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THE NEW LUNATIC EXPRESS: Lessons not learned from the East African Railway

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THE NEW LUNATIC EXPRESS: Lessons not learned from the East African Railway
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“The limits of tyrants are prescribed by the endurance of those whom they oppress.”
-Frederick Douglass

The building of standard gauge (SGR) railways in both Uganda and Kenya and the predictable sagas that have ensued are reminiscent of the controversies surrounding the building of the Uganda and Rhodesian Railways in the late 19th and early 20th centuries. Both present a framework within which it is possible finally to understand the limited achievements in development in all sectors (and frankly, underdevelopment in many) and regression in Uganda’s primary education, copper mining and agricultural sectors. Both SGR projects are tainted with suspicion of shady procurement which, if taken together with the track records of the implementers, points to corruption. It would be irresponsible to say otherwise.

The route, design, level of service and all other decisions of the Uganda Railway of 1990 were dictated by potential profits for foreign investors (both public and private) and their local agents, and not by notions of public service and the common good of those who would bear the ultimate cost. Return on investment is not a bad thing but the Imperial government also claimed to be acting in the interests of the indigenous populations.

The difference now is that there is no pretence about whether the railways are serving the interests of the general population. The different financial implications presented by the procurement process itself, the selection of routes and the relative cost of engineering in the different terrains, plus the cost of compensating displaced landowners, provide scope for long-running, energy-depleting corruption scandals. From the outset, there has been a lack of confidence that procurement processes for the necessary services would prioritise the interests of the public over the interests of the contractor and would actively exclude the personal interests of the public servants commissioning the works. This is what is triggering the anxiety surrounding the SGRs.

The different financial implications presented by the procurement process itself, the selection of routes and the relative cost of engineering in the different terrains, plus the cost of compensating displaced landowners, provide scope for long-running, energy-depleting corruption scandals.

Moreover, the choice over whether to upgrade the old railway or to start afresh was not adequately debated publicly. Ditto the options on financing. For the Kenyan SGR, the most costly of the potential routes were reportedly selectively chosen. Several cheaper routes on land allegedly already in possession of the government are said to have been rejected.

There are also questions surrounding passenger service. Do the railways only serve trade or are passengers entitled to this alternative to dangerous road transport? In areas where passengers and not commodities, who will be the primary user of the railway?

Uganda owns one half of the old East African Railway. Together with the Kenyan leg, it was put under a 25-year management contract. The new owners renamed their new toy Rift Valley Railways (RVR). In 2017, after only twelve years, the governments cancelled the contracts in a move the RVR called an illegal takeover. On the Ugandan end, there were allegations of asset-stripping by previous European concessionaires as well as unpaid concession fees and massive salary arrears caused by RVR. If RVR were to successfully sue the government for cancellation of the contract, their compensation would be the first budget overrun.

The government of Uganda then signed a Memorandum of Understanding in 2014 with the China Civil Engineering Construction Corporation (CCECC), which had submitted a study. It abandoned those negotiations in favour of a second Chinese entity, the China Harbour Engineering Company. In justifying its action, the government questioned the quality of the CCECC’s study, which it said was cut and pasted from pre-existing feasibility studies (something that could have been avoided by following proper procurement procedures). CCECC insists it was a pre-feasibility study requiring less detail than a full-blown feasibility study. Whatever the case, if CCECC had followed through with its suit for US$8 million in compensation, which would have been another massive blow to the budget at inception. Whatever compensation they have agreed to has not been made public but as matters stand, the budget for the eastern leg of the SGR has gone up from CCECC’s proposed US$4.2 billion to CHEC’s US$6.7 billion.

What stands out – apart from the incompetence, squabbling and eventual compensation claims that accompany nearly every major Ugandan development project – is that the President of the Republic is front and centre in the flouting of procurement procedures by issuing personal invitations to foreign firms and individuals to participate in projects. He has done the same with investors from the United Arab Emirates who have been promised land. The results are often disastrous: the country is in debt to the Kenya-based Bidco company after it fell short of 10,000 hectares of land it had promised the company for a vegetable oil project. As a result, Bidco received tax waivers worth US$3.1 million in 2016 alone, according to the Auditor General.

The last top-level contact with a foreign investor whose details are known resulted in the arrest in New York of Patrick Chi Ping Ho in late 2017 on charges of paying bribes to the Ugandan president and the foreign minister through an American bank. The Ho-Kutesa bribery case casts more shade on the procurement arrangements for the SGR. Without a satisfactory resolution of the matter and with the same people still in situ, citizens would be foolhardy to expect value for money from the SGR.

By the beginning of 2018, owing to cash flow difficulties, less than half of the land required for the 273-kilometre eastern section of the SGR had been acquired. Not surprisingly, as Uganda slithers into insolvency, the government has resorted to domestic and foreign borrowing to fund ordinary recurrent expenditure like payroll. Commodity prices are significantly lower and the shilling worth much less than when the SGR was first contemplated. So bad is the situation that the police force announced that police work in 2018 is to be carried out on a rotational basis among the regions as there are insufficient funds to enforce the law across the whole country at once.

The Uganda Railway, 1900

The Uganda Railway initially ran from Mombasa to the Kenyan side of Lake Victoria, where the journey was completed by steamer to Port Bell in Kampala. The main purpose of the railway was to make Uganda colonisable.

Under the hinterland principle introduced by the Treaty of Berlin of 1885, colonial powers had the first option on the ownership of the hinterland abutting on their coastal possessions. To claim possession of the hinterland, a power had to show that it had effectively occupied the coast.

Having secured the Kenyan coast, Britain was not required to effectively occupy the East African hinterland – Uganda – but was determined to do so, fronting the objective of stopping the slave trade under the Brussels Anti–Slavery Act of 1890, which also required it to “improve the moral and material conditions of existence of the native races”. The argument ran as follows: To stop the slave trade, the region had to be governed by Britain and to govern, soldiers, ammunition, civil servants and their supplies had to be transported to the region, for which a railway was essential.

Only after the annexation of Uganda did references to the slave trade fade out as the overriding objective and the need to grow cotton to feed Britain’s textile industry and reduce unemployment came in to sharper focus.

Having secured the Kenyan coast, Britain was not required to effectively occupy the East African hinterland – Uganda – but was determined to do so, fronting the objective of stopping the slave trade under the Brussels Anti–Slavery Act of 1890, which also required it to “improve the moral and material conditions of existence of the native races”.

There was competition for the hinterland from the western coast of Africa, whose Congolese hinterland Belgium owned. Belgium was interested in north-western Uganda. In the north, the French had had a military confrontation with the British in Fashoda over supremacy in the Sudan. Time was, therefore, of the essence and the proposal was tabled in Parliament without a thorough survey.

We have had a large sum of money voted, but I observe that in recent documents the survey has disappeared and it has become a ‘reconnaissance survey’. We want to know whether we are making an estimate of the cost of a railway upon a reconnaissance survey. Major Macdonald was at the head of that survey, and when he arrived at the mountains he did not survey any further but put upon his survey ‘mountains’, and so there was practically no survey” (Henry Labouchère, MP, Uganda Railway debate, April 1900)

 The expenditure necessary was minimised in presentations to Parliament,

The estimates of cost have been falsified from the very commencement. They began with an estimate of £1,700,000; then it jumped up to £3,000,000, and year after year when the vote for Uganda came on for discussion, we were told that that would not be exceeded. And now the right hon. Gentleman comes here and, pluming himself on having carried out his own estimates, asks us to vote almost two million additional; and he shows us in no sort of way that the last estimate of £5,000,000 is based on solid ground any more than the £3,000,000 estimate, or the £1,700,000 estimate […] We ought not to vote any more money until we have had a full practical businesslike survey. (Labouchère 1900)

Also distorted were facts about the purpose of the railway. The benefit to the British cotton industry, one of the country’s leading employers, was minimised while advantages to the inhabitants of British East Africa were magnified to overshadow any criticisms of the railway’s implementation. One argument was that Britain would eliminate the high cost of the squadron needed as a barrier to slave ships off the East African coast by transporting soldiers overland to quash the last remaining slave caravans.

Labouchère questioned the government in 1900 as to whether the partially complete railway had had any impact on the size of the British squadron. The answer was no, it hadn’t. In fact, as he noted “it has not prevented one single slave being carried away”. Apart from anything else, slavery was tolerated in Zanzibar and Zanzibari slaves were being used as porters by British officials even in 1900.

