everywhere and the Utah economy is booming. The difference is not accidental.

After I returned to Kenya, Bloomberg News published an article entitled How Utah is Keeping the American Dream Alive. The writer begins by confessing, “There’s no getting around it: For a girl raised on the Upper West Side of Manhattan, Salt Lake City is a very weird place.” She then proceeds to detail how the state government is collaborating with Latter Day Saints agencies to provide social protection for the poor while providing job training addressing local demand for skilled and semi-skilled labour. The formula is generating Scandinavian levels of social mobility in a state with a small but committed civil service and the country’s lowest per capita expenditure on education.

FACING AN UNEXCEPTIONAL FUTURE?

In 2017, I found a country not so different from the one I left on the brink of electing Barack Obama. Communication was efficient and uncomplicated; people were without exception polite, helpful, and friendly. The malls were filled with new versions of the usual stuff, and if you shopped smart most of it was much cheaper than it would cost in Kenya. Smoking reefer was laissez faire or just legal. The junk food was healthier, and the country was awash with innovative ideas and creative content. East Africa has changed so much more during the interim. But appearances can be deceptive.

Truth will make a comeback, and there is a world of well-informed and innovative solutions out there to get things going. Once again, it’s looking like my African friends got it right

The United States is a highly dualistic nation held together by a strong political centre. The nation’s political trajectory has consistently zigzagged between right and left of centre over the course of my lifetime. This makes for a lot of contradictions, but also for a more purple Republic over the long run. The transition from Obama to Trump was consistent with this dialectic, which is also a source of American democracy’s distinctive pattern of continuous change and incremental reform. President Trump is the latest exhibit in this tradition, but there are caveats.

The problem is not that Trump’s diagnoses of the nation’s problems were not on target. His vision for making America Great Again, in contrast, is informed by nostalgia, special interests, and backward-looking solutions. Trump’s proposed budget and tax cuts will injure the less educated and economically insecure voters who flocked to his rallies. The jobs at the Carrier factory Trump “saved” from being outsourced to Mexico are to be automated. Many elements of the economic nationalism he showcased on the stump are already in remission, and he is retreating from the foreign policy positions he used to whip up the crowds. He turned the government’s Middle East foreign policy over to the Saudis in exchange for a large order of weapons.

The future of the middle class is uncertain. The accelerating pace of machine learning and artificial intelligence may bring about the economic singularity within a generation. The country I grew up in was about exploration, problem solving, and optimising potential as we moved forward. Now I sense that for many Americans, the future is as murky as the Great Salt Lake on a cloudy winter day.

EVIL WINNERS WHO INVESTED IN PSEUDO-CHARITIES

The Koch Brothers and their friends tried to manufacture a new political culture based on libertarian values, but are really perpetuating the same financial industrial royalty presidents from Jefferson to Eisenhower warned us about. The likes of Bill Gates and Warren Buffet are following the tradition of other American philanthropists guided by noblesse oblige; the super wealthy populating the alt-right are evil winners who invested in pseudo-charities dedicated to advancing their own narrow interests.

Things were humming along until an outsider crashed the party.

Now the Trump presidency is unravelling in the face of problems largely of his own making. Our institutions are engaged, and my only hope is Trump & Co stay in office long enough to take down the whole prevaricating, alternative fact, toxic waste emitting and hate-mongering circus. We have seen worse, and I don’t begrudge the sincere citizens who played their trump card on the Donald having their day in the sun. But now it’s time to sort out the unprecedented crisis of inequality facing capitalism everywhere. Truth will make a comeback, and there is a world of well-informed and innovative solutions out there to get things going.

Once again, it’s looking like my African friends got it right.

Chief Black Hawk went down in flames over Somalia in the early 1990s. This is a missive from beyond the grave, exclusive to The Elephant.

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DEBT AND TAXES: Kenya is living large on borrowed money

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DEBT AND TAXES: Kenya is living large on borrowed money

Kenya’s fiscal policy – the means by which the government adjusts its spending levels, revenue generation and collection, and debt to monitor and influence the economy- has been a defining feature of the current administration. The three have been characterised by almost consistent features and trends.

Some background information is useful. Kenya has had an annual growth rate of about 5.46 percent from 2004 until 2016. Initially, the economy was slated to grow at around 6 percent in 2017 but this has since been revised to 5 percent. According to Genghis Capital, it will actually be between 4.25- 4.75 percent due to the drought-induced contraction in agriculture, the negative effects of the interest rate cap on the financial sector and the prolonged electioneering period. The Government thinks the economy will grow by over 6 percent next year though the World Bank projects a lower rebound to 5.8 percent in 2018 and 6.1 percent in 2019.

Kenya’s economy is primarily services driven and according to the Kenya National Bureau of Statistics (KNBS), under the Kenyatta administration, growth has largely been on the back of government spending on infrastructure projects such as the Standard Gauge Railway (SGR), the expansion of the road network as well as electricity generation and transmission projects. Other significant contributors to growth include a resurgent tourism industry and growth in information and communication, real estate and transport and storage.

Over the past 6 years, government spending has grown at an average of 14.7 percent, yet revenue growth has only increased by 12.7 percent. Under the current administration, spending has gone up by two-thirds, from Sh1.6 trillion in 2013/14 to Sh2.64 trillion in 2017/18.

Back to fiscal policy, we will address each component separately: expenditure, revenue generation and collection, and borrowing.

EXPENDITURE

Over the past 6 years, government spending has grown at an average of 14.7 percent, yet revenue growth has only increased by 12.7 percent. Under the current administration, spending has gone up by two-thirds, from Sh1.6 trillion in 2013/14 to Sh2.64 trillion in 2017/18. While some of this can be explained by inflation reducing the value of money, there is a consistent trend of notable increases in government spending.

Public spending as a % of GDP

(Source: Institute of Economic Affairs)

 

A fundamental problem in analysing fiscal policy at both national and county levels is determining the intended recurrent vs development budgets and comparing these to the actual expenditure pattern. The image below from the Institute of Economic Affairs Kenya (IEA) details this for the National Government:

Share of Recurrent and Development Budgets in Total MDA Budget.
(Source: Institute of Economic Affairs)

Overall, two key trends are clear, the first of which is that the national budget is still geared towards recurrent spending. Indeed, as the Treasury itself has admitted in the past, recurrent expenditure is reaching unsustainable levels.

There are several factors behind this aggressive growth in expenditure, the first of which is devolution. In 2010 Kenyans enacted a new constitution, which established a bicameral Parliament and 47 county governments. At the beginning of the implementation of devolution, a parliamentary report indicated that it would cost at least Sh36 billion to set up. Prior to devolution, it cost Sh6.6 billion per year to run Parliament, but that figure is expected to rise to Sh14.3 billion. The Parliamentary Budget Office has also stated that it will cost Sh21.75 billion annually to run the 47 county assemblies. Thus, while welcome, the reality is that devolution is expensive.

