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RIDING THAT TRAIN, HIGH ON COCAINE: Standard Gauge Railways In Kenya and Tanzania

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China colonises Africa
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Kenya has both narrow and standard gauge railways running in parallel between Mombasa and Nairobi. Tanzania is gearing up to build a standard gauge line to Morogoro and beyond while it goes ahead with rehabilitating the existing metre gauge line. The SGR is portrayed as an ambitious regional policy linking the six EAC countries, but without unprecedented cross-border cooperation and financial commitments, it is likely to end up as two costly unfinished initiatives: Luxury passenger trains from Mombasa to Nairobi and Dar to Morogoro and (maybe) Dodoma. As collateral damage, these politically driven projects sound the death knell of the existing railway networks, including moribund branch-lines, which have suffered from decades of neglect and poor management.

For better or for worse, most cross-border freight will continue to be transported by road thanks to the private fleets of trucks built up during the post-liberalisation years in Kenya, Tanzania and Uganda

For better or for worse, most cross-border freight will continue to be transported by road thanks to the private fleets of trucks built up during the post-liberalisation years in Kenya, Tanzania and Uganda. The political influence of the trucking lobbies will help keep the roads in a reasonable state of repair. In theory, China’s One Belt One Road initiative includes the EAC-wide SGR, but in practice the rollout of the new railway will depend on intra-EAC politics, the availability of Chinese loans, or other funding, such as a sovereign “railway bond.” Going further down this route would be a recipe for disaster.

KENYA: A NEW ‘LUNATIC EXPRESS’?

“In terms of industrialisation and job creation, the impact of the SGR will be massive.”[1]

On May 31, President Uhuru Kenyatta inaugurated the Madaraka Express, thus fulfilling one of his 2012 election promises ahead of the 2017 election. If as seems likely, he retains the presidency, he will be looking for funds to continue the Express to Naivasha and beyond. The government has sold Kenyans the notion that SGR is preferable in all respects to the existing metre gauge. It is modern, faster, safer and capable of carrying greater loads, Kenyans are told. The country’s overused and murderous roads will be given a breather as freight and passengers revert en masse to rail.

Implausibly large increases in freight are required to justify the costs involved, particularly if the SGR is to extend beyond Nairobi. At $3.8 billion, the first section of the SGR is considered highly overpriced

More sober analysis suggests that, beyond short-term gains in terms of greater customer convenience, the SGR is likely to be economically and financially unviable. Implausibly large increases in freight are required to justify the costs involved, particularly if the SGR is to extend beyond Nairobi. At $3.8 billion, the first section of the SGR is considered highly overpriced.[2] To continue the line from Nairobi to the Ugandan border would cost an additional $7.2 billion, nearly double the cost of the Mombasa-Nairobi stretch.[3] Speed is not a key issue for freight, which is where the potential profits lie. What matters is cost, predictability and reliability.[4] For the projected freight volumes and axle loads, upgrading the metre gauge would have been quite adequate, some argue, at a fraction of the cost of SGR, and could have been entirely financed through the Railway Development Levy on imports.[5] SGR’s purported advantages over other gauges have been over-hyped: Brazil and South Africa move much more freight than the EAC is ever likely to with metre gauge and Cape Gauge respectively. As to being modern, the standard gauge has been around since the 1840s, when the US government declared it as the standard to be followed in all future railway construction for interconnectivity purposes.[6]

Currently, 95% of the freight leaving Mombasa goes by road and three-quarters of all freight is destined for Nairobi. Extending the SGR beyond Nairobi is unlikely to be economically viable. Trains cannot compete with trucks for scattered destinations in Kenya and further afield.[7] Last, anything near the cost of the Mombasa to Nairobi line ($5.6 million per kilometre) would be difficult to sell to Kenyans or potential financiers, and a more reasonable construction cost per km would lay bare the rip-off of SGR Part 1.

Qalaa Holdings, the main Rift Valley Railway (RVR) concessionaire, are rightly worried that the SGR will put them out of business. In 2014, RVR received a $70 million loan from a consortium of international financing agencies, as part of their $287 million financing plan for the period 2011-16. Though progress has been slow, RVR has at least increased its freight volumes, from under a million tonnes in 2012 to 1.5 million tonnes in 2014.[8] In April, Kenya Railways Corporation served RVR with a termination notice for failing to pay fees and missing performance targets.[9] Uganda is also terminating its agreement with RVR, who are likely to sue the GoK /GoU for the loss of business occasioned by the opening of the new line.[10]

By the standards of political corruption in Kenya, the SGR arguably represents considerable progress. Whereas the Goldenberg and Anglo-Leasing scams involved simple looting of the Kenyan Treasury over largely bogus projects, the SGR gives Kenyans a spanking new railway

There is a view that KRC and Uganda Railways Corporation were never happy with the privatisation of the “lunatic express,” which was heavily leveraged by donors, and that the SGR will serve to kill it off once and for all. If this happens, there will be no freight service to Kampala until the SGR is extended. Moreover, all the narrow- gauge branch lines that could have been rehabilitated will be closed down once and for all.[11]

By the standards of political corruption in Kenya, the SGR arguably represents considerable progress. Whereas the Goldenberg and Anglo-Leasing scams involved simple looting of the Kenyan Treasury over largely bogus projects, the SGR gives Kenyans a spanking new railway that will whizz them between Mombasa and Nairobi in double quick time with (hopefully) minimum risk to life and limb. No wonder wananchi are cheering. Even if the railway is (say) a billion dollars (Ksh100 billion) overpriced, that’s still a snip compared with the cost of Goldenberg (an estimated 10% of GNP)! Unfortunately, the cost of running uneconomic services may in the long-run exceed the cost of Goldenberg and Anglo-Leasing combined.

But equally sobering is the fact that just to build the Mombasa to Kampala SGR would cost in the region of a quarter of Kenya’s 2015 GDP at present estimates. There must be other priorities.

TANZANIA: PLAYING CATCH-UP?

“The new train is expected to travel at high speed of 160 kilometres per hour…”[12]

President Magufuli’s SGR initiative is his flagship infrastructure development project, but finding finance has proven problematic.[13] In January 2014, the SGR process was endorsed enthusiastically by the Davos World Economic Forum, attended by President Jakaya Kikwete. An agreement signed in May 2015 with the China Railway Materials Group proposed a standard gauge line from Dar es Salaam to Mwanza, Kigoma and Msongati in Burundi costing $7.6 billion. China’s Exim Bank would fund 10% of the project, which was partly justified as a means of accessing large mineral deposits in Tanzania and Burundi, while Tanzania was tasked to find the balance from private sources. Rothschild, one of the world’s largest financial advisory groups, was hired as a contract advisor, and it was hinted that a consortium of private financiers was being assembled. No such consortium emerged, and there has been no more talk of private finance. [14] In February 2016, Minister of Finance Philip Mpango “set the record straight,” declaring that “Tanzania cannot afford financing the SGR project using our own funds.”[15]

Why did Tanzania decide that it too wanted to go SGR when the experts warned that it was not a good idea? In a 2009 study, Canadian Pacific Consulting Services concluded that the benefit of replacing metre gauge by standard gauge in East Africa would be ‘marginal.’