“Sir G. Portal’s expedition [sent to effectively occupy Buganda] was one which had numerous slaves in its ranks. The whole territory of the East Africa Company now was swarming with slaves. What hypocrisy would be charged against this country, if their real motive being financial greed and territorial aggrandisement, they put forward the sacred cause of slave emancipation, while at the same time their own territories were swarming with slaves, and were actually impressing these poor creatures in large numbers to carry Sir G. Portal himself on this expedition. (Robert Reid, Uganda debate, March 1893).

(This is the same G. Portal who was sent by the Crown to implement the treaty extracted from Kabaka Mwanga and who exceeded its boundaries by marching through Buganda, setting up a fort in the Kingdom of Toro from where the Kingdom of Bunyoro was annexed.)

In the interests of speed and economy, a non-standard gauge was used. This partially explains why in the 21st century Kenya and Uganda are embarking on their first SGRs rather than extending existing lines. Apologists for incompetence should take note: there will be railways but whether they are the most cost-effective, robust (extensible) option is another matter.

In their rush, the Foreign Office formed a Works Committee to build the railway, which wound up costing significantly more per mile than comparable railways in India. It was referred to as a light or small-gauge railway. The cost of two comparable light railways in India was £6,500 and £6,400 per mile, respectively. The Kenya-Uganda light railway was being built in 1900 at £8,500 per mile. (Ugandans may recall that the price tag for the new thirty-mile Kampala-Entebbe Highway was double that of a comparable highway in Ethiopia.)

Railway finance

Contrary to popular belief, railways were not a gift to the colonies; they were financed by loans paid from tax revenues collected by the local colonial administrations and, therefore, any waste and losses in the construction were borne by the taxpayers in the colonies. Even where the Imperial government made the initial expenditure, ultimately it was the citizens of the colonies who paid.

For example, Palestine was charged £1 million for a railway built to facilitate the movement of British troops during the First World War (Palestine and East Africa Loans Act 1926). The retroactive payment was engineered by guaranteeing a loan taken by Palestine the proceeds of which then went to the British treasury while Palestine (then under British administration) made the repayments. For an idea of the magnitude of a million pounds in those days, the exact same amount was provided three years later in total development grants for the entire empire, then numbering over 40 territories.

Contrary to popular belief, railways were not a gift to the colonies; they were financed by loans paid from tax revenues collected by the local colonial administrations and, therefore, any waste and losses in the construction were borne by the taxpayers in the colonies. Even where the Imperial government made the initial expenditure, ultimately it was the citizens of the colonies who paid.

The £1 million provided in 1929 would not have covered Uganda’s total budget for one year. Even without a full set of Protectorate accounts, it is still possible to see that Uganda’s budget balanced at approximately £2 million between 1931 and 1935. In those years there was an excess of assets over liabilities of between £700,000 and £1 million. The Uganda Protectorate was even able to maintain the reserve fund required by the Imperial government. It stood at over £400,000 in the 1930s.

“The Reserve Fund is really required for three purposes: (a) as a kind of insurance against a definite national emergency, such as a famine or locust invasion involving very exceptional expenditure; (b) to meet a possible deficit in case of an exceptional shortfall in revenue; and (c) to enable the normal programme of capital expenditure to be carried out from year to year unimpeded by fluctuations in revenue. It will thus be seen that a considerable sum should be kept available, and it is hoped that it will be possible to accumulate £l,000,000 in the course of time.” (A.E. Forrest, Acting Treasurer, Uganda Protectorate)

 The Imperial Loan, the earliest loan record available to this writer, was made in 1915. It was followed by development loans between 1921 and 1924 and then further loans in 1932 and 1933. Total unused balances on these loans ranged from between £3,300 and £95,727 in the years 1931 to 1935; £588 was paid towards the Kampala-Jinja Railway in 1933. Total loan servicing that year was £144,718 for the 1932 and 1933 loans. The only grant received during the same period was £841. (This is not a typo.)

Although the Imperial development grant budget was increased to £5 million in 1940 to cover an even larger number of colonies, the target could not be reached during the Second World War when funds were low. During the war, the colonies had to divert their resources to aid Britain’s war effort. Uganda and most other colonies each donated £100,000, the equivalent of Uganda’s entire development budget for 1939. Kenya raised approximately £17,000. Men from both countries volunteered to serve; there were 77,000 from Uganda and more from Kenya. (The British government finally sent pensions to Ugandan ex–servicemen in 2011 after a long, increasingly hoarse campaign. Over 2,000 British ex-servicemen and thousands of others were rewarded with land in Kenya and Rhodesia).

The people of Buganda gave an additional £10,000 and the Ankole gave £1,000 from taxes collected from their populations. Additionally, the Buganda Lukiiko and the Native Administrations of the Eastern and Western Provinces pledged to give £5,000, £7,000 and £5,000 a year, respectively, for the duration of the war and for one year after its end towards the expenditure of the Protectorate.

Gifts in kind included an airplane (from Mauritius), patrol boats (Singapore Harbour Authority), cocoa, coffee and foodstuffs of all kinds. Farmers’ savings in the cotton and coffee funds were diverted to feed and clothe Allied troops. Only the Oron tribe in Nigeria was spared – their gift of two hundred pounds was returned on the grounds of their financial standing.

Colonies also made interest-free loans to Britain: in 1940 the Kenya-Uganda Railway and Harbour Administration loaned His Majesty’s Government £100,000 for as long as the war lasted. In 1946, Uganda made an interest-free loan to His Majesty’s government of £650,000. Total loans from the colonies amounted to £1,156,983 (See: Accounts of the Uganda Protectorate, 1946 Statement of Balances, Statement XIV, at 31st December, 1946).

It is incredible that in spite of the evidence, Ugandans and other ex-colonials continue to believe that they are being “helped” first by Britain, then by the World Bank and the Chinese. It is this misreading of the facts that prevents any meaningful negotiations for better terms of development cooperation. It is the capacity to negotiate that today’s bribe-taking leaders sell for their thirty pieces of silver.

Secondly, railways transported cotton belonging to the British Cotton Growing Association (a voluntary body comprising Lancashire growers, mill owners, textile workers, shippers and workers in ancillary trades such as dyers) for free in Sierra Leone, Lagos, and Southern Nigeria in return for seeds and professional advice (Secretary of State for the Colonies, Cotton Supply debate, 1905.) Third, once built, railways were used to leverage further loans. The East African Railways and Harbours Authority, being a viable operation, was used to guarantee loans taken out by the East African High Commission (the colonial administration).

By 1961 Uganda’s indebtedness had soared. The public debt was £16,933,000 and was being reliably serviced. Guarantees of interest alone stood at £58 million and a further £3.5 million for interest on a loan from the World Bank (presumably for Nalubaale Hydro-electric Dam). (See: Statement of Contingent Liabilities of the Protectorate Government as at 30 June 1961, Statement 12)

Construction and labour management

Due to the need to build the railway as quickly as possible, “gigantic errors” were made. An attempt was made to cover up escalating costs by saying that the materials had to be upgraded from wood to steel until an examination of the original plans showed provision had been made for steel from the very beginning. Accounts were submitted late for audit.

We have to pay £2,000,000 extra as the result of putting the work into the hands of men who have no practical experience of the work they have undertaken. I, for one, decidedly protest against the reckless and careless way in which the management of the railway has been conducted up to the present time.” (Thomas Bayley, M.P., 1900)

The management of the labour makes it even clearer that the railway was not for the primary benefit of the inhabitants of the region. Much in the same way as Chinese contractors do in Uganda today, the British shipped in foreign manual labourers to carry out the work; 14,000 of the 16,000 labourers employed were expatriates from India. There was a famine in Kenya shortly after.

We ought in my opinion, instead of importing so many thousands of Indian[s], to have employed a good deal more African labour, because natives have been dying by thousands of starvation in the neighbourhood of this railway. It has been most distressing to see the natives dying in the ditches by the side of the railway, and when trains have gone up the line little starving and dying children have come and begged for food, for a little rice, or anything from those on the train. That is not the sort of thing that ought to occur where the British Government are building a railway, and they ought to have engaged labour to a much larger extent from the neighbourhood. (Robert Perks, M.P., Uganda Railway debate 1900)

Much in the same way as Chinese contractors do in Uganda today, the British shipped in foreign manual labourers to carry out the work; 14,000 of the 16,000 labourers employed were expatriates from India.

Those Africans that were employed were paid four pence a day while the Indian skilled labourers were paid 14 pence a day. (Indians had experience in building the Indian railways.)

“That seems to be pretty nearly the same thing as slave labour. I should like to know what would be said in this country if any man were induced by the Government to work for four pence a day. [Several HON. MEMBERS: Oh, oh!] Hon. Members say oh, oh! I know their views. Working men in England have votes, and working men in Africa have not.” (Labouchère, 1900).