At the beginning of the implementation of devolution, a parliamentary report indicated that it would cost at least Sh36 billion to set up. Prior to devolution it cost Sh6.6 billion per year to run Parliament, but that figure is expected to rise to Sh14.3 billion. The Parliamentary Budget Office has also stated that it will cost Sh21.75 billion annually to run the 47 county assemblies. Thus while welcome, the reality is that devolution is expensive.

Linked to the point above is the public wage bill which, according to the Salaries and Remuneration Commission (SRC), has ballooned from Sh465 billion when the Kenyatta administration took over to Sh627 billion in the 2015/2016 financial year, an annual average growth of 9 per cent. SRC’s projections show that it will be Sh676 billion in 2016/2017. Earlier this year, the International Monetary Fund (IMF) raised concerns, stating that Kenya is among countries that exhibit large increases in the wage bill, particularly in the run-up to elections. IMF is of the view that given Kenya’s rising debt levels (more on this later) the decision to increase spending on public sector wages is a concern as less funds are left over for economically productive development expenditure. The SRC pooh-poohed the IMF’s concerns, stating that wages were actually falling as a proportion of GDP: from 10.3 per cent in 2012/2013 to 9.5 per cent in 2015/2016.

A second factor behind the growth in expenditure, which the government has been eager to finger as the primary reason, has been the investment in infrastructure. According to the Capital Markets Authority (CMA), Kenya’s current estimated infrastructure funding gap is USD 2-3 billion per year over the next 10 years. To address this, government has allocated nearly a third of total budget expenditure to infrastructure between the 2016/17 and 2019/20 financial years.

The World Bank makes the point that the infrastructure investment drive in Kenya needs to be done in a way that is both efficient and sustainable. With such a robust commitment, key questions must be asked. For example, is Kenya investing in the right infrastructure? The Brookings Institution makes the point that a push for more infrastructure only raises economic growth and people’s well-being if the focus is on quality and impact, rather than quantity and volume. Has Kenya fallen short here? Has the government conducted an audit of infrastructure investment and the development it has engendered thus far? Has there been an audit of its quality? How efficient is our investment? Without an answer to these questions, the country risks wasting resources on aggressive infrastructure expenditure that generates no real benefits for its people.

Indeed, the link between infrastructure and economic growth is more tenuous than previously assumed. According to the London School of Economics, most recent studies on infrastructure’s contribution to growth tend to find smaller effects than those reported in earlier studies; this is linked to improvements in methodological approaches. Kenya, therefore, shouldn’t assume that infrastructure investment and development will automatically lead to significant improvements in economic growth. It is time for a fundamental rethink of the scale, nature and efficiency of the government’s spending on infrastructure.

Kenya, therefore, shouldn’t assume that infrastructure investment and development will automatically lead to significant improvements in economic growth. It is time for a fundamental rethink of the scale, nature and efficiency of the government’s spending on infrastructure.

The final issue regarding expenditure is linked to the mismanagement of public funds at both national and county levels. At the national level, allegations of corruption and financial mismanagement are legion and include: the National Youth Service (NYS) affair where the Auditor General stated a loss of Sh1.9 billion; Sh5.2 billion misappropriated at the Ministry of health according to an in-house audit report; mobile clinics valued at Sh1.4 million each being sold to the government at more than 7 times the price then abandoned in an NYS yard; inflated rig charges at the Geothermal Development Company (GDC) in which the Ethics and Anti-Corruption Commission (EACC) found the tender committee culpable and six managers were sent on compulsory leave.

At county level, there are rising concerns with expenditure considering that the national government has sent to the counties more than Sh1 trillion since their establishment in 2013. Research by the International Budget Partnership Kenya (IBPK) reveals that county governments are not making available fiscal documents required by the Public Financial Management Act (PFMA). Only about 20 percent of key budget documents, including fiscal expenditure documents, meant to be online had been uploaded. Indeed, IBPK reports that in some cases, budget allocations are based on lists of projects drawn up by Members of County Assemblies (MCAs). There is no clarity on the criteria governing such allocations, and even less clarity on how county funds are actually spent. There is a distinct air of mischief informing this laxity. It is not a secret that the first iteration of devolution revealed how much autonomy county governments have in the planning and use of funds they receive and generate. This lack of transparency seems to be aimed at facilitating a culture of financial mismanagement and corruption at the county level in an environment where, frankly, no one is holding them accountable.

Further, county governments see themselves as expenditure units, not development units. This needs to change. Rather than concentrating on how much they have to spend, they ought to focus on the development dividends they are responsible for generating. Without this fundamental shift in thinking, county governments will continue to be like spoilt children, forever crying over what they are owed, but with nothing to show for the development they ought to deliver.

For example, 16 firms listed on the Nairobi Stock Exchange issued profit warnings in 2016, which meant less corporation tax could be collected. Additionally, the 7000 jobs lost to downsizing and shuttering of firms, mainly in the banking sector, reduced Pay As You Earn receipts.

The greatest concern beyond the moral question of the financial mismanagement of the public funds of a poor African country, is the issue of how corruption affects spending efficiency. As will be explained later, Kenya is getting into significant debt, particularly to finance development expenditure. If such debt is not being used as efficiently as possible and instead funds are stolen or dubiously spent, the country will be saddled with onerous debt without he means – the improvements in economic performance that were to come from debt financed development projects – to pay it.

Given the factors detailed above, there are several broad changes that ought to be made. At national level, the first recommendation is for government to commit more money to development expenditure and put more effort into actually absorbing the allocations given to the docket.

Secondly, the national government ought to be more consistent in the manner in which it presents data and should make it easier to track planned versus actual expenditure, particularly across the recurrent and development dockets.

Thirdly, large allocations to infrastructure projects need to be audited and a determination made on the effectiveness of the allocations, how funds can be better spent and recommendations on how to improve efficiency.

Finally, national government has to clamp down on financial mismanagement and prosecute and punish culpable officials. Without this, the government’s commitment to ending corruption will be seen as insincere and ineffective.

At county level, there are several issues that ought to be addressed the first of which is that there needs to be a very clear hierarchy of accountability for county expenditure. Governors and the County Ministers of Finance must be held accountable for their spending and individuals need to be punished if found guilty of corruption.

Secondly, counties must comply with the PFMA and provide breakdowns of their expenditure which includes a delineation between recurrent and development expenditure.

Thirdly, the principle of fiscal discipline should carry considerable weight when national government makes county allocations such that responsible use of resources is rewarded and poor performers are punished.