Consequently, the contract with the Chinese was cancelled over alleged irregularities in the tendering process. Seeking alternative finance, President Magufuli unsuccessfully approached South African President Jacob Zuma for a loan from the BRICS bank, and the World Bank president Dr Jim Yong Kim for an IDA credit.[16] Turkish President Recep Erdogan was also lobbied during an official visit.

In April this year, Magufuli settled for a Phase 1 SGR from Dar to Morogoro (194km) costing Tsh1 trillion ($450 million), to be financed out of the country’s development budget. The contract was awarded to a Portuguese-Turkish consortium, said to have been the only bidder.[17] Phase 2 should see the line extended from Morogoro to Dodoma (263km), for an additional Tsh1.5 trillion ($675 million).

Why did Tanzania decide that it too wanted to go SGR when the experts warned that it was not a good idea? In a 2009 study, Canadian Pacific Consulting Services concluded that the benefit of replacing metre gauge by standard gauge in East Africa would be “marginal.” The conversion of the rail backbone to standard gauge was considered “cost prohibitive” using “even the most optimistic” traffic and income projections. [18] In a 2013 study, the World Bank concluded that rehabilitating existing lines was the most promising option, with a cost of $0.18 million per km compared with $3.25 million per km for standard gauge, or 18 times more.[19] But earlier feasibility studies claimed the SGR was viable. For example, in 2003, the African Development Fund financed a feasibility study for a standard gauge line from Isaka in Tanzania to Kigali and Bujumbura (1,435km) that declared the project feasible and “attractive to private investors.” This and subsequent detailed engineering proposals costing millions of dollars were based on the assumption that the new line would be built from Dar to Isaka (953km)![20]

Like Kenya, Tanzania has a poorly performing railway linking Dar to the rest of the country.[21] In November 2016, Prof Makame Mbarawa, Minister of Works Transport and Communications, told a transport sector meeting of officials and donors that the government planned to both rehabilitate the existing Central Line and start the construction of the SGR. On June 2, Reli Assets Holding Company Ltd (Rahco), issued tender documents to rehabilitate the existing railway from Dar es Salaam to Kilosa, a distance of 283km, using funds from the World Bank’s $300m Tanzania Intermodal Rail Development Project (TIRP). Launched in 2014, TIRP has had a hard time getting off the ground. It appears that while Rahco was negotiating the rehabilitation project with the World Bank, discussions were also going on with the Chinese for an SGR loan. While rehabilitating the Central Line makes sense, and is long overdue, doing this and launching the SGR concurrently makes no sense at all.[22]

While rehabilitating Tanzania’s Central Line makes sense, and is long overdue, doing this and launching the SGR concurrently makes no sense at all

Tanzania aspires to replace Kenya as the largest economy in the region, and this rivalry spills over into reciprocal trade restrictions and disagreement over the Economic Partnership Agreement with the European Union that hinder rather than promote regional integration. Inter-regional trade is said to be declining.[23] It is to be hoped that the two countries will not get involved in a wasteful beggar-thy-neighbour competition over who can build the swankiest SGR to capture the modest business in the region, especially freight, including that of their landlocked neighbours.

EAC: CO-OPERATION OR COMPETITION?

The completion of the Mombasa-Nairobi section of the SGR does not guarantee that the remainder of the Kenyan portion to Kisumu and then on to the Ugandan border will be financed, let alone the Ugandan and Rwandan sections. Though China’s Exim Bank has financed the major part of the construction to date, it appears reluctant to advance further credit without guarantees that Uganda is committed to the project.[24] Both Rwanda and Uganda are weighing up the pros and cons of the Kenyan and Tanzanian SGR options.

The early promoters of the SGR sold the project as a major step towards East African integration and economic development, including stimulating mineral exports from the EAC, DRC and elsewhere. But the above discussion suggests that, far from constituting a co-ordinated strategy to promote EAC economic integration, the two SGRs in progress are competing for much of the modest cross-border freight business. Dar and Mombasa ports compete for transit traffic. When Dar announced in 2016 that it planned to impose VAT on goods in transit, importers switched to Mombasa.[25] Realising its mistake, the Tanzanian government removed the VAT, and now hopes to attract business back from Mombasa, helped with a $150 million loan from China to upgrade the port’s handling capacity.[26]

The completion of the Mombasa-Nairobi section of the SGR does not guarantee that the remainder of the Kenyan portion to Kisumu and then on to the Ugandan border will be financed

Two-thirds of the cargo arriving in Dar port stays in Tanzania, most of the rest heads for DRC, Zambia, Burundi and Rwanda. Most Mombasa cargo stops at Nairobi, as already pointed out. Thus, given the modest volume of freight destined for landlocked countries, the justification for an EAC-wide SGR cannot be based on facilitating cross-border trade, or its likely increase in volume in the foreseeable future. SGR apologists simply ignore the economics of the huge investments required to capture such little business. If one SGR is less than obviously viable, then two can only be disastrous.

KEEP ON TRUCKING?

One key element rarely discussed in all this is the robustness of road transport throughout the region. Since trade liberalisation, Uganda, Tanzania and Kenya have built up impressive fleets of trucks carrying both fuel and containers, and road haulage has largely replaced rail, reflecting the dynamism of the private trucking sector compared with the inefficiently managed and undercapitalised state railways. Pro-road policies have been lobbied for by business associations with the support of ruling elites, themselves involved in trucking. Passengers have also migrated to privately owned buses.

The question from an EAC transport policy perspective is how state-owned railways can claw back enough trade from the trucking industry to become profitable without state subsidies, the use of force, or additional taxes. In an age where commercial activities are overpoweringly undertaken by the private sector, the move to SGR looks suspiciously like an attempt to replace relatively efficient, competitive private enterprises by state-owned monopolies. Already, importers are getting ready to resist any attempts by the GOK to force traffic onto the SGR.[27] According to one commentator on Tanzania’s proposed SGR, President Magufuli will “have to deal with the truck cartels… that have succeeded for over 40 years in keeping the government out of railway construction and maintenance.”[28] Though perhaps an exaggeration, the concern is real for all three EAC giants. Arguably more important, aid agencies have poured billions of dollars into road construction and upgrading throughout the region, much of the work undertaken by Chinese contractors.

Since trade liberalisation, Uganda, Tanzania and Kenya have built up impressive fleets of trucks carrying both fuel and containers, and road haulage has largely replaced rail, reflecting the dynamism of the private trucking sector

To plan implementable Community-wide infrastructure initiatives for the EAC rather than ad hoc bits and pieces would require an empowered EAC Secretariat with both technical competence and a delegated political mandate. SGR initiatives to date reveal that neither condition holds.[29] In March 2017, Fred Mbidde, the chair of the East African Legislative Assembly’s Committee on Communication, Trade and Investments, complained of “minimal collaboration between the regional projects.”[30] So we can expect more of the same: Dar competing with Kenya for transit trade and economic dominance, while the landlocked countries blow hot and cold on which rival to support, if any.