But Labouchère himself gave the standard racist reason for the low wages, a sentiment he expressed in defence of his own arguments that investment in Uganda was a waste of time: “What about the Ugandese themselves? They are without exception the very laziest of that laziest race in the whole world, the African negro.”

John Dillon, the Irish nationalist, demonstrated an understanding of the difference between the then African way of life and the grubbing and jostling necessary in over-populated, capitalist European countries,

“[…] where African labourers were employed the earthworks cost 10d. per cubic yard, while with the Indian labourers at the higher wage they cost but 6d., so that by employing the Indian labourer at higher wages you reduced the cost of the work. […] Very often, particularly in railway work, it is much cheaper to employ a better class of men at higher wages than men who do not understand the work at lower wages.

“One argument is that the labourers being free men, with no rent to pay, and with gardens round their huts, are not compelled to labour for the [low] wages offered by contractors and mine-owners; they can ask their own terms. What settles the price of labour in this country is the fact that a man cannot retire to his garden and his house and wait until the employer must have him at his own price; he would starve; therefore he must make the best terms he can. But in Africa the labourer is comparatively a free man, unless you have forced labour, as is so often advocated. (John Dillon, 1900)

However, it was later revealed that in addition to racialist considerations, there was a profit to be made on importing labour. Greek contractors had been awarded contracts to import the Indian labour and their commissions inflated labour costs. The point was not exhaustively argued in Parliament but there were suggestions that Sir Clement Hill, a public servant, received between £10,000 and 70,000 in commissions on materials ordered.

It was argued in Parliament that the amount of money required for the Uganda Railway was sufficient to build a full network of the light railways required in Britain. If anything speaks to the necessity of transparency it is this. Less extravagant profits assured by the government to private investors, contractors and commission agents would have ensured more was available for the common good of ordinary people in both countries, and a measure of dignity for the workers.

In contrast, before building permanent churches, schools and clinics in Uganda, Catholic missionaries in Uganda established technical schools and other training facilities in order to train the craftsmen that would be required for the work. They took the necessary time to maximise skills transference. They specialised in brick-making, architecture, glass-making and other building crafts, as well as tailoring, teaching and nursing. These facilities are still in service today, run by Africans.

For their part, indigenous communities using their own traditional model for infrastructural development known as bulungi bwa nsi (the good of the nation). They continued to contribute most of the locally available material inputs and, of course, all of the land and labour for community infrastructural development.

The character of development changed when the Imperial government commandeered the education sector in 1921 in order to “re-organise” it. After that, records show, the administration was able to manipulate communities by promising schools and other amenities to those communities that agreed to plant cash crops and do other things required of them. Voluntary communal labour was transformed into compulsory labour and extracted through corporal punishment and the dreaded poll tax.

Contracts for technical assistance these days require hired expatriate consultants to transfer skills to the indigenous staff. However, the fact that certain positions remain “expatriate” positions speaks volumes. These days African labourers on foreign-managed project sites are treated no better than the colonialists treated labourers. Ugandans at foreign-owned building sites have made numerous complaints about underpayment, lack of access to safety gear, harassment, sexual exploitation and even violence. In Uganda and elsewhere, some have been served lunch on their shovels. In the 1990s, Ugandans were made to squat in a line, one man between the legs of another. The reason given was that they kept losing/stealing the plates provided.

Chinese abuse of African workers’ rights, importation of labour, disregard for Ugandan environmental preservation and disdain for the communities among which they work is a repetition of the first invasion of capital and demonstrates the extremes to which it goes when left unfettered.

Route and service politics

The original plan had been for the railway to serve farming areas. Tax revenues from the crops would cover the cost of the construction. Introducing cotton and providing a fast means of exporting it was supposed to lead to development. Once the settlers came to know the route, the influential among them lobbied to have the railway diverted to serve their plantations.

The question of whose interests the SGR serves, as raised by Rasna Warah in a recent article published in the eReview, was as valid in the 1890s as it is today. In Kenya, the lack of “native”-directed development meant that there were insufficient railway stations between Mombasa and Lake Victoria for African requirements. It goes without saying that the interests of indigenous populations were not included in the plan. As a result, indigenous farmers had to carry their cotton long distances to the tracks – often in five shifts of one 60-pound bag at a time – and had to spend one or a few nights along the track, sleeping in the open air while waiting for the train.

Because in the beginning there were insufficient carriages and the few available were segregated, the Africans travelled in wagons. They were locked in for the safety and comfort of the first class travellers. Often, as some members of Westminster’s parliament were scandalised to learn, African passengers were unable to alight on arrival at their intended destinations despite banging on the wagon doors and were carried all the way to the next stop or to the Coast.

It goes without saying that the interests of indigenous populations were not included in the plan. As a result, indigenous farmers had to carry their cotton long distances to the tracks – often in five shifts of one 60-pound bag at a time – and had to spend one or a few nights along the track, sleeping in the open air while waiting for the train.

During the debate of the East Africa Commission Report in 1925, Henry Snell articulated the role of capital in distorting the higher development goals of bringing development to Africa,

“The land through which these railways pass [belonging to Settlers] should be taxed to help bear the cost that is involved. In the matter of transport it has been the case, unfortunately, that the Europeans have acquired the idea that railways should be built solely for their benefit, and that money granted as loans or in any other form should be entirely devoted to the white races. If by any chance a railway passes through native reserves, the cry is immediately raised that the land contiguous to the railway is too good for native use, and the native is therefore driven away, or it is urged that he should be removed to some less accessible position. It was on such a plea as that the Maasai were robbed of their country, and plots of land varying from 5,000 to 300,000 acres were given to Europeans for no other reason than that they were covetous of it and that it was in close touch with the railways.

“These extra facilities for transport can only be justified if at the same time the native interests are completely safeguarded. At the present time the difficulties are immense. The native has to raise from 10s. to 16s. per annum for hut tax, and he has to pay this almost entirely out of the material he is able to sell. That involves him in carrying a load of 60 lbs. for 40 miles. To pay this tax he may have to go as many as five journeys of 40 miles, with the 60 lb. load on his head, making for the return journey a distance of 400 miles. That is economic slavery of a most indefensible kind, and of a kind worse than was ever known in the Southern States of America. The roads are very frequently impassable because of bad weather.” (Henry Snell, M.P. East Africa Commission Debate, 1925)

Land grabbing and the Rhodesian Railway

Planning, finance, procurement, labour – what more could go wrong? Answer: speculation. The major and most lucrative railway scam was the use of the railway as a vehicle for displacement of populations and acquisition of their land by speculators. The land was acquired by those who had already been given free or cheap land by the Imperial government and were in a position to leave it idle.

“One syndicate got 500 square miles from the Foreign Office, over the head of the then Governor of Kenya. That is a fairly extensive slice of territory to be handed away. Then there was a grazing land syndicate, called the East African Syndicate, which applied for 320,000 acres, and Lord Delamere, a notorious figure in these parts, applied for 100,000 acres. If one syndicate gets 500 square miles, another gets 320,000 acres, and another applies for 100,000 acres, there is some prima facie evidence of speculators in Kenya.” (Thomas Johnston, Kenya debate, December 1926.)

In Rhodesia, as in Kenya, this resulted in large tracts of land being bought on either side of the proposed track by investors. In both territories the value shot up exponentially as the railway approached. Once the route for the Rhodesian railway was set out, a strip measuring twelve miles wide was carved out alongside taking in parts of Native Reserves. Meanwhile, the Msoro tribe of over 2,000 was displaced in favour of three settlers.

By 1920, Rhodesians had already been corralled in Native Reserves. The 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the “right” to reside in (but not own any part of) reserves measuring 8 million acres. Most of the rest of the territory still belonged to the British South African Chartered Company (BSAC) that had deposed both the Mashona and Matabele kings and seized their territory.

After 1919, the British South African Company transferred what was left over from sales of this territory to the British Crown in return for a much disputed bail-out. The bail-out was controversial because under its agreement with the Crown, the BSAC was allowed to reimburse itself for work it did on behalf of the Crown by engaging in business. The Company had earned an income from the sale of millions of acres of land and mining concessions and had exported ivory and minerals, all under the protection of the British flag and therefore the British military. This was supposed to be their “compensation”. However, breaking the rules of the charter, the Company inter-mingled its own private accounts with those of the administration of the colony, making it difficult to separate the cost of government work and BSAC business. Just as with the British East African Company when it was leaving the area, the BSAC was further “compensated” with taxpayers’ money.