Finally, a citizen-led effort to create a ranking of county governments according to fiscal transparency with a focus on expenditure would likely create pressure on county governments to adhere to their legal obligations. Included in the ranking should be how well they comply with PFMA stipulations, with the top and bottom performers widely publicised.

REVENUE GENERATION AND COLLECTION

Kenya Revenue Authority (KRA) has been falling short of its revenue targets for some time. For example, in 2016/17 total collection stood at Sh1.365 trillion representing a performance rate of 95.4 percent, and a shortfall of Sh66.64 billion- a significant number. In the first four months of this fiscal year, KRA has already fallen behind by Sh40 billion. There are questions as to why revenue collection consistently underperforms. I am of the view that KRA is given unrealistic targets, more informed by aggressive increases in government expenditure and oblivious to the serious constraints that mute tax collection.

Without this fundamental shift in thinking, county governments will continue to be like spoilt children, forever crying over what they are owed, but with nothing to show for the development they ought to deliver.

Revenue generation targets tend to be revised upwards over the course of the year. KRA’s original revenue target for the 2016/17 was Sh1.415 trillion which was later revised to Sh1.431 trillion, an increase of KES 16.24 billion. This is a concern because motivations behind the increases in targets are not clear. Do they perhaps stem from a realisation in Treasury that it cannot raise as much as anticipated in borrowing?

The second constraint is that the macroeconomic environment informs the extent to which revenues deviate from targets. For example, it is estimated that a 1 percent reduction in GDP growth reduces revenue by Sh13.4 billion and as noted earlier, this has been something of a tough year. A similar increase in inflation also requires that revenue targets be raised by Sh13 billion.

This is linked to sectoral issues which can affect the ability of KRA to collect tax. For example, 16 firms listed on the Nairobi Stock Exchange issued profit warnings in 2016 –a rising trend since 2013– which meant less corporation tax could be collected. Additionally, the 7000 jobs lost to downsizing and shuttering of firms, mainly in the banking sector, reduced Pay As You Earn receipts.

Third, government policy decisions, particularly those related to tax policy, affect the ability to generate revenue. For example, the non-implementation of changes to specific excise rates in 2016/17 reduced revenues by nearly Sh5 billion. Additionally, the duty-free importation of essential foods (maize, milk, sugar) led to a revenue loss of over Sh4 billion in the fourth quarter of the same financial year. Indeed, it is estimated that government policy decisions cost it Sh13 billion in lost revenue that entire year. The government tends to shoot itself in the foot in other ways too. For example, delays in remitting income tax from public institutions costs it Sh823 million.

Finally, revenue generation and collection in Kenya like the rest of Africa is negatively affected by illicit financial flows from the country. According to the UN, Africa loses more than US$50 billion through illicit financial outflows per year. Companies evade and avoid tax by shifting profits to low tax locations, claiming large allowable deductions, carrying losses forward indefinitely, and using transfer pricing.

The main reason why consistent subpar revenue collection is worrying is because the national treasury continues to construct budgets based on the unrealistic targets. For example, revenue generated was meant to play a bigger role in the current budget, financing 60.7 percent of the overall deficit and 58.7 percent of the development expenditure. Since it appears as though targets will again not be met, government will have to borrow more than anticipated.

 

There ought to be fundamental rethink of revenue generation and collection in order to effect a sustained increase. There are several factors to address, the first of which is improvements in the business environment that increase profits and thus taxable revenue. A key component that is often ignored here is the environment for the informal economy. Current assessments largely ignore the sector in which 90 percent of employed Kenyans earn a living. More ought to be done to make informal businesses more profitable.

At the same time, the government ought to seek to expand the revenue base by encouraging the formalisation of these businesses. Concerted efforts must be undertaken to pilot schemes that remove barriers to – and create incentives for – formalisation, particularly of larger businesses that easily evade tax yet are robust enough to consistently pay.

As recommended by the Africa Progress Report 2013, alongside demanding the highest standards of propriety and disclosure from their government, Kenyans should push citizens of the developed world to demand similar standards from their governments and companies.

Finally, Kenya needs to work on curbing illicit financial outflows. The UN makes the point that G8 leaders have committed to the 2013 Lough Erne Declaration, a 10-point statement calling for an overhaul of corporate transparency rules. Among other things, the declaration urges tax authorities to automatically share information to fight evasion. It states that poor countries should have the information and capacity to collect the taxes owed to them. Kenya should join other African countries in lobbying rich countries to enact stricter laws against tax evasion. As recommended by the Africa Progress Report 2013, alongside demanding the highest standards of propriety and disclosure from their government, Kenyans should push citizens of the developed world to demand similar standards from their governments and companies.

BORROWING AND DEBT

In 2013, the Jubilee administration inherited a debt of Sh1.7 trillion after a decade of the Kibaki government. Less than 5 years later, that has ballooned by nearly 250 percent to Sh4.4 trillion. This year’s borrowing has been particularly aggressive. The Central Bank of Kenya (CBK) says that the government is borrowing an average of Sh86 billion per month, the highest level since the bank started listing public debt in 1999, and over Sh30 billion more than the monthly averages of 2015 and 2016.

Despite this, it seems the government’s debt appetite won’t wane any time soon. The Treasury recently announced that it is seeking to issue another Eurobond, which could be used to repay the outstanding US$750 million syndicated loan the government raised in 2015 and which came due in October. What seems to be clear is that given expanding expenditure and subpar revenue collection, borrowing from both foreign and domestic sources will continue to grow. Further, as a Bloomberg analyst points out, Kenya has among the highest debt levels in sub-Saharan Africa, partly a result of having neither the commodity revenue sources of Nigeria and Angola nor the budget support from donor countries enjoyed by neighbouring Tanzania and Uganda.

Before looking at the specific features of Kenya’s debt, it is important to state that debt itself is not necessarily a problem. If used wisely, it can fund investment into activities and projects that catalyse economic development, GDP growth and growth in per capita incomes. Concerns only start being raised when the pattern of debt accrual and servicing seems headed in an unsustainable direction. If expenditure is growing in the context of muted revenue generation, that creates momentum for more debt than cannot be sustainably serviced. Further, if debt is not used efficiently and linked to increases in productivity and GDP growth, it also saddles countries with burdensome repayments. At the moment, Kenya is on the cusp where the government can either take decisive action to put the country on a better debt path, or continue with current trends that are edging the country closer to an unsustainable position.

 

The IEA points out that as of June 2012, total public debt was composed of 52.9 percent domestic debt and 47.1 percent external debt. However, the share of external debt has been steadily growing and recent statistics show that today the situation is reversed, with external debt taking up more than half (52.3 percent) of total debt.