Politics trumps economics, as is often the case

Our presidential ruling elites are not driven to endorse major investment decisions involving private or state capital on the basis of techno-economic arguments. Their decisions are driven by short-term political considerations. When people like Kiriro wa Ngugi,[31] David Ndii[32] and John Githongo[33] blow large holes in the claims of the SGR apologists on technical, fiscal/financial and governance/corruption grounds, they are met with threats, not evidence-based counter-arguments. “No one and nothing will stop us from building the railway…” stormed Deputy President William Ruto in response to critics.[34]

For the most part, our ruling elites think short-term. Long-term concessional finance for large capital investments is attractive because the current incumbents will be retired by the time the bill arrives for the reckless projects they are committing us to today

For the most part, our ruling elites think short-term. Long-term concessional finance for large capital investments is attractive because the current incumbents will be retired by the time the bill arrives for the reckless projects they are committing us to today.[35] This helps explain why mobilising state power behind the SGR may even appear to undermine the elite’s own business interests in trucking. As long as politics is in control, elites and their supporters are confident that their trucking interests will not be threatened.

WHITE ELEPHANTS IN A CHINA SHOP?

As part of its One Belt One Road initiative, China is busy funding infrastructure, including railways, across Asia, worth up to a trillion dollars. East Africa’s SGRs are perhaps the end of the One Belt line. Beyond this, China is building long-haul and urban railway systems in 35 African countries.[36] Is China overreaching itself? The strict conditions placed on further loans for the Kenya-Uganda line suggest that China is becoming increasingly circumspect in its lending practices, worried perhaps that borrowers will start defaulting on their loans. For Africa, this wouldn’t be the first time. The Africa-wide debt crisis at the end of the last century was the result of decades of borrowing from the World Bank, IMF and other official sources, much of it on uneconomic and unsustainable projects. The debts currently piling up through soft loans from China and other sources are potentially fuelling a second debt crisis that will in turn trigger another round of debt relief. But the Chinese terms for a bail-out are unlikely to be as generous as those of the donors at the end of the last century.[37] Tying debt rescheduling to commodity exports to China, including food, is one imaginable scenario should defaults become an issue.

East Africa’s enthusiasm for the SGR solution to infrastructural constraints, for which China ultimately bears responsibility, is not going to significantly improve the region’s overall transport system or competitiveness, and at tremendous cost

Without an efficient “intermodal’” transport system in place in the region – including ports, roads, and railways – economic dynamism is seriously compromised. East Africa’s enthusiasm for the SGR solution to infrastructural constraints, for which China ultimately bears responsibility, is not going to significantly improve the region’s overall transport system or competitiveness, and at tremendous cost.

The challenge is how to temper politically motivated, short-term decision-making with a strong dose of economic and financial rationality. In this respect, for the moment, the EAC, and most of its external supporters, are failing badly.

By Boyce Sarokin
Mr Sarokin is an independent researcher based in Arusha, Tanzania

 

ENDNOTES

[1] Kenyan Cabinet Secretary for Transport and Infrastructure James Macharia quoted ahead of the opening of the SGR from Mombasa to Nairobi. See: Xinhua 2017. “Kenyans upbeat ahead of new railway launch,” Guardian, 31 May.

[2] http://www.bbc.com/news/world-africa-40171095.

[3] Allan Olingo 2017. “Through Beijing, East Africa is upgrading its roads, railway and ports,” The EastAfrican, May 20. Different sources give different cost estimates.

[4] ‘Freight traffic operations are much more dependent on price and service delivery (predictability of time of arrival at the destination) than on actual speed between stations. The extra speed capabilities of SGR therefore provide limited advantage over a metre gauge operation.’ Africon Ltd 2011. “The East African Trade and Transport Facilitation Project, Part II: Transport Strategy,” East African Trade and Transport Facilitation Project, EAC, November, page 61. The estimated cost (EARMP 2009) of upgrading the entire EAC railway network to SGR was between $13 billion and $29 billion.

[5] See Kiriro wa Ngugi at: https://www.youtube.com/watch?v=IgbARMS1pyY.

[6] https://www.youtube.com/watch?v=hMUP_XMi434. The first commercial train, George Stephenson’s Rocket (1824), ran on what was to become the US standard gauge. http://www.custom-qr-codes.net/history-steam-locomotive.html

[7] Rail costs need to be 15-20% lower than trucks to compete. Unlike trains, trucks provide door to door services on demand.

[8] http://www.railjournal.com/index.php/freight/rail-freight-traffic-increases-in-kenya.html?channel=000.

At its peak in 1973, the railway transported 4.4 million tonnes.

[9] http://www.businessdailyafrica.com/news/Kenya-to-review-RVR-termination-notice/539546-3884948-xjptjf/index.html.

[10] The concession gave RVR a 25-year monopoly of railway services.

[11] Claims to the contrary by the GOK notwithstanding. See: Allan Olingo 2017. “Kenya to maintain sections of metre gauge rail linking old stations with SGR,” The EastAfrican, June 10.

[12] Florence Mugarula 2017. ‘Far reaching socio-economic benefits of SGR’, Business Standard, 18 April.

[13] Samuel Kamndaya 2015. ‘Sh60tr needed for mega projects’, Citizen, 3 September.

[14] Brian Cooksey 2016. ‘Railway rivalry in the East African Community’, GREAT Insights Magazine, Volume 5, Issue 4. July/August 2016 http://search.ecdpm.org/?q=*&fld_posttype=GREAT+insights+magazine&fld_author=Brian+Cooksey

[15] Christopher Majaliwa 2016. ‘High costs stymie standard gauge plan’, Daily News, 6 February.

[16] http://www.theeastafrican.co.ke/business/Tanzania-struggles-to-finance-SGR/2560-3935412-rggugq/index.html

[17] Athuman Mtulya 2017. ‘Issue sovereign bond to fund railway project, govt advised’, Citizen, 30 April.

[18] CPCS 2009 ‘East Africa Railways Master Plan Study’, East African Community Secretariat.

[19] World Bank 2013. ‘The Economics of Rail , Gauge in the East African Community, Africa Transport Unit, August.

[20] Craig Mathieson 2016. ‘The political economy of regional integration in Africa: the East African Community’, ECDPM, January, http://ecdpm.org/peria/eac.

[21] Managed separately, the Chinese-built and heavily indebted TAZARA railway from Dar to Zambia uses the 3ft 6in Cape Gauge. Jointly owned and managed by Tanzania and Zambia, TAZARA had accumulated debts of USD787m in 2016, blamed on ‘weaknesses in management’. See: Jaston Binala 2016. ‘Plans underway to revamp Tazara railway’, East African, 14 May.

[22] To prepare the way for the SGR, many legal commercial structures and over 250 houses in Dar es Salaam worth billions of shillings have been summarily demolished without warning or compensation. See Hellen Nachilongo 2017. ‘Tears, heartbreak as houses near railway line demolished’, Citizen, 12 March; Mwassa Jingi 2017. ‘Why the latest demolitions in Dar were illegal’, Citizen on Sunday, 19 March.