By 1920, Rhodesians had already been corralled in Native Reserves. The 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the “right” to reside in (but not own any part of) reserves measuring 8 million acres. Most of the rest of the territory still belonged to the British South African Chartered Company (BSAC) that had deposed both the Mashona and Matabele kings and seized their territory.

During the controversy, a secret agreement between the BSAC and the British government came to light under which the government had agreed to reimburse the BSAC if it deposed King Lobengula. BSAC recruited European settlers, promising each a lease of a 6,000-acre farm at 30 shillings a year. They were also offered the option of buying the farm outright at the cost of 3 pounds sterling per 20 acres or 900 pounds for 6,000 acres.

After the successful campaign, the British government paid the lease and purchase costs for the recruits. Those not wishing to purchase were reimbursed for improvements they had made on the properties. In total, £7 million was demanded, half for the recruits and half for the shareholders. All opposition in Parliament was silenced by the Colonial Secretary, public eugenicist Lord Amery, when he revealed that a Commission of Inquiry had exonerated the BSAC and its recruits of any wrong-doing in massacring the Matabele and deposing their King. They eventually settled for £4 million pounds in 1922, a sum roughly equivalent to the Colonial Office’s budget for four years.

The need for public oversight

In his essay “Mexico proved that debt can be repudiated”, published on 24 March 2017, Eric Toussaint devotes a section on showing the links between commodity extraction, railways for transporting the commodities, and loans required to finance the extraction and transport of the commodities. He demonstrates the impact these had on land ownership, the displacement of peoples, the national debt, and a clique of investors.

It is interesting to note that in South America, as on the African continent, railways did not serve to connect communities and countries but rather led straight from the point of extraction of commodities to the point of export. The entire operation was eventually paid for from the indigenous public purse.

Like chartered companies, 21st century local agents for foreign investors enjoy political and military protection by the foreign countries they serve. This phenomenon was most evident in Mexico where various debt repudiations resulted in military invasions and threats of invasion by the United States, Britain and France. Most interestingly, Mexican citizens who had lent to their government were granted European nationality after which their new countries included them among those whose rights were being defended by the invasions. They came to be known as vende patrias – sellers of their country. Then, as now, bail-outs came from taxpayers’ money.

In modern times, attempts to repudiate illegitimate debt or to choose other paths that do not profit financiers still lead to regime change. Today they take the form of grants and NGO funding, which attempt to fill the holes left by diversion of national resources. What a bail-out means is that when an investor makes a profit, it all belongs to the investor. Where s/he makes a loss, it is spread among taxpayers. As Noam Chomsky famously stated, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”

What a bail-out means is that when an investor makes a profit, it all belongs to the investor. Where s/he makes a loss, it is spread among taxpayers. As Noam Chomsky said, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”

There can be no real progress until a critical mass of the electorate makes the connection between foreign capital, its local agents and underdevelopment. As Frederick Douglass put it, “If there is no struggle there is no progress[.…] Power concedes nothing without a demand. It never did and it never will.”

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Mary Serumaga is a Ugandan essayist, graduated in Law from King's College, London, and attained an Msc in Intelligent Management Systems from the Southbank. Her work in civil service reform in East Africa lead to an interest in the nature of public service in Africa and the political influences under which it is delivered.

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What Ails the Cashew Nut Sector in Kenya?

The lack of a focused policy since the 1990s has pushed the cashew nut sector into perennial decline. The sector’s disintegration started when the state-owned Kenya Cashewnut factory ollapsed in 1997 – a time when the political environment was not inclined to rescue a sector that had been a lifeline for thousands of Kenya’s coastal residents.

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What Ails the Cashew Nut Sector in Kenya?
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Lake Kenyatta Cooperative Society (LKCS) in Mpeketoni in Lamu – perhaps the only remaining cooperative society in Kenya’s coast region formed by cashew nut farmers in the 1970s – once collected 9,000 metrics tonnes of cashew nuts from its members during the sector’s heydays in the 1980s. Currently, despite boasting a membership that has stretched to over 6,000, the cooperative does not expect to collect anything beyond 300 tonnes this year. This is the volume it managed to collect in the last calendar year.

From a peak harvest of over a total of 36,000 tonnes in the late 1970s, when the cashew nut sector was at its highest peak, the sector is today struggling to even produce 11,000 tonnes.

Cashew nut farming and processing was once a thriving undertaking in Kenya. After nationalising the economy shortly after independence, the government of Jomo Kenyatta took full control of the cashew nut sector, which was dominated by Mitchell Cotts, a shipping giant. In 1975, the government formed Kenya Cashewnut Limited (KCL) and established a large-scale processing factory in Kilifi, with a capacity to process 15,000 metric tonnes of cashew nuts per year.

The National Cereals and Produce Board (NCPB), one of the shareholders of the newly created KCL, was granted legal monopoly to buy all the cashew nuts from farmers. Other shareholders of KCL were the Industrial and Commercial Development Corporation (ICDC), the Industrial and Development Bank (IDB) and the Kilifi District Cooperative Union (KDCU).

Farmers were organised into many cooperatives across the coast – big ones such as LKCS and KDCU and also small ones. To be able to pay farmers in time for cashew nuts collected, KCL pre-financed NCPB. The factory would determine its raw material requirements and the excess would be exported in shell to India. Essentially, the factory guaranteed a stable farm gate price and provided a predictable and reliable market.

In post-independence Kenya, market stability saw the sector expand production from about 5,000 tonnes in 1965 to over 36,000 tonnes in the late 1970s and early 1980s. In 1982, KCL made a net profit of Sh26 million (US$325,000), up from Sh3 million (US$37,500) in 1975 – nearly a ten-fold increase in just seven years.

At its peak, the KCL cashew nut factory employed over 4,000 people. During this period, coastal residents were able to send their children to good schools, raise their incomes, and develop local micro-economies.

Dwindling fortunes

Those heydays didn’t last for long though. In the 1980s, President Daniel arap Moi and his cronies started engaging in rent-seeking from parastatals in order to sustain a regime that was under threat.

By 1989, KCL got caught up in governance and financial challenges, and in February 1990, it rendered a large chunk of its employees jobless. At the same time, powdery mildew disease (PMD), which had not been witnessed before, hit crop yields and production. The resultant dwindling economic fortunes of KCL meant that it could not provide extension services to the cashew nut farmers, which spelt doom for the sector.

In post-independence Kenya, market stability saw the sector expand production from about 5,000 tonnes in 1965 to over 36,000 tonnes in the late 1970s and early 1980s. In 1982, KCL made a profit of Sh26 million (US$325,000), up from Sh3 million (US$37,500) in 1975 – nearly a ten-fold increase in just seven years.

When the disastrous 1990s’ World Bank-led Structural Adjustment Programmes (SAPs) hit the country, they found an already struggling cashew nut sector. By November 1992, the Parastatal Reform Programme Committee (PRPC) recommended the sale of 65 per cent of the shares the government held in KCL through NCPB, ICDC and IDB.

The PRPC recommended that Kilifi District Cooperative Union (KDCU), the owner of the remaining 35 per cent of the shares, be granted pre-emptive rights to buy the 65 per cent government shares. A parliamentary committee would later discover that partly due to the high cost involved in buying these shares, the three main directors of the KDCU had decided to strike a deal with some of President Moi’s closest business friends.

A Ministry of Agriculture report in 2009 noted that with a value of Sh141.2 per share, the 65 per cent share of the government was valued at Sh78 million (US$1.34 million). Debts acquired by the KCL in previous years that were owed to NCPB, ICDC, the Treasury, and the Italian government amounted to over Sh118 million (US$2.03 million). The company also owed Sh33 million (US$0.56 million) in redundancy payments to former employees. In total, the KDCU would have had to invest roughly US$4 million to finance the acquisition of the company – money it did not have. This is how private money was used to buy government shares in KCL.

In 2000, the Public Investments Committee (PIC) recommended that the factory be handed back to the farmers. The same year, a subsequent cashew nut report tabled in Parliament by PIC noted that the factory’s shares were illegally acquired by Moi’s cronies, including the president’s personal secretary, Joshua Kulei, who was accused of having defrauded the farmers.

A Ministry of Agriculture report in 2009 noted that the actual majority shareholders had the KDCU appoint themselves as the management agents of the factory, which was renamed Kilifi Cashew Nut Factory Limited (KCFL), and which was under the management of P.K. Shah, who took complete de facto control of the day-to-day business of the factory.

In 1996, the KDCU received a loan of Sh2 million (US$ 35,000) from its main owner, Kenya Plantations and Products Limited, to purchase raw cashew nuts (RCN) – which it secured with its 23 per cent shares, valued at a much higher Sh28.07 million in 1992 – as collateral for the loan. When it failed to pay back the loan, these shares were transferred to private investors.