The National Treasury Report 2015 indicates that the external debt stock for Kenya is composed of multilateral debt (54.7 percent), bilateral debt (27.1 percent), export credits (1.5 percent), commercial banks (0.6 percent) and International Sovereign Bonds (16.1 percent). As the IEA points out, a large part of the external debt remains concessional (i.e. on terms substantially more generous than market loans) and mainly from multilateral creditors; however, the share of concessional loans has been falling over the last three years which means external debt is becoming ever more expensive for the country.

There are several factors affecting the composition of debt, the first of which is Treasury’s desire to reduce domestic borrowing in order to release domestic credit for the private sector. This was a major reason given for issuing the Eurobond. As shown by the statistics above, he government has stayed true to this intent in some ways. However, the cap on interest rates introduced last year, has perversely facilitated government’ ability to raise domestic debt as banks, reluctant to lend to the general public due to profit margin and risk concerns, have more aggressively pursued government securities. The attractiveness of government debt is thus pushing the domestic private sector out of the domestic debt market, which contradicts government’s original intent.

The Central Bank of Kenya (CBK) notes that the government is borrowing an average of Sh86 billion per month, the highest level since the bank started listing public debt in 1999, and over Sh30 billion more than the monthly averages of 2015 and 2016.

It is important to note that, as reported in The Standard, World Bank data indicates that the average grace period on repaying new external debt has shrunk by half in the last four years. On average, in 2013, the country was given 8.2 years before starting to repay loans. This had reduced to 4.6 years by 2016. Shorter grace periods reduce the government’s room for flexibility and could be an indicator of jittery lenders keen on getting their money back as soon as possible. Indeed, Bank of America Merrill Lynch notes that Kenyan debt underperforms its peers as evidenced by the fact that yield premiums over U.S. debt have not narrowed as much as those of other sub-Saharan debt. In short, Kenya is seen as riskier to lend to than other African countries.

Informed by the expansion in borrowing, Kenya’s fiscal deficit has also grown. Its ratio to GDP has widened significantly from 6.4 percent in 2013/14 to 10.4 percent in 2016/17. The IEA points out that the large increase in deficit partly reflected the financing of the first phase of Standard Gauge Railway (SGR) project.

Fiscal deficit as a percentage of GDP

Fiscal deficit as a percentage of GDP
(source: IEA)

The government is targeting a fiscal deficit of 5.9 percent of GDP, in the 2018/19 fiscal year, down from an estimated 7.3 percent this fiscal year. Others however do not expect this will be met. Genghis Capital thinks Kenya’s budget deficit for this fiscal year will likely reach 8 percent of GDP. Further, the government doesn’t always hit its fiscal deficit projections. Indeed, according to Cytonn Investments, in the 2016/2017 fiscal year, the government’s deficit actually widened to 8.3 percent of GDP, some way above its revised target of 6.9 percent. In any case, despite the efforts it may be making to reduce the deficit, current government targets and performance are still higher than its own preferred ceiling of 5 percent.

 

The IEA points out that as the amount of debt held increased, the cost of debt has also gone up with debt servicing increasing from about Sh19 billion in 1990 to Sh400 billion by the end of 2015. A larger component of debt servicing emanates from servicing of domestic debt, but since the proportion of domestic and external debt to GDP are almost at par, it may indicate that it is costlier to service the former.

Debt service 1980 – 2016, KES billions

Debt service 1980 – 2016, KES billions
(Source: IEA)

There are growing concerns as to how much revenue is being committed to servicing debt. In the first nine months of the 2015/16 financial year, the government spent four out of every 10 shillings it collected as tax to settle debts. In April, the IMF estimated Kenya’s debt-service to revenue-ratio at 34.7 percent against a threshold of 30 percent, and a report in the Business Daily pointed out that in the last fiscal year, the country spent more money to settle debt (Sh435.7 billion) than it did to finance development (Sh394.2 billion). If more and more revenue has to be locked into servicing debt, government will either have to ramp down spending on development (given the relatively fixed burden of recurrent expenditure) or borrow even more, none of which is good.

The IEA also notes that the ratio of debt to GDP rose from 40.7 percent in 2012 to 56.4 percent in June, which merited a ranking of 78 out of 138 countries on the World Economic Forum’s Global Competitiveness Index.

Government Budget and Public Debt as % of GDP

Government Budget and Public Debt as % of GDP
(Source: IEA); GDP is for full year (FY) and measured in thousands; * Provisional estimates

As borrowing continues to grow aggressively, it will lead to higher imbalances that will raise concerns about sustainability.

Views differ on whether Kenya’s debt is sustainable. Some are of the view that given the massive gaps in key sectors such as energy and transport infrastructure, the country must continue to do everything possible to finance and address the gaps and that debt accrued now will pay off in the long term. Kenya remains below the World Bank’s debt-to-GDP ratio ceiling (or tipping point) of 64 percent. The IMF, in its review of Kenya a year ago, said Kenya’s risk of external debt distress remains low but notes there is need for reduction in the deficit over the medium term. While the IMF has raised concerns about Kenya’s public debt, it is below what they view as the applicable ceiling for Kenya – 74 percent of GDP.

The IEA points out that as the amount of debt held increased, the cost of debt has also gone up with debt servicing increasing from about Sh19 billion in 1990 to Sh400 billion by the end of 2015.

Others, however, are of the view that a debt-to-GDP ratio beyond 40 percent for developing and emerging economies is dangerous. The IMF itself envisages fiscal consolidation that targets a 3.7 percent of GDP deficit by 2018/19 (compared to the government’s own target of 5.9 percent) which it says is critical to maintaining a low risk of debt distress while preserving fiscal space for development priorities.

I disagree with the Treasury’s assertions that the national debt is manageable and that there is headroom for more. Kenya’s debt is only manageable if decisive action is taken to reduce expenditure, boost revenue collection and reduce borrowing. If this does not happen within the next three years, the country will start feeling the effects of debt distress.

The credit rating agency Moody’s has already raised concerns about the country’s accumulating debt. Indeed, the agency is currently assessing whether it needs to downgrade the country’s credit rating from the current B1 status on grounds of its weakening ability to repay debt. Moody argues that unless a decisive policy response is introduced, the upward trajectory in government debt will see the debt-to-GDP ratio surpass the 60 percent mark by June 2018, pushing financing costs for the private sector even higher. Its assessment points to the fact that in the latest fiscal year, the government spent 19 percent of its revenues on interest payments alone, up from 10.7 percent five years ago. It notes that persistent, large, primary deficits and high borrowing costs continue to drive government indebtedness ever higher. Further, government liquidity pressures risk, the danger that the government may not have enough readily available cash to settle its immediate and short-term obligations, is rising in the face of increasingly large financing needs.

Another credit rating agency, Fitch, has also indicated that it could downgrade Kenya’s rating due to its debt position. Fitch noted that the country was spending a larger proportion of its revenue on paying debt compared to its economic peers such as Uganda, Rwanda and Ghana.