[23] James Anyanzwa 2017. ‘EA states looking outward for trading patners as local ties sour’, East African, 1 July.

[24] Frederic Musisi 2017. ‘Tanzania Starts Construction of Railway Line Link to Uganda’, Monitor, 16 April

[25] Abduel Elinaza 2016. ‘Dar Port in massive transit cargo traffic volume slump’, Daily News, 3 April.

[26] https://eblnews.com/…/china-inks-multimillion-dollar-deal-expand-dar-es-salaam-port

[27] ‘Cargo transportation should be based on what the importer wants, not what the government wants.’ See: Njiraini Muchira 2017. ‘Mandatory SGR use causes unease among importers’, East African, 11 March.

[28] Attilio Tagalile 2015. Blessing and hatred from Chinese aid’, Guardian, 13 December.

[29] Craig Mathieson 2016, op. cit.

[30] Zephania Ubwani 2017. ‘EA states faulted on railway project’, Citizen, 11 March.

[31] https://www.youtube.com/watch?v=IgbARMS1pyY; https://www.youtube.com/watch?v=rk4lJKgB4RU.

[32] https://www.kenya-today.com/politics/david-ndii-jubilee-spent-sh4-5b-19th-century-old-school-chinese-locomotives.

[33] https://www.standardmedia.co.ke/article/2000218960/eurobond-sgr-heists-to-finance-2017-election-campaigns-claims-githongo.

[34] Quoted in Cooksey op. cit. In Tanzania, neither civil society nor the media has challenged SGR decision-making.

[35] ‘The loan … from EXIM Bank of China comprised of a concessional loan of USD 1.6 billion and a commercial loan of USD 1.63 billion. The concessional loan is for 20 years and has a grace period of 7 years and an interest rate of 2% per annum while the commercial loan is for 10 years and grace period of 5 years…’ http://bankelele.co.ke/2017/05/funding-the-sgr.html.

[36] According to SMARTRAIL WORLD: ‘the most crucial factor in the developing African rail industry is … the influence of China, who despite warnings on their own domestic economy, are continuing to invest huge sums in the continent.’ See: Smartrail World 2016. ‘Special report: How five major African rail projects are supported by China’, 10 November. https://www.smartrailworld.com/five-major-african-projects-supported-by-china.

[37] That is, prepare and implement Poverty Reduction Strategy Papers, underwritten with more aid.

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Mr Sarokin is an independent researcher based in Arusha, Tanzania.

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The Real Story Behind the Dams Scam

6 min read. President Uhuru Kenyatta’s decision to cancel the tender for the construction of the Kimwarer dam but to allow for the Arror dam project to proceed at half the original cost has been viewed as a commendable action in the fight against graft. However, ALESSANDRO DA ROLD and LORENZO BAGNOLI suggest that there could more than meets the eye in what is known as the “dams scam”.

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The Real Story Behind the Dams Scam
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Since the 1970s, Kenya has been considered by convicted Italian criminals as a safe haven – a place to hide from justice. A recent tide has, however, occurred and now some of these criminals have been extradited after spending years enjoying the “good vibes” of the Kenyan sea shores, especially in their stronghold Malindi. It seems to be the end of an era marked by impunity as Kenyan authorities have started pursuing alleged felonies committed by Italians living in Kenya. The authorities are not just going after individuals, but companies as well.

On the 29th of July this year, the Milimani Chief Magistrate’s court in Nairobi allowed Kenya’s Director of Public Prosecutions (DPP), Noordin Haji, to issue an arrest warrant for the Italian citizen Paolo Porcelli, the CEO of CMC (Cooperativa Muratori e Cementisti) from Ravenna. Porcelli is charged with abuse of office, bid-rigging and misuse of public funds and could face jail time if he returns to Kenya. With him on the list of the indicted there is also the Italian joint venture between the Italian companies Itinera (Gavio Group) and CMC.

Porcelli declined to appear in court twice. “Porcelli is a fugitive. Despite being given the opportunity, he hasn’t presented himself in court for a second time,” DPP Special Prosecutor Taib Ali Taib told the court. “The Italians think they can break the law and get away with it contemptuously. They believe nothing will come out of it.  Don’t allow it, your honour”.

Porcelli’s lawyers have a different opinion on his judicial status in Kenya: they explained that the indictment has charges only against the Kenyan top officials involved in the case. “It is not clear, and it is not explained [by the investigators] why Mr Porcelli and the joint venture CMC-Itinera could be indicted for the only charges they have, namely cashing in the deposit on the construction as it was agreed upon the contracts.”

The arrest warrant issued to the Italian manager is the latest development in a long saga reported in the international media as the “dams scam”. This story has many facets: the alleged criminal conduct of the Italian company in Kenya (CMC declines any involvement, claiming its innocence); the blatant lies and unfulfilled promises to the local population living around the proposed dams area; and the way local politicians turned Kenya’s natural assets into a personal gold mine.

The CMC’s long nightmare

CMC is a giant company in the field of construction globally. Wherever there is an important tender, the company is among the bidders. However, the glorious history of the company didn’t guarantee CMC’s success – construction is a competitive sector around the world. Sometimes to be awarded a tender, managers have to cross the line between lobbying and corruption.

In 2014, CMC signed a consultancy contract with Primo Greganti, a businessman and former politician who was arrested for alleged corruption: he would have helped some companies to be granted tenders for the construction of the site of Expo Milan 2015, the world food exhibition hosted in the Italian city.  The trial ended in a plea: in the Italian judiciary system, it means there is no verdict on the culpability of the defendant.

This story has many facets: the alleged criminal conduct of the Italian company in Kenya; the blatant lies and unfulfilled promises to the local population living around the proposed dams area; and the way local politicians turned Kenya’s natural assets into a personal gold mine.

The company was effectively granted a six million euro tender for the recovery of the land of the so called “plate”, the foundation for the exhibition facilities. At the end of the work, the final cost skyrocketed to 30 million euros because of differences caused by unexpected changes in the project. These extra costs were heavily criticised by the Expo 2015 board members because there were no grounds for justifying them. But because time for the construction at the site was running out, nobody within the board could reject the CMC’s requests. CMC was also awarded the tender for the construction of one of the French pavilions at the exhibition.

In May 2018, the company issued a press release on its financial situation. Under “total turnover” it reads: “Decreased from €289.0 million to €258.2 million. In particular, construction revenue decreased from €278.0 million to €236.7 million, due to a €23.0 million reduction overseas and an €18.3 million reduction in Italy. A significant increase is expected from certain projects achieving full production stage and from the start of the new project secured in recent quarters.”

In another press release issued in November last year, the company stated: “The Board unanimously concurred that, in a market context that was already structurally problematic, for reasons that arose spontaneously without any predictability, linked to non-receipts of orders and/or the state of progress of work, the Company is facing a moment of cash-flow tension.”