Eventually, in 1997, KCL collapsed under its financial and operational burden. Unable to service an outstanding loan of about Sh95 million, Barclays Bank placed the factory under KPMG- managed receivership in 2000, and on 8 May 2002 sold all its assets, including the plant and machinery, to Millennium Management Limited (MML) for Sh58 million (US$ 0.97)

In just a few years, the marketing monopoly that the NCPB enjoyed and the logistical machinery it had put in place to procure cashews came a cropper. The board completely withdrew from marketing cashew nuts. This decision led to the disappearance of key functions, such as financing cooperatives and reliably supplying KCL with affordable raw cashew nuts.

The lack of a focused policy in the last three decades has pushed the cashew nut sector into a perennial multi-year production and profit decline. The sector’s decline and disintegration started when the state-owned KCL collapsed in 1997 – a time when the political environment was not inclined to rescue a sector that had been a lifeline for thousands of Kenya’s coastal residents.

New players  

With the stake of the factory diminished, and the end of its monopoly in cashew nut matters, exporters of raw cashew nuts emerged. These exporters were able to offer significantly higher and faster payments due to the high rebates they enjoyed for exporting raw materials that would in turn create jobs in the importing countries.

By buying through middlemen – who became the sector’s main players – the new market structure undermined the role of cooperative societies that had enjoyed state-sanctioned market support. They could not survive and all but collapsed.

The first main processor, Wondernut Ltd, came into the country in 2003. Kenya Nut Company (KNC), owned by Pius Ngugi, and Equatorial Nuts, owned by Peter Munga, which predominately deal in macadamia nuts from the Mount Kenya region where their factories are based, made forays into processing cashew nuts as well.

In just a few years, the marketing monopoly that the NCPB enjoyed and the logistical machinery it had put in place to procure cashews came a cropper. The board completely withdrew from marketing cashew nuts. This decision led to the disappearance of key functions, such as financing cooperatives and reliably supplying KCL with affordable raw cashew nuts.

With the Kilifi Cashew Nut Factory (partially revived by MML) and the later entry of another Central Province macadamia processor, Jungle Nuts, the number of active cashew processors in Kenya had expanded to five.

Even so, these five processors had to compete with the well-established exporters of raw, unprocessed nuts who had gained favour with farmers due to their market flexibility and higher prices. In the 2007/8 season, for instance, exporters of raw cashew nuts went on a buying spree that saw the share of processed export nuts drop by over 20 per cent that season. This posed a huge threat to local processors.

Despite a total ban on the export of raw cashew nuts in 2009 (which nut processors had called for) the industry has gone horribly wrong in the last decade. In their call to the government to ban exports, the nut processors argued that the ban would allow them an opportunity to gather enough harvest to enable them to utilise their excess installed processing capacity.

A baseline survey that had been done on the crop in 2009 by the Institute of Development and Business Management Services (IDS) on behalf of the Micro Enterprises Support Programme Trust (MESPT), a value chain government initiative, had revealed a sector reeling in distress.

This is the situation that the sector found itself in 2009 when the Nut Processors Association of Kenya (NutPAK) – the result of processors pulling together resources – was formed to lobby for the industry’s protection, with a keen focus on the export ban.

Despite a total ban on the export of raw cashew nuts in 2009 (which nut processors had called for) the industry has gone horribly wrong in the last decade. In their call to the government to ban exports, the nut processors argued that the ban would allow them an opportunity to gather enough harvest to enable them to utilise their excess installed processing capacity.

William Ruto, the current Deputy President who was then the Minister of Agriculture, met stakeholders in the cashew nut industry at Pwani University in Kilifi in March 2009. He ordered a Cashew Nut Revival Task Force (CNRTF) on 9 April 2009 to submit a report by the end of April and to come up with recommendations on measures to be taken to revive the cashew industry. John Safari Mumba, the former Managing Director of KCL and former MP for Bahari Constituency, and then the Chairman of the Kenya Cashew Growers Association, led the four-member task force.

When the task force finally submitted its report based on views it received from various players, it recommended banning the export of raw nuts.

That same year, Ruto heeded their call and pronounced an export ban on RCN after the four-member task force hastily collected views from the industry’s key players. On 16 June 2009, barely one month after the task force’s report had been submitted, Ruto published “The Agriculture (Prohibition of Exportation of Raw Nuts) Order, 2009” banning the export of raw cashew and macadamia nuts.

The government also announced that all nuts would be sold through the NCPB, which was then struggling to buy maize from farmers. It would later sell the produce to processors.

The population of cashew nut trees then stood at about 2 million, with 20 per cent of them beyond the production age and more trees projected to graduate to the unproductive age bracket in just a couple of years. Inadequate crop husbandry, the IDS study further revealed, saw farmers exploit less than a half of the total crop’s potential.

A disorganised nut market that followed the exit of KCL and the coming up of new entrants (largely exporters of RCN who relied mainly on brokers), affected the growth of the crop’s production and productivity since these traders would only emerge during the harvest season and did nothing to promote the crop. The exporters of RCN shifted base to neighbouring Tanzania, one of the world’s leading producers of cashew nuts that exports most of its nut produce raw.

Cashew nut woes

Fast forward to the 2010s. A statistic by the Nut and Oil Directorate shows that the area under cashew nut production went down from 28,758 hectares in 2015 to 21,284 hectares in 2016. Production also declined from 18,907 tonnes to 11,404 tonnes in the same period, with the value of the crop recording Sh398 million compared to Sh506 million in 2015. This was attributed to crop neglect and logging of cashew nut trees for charcoal and to pave way for other crops.

In the absence of farmers’ groups, a poorly structured NCBP and lack of enough collection centres in the cashew catchment areas, NCPB was not able to buy the nuts, so middlemen continue to dominate the scene to date.

To address these shortcomings, the sector’s stakeholders, led by the Provincial Director of Agriculture, formed a multi-sectoral task force to lead in revitalising the sector. Its other members included NutPAK, Cashew Nuts Growers Association and Kenya Agricultural Research Institute (KARI), which was to lead in production expansion.

The task force set out a cashew nuts revival programme that included increased production, streamlining the marketing system to rid the sector of middlemen and setting up minimum farm gate prices, among other measures. However, due to financial challenges, especially for the growers association, the team’s initiatives were not realised.

In the absence of farmers’ groups, a poorly structured NCBP and lack of enough collection centres in the cashew catchment areas, NCPB was not able to buy the nuts, so middlemen continue to dominate the scene to date.

The matter was made worse in 2013 when the agriculture function was devolved and the task force initiatives lost the support of the Ministry of Agriculture, which dealt a devastating blow to its programmes. Unfortunately, the foundation it had sought to build since 2010 was not transitioned to county governments in cashew catchment areas after devolution.

The county governments have continued to under-fund the cashew nut sector and lack strong policy guidelines to promote the sector. Last year, Kwale County allocated only Sh1.5 million to promote procurement of cashew seedlings in a programme that was being funded by the European Union (EU) to increase production in Lamu, Kwale and Kilifi counties. The EU injected Sh240 million through Ten Senses Africa, which was meant to plant 333,333 trees in each of the three cashew-producing counties.

The main processors have scaled down operations in the cashew nut sector. Most of them are located in the Mount Kenya region, where they have mainly focused on macadamia nuts. The ban on the export of raw cashew nuts favoured the macadamia sector, which has recorded a five-fold increase to reach a production of 50,000 metric tonnes per year.

The industry has thus been left to new entrants but there are strong indications that it still has potential, if well supported. In 2019, for instance, the total estimated area under cashew growing was reported to be 22,686 hectares, which is a marginal improvement from the 22,655 hectares reported in 2018, due to efforts to plant new seedlings.

The sector’s revival

The COVID-19 pandemic has simply worsened the cashew export market. This decline has been exacerbated by rare new pests, and a disorganised free-for-all market that has dampened supplies for cashew cooperatives and nearly sealed the sector’s fate.

LKCS’s chairman, David Njuguna, doubts that the cooperative will be able to offer a farm gate pre-2019 price of Sh30 a kilo once the farmers dispose of the harvest they are still hoarding. According to his estimates, a highly compromised cashew nut quality this year means that farmers will only be able to recover 34 per cent from their entire harvest. This can be attributed to poor crop husbandry, thanks to the low price the crop has been fetching, thus denying farmers the capacity to profitably commercialise the sector.