Fitch gave Kenya a B+ rating, with a negative outlook. These credit ratings are important as a fall in rating will mean any new foreign debt taken on by the country will be more expensive.

 

There are several broad strategies Kenya can use to better manage its debt the first of which is to aggressively reduce expenditure. Government must implement austerity budgets and limit unnecessary expenditure. I also think here should be a fundamental downward review of salaries of those in government. While those of technocrats such as Cabinet and Permanent Secretaries as well as professionals such teachers and doctors should remain attractive, there are far too many people in elected office on overly generous terms, and the related wage bill is not sustainable for a relatively poor African country.

Secondly, government needs to improve its recurrent vs development expenditure allocations. As elucidated before, year after year, more money is allocated to recurrent expenditure which is not economically productive. A reduction in recurrent expenditure is crucial and this can be partially addressed by a downward review in wages as explained above. The IEA points out that although in relative terms the proportion of recurrent expenditure to GDP has slightly declined while that of development expenditure has nearly doubled from 5.7 percent of GDP in 2007/8 to 11.0 percent in 2016/17, recurrent expenditure still remains comparatively high.

In April this year, the IMF estimated Kenya’s debt-service to revenue-ratio at 34.7 percent against a threshold of 30 percent, and a report in the Business Daily pointed out that in the 2016/17 fiscal year, the country spent more money to settle debt (Sh435.7 billion) than it did to finance development (Sh394.2 billion).

Development expenditure should be prioritised by considering projects which bring immediate returns to the economy. More money must be committed to spurring the growth required to pay debts, if Kenya is to avoid a repayment crisis.

Thirdly, government has to create strategies to ensure more development expenditure is absorbed. A November 2017 report by Controller of Budget showed the use of development funds for the financial year ending in June was at 70 percent, the highest since 2013. While this is good news and higher than the 66 per cent rate recorded in the previous year, it is not good enough. Indeed, the organisation Development Initiatives notes that the 2017/18 fiscal year actually saw a decline in total allocations to development spending by 12.3 percent, as a result of lower absorption of development spending by ministries in 2016/17. The problem is at both national and county levels. As Price Waterhouse Coopers points out, if the entire amount allocated is not being absorbed, it defeats the purpose of the budget especially around development expenditure. Given that the country is getting into a great deal of debt for development expenditure, it is crucial that absorption rates in this docket increase in order to spur economic growth.

Fourthly, government needs to better track how the debt which is financing the development docket, is being used. Given concerns with financial mismanagement of public funds at both national and county levels, it is crucial that the debt spending is meticulously tracked. This is because financial mismanagement of debt funds poses the dangerous risk of pushing the country into debt unsustainability as money is pocketed rather spent to generate growth.

 

CONCLUSION

This article has elucidated Kenya’s fiscal policy and position in terms of expenditure, revenue generation and debt accrual. It is important that the country reduces expenditure, increases revenue generation and better manages debt spending to put the country on a more sustainable fiscal path. We are in a position where Kenya’s fiscal health can be dramatically improved by taking decisive action as per the recommendations herein. It is my hope that the government takes the required action to improve the country’s fiscal path so that fiscal policy plays the positive and important role it can in driving the country’s development.

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MIND YOUR LANGUAGE: Roots of the crisis in Cameroon

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MIND YOUR LANGUAGE: Roots of the crisis in Cameroon

Since October 2016, Cameroon – one of the most stable states in a volatile subregion – has been making international headlines. A political crisis – the Anglophone Crisis – is shaking the country to the core. It started as a sectoral crisis – with lawyers and teachers demanding for English to remain the primary language of the education and judiciary systems of the English-speaking part of the country – but later turned into a political crisis after the protests were met with military violence, mass arrests and torture.

A country in turmoil

In November 2016, hundreds of people took to the streets in Bamenda after violence was inflicted on lawyers asking for Common Law and English to remain the basis of the judiciary subsystem and on teachers asking for the non-Francophonisation of the Anglophone education subsystem. At first, many people from the northwest and southwest regions were not for separation or violence; people were peacefully protesting for change. However, denial in official statements and the continuous violent responses from the government led to the emergence of small secessionist groups that are taking advantage of the situation to radicalise local activists and non-activist citizens.

Local groups and parts of the Anglophone diaspora have revived the separatist agenda: some demand federalism, others secession.

On October 1st, thousands of people in the English-speaking regions of Cameroon took part in a peaceful march to symbolically proclaim the independence of Ambazonia, the name of an independent country that would be located in the northwest and southwest regions.

According to an International Crisis Group report, security in Cameroon has deteriorated in the Anglophone regions of the northwest and southwest. To protest against the government’s marginalisation of Anglophones, protestors set fire to seven schools and several shops and, for the first time in Cameroon’s post-independence history, homemade bombs were detonated in mid-September 2017. Between 14th and 20th September, two bombs exploded in the northwest region; there were no casualties. On 21st September, another bomb was detonated at a police station in Bambenda, injuring three police officers. A fourth bob nearly exploded in Douala.

After the explosion, the governors of the northwest and southwest regions imposed a de facto curfew, cutting off the Internet for 24 hours, barring movement between Anglophone divisions, and banning gatherings and demonstrations until 3rd October. Despite these measures, around 50,000 people took to the streets in tens of towns and communities in the northwest and southwest regions on September 22nd, demanding the departure of President Paul Biya, the release of Anglophone political leaders and separation. The date chosen coincided with the president’s speech at the United Nations General Assembly. However, what was supposed to be a peaceful march turned violent in some areas. According to local newspapers, some protesters in Buea vandalised the home of the town’s mayor, who is Anglophone but against the protesters. In Mamfe, a police station was set on fire. Four protesters were shot to death by police forces and several more were injured.

On October 1st, thousands of people in the English-speaking regions of Cameroon took part in a peaceful march to symbolically proclaim the independence of Ambazonia, the name of an independent country that would be located in the northwest and southwest regions. This also coincided with the anniversary of the reunification of Cameroon under French mandate and British Southern Cameroon in 1961.

The response of military forces to the march was the most repressive to date. According to Amnesty International, 17 people were reported dead and more than 200 people were arrested during demonstration. The government put the figure at around 10 deaths, but according to locals, the army killed about 100 people on that day. In total, since the beginning of the crisis in October 2016, at least 55 people have officially been reported dead.

These repressive measures led to retaliation by the populace. People burnt vehicles belonging to the sub-prefect and prefect in Boyo and Fundong (in the northwest), snatched weapons from gendarmes in Kumba (in the southwest), ransacked police stations in Ikiliwindi, Mabanda Teke and Kongle, and threw stones at police and military officers in Buea and Bamenda. Since the beginning of November, four military men have been killed in conditions that are still not clear. Cho Ayaba, a leading member of the political wing of the separatist movement who lives abroad, told Reuters, “Cameroon soldiers are enforcing an occupation. The only thing that will make us stop these attacks is if the regime withdraws. If they stop using the military to impose political exclusion and systematic terror on our people.”