The main “non-receipts of order” at that time was Anas, the Italian company partially controlled by the state and in charge of maintaining and managing Italian highways. With the Kenya dams tender, it seemed that the cash flow problem might be solved. Kenya and Nepal were at that point considered as possible anchors that could recover the company’s accounts. One of the primary goals of the managers, therefore, was to immediately cash in on the advances made on work yet to be carried out. And this is when new problems arose.

The masterminds targeted by the investigation

CMC in Kenya has been granted contracts worth almost 800 million euros for the construction of the dams at Arror and Kimwarer. The awarding of the tender was officially presented during a meeting between the former Italian Prime Minister, Matteo Renzi, and President Uhuru Kenyatta. Both projects were expected to provide water to the population of the Rift Valley. According to the 2017 annual budget of CMC, Kenya was among the list of countries that contributed to expand the productivity of the company. Two years later, the situation is totally different.

In Italy, the authors of this article have since March been investigating the Kenyan dams case for La Verità, a right wing newspaper. The newspaper discovered a contract signed in 2013 between CMC and Stansha Limited, the company associated with the Lamu West MP, Stanley Muthama who was arrested on 28th June for tax evasion. It is a consultancy contract granting Muthama a fixed fee of 3 per cent in case CMC signs a contract with local development authorities in Kenya.

CMC in Kenya has been granted contracts worth almost 800 million euros for the construction of the dams at Arror and Kimwarer. The awarding of the tender was officially presented during a meeting between the former Italian Prime Minister, Matteo Renzi, and President Uhuru Kenyatta.

In that case, it was the Itare dam, another project to supply water in the Rift Valley, which apparently is not included in the current investigation. The investigation went silent until 22nd July when 28 other people were arrested on a different charge: international corruption. Among them was the Italian CEO, Paolo Porcelli, and Kenya’s Treasury Cabinet Secretary, Henry Rotich. The Italian prosecutor Lucia Lotti is handling the case in Rome, with the option to file a new investigation in Italy as well.

As is everything in Kenya now, this case could be framed as the battle between Uhuru and his number 2 in the 2022 election campaign, William Ruto. It has been suggested that Ruto could be using the Italian company for political support. Ruto’s daughter, June Chepchirchir, holds a senior position as the second counselor at the Kenyan embassy in Rome, Italy.

A key moment in diplomatic relations

The investigation on CMC Itinera is happening at a sensitive moment. Kenya and Italy are trying to collaborate on the Silvia Romano kidnapping. The 23-year-old Italian volunteer, who worked for the Italian charity Africa Milele, was abducted on 20th November last year from Chakama village in Kilifi County. But since then there has been no substantial information on her situation, apart from the trial of Gababa Wariu and Moses Lwari Chende, who confessed to aiding Romano’s abduction. But the investigation so far has not resulted in finding her.

In Italy the absence of updates on Silvia Romano’s health conditions are considered very alarming. At the same time, there is a new ongoing effort in Italy to have Romano released. The Kenyan head of public prosecutions, Noordin Haji, and Italian prosecutors in Rome are discussing a common strategy on the issue. If no positive results are achieved, the predictable outcome could be the cooling down of business and diplomatic relations between the two countries, at least in the initial stages.

The investigation on CMC Itinera is happening at a sensitive moment. Kenya and Italy are trying to collaborate on the Silvia Romano kidnapping. The 23-year-old Italian volunteer, who worked for the Italian charity Africa Milele, was kidnapped on 20th November last year from Chakama village in Kilifi County.

While Italy is grappling with the dams scandal and the search for Silvia Romano, France is trying to find a foothold in East Africa by signing new contracts with the Kenyan government. Rivalry in bilateral relationships in Africa is always a hot issue within the European Union (EU) member states, who have been unable to come up with a single comprehensive strategy for how EU member states should deal with African governments.

A possible read on the dams case is that William Ruto was the guarantor for the Italians and he can’t assure them anymore because he is currently dealing with bigger challenges related to his re-election campaign, which has been marred by corruption scandals implicating individuals from his political camp.

 

Editorial note:

For additional information on the Arrow and Kimwarer Dams saga see links below.

A consultancy agreement between C.M.C. di Ravenna South Africa Branch and Stansha Limited (a company registered in Kenya) for the general purposes to provide consultancy services for the Itare Dam and Ruiru II Dam project under Athi Water Service Board.

DPP’s press statement on investigations concerning KVDA and Rift Valley Water Services Board
Following complaints to the Government of Kenya has been exposed to the loss of billions of shillings arising out of manipulation of the tendering process of several dam projects including the Arrow dam, Kimwarer dam, Itare dam, Embobut multi-purpose dam, Lower Turkwell irrigation scheme et.al the DPP’s office constituted a team of prosecutors to ensure the investigations of the aforementioned projects were carried out.

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Freedom Fighter or Ruthless Dictator? Unravelling the Tragedy that was Robert Gabriel Mugabe

8 min read. Admired by Pan-Africanists for his anti-imperialist rhetoric but loathed at home for his authoritarian tendencies, Robert Mugabe was a man full of contradictions. TINASHE L. CHIMEDZA reflects on the controversial life of Zimbabwe’s longest-serving leader.

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Freedom Fighter or Ruthless Dictator? Unravelling the Tragedy that was Robert Gabriel Mugabe
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Robert Gabriel Mugabe, Zimbabwe’s leader for nearly four decades. died on the 6th of September 2019 in a hospital in Singapore. Mugabe’s death, like his life, has generated animated debate, the very first irony being that after nearly four decades in office he died in a foreign hospital. Some have praised Mugabe for being a “liberation icon”, and a “great Pan-Africanist”. Former South African president Thabo Mbeki called him “a fellow combatant”. Others have charged Mugabe with being a “tyrant” who collapsed his country and fanned “genocidal” ethnic divisions.

However, in order to fully understand this complex character, we have to put Mugabe into a broader historical purview. Mugabe was educated by Jesuit Catholics. Initially trained as a teacher, he would remain deeply religious his entire life. It was in the maelstrom of liberation contests that Mugabe’s oratory skills came to the fore and he became the target of the vicious Rhodesian state that threw him and other nationalists, into detention.

Mugabe used his time in jail to get qualifications in law and economics. With his release from the Rhodesian jail, after almost eleven years, he headed straight to the liberation war front by escaping the country and crossing into Mozambique. There he became the voice on Radio Zimbabwe, and fronted media engagements. His star was shining as he became the forceful voice leading liberation delegations first at the failed Geneva Conference of 1976 and then at the Lancaster House settlement in 1979 in London.

When Mugabe was prime minister and then president, there were geopolitical factors that worked against the success of Zimbabwe. South of the Limpopo, apartheid South Africa destabilised the whole region. Importantly, the Rhodesian political economy was constructed for a few white settlers and the black majority government that Mugabe led had inherited an economy that was stable but very parochial.