Mumba led a task force in 2009 that formulated seven clear recommendations that were to be carried out before the ban was effected:

  1. To revive the cashew nut industry, the Ministry of Agriculture should first establish a cashew nut revitalisation desk with immediate effect to coordinate the task report’s recommendations;
  2. The ministry should with immediate effect establish a regulatory apex body for the development of the cashew nut industry to be named the Kenyan Cashew Nut Development Authority (KECADA);
  3. KECADA should initiate the process of formulating a cashew nut policy independent from other crops;
  4. Immediately following the formation of KECADA, regulation for a minimum farm gate price should be put in place;
  5. The government, in conjunction with KECADA, should establish funds to support farm input subsidies, as well as guarantees for public-private partnerships financing cashew farmers;
  6. Former farmers’ cooperatives should be revived; and
  7. Most importantly, only once these recommendations have been put in place (particularly the minimum price), should the government consider implementing an export ban on raw cashew nuts, which should be reviewed regularly regarding its effects.

By putting together the right structures and policies, both the national and county governments can bring this important cash crop back to its former glory.

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Why Cash Transfers Are an Efficient Method of Reducing Food Insecurity

With high levels of mobile phone and internet penetration, coupled with advanced digital technologies in the financial sector, Kenya has favourable conditions for cash transfers to the most vulnerable populations. However, corruption and lack of reliable data on beneficiaries can derail efforts to make all Kenyans food secure during and after the COVID-19 pandemic.

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Why Cash Transfers Are an Efficient Method of Reducing Food Insecurity
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As governments across the globe continue to grapple with the economic effects of COVID-19, many are faced with the additional burden of guaranteeing food security for millions of their citizens. Restrictions in movement and other social distancing measures adopted to contain the spread of the virus have put a significant strain on food supply chains, both at production and distribution links. As a result of this, millions have been pushed to the brink of hunger. The United Nations estimates that up to 265 million people will face acute food shortage by December 2020, a sharp increase from earlier predictions of 135 million people. A disproportionate share of these people live in low- and middle-income countries where shock-responsive social safety nets are inadequate or poorly managed.

In Kenya, long before the World Health Organisation (WHO) declared COVID-19 a global pandemic, an estimated 1.3 million Kenyans were already facing acute food shortage as a result of prolonged droughts, extended long rains well into the harvesting season and a locust infestation not witnessed in a decade.

On 13th March, after the country reported its first case of the virus, the government instituted containment measures in the interest of public health. This further disrupted food supply chains and consequently put a strain on the country’s food systems. Stay at home advice, a night curfew, closure of non-essential social spaces and social distancing requirements have reduced economic activity resulting in job and income losses. The resultant reduced household purchasing power further propelled more households into crisis food shortage.

Further, and with schools closed, millions of students who benefit from school feeding programmes are losing out on this benefit, with parents having to fully take on an all-day feeding responsibility. The World Food Programme (WFP) now projects that a total of 5 million Kenyans will require food and livelihood assistance as a result.

Three months into the pandemic, we can already see a deacceleration of philanthropic acts to provide food supplies to the most vulnerable populations compared to the early days of the pandemic, an indication that private charity, while important, is not adequately prepared to address the need and is not sustainable. Given the uncertainty of when a vaccine will get to the market and when we will see the resumption of normalcy, it is expected that millions will require food assistance and government and private philanthropy will need to better coordinate this assistance and ensure that households remain food secure during this pandemic.

Food packages vs cash transfers

According to the Kenya Food Security Steering Group, despite the adverse climatic shocks, Kenya’s food availability remains stable as a result of a favourable harvest due to above average short rains towards end of the year in most agricultural areas. COVID-19, however, presents a challenge of affordability for many households, who no doubt will require food assistance.

However, how can governments, development agencies and philanthropists provide this assistance in a manner that provides choice, flexibility, and dignity to those that need it and in line with their individual circumstances?

Three months into the pandemic, we can already see a deacceleration of philanthropic acts to provide food supplies to the most vulnerable populations compared to the early days of the pandemic, an indication that private charity, while important, is not adequately prepared to address the need and is not sustainable.

How do we put people at the centre of this assistance by not only providing food, but promoting financial inclusion of the poorest and most vulnerable during this pandemic? How do we ensure that the nutritional needs and requirements of the vulnerable are not generalised and reduced to a few food and other household items? How do we move away from paternalistic tendencies that have long viewed hunger as a question of charity rather than one of justice? Who decides what food items a given household requires in comparison to the rest?

These questions require reflection on the forms and manner in which food assistance can be provided. Should we provide households with food packages or should we provide cash transfers?

In determining a suitable approach, we will need to be cognisant of the unique challenges COVID-19 throws into this long-standing debate of food packages vs cash transfers in development circles. Firstly, and from an epidemiological standpoint, there is a need to reduce social contact as much as possible to ensure food distribution does not become a conduit for virus transmission. Secondly, it is worth noting that the pandemic is causing involuntary stay-at-home, therefore disengaging many from meaningful economic activities, and thereby creating COVID-induced dependency.

This group is particularly of concern given that there is no telling how long they will require assistance even when restrictions are eased. As such, cash transfers remain a lifeline for many as they allow people to navigate through the pandemic and rebuild their lives after the crisis. Thirdly, given the reduced household purchasing power and the resultant decreased demand in household and food items, cash transfers can be an effective tool in turning food need into an effective food demand to sustain supply chains, particularly among downstream smallholder farmers. This, however, needs concerted efforts to ensure distributional links, particularly to small open-air markets, as a majority of lower-income households in urban areas depend on these markets for their food supplies.

Interventions to ensure that households remain food secure will, therefore, need to provide households with flexibility and choice in determining food and other household items that meet their unique circumstances. Choice will need to be devolved to the household level and not left to the imaginations of benefactors – government or private.

Cash transfers have proven to do exactly this by increasing household expenditure, particularly food expenditure, thereby enabling households to meet their unique and diverse dietary requirements, improved health and nutritional outcomes and other outcomes, such as savings and investments. The 2015/16 Kenya Integrated Household Budget Survey (KIHBS), for instance, shows that food remains a high expenditure item at the household level, with 33.5 per cent of cash transfers received from within Kenya used on food items, only preceded by education, at 44.6 per cent.

However, food consumption is higher in rural households compared to education spending, at 38.9 per cent and 38.2 per cent, respectively. Further, the survey shows a higher proportion of food expenditure in female-headed households compared to male headed households, especially in the rural areas, at 41.8 per cent and 35.2 percent, respectively.

In addition to providing beneficiaries with choice, cash transfers have a positive spillover effect of stimulating local markets to the benefit of downstream local producers and retailers. However, in determining amounts for disbursement, it is worth ensuring these are informed by household food consumption rates to sufficiently cover food needs.

Granted, food packages bear the benefit of cushioning beneficiaries against commodity price spikes, especially where markets are disintegrated and retail prices are vulnerable to erratic price changes. But on the flip side, they often limit dietary diversity and may fail to respond to disparate nutritional needs across households, especially those with infants, young children, lactating mothers, pregnant women, and the elderly. Food packages normally contain food items with long shelf life (i.e. cereals, rice, maize, wheat flour, salt, cooking oil and other household items), often leaving out short shelf life items, such as milk and other dairy products, that have essential nutrients for household members with unique nutritional requirements.

The 2015/16 Kenya Integrated Household Budget Survey (KIHBS), for instance, shows that food remains a high expenditure item at the household level, with 33.5 per cent of cash transfers received from within Kenya used on food items, only preceded by education, at 44.6 per cent.

Administratively, food packages present logistical challenges in distribution, and depending on the approaches of distribution, may be inconsistent with measures to curb the further spread of the virus. For instance, social distancing measures require minimal social contact, yet distribution of food packages require social proximity, which makes these packages possible conduits for virus transmission.

Additionally, food packages are prone to mismanagement by those responsible for distribution. When factored in, the cost of corruption may significantly impact the overall cost of food distribution. For instance, a 2011 World Bank review of India’s Public Distribution System (PDS) showed that 58 per cent of food did not reach the intended beneficiaries.

In contrast, because cash transfers are distributed through mobile money, not only are the administrative costs of this form of assistance reduced, but cash transfers provide a transparent framework for distribution, thereby minimising misappropriation.

Cash transfers have their limitations too. Targeting of the most deserving beneficiaries may be a challenge where accurate identification and validation of beneficiaries is hampered by lack of reliable data.

Strong digital infrastructure

Kenya’s ICT sector has rapidly grown over the years, placing the country’s mobile phone and internet penetration at 91 per cent and 84 per cent, respectively, which is above Africa’s average of 80 per cent and 36 per cent, respectively. Although variations exist in mobile ownership between rural and urban populations, at 40 per cent and 60 percent respectively, Kenya still fairs relatively well in reaching rural populations. On the gender front, more females (10,425,040) than males (10,268,651) own a mobile phone, according to the 2019 Kenya Population and Household Census.