The so-called Anglophone Crisis is not something new, as the international media suggest; it has its roots in the decolonisation era.

Currently, the English-speaking regions of Cameroon have become ghost towns due to general strikes – an initiative taken by the Cameroon Anglophone Civil Society Consortium as part of their long-term protest against a government they deem biased towards French speakers. For a year now, schools have not been fully operational, a lost year for students. In September, the so-called Ghost Town operations continued for three days each week. Several stores and seven schools were burnt down to protest against them opening despite the ban. Paul Biya agreed to release some Anglophone leaders and activists to stop the operations and to prevent the school year from being jeopardised for the second year in a row. However, the releases had little or no effect; enrolment rates remain very low and the ghost town operations are still ongoing.

The root of the crisis

The so-called Anglophone Crisis is not something new, as the international media suggest; it has its roots in the decolonisation era. Despite the fact that the current crisis started as a language issue between Anglophones and Francophones, the problem is not really about language; it is about people fighting for respect, integration and identity.

In July 1884, the German government and the traditional Douala chiefs signed a treaty that established a protectorate called Kamerun. After Germany lost in World War I, the victorious powers imposed punitive territorial, military and economic provisions that led to Germany losing her colonies. Kamerun, which was a former German colony, was partitioned between Britain and France under a League of Nations mandate, which appointed France and Britain as joint trustees of Kamerun. France gained the larger share and ruled its territory Cameroun from Yaoundé. Britain’s territory, Northern and Southern Cameroon – a strip bordering Nigeria from the sea to Lake Chad – was ruled from Lagos. During the period of the mandate and the trusteeship, each colonial power shaped their territories in their own image.

 

A report from International Crisis Group describes the situation clearly:

This resulted in major differences in political culture. English was the official language in the territory under British administration. The justice system (Common Law), the education system, the currency and social norms followed the British model. The system of indirect rule allowed traditional chiefdoms to remain in place and promoted the emergence of a form of self-government to the extent that freedom of the press, political pluralism and democratic change in power existed in Anglophone Cameroon prior to independence. The territory was administered as though it was part of Nigeria and several members of British Cameroon’s Anglophone elite were ministers in the Nigerian government in the 1950s.

 In contrast, the Francophone territory was directly administered by France following the assimilationist model, although colonisers and the traditional elites also practised a form of indirect government, especially in the north of the country. French was spoken and France’s social, legal and political norms shaped the centralist political system of successive regimes. Bogged down in a total war against the nationalist movement (Union des populations du Cameroun – UPC), which challenged French presence, the Francophone territory was less democratic.

Being used to self-administration, Southern and Northern Cameroon were in many ways more developed than French Cameroun, with several industries and a sense of democracy. French Cameroun accessed independence before English-speaking Cameroon on January 1, 1961. British Cameroon was aspiring to independence as an autonomous state, but former colonial powers believed that it would not be economically viable and advocated for not creating microstates. So a referendum took place on February 11, 1961: British Cameroon was supposed to choose between joining Nigeria or the new Republic of Cameroon. Northern Cameroon chose to join Nigeria and Southern Cameroon chose to join the Republic of Cameroon. This led to the independence of Southern Cameroon in October 1961 and the creation of a federal state with a flag with two stars symbolising the two territories coming together – West Cameroon being the former Southern Cameroon and East Cameroon being the former Republic of Cameroon. Both territories were now one under the name United Republic of Cameroon.

Problems started when, despite the constitutional provision stating that English and French were both official languages, French became the language of administration.

A federal constitution approved by the National Assembly of the Republic of Cameroon in August 1961 and promulgated by the then president Amadou Ahidjo in September 1961 was imposed when negotiating the terms of reunification. (Southern Cameroon was then still under the trusteeship of Britain since as it obtained independence on October 1, 1961.)

Centralisation was the governing mode of the former French territory, and the federated state was administrated from Yaoundé, where political leaders held all powers in their hands to the detriment of traditional chiefs whose authority was recognised and respected during the trusteeship. The assimilationist model the former French territory experienced under French trusteeship became its way of governance. In line with the constitutional provision stating that the vice president must be from West Cameroon if the federal president comes from East Cameroon and vice versa, John Ngu Foncha became vice president of the country and prime minister of West Cameroon.

Problems started when, despite the constitutional provision stating that English and French were both official languages, French became the language of administration. Then Amadou Ahidjo divided the country into six administrative regions and appointed federal inspectors in each region. English- speaking Cameroonians were not happy because West Cameroon could not at the same time be a federated state according to the constitution and be an administrative region by decree. The appointed federal inspector had more powers over the region than its prime minister. At the economic level, Ahidjo imposed an exchange rate of £1 to FCFA692 instead of the normal FCFA800, which reduced the purchasing power of the region that still had strong ties with Britain. Then he demanded for West Cameroon to cut ties with Britain, which made the region lose export duty advantages.

Though the southwest and northwest regions play an important role in the economy, especially when it comes to agriculture and trade, and though most of Cameroon’s oil, which accounts for one-twelfth of the country’s gross domestic product (GDP), is located off the coast of the Anglophone region, these regions are still lagging behind.

The economic decline of West Cameroon became evident. Reunification came with the dismantlement of the federal state/region’s economic structures, such as the West Cameroon Marketing Board, the Cameroon Bank and Powercam, as well as abandonment of several projects (the port of Limbé, and airports at Bamenda and Tiko), with investments in the Francophone part of the country having more advantages. The problem still persists to date.

Though the southwest and northwest regions play an important role in the economy, especially when it comes to agriculture and trade, and though most of Cameroon’s oil, which accounts for one- twelfth of the country’s gross domestic product (GDP), is located off the coast of the Anglophone region, these regions are still lagging behind.   As Amindeh Blaise Atabong declared on Quartz, “In Cameroon’s 2017 public investment budget, home region of president Paul Biya, in the south, was allocated far more resources than the northwest and southwest regions put together. Going by the country’s government project logbook for the year, the south region was accorded over 570 projects at a total sum of over $225 million (FCFA 126 billion). For its part, the northwest region had no more than 500 projects to be executed with over $76 million (FCFA 42 billion), while the southwest region had slightly over $77 million (FCFA 43 billion) for over 500 projects.”