The 1980s, considered by some as the happy years, were also full of contradictions. Education and health were expanded but in the western part of the country, Mugabe’s comrades were brutalising a whole region into subservience. Young men labelled “dissidents” were tortured, murdered in cold blood, and buried in mass graves. The violence was so macabre it brought nationalist leader Joshua Nkomo to near tears. He escaped to London and wrote The Story of My Life (1984). This was only settled in Mugabe’s favour when they signed the Unity Agreement of 1987.

That sordid part of Zimbabwe’s post-colonial history provided a script into the 1990s and 2000s. But what most political biographers of Zimbabwe leave out is that the Rhodesian settler-state inherited by the nationalist movement was a war machinery built to defend white settler interests. Ken Flower, who was the first director of the vicious Central Intelligence Organisation (CIO), wrote about the “exploits” of the white-security state apparatus in a book titled Serving Secretly. The 1980 Lancaster House Constitution at Zimbabwe’s independence left this state-security apparatus unreformed and years later Mugabe would boast that “he had degrees in violence” and that the “gun was mightier than the pen”.

The 1980s, considered by some as the happy years, were also full of contradictions. Education and health were expanded but in the western part of the country, Mugabe’s comrades were brutalising a whole region into subservience.

The ruling political class dealt with opponents ruthlessly and Mugabe’s rise and demise as leader was tightly linked to the military. Professor Jonathan Moyo argued that Mugabe was the victim of Zimbabwe’s “militarists”’. It was a military declaration in 1975 called the Mgagao Declaration that put Mugabe at the apex of the liberation movement in Mozambique. It was the military that kept him in power and that took him out of power via the putsch of November 2017. He was replaced with a man chosen by the military – Emerson Mnangagwa aka the crocodile, a name bequeathed to him because of his ruthlessness.

Scattered ideological orientations

Mugabe blundered from one political ideology to another but at the core of the project was power retention at any cost. In the 1970s Mugabe preached socialism and dabbled in some incoherent half-understood Marxist-Leninism. But when young guerillas attempted to build a Marxist political movement, they were thwarted and thrown into prison.

One young military commander from then, Wilfred Mhanda, wrote about the experience in his memoir Dzino: Memories of a Freedom Fighter (20011 – Weaver Press). In the early 1980s, Mugabe articulated variant forms of socialism and Marxism but only to court allies, given the global geopolitical contests of the Cold War era. The ZANU-PF manifestos of the 1980s discussed socialism in theory but there was no attempt to build a socialist economy and by the end of the 1980s any pretence to building socialism was abandoned – the road to socialism was closed off. In another memoir, Re-living the Second Chimurenga: Memories from Zimbabwe’s Liberation Struggle (2006), Fay Chung would state that Mugabe was a devoted Roman Catholic and it’s possible that this closed off any concrete inclination towards Marxism or Maoism.

In the 1990s Mugabe walked into neoliberalism, embraced structural adjustment programmes (SAPs), and took loans from the International Monetary Fund (IMF). But the policy move was disastrous. Social and public services collapsed, informality set it and the industrial base melted away, provoking resistance from the labour, women and student movements. The crisis of falling incomes, unemployment, inflation, adventure into the DRC war and the increased debt levels knocked the economy down. This was made more acute by the seizure of white-owned farms, which led to the collapse of the agriculture sector.

Mugabe then veered into a radical indigenisation programme. To keep all these threads from exploding, he entrenched a political system of shredding the Constitution and making himself an imperial, almost feudal-aristocratic president. Zimbabweans mass migrated into the region and a passport, to escape anywhere, became a prized possession in a country that has become what Dambudzo Marechera called “The House of Hunger”.

The 2017 coup and the militarists

When Zimbabwe’s generals staged a coup in 2017, they pointed out that ZANU-PF was corrupt and needed to be rescued from itself. The whirlwind that consumed Mugabe was in the seeds that he had sown. When the Movement for Democratic Change (MDC) emerged in 1999, he had allowed the chief of defence forces to say “the presidency was a straightjacket” and in 2008 he had allowed the military to take over the running of the election under the Joint Operations Command (JOC) – a relic of the Rhodesian military state.

The political nose that Mugabe had used to strangle the opposition and to brutalise civil society into subjugation was now turned on his neck. Professor Jonathan Moyo, now in exile, has argued that Mugabe was a mere “spokesperson” of the military system that harbours, in his words, the “repugnant ideology” that the “gun commands politics”. To claim that Mugabe, after almost half a century at the helm of the nationalist movement, was a mere “mouth” of the military is the grandest of revisionism.

In the 1990s Mugabe walked into neoliberalism, embraced structural adjustment programmes (SAPs), and took loans from the International Monetary Fund (IMF). But the policy move was disastrous. Social and public services collapsed, informality set it and the industrial base melted away, provoking resistance from the labour, women and student movements.

But Mugabe also went beyond violence as a means of political rule. Using his oratory skills, he presented himself as a Pan-African liberation fighter, and often riled against imperialism and stirred the ideological support of nationalist movements. In Zimbabwe, the political system became dominated by what Professor Ranger called “patriotic history”. In a way the system of political rule was a complex combination of authoritarianism, ideological narrative and patronage networks. Jonathan Fisher and Nic Cheeseman have pointed out more clearly that “authoritarian regimes rely on ideas, not just guns”:

“The more resilient of Africa’s authoritarian regimes, for example, have bought support from powerful local elites, soldiers, particular ethnic groups or political influencers through building them into extensive patronage structures where state resources are cascaded down chains of patron-client links. In so doing, they may assemble a large, and often diverse, group of communities who rely on the regime’s survival for their prosperity.” (Mail and Guardian, 6 November 2019)

In dealing with his opponents within and outside his party, Mugabe was scheming and coldly ruthless, but he also built ideological narratives and patronage networks, and controlled the public memory to place himself – not other nationalists – at the centre of history. Mugabe compared the nationalist leader Joshua Nkomo to “a snake whose head must be crushed”.

In the 1990s, when his former comrade Edgar Tekere opposed the “one-party state”, he was thrown out of the party and his supporters were accusing of “courting death”. Years after that the famed guerilla leader, Rex Nhongo, Zimbabwe’s first army general, died in a suspicious fire. Rex Nhongo was suspected of first supporting Simba Makoni and then his wife Joyce Mujuru to challenge Mugabe. A few years later, Emerson Mnangagwa was kicked out as Mugabe played one political faction against the other in Machiavellian style. Nearly all of Zimbabwe’s opposition leaders were charged of “subversion”. (Morgan Tsvangirai has written about his trials and tribulations is his memoir At the Deep End.)

When Mugabe was president, the opulence of his and his family’s lifestyle was on display at their home called “The Blue Roof”. Nepotism and cronyism were rife. Those networked with the Mugabes worked their way into economy. In Mazowe, just outside Harare, poor farmers who had been allocated land were kicked out and some were only saved by High Court orders. Nephews, nieces, uncles, children and the president’s immediate family amassed vast amounts of wealth. Mining claims, multiple farms, fuel cartels and contracts with the government is how this wealth was amassed. One of Mugabe’s nephews boasted “if you want to be rich join ZANU PF”. Public enterprises were looted with reckless abandon. Before being deposed, the Mugabes were going to build a Robert Mugabe University to the tune of US$1billion. Even in death Mugabe will be buried in a mausoleum possibility costing millions.