Kenya’s digital payment infrastructure is equally advanced, making it a global leader in mobile money usage. Data from the Central Bank of Kenya shows that as by December 2019, there were 58 million active mobile money accounts and 242,275 mobile money agents across the country. In 2019, Kenyans transacted a total of Sh4.35 trillion (almost half the country’s GDP) through their mobile phones. According to the KIHBS 2015/16, mobile money transfer was used more by households in rural areas compared to those in urban areas, at 46.2 per cent and 38.9 per cent, respectively, an indication of the effectiveness of mobile money- enabled cash transfers in reaching the most vulnerable.

To further deepen reach and ensure vulnerable populations, such as the elderly, women and remote populations, are reached, there is a need for the government and mobile phone operators to temporarily relax the know-your-customer requirements, and ensure all targeted individuals/household are facilitated to access cash transfers through mobile money.

These advancements provide a strong digital infrastructure that when effectively deployed can support a massive cash transfer programme to ensure households are adequately cushioned during this pandemic. Given the time lag in collecting socio-economic data at the national level, a lag that may not quickly correspond to the changing socio-economic characteristics of the population, data from mobile and internet usage offer a quick and verifiable option of targeting the most vulnerable and therefore making them food insecure.

In 2019, Kenyans transacted a total of Sh4.35 trillion (almost half the country’s GDP) through their mobile phones. According to the KIHBS 2015/16, mobile money transfer was used more by households in rural areas compared to those in urban areas, at 46.2 per cent and 38.9 per cent, respectively…

Combined, mobile phone use and historical mobile money transactions provide massive data, which when carefully analysed, prove a useful resource for assessing the socio-economic standing of individuals, and therefore accurately determining individuals who most qualify for assistance.

Additionally, technology offers a robust and trusted framework that when optimally utilised limits leakages that are often associated with traditional methods of cash disbursement. For one, they make visible households that qualify for cash transfers and when disbursements are due. The predictability they offer also enables households to know when to expect cash and therefore plan better for both food and other household expenditure.

Constraints

Effective mobile-enabled cash transfer programmes rely on rich verifiable data that accurately capture the changing socio-economic positions of citizens. Employment and income status of citizens need to be regularly updated to ensure they accurately capture the most deserving. While the government has over the years invested in collecting socio-economic data through the national census, most recently during the 2019 Kenya Population and Household Census, as well as digital registration of citizens during the Huduma Namba registration, there is a need to build on to these databases, and regularly update the same for purposes of establishing robust social welfare systems.

COVID-19 and its impact on household well-being is perhaps bringing to the fore the value of big data in building such systems and cushioning livelihoods through evidence-based social protection policies, particularly as far as these policies are meant to guarantee household food security. The ability of applying these lessons will determine how prepared governments are in fighting the next pandemic and food security challenges, especially as climate change continues to threaten food security systems.

In the immediate term, and as the government props up its cash transfer programme, there is a need for community-based participatory approaches in assessing the most vulnerable and needy households to ensure efficient utilisation of funds. Relying on community social capital is an effective way of determining households that were vulnerable prior to COVID-19 and those that have become dependent as a result of the pandemic.

Corruption

A pandemic itself, corruption is a systemic problem in Kenya, with proven ability to cripple noble initiatives aimed at benefiting the poor. Worse, this problem has significantly reduced trust levels between the government and citizens and has limited citizens’ participation in governance matters. There is, therefore, a need to build safeguard measures in cash transfer programmes to minimise avenues for leakages. This should include digitised and transparent targeting criteria, citizen-led participatory monitoring and oversight, as well as effective complaint mechanisms.

Corruption thrives in information asymmetry. Therefore, automated platforms that make information accessible to the public on who qualifies for transfers, how much they are eligible for, and the frequency of distribution (with all data privacy protocols observed) provide a better bet in bridging this gap.

Information and communication technologies (mobile-enabled transfers coupled with digitised social safety net frameworks) have the potential effect of limiting the discretionary powers of public officers in determining who benefits. This reduces human intervention in the process, thereby limiting opportunities for cash diversion for personal gain. The technologies, when properly managed, can also minimise political manipulation, capitalisation and clientelism to the advantage of the political class. This, however, is dependent on a strong commitment by the government in ensuring cash for disbursement is made available in the first instance. More importantly, citizens will need to push for structured collective social accountability mechanisms, such as social audits and citizens reports, and will need to actively participate in holding public officials accountable.

Corruption thrives in information asymmetry. Therefore, automated platforms that make information accessible to the public on who qualifies for transfers, how much they are eligible for, and the frequency of distribution provide a better bet in bridging this gap.

Given the uncertainty of COVID-19’s staying power, and its disruption to food supply chains, there is no doubt that food security will remain a key concern that requires better coordinated approaches in feeding those who are most vulnerable. The approaches and manner in which this is done will need to take into consideration the unique challenges the pandemic presents.

With advanced digital technologies, particularly in the financial sector, Kenya is well ahead of many countries in the developing world and well prepared to deepen cashless assistance as it works to contain the spread of the disease. Perhaps this is the litmus test for the government’s ability to rise up to the challenge of walking the talk on ensuring its food security and nutrition commitment under the Big Four Agenda.

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Curfews, Lockdowns and Disintegrating National Food Supply Chains

The disruption of national food supply chains due to COVID-19 lockdowns and curfews has negatively impacted market traders, but it has also spawned localised – and more resilient – supply chains that are filling the gap in the food system.

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Curfews, Lockdowns and Disintegrating National Food Supply Chains
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Our stomachs will make themselves heard and may well take the road to the right, the road of reaction, and of peaceful coexistence…you are going to build in order to prove that you’re capable of transforming your existence and transforming the concrete conditions in which you live.” – Thomas Sankara, assassinated leader of Burkina Faso

 On July 6, 2020, Kenya’s President Uhuru Kenyatta announced phased reopening of the country as the government moved to relax COVID-19 restrictions. That day found me seated in a fishmonger’s stall in Gikomba market, located about five kilometres east of Nairobi’s Central Business District (CBD) and popularly known for the sale of second-hand (mitumba) clothes. The customer seated next to me must have received a text message on her mobile phone because she began howling at the fishmonger to tune in to the radio, which was playing Benga music at the time. It was a few minutes after 2 p.m.

“I order and direct that the cessation of movement into and out of the Nairobi Metropolitan Area, Mombasa County and Mandera County, that is currently in force, shall lapse at 4:00 a.m. on Tuesday, 7th July, 2020,” pronounced the president on Radio Jambo.

The response to this news was cathartic. The female customer, on hearing the words “cessation of movement shall lapse” ululated, and burst out in praise of her God – “Nyasaye” – so loudly it startled the fishmonger. The excited customer jumped on her feet and started dancing around the fish stalls, muttering words in Dholuo. Nyasacha, koro anyalo weyo thugrwok ma na Nairobi, adog dala pacho. Pok a neno chwora, chakre oketwa e lockdown. Nyasacha, iwinjo ywak na. Nyasacha ber.” Oh God, I can now leave the hardship of Nairobi and go back to my homeland. I have not seen my husband since the lockdown measures were enforced. Oh God, you have heard my prayers. Oh God, you are good to me.

“She, like most of us are very happy that the cessation measures have been lifted. Life was becoming very hard and unbearable,” said Rose Akinyi, the fifty-seven year old fishmonger, also known as “Cucu Manyanga” to her customers because of her savvy in relating to urban youth culture. “Since the lockdown, business has been bad. Most of my customers have stopped buying fish because they have either lost their sources of income while others have been too afraid of catching the coronavirus that they have not come to make their usual purchases,” explained Akinyi.

Gikomba market is also Nairobi’s wholesale fish market.  Hotels, restaurants, and businesses flock there to purchase fresh and smoked fish from Lake Victoria and Lake Turkana. But with the government regulations to close down eateries, fish stocks have been rotting, lamented Akinyi. She has had to reduce the supply of her fish stocks in response to the low demand in the market.

“With the re-opening of the city, I plan to travel to my home county of Kisumu and go farm. At least this way I can supplement my income because I don’t see things going back to normal anytime soon,” she explained.

Two days later, I found my way to Wakulima market, popular known as Marikiti. The stench of spoilt produce greets you as you approach the vicinity of the market, Nairobi’s most important fresh produce market. News of the president’s announcement had reached the market and the rush of activity and trade had returned.

Gikomba market is also Nairobi’s wholesale fish market.  Hotels, restaurants, and businesses flock there to purchase fresh and smoked fish from Lake Victoria and Lake Turkana. But with the government regulations to close down eateries, fish stocks have been rotting, lamented Akinyi.