When Paul Biya succeeded Amadou Ahidjo in November 1982, he further centralised power. On August 22, 1983, he divided the Anglophone region into two provinces: North-West and South-West provinces. The following year, he changed the country’s official name to the Republic of Cameroon and removed the second star representing the English-speaking part of the country from the flag. (The Republic of Cameroon was the name of the former Francophone territory.) These decisions symbolically killed West Cameroon and assimilated it within the Republic of Cameroon.

The separatist agenda and the way forward

As previously mentioned, the separatist agenda is not a new one. In 1993, English-speaking Cameroonians organised the All Anglophone Conference (AAC) and called for a return to federalism. During this period, Anglophone political leaders Muna and John Ngu Foncha went to the United Nations to demand independence for former Southern Cameroon. The position of the Social Democratic Front (the main opposition party then and now with a strong contingent of English-speaking Cameroonians) was judged to be ambiguous since it was against secession, which led to the creation in 1995 of the Southern Cameroons National Council (SCNC). Since 1996, the SCNC has been demanding secession and has taken its case to the UN, the African Court of Banjul, the Commonwealth and national embassies.

Cameroon cannot afford another armed conflict. The country is already engaged in the fight against Boko Haram in the far north and militias from the Central African Republic in the east. The president has to take drastic and lasting measures to solve the crisis.

Despite the situation being a stalemate, measures have been taken to solve the crisis: there have been several attempts to dialogue; about a thousand English-speaking teachers across the southwest and northwest have been appointed; a Commission for the Promotion of Bilingualism and Multiculturalism has been created; and leaders of the separatist movement have been released. In reality, however, these measures were doomed to fail from the start. Dialogue was actually the government trying to impose its conditions on the English-speaking leaders at the table. And the Commission is nothing but the recycling of former members of government or people with close ties to it.

Cameroon cannot afford another armed conflict. The country is already engaged in the fight against Boko Haram in the far north and militias from the Central African Republic in the east. The president has to take drastic and lasting measures to solve the crisis.

Firstly, the president should act as if he cares about the situation and spend more time on national soil instead of abroad. Secondly, a mediator should be appointed to negotiate high-level talks between the government and the separatists, be they on national soil or from the diaspora, since the diaspora is playing a major part in the movement. Thirdly, each official who has ever been publicly disrespectful when addressing or talking about English-speaking Cameroonians should apologise and resign.

The law on decentralisation promulgated in 2004 should be enforced, not for regions to operate autonomously, but for each of them to be in charge of social and financial development of the region for the sake of the region and of the country as a whole. English-speaking regions of the country are not the only ones suffering from bad governance, so this will be an opportunity for the government to solve the crisis and improve the desperate situation of the country as a whole. The best way to go about this is to work on these issues before the next presidential election that is supposed to take place in 2018.

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CHANGING FACES: How Zimbabwe’s Liberation Movement is Re-Inventing Itself to Hold on to Power

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Changing Faces: How Zimbabwe’s Liberation Movement Re-Inventing Itself to Hold on to Power

Zimbabwe has a new president thanks to what its military chiefs called an “intervention” to “weed out criminals” that were negatively affecting the work of the President.  The actions of the army generals ended up leading to a popularly, if not emotionally, supported removal of President Mugabe, the man they had initially pledged to be acting to protect.

The new president, Emmerson Mnangagwa was sworn in on Friday 24 November 2017.  The state media glowingly called it an inauguration at Harare’s National Sports Stadium at a ceremony attended by at least 60,000 people, including serving presidents from the Southern African Development Community (SADC) member states, Ian Khama, Edgar Lungu and Filipe Nyusi of Botswana, Zambia and Mozambique respectively.

There are multiple reasons why the army and those sympathetic to the ruling party within SADC would not out rightly call the tumultuous political events in Zimbabwe over the last two weeks a coup.  Or why the commander of the Zimbabwe Defence Forces (ZDF) General Constantino Chiwenga and his subordinates would reach such alarming levels of national popularity.

The most obvious reason is that a lot of people in Zimbabwe, the region and the continent were genuinely tired or annoyed by Mugabe’s long stay in power.  His wife most certainly did not help matters in a patriarchal society by insulting those who were long time loyalists (including Mnangagwa) in public. The move by the military, well-choreographed as it was, invariably had a popular veneer to gloss over what it really was, a decision by the military to defy their commander in chief and hold him in captivity. Also generally known in political science studies as a military coup d’etat.

There are multiple reasons why the army and those sympathetic to the ruling party within SADC would not out rightly call the tumultuous political events in Zimbabwe over the last two weeks a coup. Or why the commander of the Zimbabwe Defence Forces (ZDF) General Constantino Chiwenga and his subordinates would reach such alarming levels of national popularity.

The other more significant motivation for the military intervention is that the ruling ZANU-PF party had failed to deal with its succession politics via the clearer political route.  And that the veterans of Zimbabwe’s liberation guerilla war which run from the late 1960s to 1979 and who are recognized in the national as well as the ruling party constitutions, were beginning to stake a claim on who they thought should succeed Mugabe. Initially, and this is to their credit, the Zimbabwe National Liberation War Veterans Association (ZNLWVA) sought the political route to resolving this issue. They were the only members of the ruling ZANU-PF party that consistently asked Mugabe to appoint his successor, much to the latter’s chagrin. Mugabe would insist that his successor would come from the people via congress and that it was only the people who would tell him to go.

The decisive factor to consider, therefore, is how the war veterans eventually got to the stage where their preferred successor, Emmerson Mnangagwa, got fired and made what is with hindsight a startlingly prescient claim as he left for exile in South Africa that he would be back to lead Zimbabwe.  He would also cheekily refuse to meet Mugabe before the latter resigned because the ‘people have said so’.

The war veterans are not only former guerrillas in Zimbabwe’s liberation war. They are also still serving in key command positions in all sections of the National Army, the Police Service, the Airforce and the Prisons Services.  The commander of the ZDF, General Chiwenga is himself a war veteran, and so are all of his subordinates.

In the corridors of the ZNLWVA, it is an open secret that the veterans felt it was the turn of one of their own, or at least one who had undergone military training during the war to take over. This, it was argued by some of the war veterans leaders, was because the nationalists (such as Mugabe, Joshua Nkomo and others) had had their turn at the head of the liberation movement and, more significantly in Mugabe’s case, as head of state and government.

Their consistent argument was that as a liberation movement, due recognition should be given to those that went to war but are still alive and still capable of playing a leadership role in the post-independence ruling ZANU-PF party and its government.  And quite literally, this role meant having ‘one of their own’ being the first secretary and president of the ruling ZANU-PF party. (Mnangagwa is viewed as exactly that by the war veterans.)

And that the veterans of Zimbabwe’s liberation guerilla war which run from the late 1960s to 1979 and who are recognized in the national as well as the ruling party constitutions, were beginning to stake a claim on who they thought should succeed Mugabe.