Of Kwame Nkrumah, Mwalimu Nyerere and Nelson Mandela 

Robert Mugabe left no condensed publication of his thoughts, which means his intellectual footprint is only found in speeches and scattered interviews. For a president whose education varied from law, economics and education, this is rather disappointing.

In dealing with his opponents within and outside his party, Mugabe was scheming and coldly ruthless, but he also built ideological narratives and patronage networks, and controlled the public memory to place himself – not other nationalists – at the centre of history.

It was at continental and global forums that Mugabe attracted the affinity of Black Africa, and where he mesmerised the Global Pan-African movements and other social and political forces. He went to United Nations General Assembly meetings religiously. There he made scathing comments about racism, demanded equality at the UN Security Council, railed against economic exploitation of Africa and raised his voice to throw spears at imperialism. An articulate black president from a small former African colony who repossessed land, who was placed under sanctions, and who made stinging statements against inequitable global power relations is what the Pan-Africanist movement was lacking and some sections praised Mugabe for this.

Compared to the other towering intellectuals, theorists and revolutionaries of Pan-Africanism, Robert Mugabe’s legacy withers. Kwame Nkrumah was a thinker and an intellectual who penned treatises that dealt with the African condition. Mwalimu Nyerere was a nation-state builder who forged the disparate social groups of Tanzania into a cohesive stable polity and who retired into a modest life. Nelson Mandela pulled the strands of a nation traumatised by the violence of apartheid into a “Rainbow Nation”. Having had a “long walk to freedom”, Nelson Mandela subjected the country to constitutional democracy. Thomas Sankara forged an everlasting revolutionary legacy. He placed women at the centre of politics and development, tackled illiteracy, and invested in health. The young captain lived a modest life, shunned decadent opulence and boldly set into motion the belief that the “future can be invented”.

Broad strokes of history

They say history is written in broad strokes. Mugabe’s anti-colonial credentials will shine; he stayed in prison for over a decade, the radical land repossession will also burn bright but this will be blighted by the brutality, the ruthlessness, the corruption and the repugnant politics of polarity authored by Mugabe. Of Mugabe’s politics, the Pan-Africanist Tajudeen Abdul-Raheem had this to say:

“Zimbabwe and President Mugabe are a situation we cannot in all good conscience continue to pussyfoot about anymore. It is indefensible that one man, no matter his contribution to the country, should be holding the people to ransom…Mugabe is no longer the part of the problem of Zimbabwe: he is now the problem (Speaking Truth to Power: Selected Pan-African Postcards, 2010)

Mugabe built a surveillance state of Stalinist proportions that was littered with impunity, arrogance of power, extrajudicial killings, a rapacious propaganda system, and a personality cult that exacted worship and fear from the man and woman on the street. The long motorcade, ambulance in tow, imported cavalcade of cars, gun-toting soldiers, loud police sirens, police motorbikes, traffic cleared from the road and armoured cars that ferried Mugabe have died down. The putsch of 2017 ushered in the country’s militarists who remain in control of a vicious perpetuum mobile ­­– a kleptocratic military class that has melted away any respect for the constitutional edicts of the country.

We from Zimbabwe will remember Mugabe for a dream that could have been possible but instead was collapsed into what Professor Sabelo Gatsheni-Ndlovu called “grotesque nationalism”.

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Why South Africa Should Not Do a Zimbabwe: Demerits of the Proposed Land Expropriation Law

8 min read. A law to allow the seizure of white-owned land could have a profoundly negative impact that goes well beyond the violation of fundamental human rights. Its consequences could be catastrophic on the industrial, agricultural, and banking sectors in South Africa.

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Why South Africa Should Not Do a Zimbabwe: Demerits of the Proposed Land Expropriation Law
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Some time has passed since South African President Cyril Ramaphosa’s highly controversial announcement of a new land reform law that would allow for the expropriation of land without compensation. Accused by some of racism, and by others of populism, the president is trying to address the pressing requests of the vast majority of blacks who still feel oppressed after white minority rule ended in 1994. According to a recently released parliamentary media statement, this bold move should fix “the historical wrongs caused by arbitrary dispossession of land, and in so doing ensure equitable access to land and further empower the majority of South Africans to be productive participants in ownership, food security, and agricultural reform programmes.”

Apparently, in a country where the white minority account for just over 9 per cent of the population but which owns over 70 per cent of the land, such a law seems to be a fair way to balance the scales of social justice. However, on the other side of the barricade, there are thousands of white Afrikaners descended from Europeans who colonised South Africa who claim that they worked hard to obtain that land. These people are human beings as well, and many of them are only paying the price of a segregation regime imposed by their fathers and grandfathers.

This bitter battle between these two sides is rooted in apartheid, a terrible word that does more than just bring back bad memories. It is an ugly concept that speaks to us of racial segregation, and inhumane treatment. And even if now the faces (and colours) of the protagonists may have swapped, the dehumanising cruelty behind it has probably not.

The controversial amendment to section 25 of the Constitution

To date, the African National Congress (ANC), the country’s leading political party since the end of apartheid, has redistributed land following a “willing seller, willing buyer” model. In a nutshell, the government buys white-owned farms and then redistributes them to black farmers. The idea was to return at least 30 per cent of the land that was expropriated from black farmers to their legitimate owners by 2014. However, today less than 10 per cent of commercial farmland has been redistributed. Exponents of the South African Homeless People’s Association claim that the “willing seller, willing buyer” model only widened the social divide, bringing more poverty to the masses.

The law proposed by Ramaphosa aims at amending section 25 of the Constitution to make the expropriation of land without compensation an explicitly legitimate option. In other words, the government could take this land away from white hands without paying them anything, as long as the reform doesn’t cause any damage to the nation’s economy, agricultural production, and food security.

This law was supported by a small radical party led by Julius Malema, the newly-created Economic Freedom Fighters (EFF). However, not all the white owners got their land by means of coercion during the previous century. Many claim they legitimately bought it through the hard work of their ancestors and defined this law as grossly immoral and inhumane. Some threatened to wage war to defend their farms, bringing back the sad memories of the recent land expropriation policies enforced in Zimbabwe. Some other “softer” reforms have been proposed, such as paying “just and equitable” compensation that is well below market price to landowners, or banning foreigners from buying agricultural lands.

Racism: the legacy of a century of apartheid in South Africa

Unlike other countries where racism is a tremendous plague that crawls hidden in the very fabric of society, in South Africa racism and discrimination against blacks were explicit laws. During the last century, European colonialists simply institutionalised them as part of the nation’s legal infrastructure. Similar to the racial laws that forced Jews to lose their jobs just because of their heritage, during apartheid in South Africa, a series of laws were put in place to enforce white dominance. It was the Parliament itself that decided that black people had to be inferior human beings and had, therefore, limited access to rights.