“Since the lockdown, business has been dire to say the least,” complained one Robert Kharinge aka Mkuna, a greengrocer and pastor in a church based in Madiwa, Eastleigh. Robert, who sells bananas that he gets from Meru County, noted that “business has never been this bad in all my twenty years as a greengrocer. Now, I’ve been forced to supplement my income as a porter to make ends meet. Before COVID-19, I would sell at least 150 hands of bananas in a day. Today, I can barely sell five hands,” he explains.

Robert, who is also a clergyman, leans on his faith and is hopeful that things will get back to normal since the cessation of movement has been lifted. He also hopes that the county government of Nairobi will finally expand the Marikiti market to cater for the growing pressure of a city whose population is creeping towards five million.

A short distance from Robert’s stall and outside the market walls stands Morgan Muthoni, a young exuberant woman in her early twenties selling oranges on the pavement. Unable to find space in the market, she and a number of traders have opted to position themselves along Haile Selassie Avenue, where they sell produce out of handcarts.

“When President Uhuru announced the cessation of movement in April, our businesses were gravely affected,” Muthoni says as attends to customers. “I get my oranges from Tanzania and with the lockdown regulations, therefore, produce hasn’t been delivered in good time despite what the government has been saying. Before COVID-19, I would get oranges every two days but now I have to wait between four and five days for fresh produce. My customers aren’t happy because they like fresh oranges and I’m now forced to sell them produce with longer shelf life.”

COVID-19 vs the Demand and Supply of Food
With the prior government lockdowns in Nairobi and Mombasa’s Old Town, which have large populations and are key markets for various food products, the government had to ensure that people in those areas were not cut off from essential goods and services. It was also the mandate of the government to shield farmers and manufacturers of the goods from incurring heavy losses because of the restrictions. Despite good attempts by the authorities to introduce measures that allowed the flow of goods to populated areas affected by the lockdown, there were several reports of police harassment.

“Truck drivers are complaining that they are been harassed by the police for bribes at the police stops, which is gravely affecting our businesses. The police, with their usual thuggery, are using this season of corona to mistreat and extort truck drivers to pay bribes in order to give them way at police checks even if they have adhered to the stipulated regulations,” complained Muthoni.

The movement of goods is further complicated by the disjointed health protocols. “We also hear that because Magufuli’s Tanzania has a different policy towards COVID-19, trucks drivers are taking longer at the border because they need to be tested for coronavirus before they are allowed to pass. But we don’t know how true these reports are. For now, we believe that things will get better since the cessation has been lifted. If God is for us, who can be against us?” Muthoni concludes.

Divine intervention is a recurring plea in these distressed economic times, but unlike Muthoni and Robert, who remain hopeful, this is not the case for Esther Waithera, a farmer and miller based in Mwandus, Kiambu, about 15 kilometres from Nairobi. Kiambu, with its fertile rich soils, adequate rainfall, cool climate, and plenty of food produce, is a busy and bustling administrative centre in the heart of Kikuyuland.

After the president’s announcement of the quasi-lockdown and curfew, Waithera has been spending her afternoons selling fresh produce from her car that is parked opposite Kiambu mall on the weekends and in Thindigwa, a splashy middle-class residential area off the busy Kiambu Road, on weekdays.

“Before COVID-19, I used to supply fresh farm produce to hotels and restaurants across the city. But now I have been forced to sell my produce from my car boot because if I don’t, my produce will rot in the farm. My husband runs the family mill and even that has been doing badly since the coronavirus came to plague us. We have had to decrease our milling capacity and the cost of maize flour to adjust to new market prices as demand reduces.”

After the president’s announcement of the quasi-lockdown and curfew, Waithera has been spending her afternoons selling fresh produce from her car that is parked opposite Kiambu mall on the weekends and in Thindigwa, a splashy middle-class residential area off the busy Kiambu Road, on weekdays.

Maize is Kenya’s staple food and Kenyans rely on maize and maize products for subsistence but, “Kenyans are going hungry and many households are skipping meals to cope with these harsh times,” explains Waithera.

Waithera, who is a mother of three children, doesn’t seem hopeful about the future. “This government that we voted for thrice has let us down. They have squandered the lockdown and have caused economic harm without containing COVID-19. Now we are staring at an economic meltdown, a food crisis and a bleak future for our children.”

A devout Christian of the evangelical persuasion, Waithera deeply believes that “God is punishing the country and its leaders for its transgressions because they have turned away from God and taken to idol worship and the love for mammon”. And like the biblical plagues, “the recent flooding, the infestation of desert locusts and the corona pandemic are all signs from God that he has unleashed his wrath on his people unless we repent our wrongdoings and turn back to God”, laments a bitter Waithera.

For Joyce Nduku, a small-scale farmer and teacher based in Ruiru, this new reality has provided her with opportunities for growth. She acknowledged that her sales have increased during the COVID-19 pandemic, saying, “I now have more customers because there are not enough vegetables available in the market from upcountry”.

Localised and more resilient food systems

At a time when regular food supply chains have not been assured, some food markets have closed, mama mbogas (women vegetable vendors) are out of business, and the cessation of movement is deterring travel, Nduku attributes her increased food production to meet the growing demand to a business model that lays emphasis on a localised food system and short food supply chains.

Approaching food production through a localised food system, she says, “gives me local access to farm inputs”.

She adds, “I get my manure from livestock keepers within my locale and my seeds from local agrovets. I have direct access to my consumers, removing middlemen who expose my produce to unsafe and unhygienic handling and high logistical and transport costs. Hence I’m able to increase the access to safe and affordable food.”

Agriculture, forestry and fishing’s contribution to GDP in 2019 was 34.1 per cent, according to the Kenya National Bureau of Statistics’ Economic Survey 2020. Another 27 percent of GDP is contributed indirectly through linkages with other sectors of Kenya’s economy. The sector, the survey revealed, employs more than 56 percent of the total labour force employed in agriculture in 2019. It also provides a livelihood (employment, income and food security needs) to more than 80 percent of the Kenyan population and contributes to improving nutrition through the production of safe, diverse and nutrient dense foods, notes a World Bank report.

Yet, in a matter of weeks, Nduku tells me, “COVID-19 has laid bare the underlying risks, inequities, and fragilities in our food and agricultural systems, and pushed them close to breaking point.”

These systems, the people underpinning them, and the public goods they deliver have been under-protected and under-valued for decades. Farmers have been exposed to corporate interests that give them little return for their yield; politicians have passed neoliberal food policies and legislation at the peril of citizens; indigenous farming knowledge has been buried by capitalist modes of production that focus mainly on high yields and profit; and families have been one meal away from hunger due to untenable food prices, toxic and unhealthy farm produce and volatile food ecosystems.

Nduku firmly believes that the pandemic has, however, “offered a glimpse to new, robust and more resilient food systems, as some local authorities have implemented measures to safeguard the provision and production of food and local communities and organisations have come together to plug gaps in the food systems.”

Food justice

Many young Kenyans have also emerged to offer leadership with more intimate knowledge of their contexts and responded to societal needs in more direct and appropriate ways. If anything, Nduku tells me, “we must learn from this crisis and ensure that the measures taken to curb the food crisis in these corona times are the starting point for a food system transformation”.

The sector, the survey revealed, employs more than 56 per cent of the total labour force employed in agriculture in 2019. It also provides a livelihood (employment, income and food security needs) to more than 80 per cent of the Kenyan population…

To achieve the kind of systematic transformation Kenya needs, we must “borrow a leaf from Burkina Faso’s revolutionary leader Thomas Sankara”, Nduku adds. Sankara emphasised national food sovereignty and food justice, advocated against over-dependence on foreign food aid, and implemented ecological programmes that fostered long-term agro-ecological balance, power-dispersing, communal food cultivation, and the regeneration of the environment, which remain powerful foundations for food justice today.

Indeed, we must also not rely on discrete technological advances or conservative and incremental policy change. We must radically develop a new system that can adapt and evolve to new innovations, build resilient local food systems, strengthen our local food supply chains, reconnect people with food production, provide fair wages and secure conditions to food and farm workers, and ensure more equitable and nutritious food access for all Kenyans.

Importantly, Nduku emphasises, “We must start thinking about the transformation of our food systems from the point of view of the poorest and those who suffer the greatest injustice within the current framework of our food systems.” This will provide a much more just, resilient and holistic approach to food systems transformation.

This article is part of The Elephant Food Edition Series done in collaboration with Route to Food Initiative (RTFI). Views expressed in the article are not necessarily those of the RTFI.

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