Zimbabwe’s military is therefore led by those that were and are part of ZANU-PF in two specific respects.  First as a liberation movement and secondly as a contemporary ruling party.   It is also important to note that unless they have been unwell, all service chiefs, including the commander of the ZDF, have religiously attended, the ruling ZANU-PF party’s annual conferences and periodic congresses.

Though they will claim neutrality in politics, their actions clearly indicate that the military top brass is embedded in the liberation struggle claim of being the military wing of what once was a revolutionary movement prior to independence.

When Mugabe used to claim that his party had committed itself to the Maoist dictum that it is ‘politics that always leads the gun’, he probably assumed that those holding the gun had no vested interests.  Nor thought that they could carry out an internally (to the party) and externally (nationally) popular coup.

They did this using a combination of understanding national constitutional and internal ruling party processes and procedures, knowing the then first lady Grace Mugabe’s lack of popularity, and reaching out through cultural events/music to younger Zimbabweans.  (There is a popular musical outfit called Military Touch Movement that, as its name suggests, is rumoured to have close ties to the military establishment).

On the national party processes and procedures, they knew that SADC would never accept anything that they referred to as a coup.  Their carefully choreographed public statements – referring to Mugabe as being confined to his home, and as still being in charge of the country while allowing him to appear at a graduation ceremony and undertake a “State of the Nation” address where he conceded that their actions had his permission – were testament to that. Allowing and urging Zimbabweans, through the ZNLWVA to march on the capital’s streets and closely controlling the domestic media narrative, the veterans managed to get the American and British governments to support their cause through issuing positive statements even as SADC dithered.

The subsequent roping in of the ZANU-PF Central committee to dismiss Mugabe and recommend Mnangagwa to succeed him until not only their extraordinary congress scheduled for early December 2017 but also the harmonized general elections for 2018, entrenched a civilian dimension in what was a military-led deposing of the party leader.

After it turned out Mugabe was ‘refusing’ to resign, a process of parliamentary impeachment that ZANU-PF embarked upon, ironically with the support of the mainstream opposition Movement for Democratic Change-Tsvangirai (MDC-T), sanitized the military change of ZANU-PF leadership.

The generals had however not stopped trying to persuade Mugabe to resign and through a mediation process facilitated by a Catholic priest, eventually got the letter they wanted on 21 November 2017 as parliament sat to impeach their Commander in chief.

When Mugabe used to claim that his party had committed itself to the Maoist dictum that it is ‘politics that always leads the gun’, he probably assumed that those holding the gun had no vested interests. Nor thought that they could carry out an internally (to the party) and externally (nationally) popular coup.

Emmerson Mnangagwa upon his return was well aware of this and made it apparent in his first remarks to his supporters at a rally held at the ZANU-PF headquarters.  He however indicated that he had all along had a hand in this ‘intervention’ by staying in ‘constant touch’ with the generals even though he was in exile.

He also made it clear in his first address as president of Zimbabwe, that he owed his ascendancy to the ruling party.  This is a point that the generals would have no problem with, as they were acting, in the final analysis, in tandem with their role as what General Chiwenga has referred to in previous interviews with the state media as ‘stockholders’ of the liberation struggle and therefore the country. All via the party.

SADC could do little else.  Not least because of the fact that apart from Malawi, Zambia, Seychelles and Mauritius, all of the current governments in the region are led by former liberation movements (Kabila’s in the DRC claims Lumumbist origins to his government).   And they tolerated this military action on a serving president so long there was deference to the ruling party and a modicum of constitutionalism could be salvaged from the process.

For now, with Mnangagwa sworn in as a president to finish off Mugabe’s term as outlined in the sixth schedule of Zimbabwe’s constitution, this would appear to be the case. I am certain that SADC will probably follow up with the new president on the holding of free and fair elections in 2018 as scheduled, which Mnangagwa confirmed in his first speech as president and when he will pursue a full five-year term.

This is not to say ZANU-PF’s military-political complex does not understand the need for ‘performance legitimacy’ despite having the capacity to deploy force for a political outcome. They understand this entirely hence Mnangagwa’s new focus is on the national economy.

SADC will definitively seek a greater role in supervising these elections and closely monitor the role of the military in how they are conducted.  But the ruling party will not worry too much about this as it is already riding on a peculiar wave of popularity that while it is surprised by, it is still very keen to consolidate, not only to renew its stay in power, but also to make it unthinkable for the opposition MDC-T, or any new opposition parties for that matter, to realistically hope to wrestle away power. Also, because the war veterans actively serving in the defence forces have become the guarantors of the ruling party’s succession politics and its ability to stay in power at a time of political crisis.

This is not to say ZANU-PF’s military-political complex does not understand the need for ‘performance legitimacy’ despite having the capacity to deploy force for a political outcome. They understand this entirely hence Mnangagwa’s new focus is on the national economy.  His government intends to introduce free market economic policies and probably do so within the ambit of Chinese-style ‘state capitalism’ which will court foreign direct investment and introduce property rights to the controversial issue of the Fast Track Land Reform Programme (FTLRP).

One of the first acts of his government will be to ease the liquidity crisis and seek the effecting of what Mugabe had referred to as ‘mega deals’ with the Russians and the Chinese in order to create a massive influx of jobs. The American and British governments will be courted to invest in the economy in return for the removal of sanctions and the re-integration of Zimbabwe into Western investor circles. And the Australian government will get promises to protect its mining interests again in return for support in other areas of the national economy.

What is apparent is that in the aftermath of this military intervention, there is limited scope for a value based politics in Zimbabwe. The now very popular actions of the ZDF in tandem with the political endorsements of ZANU-PF have left a void that the opposition cannot fill.

While this temporary and highly politicized economic shift is underway, the opposition will be courted with carrots such as support for the livelihoods of some of its leaders along with deferential treatment.  But essentially, they will be a divided lot that will be unable, barring a miracle, to defeat Mnangagwa’s militarized but popular version of ZANU-PF in what the latter will be at pains to prove to SADC, the African union and the world, is a free and fair 2018 election.

What is apparent is that in the aftermath of this military intervention, there is limited scope for a value based politics in Zimbabwe. The now very popular actions of the ZDF in tandem with the political endorsements of ZANU-PF have left a void that the opposition cannot fill. That void is the inability to articulate what would have been a democratic alternative to ZANU-PF rule, especially given the backing of war veterans in the military and the neo-liberal global west and east in their pursuit of markets, minerals and military dominance.

As it is Zimbabweans must brace themselves to be governed by a military–political complex that claims legitimacy on the basis of national liberation and assumes it can re-create itself in subsequent generations of not only civilians, but also those that would serve in the defence forces.  All in aid of an intended perpetuation of ZANU-PF’s hold on political power and the cosmetic maintenance of a hapless and long suffering political opposition.

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