In 1913, the South African’s colonialist administration passed the Natives Land Act, a law which stripped nearly all black people of their right to own land. Although 72 per cent of the population consisted of black people, this law limited land ownership among blacks to a mere 8 per cent of the country. White South Africans literally gave land to themselves, a capital offence that created a terrible precedent as many black people were forcefully evicted from their farms.

The law proposed by Ramaphosa aims at amending section 25 of the Constitution to make the expropriation of land without compensation an explicitly legitimate option. In other words, the government could take this land away from white hands without paying them anything, as long as the reform doesn’t cause any damage to the nation’s economy, agricultural production, and food security.

Other laws, such as the Reservation of Separate Amenities Act of 1953 and the Group Areas Development Act of 1955, further reinforced these policies of segregation. Blacks were forced into unproductive land and underdeveloped regions, which excluded them from amenities such as parks, schools, and hospitals that only whites could access. Blacks could not obtain formal training for skilled jobs, which denied them the right to study, and barred them from equal employment and development opportunities. Together with many other racial laws, apartheid drove the black community into poverty, prevented them from expressing their opinions freely, and stripped them of their properties.

When the apartheid formally saw its end in 1994, many who suffered from these disparities imposed by this regime rejoiced, hoping for reforms that would bring back some justice in their lives. However, as often happens in politics, many of these promises of equity and equality quickly turned into empty words and vain declarations. The resources that the South African government allocated for land reform were vastly insufficient, never exceeding a mere 1 per cent of the national budget. Even today, land reform doesn’t look like a priority, with the amount allocated to it being just 0.4 per cent of the national budget. Racial inequalities persist in many sectors, including in the mining and industrial sectors, which constitute the backbone of the nation’s economy. The majority of the most profitable companies remain controlled and managed by whites, and the whole labour market still suffers from substantial polarisation.

Growing inequalities

The snowball effect of nearly 400 years of colonialism left the black community in dire poverty, ripe with nearly-illiterate individuals who had no chances to become competitive in the upcoming century of globalisation. According to the World Bank, 25 years after the end of apartheid, South Africa is still one of the most unequal countries in the world. In 2017, the unemployment rate was still high and growing at 27 per cent, with many people lacking tangible prospects for a better life. Race still has a tremendous impact on an individual’s chances of finding a job, as well as on the wages received once employed. A bitter divide between white Afrikaners and black people has kept growing and has become the core of all social or political debate in this tormented country.

Despite the country’s huge potential for growth, the economy kept stagnating during the nine years of Jacob Zuma’s presidency. Characterised by rampant corruption and continuous scandals, Zuma’s administration came under pressure as the masses started asking for policies that would address unemployment, disparities, and poverty.

The resources that the South African government allocated for land reform were vastly insufficient, never exceeding a mere 1 per cent of the national budget. Even today, land reform doesn’t look like a priority, with the amount allocated to it being just 0.4 per cent of the national budget.

Eventually, after an extremely unpopular cabinet reshuffle, Zuma was forced to resign and was replaced by Cyril Ramaphosa in February 2018. The new president cracked down on corruption and kicked out many inept ministers while Zuma was indicted for money laundering and racketeering. However, the damage that Zuma inflicted to the party’s credibility was so severe that it had to rely on radical parties such as the EFF to gain some traction.

The ANC lost so many voters in the 2016 local elections that the 2019 ones may be in jeopardy. Some argue that Ramaphosa is simply pushing the Land Expropriation Act as a populist ploy aimed at recovering a significant portion of the voters’ trust. The nation’s poor, in fact, make up the majority of the electorate, and addressing their plight will certainly provide him with the political stability his government needs so much.

The human, social, and economic consequences

ANC’s and EFF’s new land reform tastes like nothing but a bloody policy of revenge inspired by populism and driven by a desperate need to win the elections. But blood always calls for blood, and may easily throw South Africa into a new civil war, no matter how justified this law may seem. The French Revolution, the recent Zimbabwe land expropriation laws, and even the Communist Revolution all teach us a fundamental lesson – that legislation that allows a state to violate property rights only creates new privileged elites rather than equalising the social fabric.

A law to allow the seizure of land has a profoundly negative impact that goes well beyond the violation of fundamental human rights. Its consequences can be catastrophic on the industrial, agricultural, and banking sectors as well, and neighbouring Zimbabwe is a prime example. Just like Venezuela, another country where land was redistributed from the rich to the poor, today Zimbabwe needs to import nearly all the food it needs rather than producing most of it, as it did 20 years ago.

Distributing land “fairly and equally” to all people means creating a large number of smallholder farmers who will have to face tremendous costs to grow and be competitive. An entire nation of small farmers will have a really hard time competing with the larger players of globalised agriculture unless they have access to the latest methods and technologies. Yet, once again, has the government thought and planned a strategy to provide these future landowners with the necessary means to survive in such a harshly competitive environment? Worst case scenario: this may lead to large-scale deforestation by owners who will start selling their wood cheaply to foreign companies – a process that has already devastated Kenya, Uganda, and Ethiopia.

However, we may have a very different scenario – one where land is handed down to a smaller amount of black people who will quickly become rich at the expenses of others. A new handful of privileged individuals who will simply substitute former white owners with other newer sons and daughters of uncontrolled capitalism. Their faces may change, but the inequality will bring the country to its knees in the same exact way. Whether their skin tone is darker won’t make them any better than their colonialist predecessors, nor will make the whole act of seizing land be more just or justifiable by any means.

On top of all that, a scenario of harsh social tensions and violent clashes is a bomb that is about to explode. Following some cases of brutal and murderous attacks of white farmer that got the attention of the media, some Afrikaners called out for international aid, claiming there was a “white genocide” going on. And while smart people may easily understand that the numbers are no way as high as to justify the choice of this vastly exaggerated terminology, this alarmist rhetoric is bound to have serious global consequences.

Distributing land “fairly and equally” to all people means creating a large number of smallholder farmers who will have to face tremendous costs to grow and be competitive. An entire nation of small farmers will have a really hard time competing with the larger players of globalised agriculture…

In an era where the rise of neo-fascism, fake news, gross misinformation, and distorted nationalisms represent a serious threat to all societies, this may be a spark that would ignite an uncontrollable chain reaction. Black people around the world are often unjustly identified as enemies by organisations and parties who willfully manipulate information. Knowing there’s a country where a murderous government justifies their violent persecution will only fuel a hate that is certainly more detrimental than beneficial to the black cause.

Conclusion

History cannot be corrected by doing the wrong thing, and the ANC’s policy means nothing but repeating the same mistake over and over again. South Africans deserve having the right to cultivate their lands once again, they deserve to live in a fair country, they deserve peace. It is totally understandable that poverty must be fought with all means, and that the current situation is all but just or fair.

But enforcing the rights of black people with violence won’t restore the justice and equality this country so desperately needs. It will only open a gaping wound across the nation that will widen the divide even more. It may reach the point of breaking any bridge built so far between all those human beings whose sole difference is the colour of their skin and the heredity of their ancestors.

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